Reckitt Benckiser Group PLC — Call Transcript 2025

I think, hopefully, the lunch was great, and we've got Reckitt here today, Kris and Shannon. Thank you for attending and supporting the conference every year. We appreciate that, so the format today, as has been the case already, is going to be a fireside chat. We are going to do a breakout, by the way, next door afterwards for 15 minutes for those who want to join, so I've got a lot of questions for you guys. So we're going to try and get through as many as possible, but maybe kick off, Kris. Can you talk a little bit about the new organization? You're talking about a more accountable organization. Why and how is that an unlock? And how would it help you deliver and execute more consistently? Because obviously, consistency is the name of the game. It is. So, thank you for having us. Cool. It's a pleasure to be here. So, I felt strongly that we needed to simplify our organization. And I would say the main driver of the changes that we've made was really about simplicity, effectiveness, accountability, and hopefully speed. There's a byproduct, which is it's less costly. We have fewer senior executives. But I think the overwhelming focus is for us to create a simple and fast organization. And we heard that from the rank and file in the company for a while, that they felt that was an opportunity to get to faster decision-making. And I felt clarity around accountabilities was important. So, what we did is we took out a couple of layers of management. It's quite a significant change. And then we simplified the geographic reporting. So, we now have three presidents that are accountable for all execution. And that makes it much easier for me to work with them and drive good execution, but also, of course, to make sure we have clarity of accountability. And by the way, that is also the case below. We simplified our regional structures quite a bit, too. So, we made this change six months ago. So, we've been living in this new organization for, well, the year is going fast. It's eight months now. But I think it's going well. We're capturing benefits from it. But I would also say any big organizational change like this, it takes a year or two before you get all the benefits. So, there's more to come. Maybe moving to innovation. Innovation is a lifeblood of consumer staples. Can you explain the One Reckitt way of brand building and building categories? You've done it with Lysol Air. You've done it with Lysol Laundry Sanitizer, which have made new markets. And it's allowed you to get a price premium given the level of differentiation. So the question is, can you replicate that market-making model to other power brands? And is your R&D set up enough so that you can do it more quickly and more agile? Or are these big breakthroughs quite infrequent events? And which technologies are you most excited about in terms of innovation that can really move the top line needle? So it's a big question around innovation. That feels like five questions. But. One big question. Let's take the one big one. Let's take the elements of the big question in turn. So, innovation is our lifeblood. And we have been investing in our pipeline and in our R&D capabilities quite a bit. And it takes years. So, we did have a period historically where we didn't invest enough. And then it's a catch-up process. The good news is we're done with the catch-up. So we're now in a position where we have really meaningful innovation. To your point, you don't want actually too many of them. You want sort of a cadence of big platforms, one or two that land in the market every year. Because the job isn't just to launch them and land them. The job is actually to use three or four years to scale them. Because we want them to be permanent new additions to the portfolio. Category creation is the most valuable kind of innovation that we can do. And the way that you do that is, obviously, your fundamentals have to be good. You have to be consumer-obsessed. You have to see a need in the market. You have to have the technology solution that is really going to deliver on the promise. But I think what is helpful for us is you really have to have a number one equity. Your brands have to have the right to create categories. And one of the things that we're spending a lot of time on is understanding which of our brands have that right and where can we do it, to your question. But you look at a brand like Dettol, where we've dramatically expanded the number of categories that Dettol operates in. In a market like China, that's a big part of our growth. And so much of it comes back to do we have the right brands? And the good news is in our core Reckitt portfolio, we only have very strong power brands. It's really the whole idea behind the plan. Bringing you in, Shannon. I'll try and make it a bit shorter, this one. On the fixed cost reduction, it looks like you're tracking well ahead of your targets. I think you were already at 20% the first half against your 19% target. You've talked about two big areas of scaling shared services as an opportunity and also working with Generative AI to reduce overhead. So, just interested if you can maybe elaborate a bit more on those two points. And I guess, given where you're tracking, is there any reason why you don't hit that target a little bit earlier than you've said, given you're already well ahead? Yeah, we're super pleased with the progress we've made to date. As you said, savings are coming in quite quickly from overhead. I think that as far as resetting any targets, not really looking to do that. I think 19% is the right target for us. We're committed to getting there as we exit 2027. I would say, of course, there's no finish line. So, once we get there, we can talk about going further. To your point, I think what's important to remember is while we've had strong delivery early on in the program, if you think about 2026 and 2027, first of all, in 2026, we'll be needing to mitigate stranded costs from Essential Home. So, if you think of that trajectory of savings delivery, I think that could moderate a bit in 2026. And then if you think of those two buckets you called out, so shared service and GenAI, we absolutely think they're large opportunities. We think they're very structural, sustainable opportunities. So once we have that capability up and running, we think it's something that for the long haul will continue to drive savings. But it's also two opportunities that take a lot of work to really get them going. And so those are the two pockets of savings that I would see coming into play as we get into 2026 and then in a really significant way in 2027. Okay, thank you. And maybe just touching on advertising spend, because that was up significantly in the first half, I think 130 basis points from 13.3% of sales to 14.6%. That's a big jump. Can you maybe outline where that money is going, what the top priorities for that spend, maybe how much of that spend is digital today, if you have that number? And should we assume it kind of levels off? Or just in terms of calibrating modeling, what's the thought process about what the right level of spend should be in the business? Sure. So in addition to innovation, I'd say one of the second most important things, I think, for FMCG is to be really investing in our brand equity and making sure we're fully supporting our brands. And so our intention is that over time, brand investment as a % of net revenue should absolutely be growing. And so in 2023, we had a significant step up, more than 100 basis points. In 2024, we increased it another 30 basis points. Year in and year out, you should be looking for that to be increasing as we take some of this fixed cost optimization and put it back in to invest behind our brands. As far as where that goes, I mean, obviously, one of our top priorities is that when we do have great innovations, we want those to be fully funded. That would be the first place that we're putting incremental BEI. We're constantly looking at country-brand combinations to understand where do we think we either have clear opportunity to drive high ROI investment, where do we think we're behind some of our key competitors, and we're very targeted in where we put that incremental spend over time. And then another one on EPS growth. Shannon, I know you've had it a few times, but for some of us, it's quite hard to model. And there's a lot of moving pieces. You've said that EPS will be up in 2026 after the Essential Home exit. And so you've got a few things going on there. You've got the 30% associate that we need to model. You've got the stranded overheads. So, can you maybe help us a little bit, sort of bridge that to give us confidence that actually, indeed, the 2026 EPS will be up? What would you outline? What would you point to? Sure. So absolutely, our ambition is that year in and year out, we're growing EPS. I think both Kris and I recognize that if you look back historically, it's been a bit of a missing piece if you think about consistency of EPS growth from the Reckitt story for the past few years. We had great results last year. We're confident this year that we'll be growing EPS. When you look into 2026, the building blocks I would think through are, obviously, the sale of Essential Home is diluted. It's about $2 billion of net revenue. What bridges us to growing EPS and the ambition to grow EPS is, first of all, core Reckitt top line growth. And so we expect strong top line growth. We've guided 4%-5% as our midterm outlook for core Reckitt. Going back to the Fuel for Growth programme, we expect to deliver cost savings in 2026 from Fuel for Growth, which will help drive operating profit expansion. That'll all be compounded by we've had an ongoing share buyback program that we launched in October 2023, which will continue to be a tailwind on EPS. As we have the special dividend with the Essential Home transaction, there will be a share consolidation with that. That will be a tailwind for growing EPS. And then to your point, we would expect to have some benefit coming into EPS from both the interest on the vendor loan note associated with Essential Home transaction as well as the 30% stake. Obviously, FX, I can't predict that. So we'll see what the impact is. But those are the building blocks. Okay, thank you, Shannon. That's super useful. Maybe back to you, Kris. Got to ask you about the U.S. market. You've called it as hard to call. Lots of moving pieces, a lot of channel shift going on, a lot of consumer shift. How exposed are you to the declining drugstore channels versus the growing channels of Amazon, Walmart, and Costco? And how are you trying to improve execution with the winning retailers like Walmart? What investments are you making in supply chain technology people maybe to win in the US, almost regardless of what the macro does? Great question. So yeah, I think the U.S. is quite dynamic. It's tough, although it's stabilizing. So actually, if anything, from what was quite a concerning outlook in the middle of the spring, I would say, it feels more stable now. Our categories are pretty stable. It's a low-growth environment, but it's an environment that we can work with and we can drive reasonable performance. Our brands are quite strong in the U.S. We are leaders in most of our categories. And that means that our brands find their way to consumers' pantries irregardless of channel shifts. We're available broadly. We win with lots of different retailers. And so I'm not so concerned that the consumer won't find our brand. In fact, we have good traction and execution is improving. And that's really good to see. So we're watching channel shifts. The drug channel is obviously having a tougher time. But we've been winning with winning retailers for a long time. So, Walmart is not a new focus. Walmart's been a winning retailer for a long time and a focus of ours for a long time. We have a great partnership with Costco. We have great partnerships with many retailers. And we do well online. So I'm not so worried about these shifts. They tend to happen quite a bit. And we have to be able to navigate that and deliver performance regardless. I don't think the shifts that we're seeing in the U.S. are dramatic. There's other markets around the world where we're seeing far more dramatic channel shifts, like China. And so, I think we can navigate it. Okay. And maybe like a specific one on the U.S. I think it was down 2.7%, I think it was. And you said that a lot of that was due to the reformulation of Mucinex. Yes. So, we were reformulating the Sinus range and the Mucinex. And that product has been going back. The reformulated product went back into the market at the beginning of Q3. So it's a bad guy in Q2, a good guy in Q3. Was it most of that minus 2.7? Just trying to understand. And does it mechanically completely come back in Q3? Yes. I mean, we obviously have to execute that well, and we've been micromanaging that execution, but yeah, I would expect it to come back fully. In terms of sell-in, sell-out dynamics, are you seeing where are inventory levels today? Is that also improving or normalizing? Maybe are you able to say how much stock is in the system? Give us an idea of where it goes. There was a bit of destocking in the spring. I think a lot of that had to do with the confluence of what inventory levels were after a relatively weak start to the season and then a very sharp decline in March after a robust season in January and February. That gave retailers, I think, the opportunity to just work through the inventory they already had, and so I think my interpretation is a bit more of a short-term situation that was very reflective of how the season was moving and also what was happening in the macro at that time. We're not seeing destocking as a significant impact for our business now. We don't anticipate it being a significant impact. In fact, we're quite happy with the sell-in and the shipments for the season that's upcoming. So net-net, would we expect the U.S. to therefore be up in the second half, given Mucinex is coming back? Yeah, we expect the U.S. to grow. Yeah. And maybe turning to emerging markets, that was obviously the star performer in the second quarter. It was up from 10% to 15%. I think you've got a mini CMD on EM coming up in December, which will be super interesting. But when you think about the sustainability of that growth in emerging markets, Reckitt's been a bit up and down, I would say, in EM in the past. How can we get comfortable that this time it will be more sustainable, that you can actually grow EM, I don't know, high single digit? And are you confident you can comp the comp? Because Q3 is fine. But in Q4, Q1, Q2, you start to get into much tougher comps. When that happens, would we still expect to see maybe not 15%, but still high single digit growth? Yeah. What we've said about this, and I believe that to still be true, is we shouldn't get used to growing at double digit just because it's unlikely to sustain itself quarter in, quarter out, year in, year out, but high single digit I feel very comfortable we can do consistently. And as we can see, the business can definitely do more than that, too, as it has been doing now for three or four quarters. We have been successful in China and India for a long time, and that's really the markets that are driving most of that growth. Not all of it, because it's broad-based, but most of it, and we have the ingredients to be successful in those markets for a long time. We have very strong brands. Much of our growth is volume-driven growth because we're competing very effectively in the online channels in China. And we're expanding our offline footprint in India. Much of the growth is in health and in intimate wellness, where we are leaders and have a big runway for continued household penetration. So, I'm very happy with the teams we have in place. They really know what they're doing. I think we have some advantaged capabilities. So, for China and India, I feel quite confident that we're going to see continued strong growth. Then the most exciting part about this footprint to me is the remainder of emerging markets, where we have a cluster of six or seven markets that taken together will be and is of the size of India or China and has the same growth potential. And so actually accelerating those markets is a big priority of ours for the coming years, which will also support the. Which countries would you call out? Is it Colombia? Is it Malaysia? Is it Indonesia? What would be the most exciting? Yeah. So, there's good names in there. So, we have, for us, Malaysia, Vietnam, Sub-Saharan Africa, Colombia, and Mexico and Brazil, where we have nice businesses today. Now, there's more markets than that, but those are the ones that are on my radar in terms of really big growth potential. And how do you seed those markets? How are you actually going about trying to grow them? How do you prioritize? Is it Sub-Saharan Africa versus Indonesia? What's the kind of? Well, we have a lot of conversation about this. I mean, I don't want to prioritize too much because there's so much growth. So, I would like most of it if we can find a way. But obviously, that's already a subset of markets that we've picked. The good news is we're not starting from scratch. So, we have pretty good businesses in these markets. They just haven't been, let's say, the biggest priority for the organization. And so that's what we're changing. And what that looks like is investments in the brands and supply chain. In some places, we can have more capable R&D that's a little closer to the market to get the innovation really firing. So, every market is a bit different. But what's exciting about it is our people know how to do this. And so our new structure, where we have emerging markets under one roof with some very capable, experienced leaders, they can start to really spread these capabilities and playbooks in a more effective way. That's probably the thing that I'm most excited about, about our new organization. Okay. Maybe back to you, Shannon. As we're staying on the geographical tour, maybe we can turn back to Europe. I think you said that the Q1 stage, Europe would be kind of up low single digits. It ended up being flat. So, that was one of the few areas that was a little bit behind what you had thought. Can you maybe outline why that was? And where do you see kind of category growth in Europe share? Do you expect Europe to be back into positive territory in the back half, as Kris does, from North America in Europe? Sure. So Europe, I mean, I'll start with your last point. We do expect Europe to be back into growth in the back half. I think the dynamic we saw in Europe in the front half, there were a couple aspects to it. One is we certainly saw category growth rates declining. If you go back to January and sort of map that out through the front half, we do feel like that's now stabilized. And so when we look at category growth rates today in Europe, we're seeing them pretty flat. But we see that as stabilizing. We talked about the fact in our half one results, from a share standpoint, we feel good about what we're delivering in Europe. We talked about it's the first time that we've been market leader for Finish and all large European markets. So, we feel like we're getting to a place where we're showing up very competitively for the consumer. We have some good innovation. We've been talking about intimate wellness in Europe and innovation there. And so I think as we look to the back half, we see sell-in and sell-out should be converging in Europe. And even with very low to flat category growth rates, we're confident that we'll be delivering growth in the back half. And you touched on Finish, Shannon. So, I want to ask you one about that. It's one of your biggest brands. And what we're seeing are some different dynamics in the U.S. versus Europe. In the U.S., it's obviously you're up against a big competitor. We are. Can you maybe sort of just outline where market share trends are for Finish in the U.S. and Europe, what you're trying to do to improve it where it's not currently there? And then sort of a second one on Finish as well. The other thing that really struck me at the CMD, I think you said that you sell Finish to 27 million Australians, more than the 4.8 billion Asian consumers. So, that kind of shows you the potential that a brand has in some of those other EMs. But how do you actually think about playing? How do you actually crack those markets? Is it just about dishwasher penetration? Or how do you drive the category? So one about the Europe-U.S., one about EM on Finish specifically. Yep. So Europe-U.S., I mean, you have to remember the competitive dynamic is totally different. So in Europe, we're the market share leader, as I just said, market share leader in all large European markets. In the U.S., we're obviously in the challenger position. And so the activities across Finish, though, are quite similar. I mean, it's a brand where it's really important to make sure from a media standpoint, we're supporting the brand in the right way. But almost even more importantly, that every day when consumers go into retailers, that we're showing up in a competitive way. And so starting in the back half of 2024, we were talking about the need, particularly in Europe, to really make sure we had the right level of promo, right frequency, right depth. As we got that right, market by market by market in Europe, that's when we really started to see the share results turn around. So it's a very different dynamic. A good part of being a challenger in North America is that even when we're not gaining share, we can be growing revenue quite nicely. Of course, our intention is we want to be gaining share. It's the same levers that we saw in Europe that we're playing with in the U.S. to try and get to that place. From a long-term potential of the business, I mean, this is one we talk about as having decades of runway. When you go country by country and look at dishwasher penetration, I mean, it's very surprising to even see in developed markets, you have markets where the penetration is well below 20%. That will be one of the key enablers for long-term growth for Finish as we see that dishwasher penetration move forward. We're very focused on making sure we're there. We're partnering with the manufacturers of the machines so that we're really the first brand that new consumers to the category are learning from and growing with. Okay. Thank you. Kris, talk about intimate wellness. It's your star category. We've seen a step-changing growth. What's driving that? How sustainable is it? It sounds like it's adjacencies. And particularly your China business, your market share was, I'm not going to say nowhere, but five years ago was much lower than it is today. You're a clear market leader. And the brand Durex is a billion in revenues. What is the real potential for this brand? If you look out, crystal ball, how big could this brand be? It could be very big, but obviously, we have to do the hard work to get it there. So, I think Durex is maybe one of those brands that exemplify what we talked about before, which is the power of strong R&D and breakthrough innovation. We have really made big strides in our IP, our capabilities as it pertains to materials innovation, and in condoms, it's really all about materials and what benefits they bring, and so we are now clearly global leaders again, and that's where I want us to stay. We have a big runway for growth. It's actually not just China. I mean, Durex is growing double-digit in many emerging markets, and it's got a big runway for growth in emerging markets, kind of similar to Finish. I mean, really, the category needs to be built and we're the right people to build it. Then we also have adjacencies. So, female intimate wellness is a growing space. And we have a really great brand called Intima, which is indeed now growing very fast in China from European roots. You've hit double digit, isn't it? Yeah. So it's fast. So, now we can't sustain necessarily that kind of growth rate. But it's just an indication back to your question. I mean, how big can this be? I think it's just a function of how good of a job we do to create categories. I don't think there's really a clear ceiling. It's a question of category adoption, education, capturing people at the right age to teach them about how to be healthy and safe with this category. So, we have a lot of work to do there. Thank you. I also want to touch on brand stretch because one of the big things that came out for me at the CMD was your Dettol brand and the performance in India is incredible, and it's also in 13 subcategories. Yeah, so we've expanded it significantly. But I mean, most of your others are in two or three subcategories. So, why is Dettol an outlier? And can you replicate that playbook with some of your other power brands? Or is there something about Dettol that's different? And if you can replicate it, which of the power brands would you like to stretch more into adjacencies? So, most power brands have the ability to stretch because they are trusted. They are the number one equity. They're well known. And they deliver. So, I would never say that any of our power brands cannot stretch. They can all stretch. The question is how far, how many categories can we sort of straddle? And when is the right time? What's the right product proposition? Because again, efficacy is everything. So it has to deliver. So, Dettol is the brand that we've successfully stretched across the most categories. It is a phenomenal equity. And in that part of the world, it's really a beloved brand. But look at Lysol. We've stretched Lysol into multiple categories. Durex, we've stretched into multiple categories. Finish is both auto dish tablets, but it's also cleaners and other things. So, I would hesitate to say that we have any brand that can't stretch. And if I showed you our strategic plan for growth for the next three or four years, unsurprisingly, brand stretch and category expansion is a huge part of our growth. So, we have big plans, I would say, for every one of our brands to stretch into new categories. Probably Dettol is always going to be the shiniest example that we have. But that's okay. We don't need 13 categories for each brand. We just need to successfully stretch into. What's the brand doing in India now in Dettol? Where's the growth? How big was it like 10 years ago? Where is it now? Where's it going? Is it still growing? Because it's been around for a long time. It's growing. Where is it growing? Yeah, so we develop new formats and do line extensions. Dettol in India is a very mature business. It's been around for 100 years. It's bar soap. It's ASL, antiseptic liquid. That's the core of the brand, but then we're extending it into new formats and new benefits. In bar soap, we've been selling Dettol bar soap forever, but now we have our Cool platform that's driven some great growth, and we do other things that's more dermatological that will also bring good growth. But actually, Dettol, the best case example for what Dettol can do is China. Because in China, we've really stretched the brand far beyond even what we managed to do in India, and that's where the 13 subcategories happens. Why is that? What is it about, Shannon? Yeah. I think we cracked the code on some really good propositions. In China, we have found a way to engage with consumers that's highly impactful. So, we can explain to them a new proposition, and Chinese consumers are really engaged in our categories. It's probably one of the, if not the most curious and well-informed consumers we meet anywhere in the world. And we've cracked the code on how to connect with them online to explain the benefits of new categories, new products, and that's really helping. Shannon, I want to turn back to you and ask you a question on free cash flow conversion, free cash flow yield. I think free cash flow conversion was only 54% in the first half. I know there were some one-offs in there. But we normally would expect Reckitt to be 90%, 100%. Even if I X out the one-offs, it was still a little bit lower than that level. Were you disappointed by that performance on the free cash flow conversion? And maybe what should we expect for the full year? And maybe can you maybe pass out for us the phasing of the restructuring costs and where you see the biggest opportunities to improve free cash flow? Because I imagine exiting Essential Home may be a bit of a drag on the cash. So, when you sort of take a step back and look through the ups and the downs, and I know there's lots of moving pieces, how are you feeling about the underlying free cash flow generation of the company? Sure. So, I'll start at the end. So we feel good about the underlying cash flow generation of the company, for sure. I mean, it's one of the hallmarks of the investment case of Reckitt, is our free cash flow. From a free cash flow conversion standpoint, the biggest driver far and away of that decline is, in fact, the restructuring costs and those one-off costs. Expectation is that those will continue in 2026 and be a substantive headwind in 2026. I would expect that to really be tailing off in 2027. I fully expect that when you get through that restructuring program, Reckitt, core Reckitt free cash flow should be back up into the 90% plus, which is much more in line with historical levels. Okay. And the final one for you, Kris. And it's about the kind of guidance and the 11 power brands. You've got these 11 power brands. You've got the target of four to five. You raised the guide to about four already. For the year, yeah. For the year. So you're on track. You're kind of on the journey. When you look at that four to five, how would you compare that to market growth? What would you expect? I know it differs year by year, but the split between volume, price, and mix to be. And when you've got these 11 brands, which of them do you think has the biggest potential? And then which of the non-power brands? Because you've got lots of non-power brands, like things like Biofreeze. Yeah. Which could be the next power brands for the future? So, a little bit about getting comfortable with the four to five, and then a little bit also around some of these other jewels that maybe we don't hear as much about. Yeah. So, I think for the power brands, it's a terrific portfolio. It is a portfolio that's designed to grow and grow for a long time. We said the four to five. We feel good about that. As you said, different years, different dynamics. Obviously, this year is quite unusual. But our medium-term framework is four to five. I feel good about that. I think if everything goes right, we can beat that. And that's probably a good place to be so that we can deliver consistently. And then sometimes we might be able to beat. So that's how we thought about that. I think in terms of the algorithm, it's a balanced algorithm that we want. Two points of growth, two points of pricing, a little bit of mix. This would imply slight outperformance in our categories. But we don't have to do anything extraordinary to deliver in that algorithm vis-à-vis category growth. So I feel like it's good. It's solid. And we can work with that. In terms of the smaller brands that we have, we do have some smaller brands. And we don't have a lot. So we're 80% power brands now. So we're quite concentrated. The things that we didn't divest were things that we wanted to keep for a reason. So a lot of the things there are health businesses that are not as big but can be big one day. Biofreeze is one. Obviously, topical analgesics has slowed down as a category. But Biofreeze is a great brand. I think once we get out of this economic cycle that we're in right now and the consumer is sort of freed up a bit to spend again, I think topical analgesics will grow fast, and I think Biofreeze will do well. We have some other health businesses that are small but growing so fast that soon they can become power brands. Some of our VMS brands are in that camp. Who knows? Intima, if it keeps growing like this one day, Intima might be a power brand. Okay. And maybe just in self-care, I mean, we don't hear that much about brands like Gaviscon and Strepsils. What are the plans for those kind of brands? Gaviscon and Strepsils are sort of slightly unsung heroes of our portfolio. They have grown steadily, and they have grown fast, much faster than OTC averages. Part of that is because they're growing in emerging markets. Gaviscon, for a while, we grew faster than we could actually supply. That's moderated a bit, but still, these are growth businesses. For each of them, we have a plan for brand stretch, category expansion, geographic expansion. Emerging markets remains a really big part of that growth. Within that, with all the hopefully the growth that's coming through, do you think the manufacturing configuration is such that you can supply the demand? Because historically, I know you've had issues with bottlenecking. Sometimes it's been more the supply than the demand issue. Can you maybe explain what you're doing to actually ensure that the manufacturing footprint is optimized for that higher growth? This is my favorite question of the day. This is a topic I'm very passionate about. So, I say to our team all the time, you're only as good as your supply chain. At the end of the day, we're selling consumer packaged goods. We're selling products in boxes and cans, and they need to be available. And we have historically not invested enough in our manufacturing footprint as a company, and we have been on a journey to change that. So, we're building a big anchor facility for a health business in North America. We built a mega factory in China. There's more CapEx coming, more investments in that manufacturing backbone, and it's critical for growth, and it does drive growth. I'm really happy that we've seen over the past year a sharp recovery in our service levels. So, I feel that our supply chain team is very much on this. And they're doing a nice job. But we have years of improvements to make. And every time we can deploy CapEx in a good way, that strengthens manufacturing and the footprint, we can grow off of that. And we can get some good productivity. I'm glad I asked your favorite question last. We are actually on the buzzer, so thank you, Shannon, and thank you, Kris. Thank you, everybody, for listening, and we've got a breakout next door for 15 minutes. If you want to join us, thank you. Thank you.

Speaker 3: I think, hopefully, the lunch was great, and we've got Reckitt here today, Kris and Shannon. Thank you for attending and supporting the conference every year. We appreciate that, so the format today, as has been the case already, is going to be a fireside chat. We are going to do a breakout, by the way, next door afterwards for 15 minutes for those who want to join, so I've got a lot of questions for you guys. I think, hopefully, the lunch was great, and we've got Reckitt here today, Kris and Shannon. i think hopefully the lunch was great and we've got reckitt here today kris and shannon Thank you for attending and supporting the conference every year. thank you for attending and supporting the conference every year We appreciate that, so the format today, as has been the case already, is going to be a fireside chat. we appreciate that so the format today as has been the case already is going to be a fireside chat We are going to do a breakout, by the way, next door afterwards for 15 minutes for those who want to join, so I've got a lot of questions for you guys. we are going to do a breakout by the way next door afterwards for 15 minutes for those who want to join so i've got a lot of questions for you guys So we're going to try and get through as many as possible, but maybe kick off, Kris. Can you talk a little bit about the new organization? You're talking about a more accountable organization. Why and how is that an unlock? And how would it help you deliver and execute more consistently? Because obviously, consistency is the name of the game. So we're going to try and get through as many as possible, but maybe kick off, Kris. so we're going to try and get through as many as possible but maybe kick off kris Can you talk a little bit about the new organization? can you talk a little bit about the new organization You're talking about a more accountable organization. you're talking about a more accountable organization Why and how is that an unlock? why and how is that an unlock And how would it help you deliver and execute more consistently? and how would it help you deliver and execute more consistently Because obviously, consistency is the name of the game. because obviously consistency is the name of the game

Speaker 2: It is. So, thank you for having us. It is. it is So, thank you for having us. so thank you for having us

Speaker 3: Cool. Cool. cool

Speaker 2: It's a pleasure to be here. So, I felt strongly that we needed to simplify our organization. And I would say the main driver of the changes that we've made was really about simplicity, effectiveness, accountability, and hopefully speed. There's a byproduct, which is it's less costly. We have fewer senior executives. But I think the overwhelming focus is for us to create a simple and fast organization. It's a pleasure to be here. it's a pleasure to be here So, I felt strongly that we needed to simplify our organization. so i felt strongly that we needed to simplify our organization And I would say the main driver of the changes that we've made was really about simplicity, effectiveness, accountability, and hopefully speed. and i would say the main driver of the changes that we've made was really about simplicity effectiveness accountability and hopefully speed There's a byproduct, which is it's less costly. there's a byproduct which is it's less costly We have fewer senior executives. we have fewer senior executives But I think the overwhelming focus is for us to create a simple and fast organization. but i think the overwhelming focus is for us to create a simple and fast organization And we heard that from the rank and file in the company for a while, that they felt that was an opportunity to get to faster decision-making. And I felt clarity around accountabilities was important. So, what we did is we took out a couple of layers of management. It's quite a significant change. And then we simplified the geographic reporting. So, we now have three presidents that are accountable for all execution. And we heard that from the rank and file in the company for a while, that they felt that was an opportunity to get to faster decision-making. and we heard that from the rank and file in the company for a while that they felt that was an opportunity to get to faster decision-making And I felt clarity around accountabilities was important. and i felt clarity around accountabilities was important So, what we did is we took out a couple of layers of management. so what we did is we took out a couple of layers of management It's quite a significant change. it's quite a significant change And then we simplified the geographic reporting. and then we simplified the geographic reporting So, we now have three presidents that are accountable for all execution. so we now have three presidents that are accountable for all execution And that makes it much easier for me to work with them and drive good execution, but also, of course, to make sure we have clarity of accountability. And by the way, that is also the case below. We simplified our regional structures quite a bit, too. So, we made this change six months ago. And that makes it much easier for me to work with them and drive good execution, but also, of course, to make sure we have clarity of accountability. and that makes it much easier for me to work with them and drive good execution but also of course to make sure we have clarity of accountability And by the way, that is also the case below. and by the way that is also the case below We simplified our regional structures quite a bit, too. we simplified our regional structures quite a bit too So, we made this change six months ago. so we made this change six months ago So, we've been living in this new organization for, well, the year is going fast. It's eight months now. But I think it's going well. We're capturing benefits from it. But I would also say any big organizational change like this, it takes a year or two before you get all the benefits. So, there's more to come. So, we've been living in this new organization for, well, the year is going fast. so we've been living in this new organization for well the year is going fast It's eight months now. it's eight months now But I think it's going well. but i think it's going well We're capturing benefits from it. we're capturing benefits from it But I would also say any big organizational change like this, it takes a year or two before you get all the benefits. but i would also say any big organizational change like this it takes a year or two before you get all the benefits So, there's more to come. so there's more to come

Speaker 3: Maybe moving to innovation. Innovation is a lifeblood of consumer staples. Can you explain the One Reckitt way of brand building and building categories? You've done it with Lysol Air. You've done it with Lysol Laundry Sanitizer, which have made new markets. And it's allowed you to get a price premium given the level of differentiation. Maybe moving to innovation. maybe moving to innovation Innovation is a lifeblood of consumer staples. innovation is a lifeblood of consumer staples Can you explain the One Reckitt way of brand building and building categories? can you explain the one reckitt way of brand building and building categories You've done it with Lysol Air. you've done it with lysol air You've done it with Lysol Laundry Sanitizer, which have made new markets. you've done it with lysol laundry sanitizer which have made new markets And it's allowed you to get a price premium given the level of differentiation. and it's allowed you to get a price premium given the level of differentiation So the question is, can you replicate that market-making model to other power brands? And is your R&D set up enough so that you can do it more quickly and more agile? Or are these big breakthroughs quite infrequent events? And which technologies are you most excited about in terms of innovation that can really move the top line needle? So it's a big question around innovation. So the question is, can you replicate that market-making model to other power brands? so the question is can you replicate that market-making model to other power brands And is your R&D set up enough so that you can do it more quickly and more agile? and is your r&d set up enough so that you can do it more quickly and more agile Or are these big breakthroughs quite infrequent events? or are these big breakthroughs quite infrequent events And which technologies are you most excited about in terms of innovation that can really move the top line needle? and which technologies are you most excited about in terms of innovation that can really move the top line needle So it's a big question around innovation. so it's a big question around innovation

Speaker 2: That feels like five questions. But. That feels like five questions. that feels like five questions But. but

Speaker 3: One big question. One big question. one big question

Speaker 2: Let's take the one big one. Let's take the elements of the big question in turn. So, innovation is our lifeblood. And we have been investing in our pipeline and in our R&D capabilities quite a bit. And it takes years. So, we did have a period historically where we didn't invest enough. And then it's a catch-up process. The good news is we're done with the catch-up. Let's take the one big one. let's take the one big one Let's take the elements of the big question in turn. let's take the elements of the big question in turn So, innovation is our lifeblood. so innovation is our lifeblood And we have been investing in our pipeline and in our R&D capabilities quite a bit. and we have been investing in our pipeline and in our r&d capabilities quite a bit And it takes years. and it takes years So, we did have a period historically where we didn't invest enough. so we did have a period historically where we didn't invest enough And then it's a catch-up process. and then it's a catch-up process The good news is we're done with the catch-up. the good news is we're done with the catch-up So we're now in a position where we have really meaningful innovation. To your point, you don't want actually too many of them. You want sort of a cadence of big platforms, one or two that land in the market every year. Because the job isn't just to launch them and land them. The job is actually to use three or four years to scale them. Because we want them to be permanent new additions to the portfolio. So we're now in a position where we have really meaningful innovation. so we're now in a position where we have really meaningful innovation To your point, you don't want actually too many of them. to your point you don't want actually too many of them You want sort of a cadence of big platforms, one or two that land in the market every year. you want sort of a cadence of big platforms one or two that land in the market every year Because the job isn't just to launch them and land them. because the job isn't just to launch them and land them The job is actually to use three or four years to scale them. the job is actually to use three or four years to scale them Because we want them to be permanent new additions to the portfolio. because we want them to be permanent new additions to the portfolio Category creation is the most valuable kind of innovation that we can do. And the way that you do that is, obviously, your fundamentals have to be good. You have to be consumer-obsessed. You have to see a need in the market. You have to have the technology solution that is really going to deliver on the promise. But I think what is helpful for us is you really have to have a number one equity. Category creation is the most valuable kind of innovation that we can do. category creation is the most valuable kind of innovation that we can do And the way that you do that is, obviously, your fundamentals have to be good. and the way that you do that is obviously your fundamentals have to be good You have to be consumer-obsessed. you have to be consumer-obsessed You have to see a need in the market. you have to see a need in the market You have to have the technology solution that is really going to deliver on the promise. you have to have the technology solution that is really going to deliver on the promise But I think what is helpful for us is you really have to have a number one equity. but i think what is helpful for us is you really have to have a number one equity Your brands have to have the right to create categories. And one of the things that we're spending a lot of time on is understanding which of our brands have that right and where can we do it, to your question. But you look at a brand like Dettol, where we've dramatically expanded the number of categories that Dettol operates in. In a market like China, that's a big part of our growth. Your brands have to have the right to create categories. your brands have to have the right to create categories And one of the things that we're spending a lot of time on is understanding which of our brands have that right and where can we do it, to your question. and one of the things that we're spending a lot of time on is understanding which of our brands have that right and where can we do it to your question But you look at a brand like Dettol, where we've dramatically expanded the number of categories that Dettol operates in. but you look at a brand like dettol where we've dramatically expanded the number of categories that dettol operates in in In a market like China, that's a big part of our growth. in a market like china that's a big part of our growth And so much of it comes back to do we have the right brands? And the good news is in our core Reckitt portfolio, we only have very strong power brands. It's really the whole idea behind the plan. And so much of it comes back to do we have the right brands? and so much of it comes back to do we have the right brands And the good news is in our core Reckitt portfolio, we only have very strong power brands. and the good news is in our core reckitt portfolio we only have very strong power brands It's really the whole idea behind the plan. it's really the whole idea behind the plan

Speaker 3: Bringing you in, Shannon. I'll try and make it a bit shorter, this one. On the fixed cost reduction, it looks like you're tracking well ahead of your targets. I think you were already at 20% the first half against your 19% target. You've talked about two big areas of scaling shared services as an opportunity and also working with Generative AI to reduce overhead. Bringing you in, Shannon. bringing you in shannon I'll try and make it a bit shorter, this one. i'll try and make it a bit shorter this one On the fixed cost reduction, it looks like you're tracking well ahead of your targets. on the fixed cost reduction it looks like you're tracking well ahead of your targets I think you were already at 20% the first half against your 19% target. i think you were already at 20% the first half against your 19% target You've talked about two big areas of scaling shared services as an opportunity and also working with Generative AI to reduce overhead. you've talked about two big areas of scaling shared services as an opportunity and also working with generative ai to reduce overhead So, just interested if you can maybe elaborate a bit more on those two points. And I guess, given where you're tracking, is there any reason why you don't hit that target a little bit earlier than you've said, given you're already well ahead? So, just interested if you can maybe elaborate a bit more on those two points. so just interested if you can maybe elaborate a bit more on those two points And I guess, given where you're tracking, is there any reason why you don't hit that target a little bit earlier than you've said, given you're already well ahead? and i guess given where you're tracking is there any reason why you don't hit that target a little bit earlier than you've said given you're already well ahead

Speaker 1: Yeah, we're super pleased with the progress we've made to date. As you said, savings are coming in quite quickly from overhead. I think that as far as resetting any targets, not really looking to do that. I think 19% is the right target for us. We're committed to getting there as we exit 2027. I would say, of course, there's no finish line. So, once we get there, we can talk about going further. Yeah, we're super pleased with the progress we've made to date. yeah we're super pleased with the progress we've made to date As you said, savings are coming in quite quickly from overhead. as you said savings are coming in quite quickly from overhead I think that as far as resetting any targets, not really looking to do that. i think that as far as resetting any targets not really looking to do that I think 19% is the right target for us. i think 19% is the right target for us We're committed to getting there as we exit 2027. we're committed to getting there as we exit 2027 I would say, of course, there's no finish line. i would say of course there's no finish line So, once we get there, we can talk about going further. so once we get there we can talk about going further To your point, I think what's important to remember is while we've had strong delivery early on in the program, if you think about 2026 and 2027, first of all, in 2026, we'll be needing to mitigate stranded costs from Essential Home. So, if you think of that trajectory of savings delivery, I think that could moderate a bit in 2026. To your point, I think what's important to remember is while we've had strong delivery early on in the program, if you think about 2026 and 2027, first of all, in 2026, we'll be needing to mitigate stranded costs from Essential Home. to your point i think what's important to remember is while we've had strong delivery early on in the program if you think about 2026 and 2027 first of all in 2026 we'll be needing to mitigate stranded costs from essential home So, if you think of that trajectory of savings delivery, I think that could moderate a bit in 2026. so if you think of that trajectory of savings delivery i think that could moderate a bit in 2026 And then if you think of those two buckets you called out, so shared service and GenAI, we absolutely think they're large opportunities. We think they're very structural, sustainable opportunities. So once we have that capability up and running, we think it's something that for the long haul will continue to drive savings. And then if you think of those two buckets you called out, so shared service and GenAI, we absolutely think they're large opportunities. and then if you think of those two buckets you called out so shared service and genai we absolutely think they're large opportunities We think they're very structural, sustainable opportunities. we think they're very structural sustainable opportunities So once we have that capability up and running, we think it's something that for the long haul will continue to drive savings. so once we have that capability up and running we think it's something that for the long haul will continue to drive savings But it's also two opportunities that take a lot of work to really get them going. And so those are the two pockets of savings that I would see coming into play as we get into 2026 and then in a really significant way in 2027. But it's also two opportunities that take a lot of work to really get them going. but it's also two opportunities that take a lot of work to really get them going And so those are the two pockets of savings that I would see coming into play as we get into 2026 and then in a really significant way in 2027. and so those are the two pockets of savings that i would see coming into play as we get into 2026 and then in a really significant way in 2027

Speaker 3: Okay, thank you. And maybe just touching on advertising spend, because that was up significantly in the first half, I think 130 basis points from 13.3% of sales to 14.6%. That's a big jump. Okay, thank you. A nd maybe just touching on advertising spend, because that was up significantly in the first half, I think 130 basis points from 13.3% of sales to 14.6%. okay thank you. a nd maybe just touching on advertising spend because that was up significantly in the first half i think 130 basis points from 13.3% of sales to 14.6% That's a big jump. that's a big jump Can you maybe outline where that money is going, what the top priorities for that spend, maybe how much of that spend is digital today, if you have that number? And should we assume it kind of levels off? Or just in terms of calibrating modeling, what's the thought process about what the right level of spend should be in the business? Can you maybe outline where that money is going, what the top priorities for that spend, maybe how much of that spend is digital today, if you have that number? can you maybe outline where that money is going what the top priorities for that spend maybe how much of that spend is digital today if you have that number And should we assume it kind of levels off? and should we assume it kind of levels off Or just in terms of calibrating modeling, what's the thought process about what the right level of spend should be in the business? or just in terms of calibrating modeling what's the thought process about what the right level of spend should be in the business

Speaker 1: Sure. So in addition to innovation, I'd say one of the second most important things, I think, for FMCG is to be really investing in our brand equity and making sure we're fully supporting our brands. And so our intention is that over time, brand investment as a % of net revenue should absolutely be growing. Sure. sure So in addition to innovation, I'd say one of the second most important things, I think, for FMCG is to be really investing in our brand equity and making sure we're fully supporting our brands. so in addition to innovation i'd say one of the second most important things i think for fmcg is to be really investing in our brand equity and making sure we're fully supporting our brands And so our intention is that over time, brand investment as a % of net revenue should absolutely be growing. and so our intention is that over time brand investment as a % of net revenue should absolutely be growing And so in 2023, we had a significant step up, more than 100 basis points. In 2024, we increased it another 30 basis points. Year in and year out, you should be looking for that to be increasing as we take some of this fixed cost optimization and put it back in to invest behind our brands. And so in 2023, we had a significant step up, more than 100 basis points. and so in 2023 we had a significant step up more than 100 basis points In 2024, we increased it another 30 basis points. in 2024 we increased it another 30 basis points Year in and year out, you should be looking for that to be increasing as we take some of this fixed cost optimization and put it back in to invest behind our brands. year in and year out you should be looking for that to be increasing as we take some of this fixed cost optimization and put it back in to invest behind our brands As far as where that goes, I mean, obviously, one of our top priorities is that when we do have great innovations, we want those to be fully funded. As far as where that goes, I mean, obviously, one of our top priorities is that when we do have great innovations, we want those to be fully funded. as far as where that goes i mean obviously one of our top priorities is that when we do have great innovations we want those to be fully funded That would be the first place that we're putting incremental BEI. We're constantly looking at country-brand combinations to understand where do we think we either have clear opportunity to drive high ROI investment, where do we think we're behind some of our key competitors, and we're very targeted in where we put that incremental spend over time. That would be the first place that we're putting incremental BEI. that would be the first place that we're putting incremental bei We're constantly looking at country-brand combinations to understand where do we think we either have clear opportunity to drive high ROI investment, where do we think we're behind some of our key competitors, and we're very targeted in where we put that incremental spend over time. we're constantly looking at country-brand combinations to understand where do we think we either have clear opportunity to drive high roi investment where do we think we're behind some of our key competitors and we're very targeted in where we put that incremental spend over time

Speaker 3: And then another one on EPS growth. Shannon, I know you've had it a few times, but for some of us, it's quite hard to model. And there's a lot of moving pieces. You've said that EPS will be up in 2026 after the Essential Home exit. And so you've got a few things going on there. You've got the 30% associate that we need to model. You've got the stranded overheads. And then another one on EPS growth. and then another one on eps growth Shannon, I know you've had it a few times, but for some of us, it's quite hard to model. shannon i know you've had it a few times but for some of us it's quite hard to model And there's a lot of moving pieces. and there's a lot of moving pieces You've said that EPS will be up in 2026 after the Essential Home exit. you've said that eps will be up in 2026 after the essential home exit And so you've got a few things going on there. and so you've got a few things going on there You've got the 30% associate that we need to model. you've got the 30% associate that we need to model You've got the stranded overheads. you've got the stranded overheads So, can you maybe help us a little bit, sort of bridge that to give us confidence that actually, indeed, the 2026 EPS will be up? What would you outline? What would you point to? So, can you maybe help us a little bit, sort of bridge that to give us confidence that actually, indeed, the 2026 EPS will be up? so can you maybe help us a little bit sort of bridge that to give us confidence that actually indeed the 2026 eps will be up What would you outline? what would you outline What would you point to? what would you point to

Speaker 1: Sure. So absolutely, our ambition is that year in and year out, we're growing EPS. I think both Kris and I recognize that if you look back historically, it's been a bit of a missing piece if you think about consistency of EPS growth from the Reckitt story for the past few years. We had great results last year. We're confident this year that we'll be growing EPS. Sure. sure So absolutely, our ambition is that year in and year out, we're growing EPS. so absolutely our ambition is that year in and year out we're growing eps I think both Kris and I recognize that if you look back historically, it's been a bit of a missing piece if you think about consistency of EPS growth from the Reckitt story for the past few years. i think both kris and i recognize that if you look back historically it's been a bit of a missing piece if you think about consistency of eps growth from the reckitt story for the past few years We had great results last year. we had great results last year We're confident this year that we'll be growing EPS. we're confident this year that we'll be growing eps When you look into 2026, the building blocks I would think through are, obviously, the sale of Essential Home is diluted. It's about $2 billion of net revenue. What bridges us to growing EPS and the ambition to grow EPS is, first of all, core Reckitt top line growth. And so we expect strong top line growth. We've guided 4%-5% as our midterm outlook for core Reckitt. When you look into 2026, the building blocks I would think through are, obviously, the sale of Essential Home is diluted. when you look into 2026 the building blocks i would think through are obviously the sale of essential home is diluted It's about $2 billion of net revenue. it's about $2 billion of net revenue What bridges us to growing EPS and the ambition to grow EPS is, first of all, core Reckitt top line growth. what bridges us to growing eps and the ambition to grow eps is first of all core reckitt top line growth And so we expect strong top line growth. and so we expect strong top line growth We've guided 4%-5% as our midterm outlook for core Reckitt. we've guided 4%-5% as our midterm outlook for core reckitt Going back to the Fuel for Growth programme, we expect to deliver cost savings in 2026 from Fuel for Growth, which will help drive operating profit expansion. That'll all be compounded by we've had an ongoing share buyback program that we launched in October 2023, which will continue to be a tailwind on EPS. Going back to the Fuel for Growth programme, we expect to deliver cost savings in 2026 from Fuel for Growth, which will help drive operating profit expansion. going back to the fuel for growth programme we expect to deliver cost savings in 2026 from fuel for growth which will help drive operating profit expansion That'll all be compounded by we've had an ongoing share buyback program that we launched in October 2023, which will continue to be a tailwind on EPS. that'll all be compounded by we've had an ongoing share buyback program that we launched in october 2023 which will continue to be a tailwind on eps As we have the special dividend with the Essential Home transaction, there will be a share consolidation with that. That will be a tailwind for growing EPS. As we have the special dividend with the Essential Home transaction, there will be a share consolidation with that. as we have the special dividend with the essential home transaction there will be a share consolidation with that that That will be a tailwind for growing EPS. that will be a tailwind for growing eps And then to your point, we would expect to have some benefit coming into EPS from both the interest on the vendor loan note associated with Essential Home transaction as well as the 30% stake. Obviously, FX, I can't predict that. So we'll see what the impact is. But those are the building blocks. And then to your point, we would expect to have some benefit coming into EPS from both the interest on the vendor loan note associated with Essential Home transaction as well as the 30% stake. and then to your point we would expect to have some benefit coming into eps from both the interest on the vendor loan note associated with essential home transaction as well as the 30% stake Obviously, FX, I can't predict that. obviously fx i can't predict that So we'll see what the impact is. so we'll see what the impact is But those are the building blocks. but those are the building blocks

Speaker 3: Okay, thank you, Shannon. That's super useful. Maybe back to you, Kris. Got to ask you about the U.S. market. You've called it as hard to call. Lots of moving pieces, a lot of channel shift going on, a lot of consumer shift. How exposed are you to the declining drugstore channels versus the growing channels of Amazon, Walmart, and Costco? And how are you trying to improve execution with the winning retailers like Walmart? Okay, thank you, Shannon. okay thank you shannon That's super useful. that's super useful Maybe back to you, Kris. maybe back to you kris Got to ask you about the U.S. market. got to ask you about the u.s market You've called it as hard to call. you've called it as hard to call Lots of moving pieces, a lot of channel shift going on, a lot of consumer shift. lots of moving pieces a lot of channel shift going on a lot of consumer shift How exposed are you to the declining drugstore channels versus the growing channels of Amazon, Walmart, and Costco? how exposed are you to the declining drugstore channels versus the growing channels of amazon walmart and costco And how are you trying to improve execution with the winning retailers like Walmart? and how are you trying to improve execution with the winning retailers like walmart What investments are you making in supply chain technology people maybe to win in the US, almost regardless of what the macro does? What investments are you making in supply chain technology people maybe to win in the US, almost regardless of what the macro does? what investments are you making in supply chain technology people maybe to win in the us almost regardless of what the macro does

Speaker 2: Great question. So yeah, I think the U.S. is quite dynamic. It's tough, although it's stabilizing. So actually, if anything, from what was quite a concerning outlook in the middle of the spring, I would say, it feels more stable now. Our categories are pretty stable. It's a low-growth environment, but it's an environment that we can work with and we can drive reasonable performance. Great question. great question So yeah, I think the U.S. is quite dynamic. so yeah i think the u.s is quite dynamic It's tough, although it's stabilizing. it's tough although it's stabilizing So actually, if anything, from what was quite a concerning outlook in the middle of the spring, I would say, it feels more stable now. so actually if anything from what was quite a concerning outlook in the middle of the spring i would say it feels more stable now Our categories are pretty stable. our categories are pretty stable It's a low-growth environment, but it's an environment that we can work with and we can drive reasonable performance. it's a low-growth environment but it's an environment that we can work with and we can drive reasonable performance Our brands are quite strong in the U.S. We are leaders in most of our categories. And that means that our brands find their way to consumers' pantries irregardless of channel shifts. We're available broadly. We win with lots of different retailers. And so I'm not so concerned that the consumer won't find our brand. Our brands are quite strong in the U.S. our brands are quite strong in the u.s We are leaders in most of our categories. we are leaders in most of our categories And that means that our brands find their way to consumers' pantries irregardless of channel shifts. and that means that our brands find their way to consumers' pantries irregardless of channel shifts We're available broadly. we're available broadly We win with lots of different retailers. we win with lots of different retailers And so I'm not so concerned that the consumer won't find our brand. and so i'm not so concerned that the consumer won't find our brand In fact, we have good traction and execution is improving. And that's really good to see. So we're watching channel shifts. The drug channel is obviously having a tougher time. In fact, we have good traction and execution is improving. in fact we have good traction and execution is improving And that's really good to see. and that's really good to see So we're watching channel shifts. so we're watching channel shifts The drug channel is obviously having a tougher time. the drug channel is obviously having a tougher time But we've been winning with winning retailers for a long time. So, Walmart is not a new focus. Walmart's been a winning retailer for a long time and a focus of ours for a long time. We have a great partnership with Costco. We have great partnerships with many retailers. And we do well online. But we've been winning with winning retailers for a long time. but we've been winning with winning retailers for a long time So, Walmart is not a new focus. so walmart is not a new focus Walmart's been a winning retailer for a long time and a focus of ours for a long time. walmart's been a winning retailer for a long time and a focus of ours for a long time We have a great partnership with Costco. we have a great partnership with costco We have great partnerships with many retailers. we have great partnerships with many retailers And we do well online. and we do well online So I'm not so worried about these shifts. They tend to happen quite a bit. And we have to be able to navigate that and deliver performance regardless. I don't think the shifts that we're seeing in the U.S. are dramatic. There's other markets around the world where we're seeing far more dramatic channel shifts, like China. And so, I think we can navigate it. So I'm not so worried about these shifts. so i'm not so worried about these shifts They tend to happen quite a bit. they tend to happen quite a bit And we have to be able to navigate that and deliver performance regardless. and we have to be able to navigate that and deliver performance regardless I don't think the shifts that we're seeing in the U.S. are dramatic. i don't think the shifts that we're seeing in the u.s are dramatic There's other markets around the world where we're seeing far more dramatic channel shifts, like China. there's other markets around the world where we're seeing far more dramatic channel shifts like china And so, I think we can navigate it. and so i think we can navigate it

Speaker 3: Okay. And maybe like a specific one on the U.S. I think it was down 2.7%, I think it was. And you said that a lot of that was due to the reformulation of Mucinex. Okay. okay And maybe like a specific one on the U.S. and maybe like a specific one on the u.s I think it was down 2.7%, I think it was. i think it was down 2.7% i think it was And you said that a lot of that was due to the reformulation of Mucinex. and you said that a lot of that was due to the reformulation of mucinex

Speaker 2: Yes. So, we were reformulating the Sinus range and the Mucinex. And that product has been going back. The reformulated product went back into the market at the beginning of Q3. So it's a bad guy in Q2, a good guy in Q3. Yes. yes So, we were reformulating the Sinus range and the Mucinex. so we were reformulating the sinus range and the mucinex And that product has been going back. and that product has been going back The reformulated product went back into the market at the beginning of Q3. the reformulated product went back into the market at the beginning of q3 So it's a bad guy in Q2, a good guy in Q3. so it's a bad guy in q2 a good guy in q3

Speaker 3: Was it most of that minus 2.7? Just trying to understand. And does it mechanically completely come back in Q3? Was it most of that minus 2.7? was it most of that minus 2.7 Just trying to understand. just trying to understand And does it mechanically completely come back in Q3? and does it mechanically completely come back in q3

Speaker 2: Yes. I mean, we obviously have to execute that well, and we've been micromanaging that execution, but yeah, I would expect it to come back fully. Yes. yes I mean, we obviously have to execute that well, and we've been micromanaging that execution, but yeah, I would expect it to come back fully. i mean we obviously have to execute that well and we've been micromanaging that execution but yeah i would expect it to come back fully

Speaker 3: In terms of sell-in, sell-out dynamics, are you seeing where are inventory levels today? Is that also improving or normalizing? Maybe are you able to say how much stock is in the system? Give us an idea of where it goes. In terms of sell-in, sell-out dynamics, are you seeing where are inventory levels today? in terms of sell-in sell-out dynamics are you seeing where are inventory levels today Is that also improving or normalizing? is that also improving or normalizing Maybe are you able to say how much stock is in the system? maybe are you able to say how much stock is in the system Give us an idea of where it goes. give us an idea of where it goes

Speaker 2: There was a bit of destocking in the spring. I think a lot of that had to do with the confluence of what inventory levels were after a relatively weak start to the season and then a very sharp decline in March after a robust season in January and February. There was a bit of destocking in the spring. there was a bit of destocking in the spring I think a lot of that had to do with the confluence of what inventory levels were after a relatively weak start to the season and then a very sharp decline in March after a robust season in January and February. i think a lot of that had to do with the confluence of what inventory levels were after a relatively weak start to the season and then a very sharp decline in march after a robust season in january and february That gave retailers, I think, the opportunity to just work through the inventory they already had, and so I think my interpretation is a bit more of a short-term situation that was very reflective of how the season was moving and also what was happening in the macro at that time. That gave retailers, I think, the opportunity to just work through the inventory they already had, and so I think my interpretation is a bit more of a short-term situation that was very reflective of how the season was moving and also what was happening in the macro at that time. that gave retailers i think the opportunity to just work through the inventory they already had and so i think my interpretation is a bit more of a short-term situation that was very reflective of how the season was moving and also what was happening in the macro at that time We're not seeing destocking as a significant impact for our business now. We don't anticipate it being a significant impact. In fact, we're quite happy with the sell-in and the shipments for the season that's upcoming. We're not seeing destocking as a significant impact for our business now. we're not seeing destocking as a significant impact for our business now We don't anticipate it being a significant impact. we don't anticipate it being a significant impact In fact, we're quite happy with the sell-in and the shipments for the season that's upcoming. in fact we're quite happy with the sell-in and the shipments for the season that's upcoming

Speaker 3: So net-net, would we expect the U.S. to therefore be up in the second half, given Mucinex is coming back? So net- net, would we expect the U.S. to therefore be up in the second half, given Mucinex is coming back? so net- net would we expect the u.s to therefore be up in the second half given mucinex is coming back

Speaker 2: Yeah, we expect the U.S. to grow. Yeah. Yeah, we expect the U.S. to grow. yeah we expect the u.s to grow Yeah. yeah

Speaker 3: And maybe turning to emerging markets, that was obviously the star performer in the second quarter. It was up from 10% to 15%. I think you've got a mini CMD on EM coming up in December, which will be super interesting. But when you think about the sustainability of that growth in emerging markets, Reckitt's been a bit up and down, I would say, in EM in the past. And maybe turning to emerging markets, that was obviously the star performer in the second quarter. and maybe turning to emerging markets that was obviously the star performer in the second quarter It was up from 10% to 15%. it was up from 10% to 15% I think you've got a mini CMD on EM coming up in December, which will be super interesting. i think you've got a mini cmd on em coming up in december which will be super interesting But when you think about the sustainability of that growth in emerging markets, Reckitt's been a bit up and down, I would say, in EM in the past. but when you think about the sustainability of that growth in emerging markets reckitt's been a bit up and down i would say in em in the past How can we get comfortable that this time it will be more sustainable, that you can actually grow EM, I don't know, high single digit? And are you confident you can comp the comp? Because Q3 is fine. But in Q4, Q1, Q2, you start to get into much tougher comps. When that happens, would we still expect to see maybe not 15%, but still high single digit growth? How can we get comfortable that this time it will be more sustainable, that you can actually grow EM, I don't know, high single digit? how can we get comfortable that this time it will be more sustainable that you can actually grow em i don't know high single digit And are you confident you can comp the comp? and are you confident you can comp the comp Because Q3 is fine. because q3 is fine But in Q4, Q1, Q2, you start to get into much tougher comps. but in q4 q1 q2 you start to get into much tougher comps When that happens, would we still expect to see maybe not 15%, but still high single digit growth? when that happens would we still expect to see maybe not 15% but still high single digit growth

Speaker 2: Yeah. What we've said about this, and I believe that to still be true, is we shouldn't get used to growing at double digit just because it's unlikely to sustain itself quarter in, quarter out, year in, year out, but high single digit I feel very comfortable we can do consistently. And as we can see, the business can definitely do more than that, too, as it has been doing now for three or four quarters. Yeah. yeah What we've said about this, and I believe that to still be true, is we shouldn't get used to growing at double digit just because it's unlikely to sustain itself quarter in, quarter out, year in, year out, but high single digit I feel very comfortable we can do consistently. A nd as we can see, the business can definitely do more than that, too, as it has been doing now for three or four quarters. what we've said about this and i believe that to still be true is we shouldn't get used to growing at double digit just because it's unlikely to sustain itself quarter in quarter out year in year out but high single digit i feel very comfortable we can do consistently. a nd as we can see the business can definitely do more than that too as it has been doing now for three or four quarters We have been successful in China and India for a long time, and that's really the markets that are driving most of that growth. Not all of it, because it's broad-based, but most of it, and we have the ingredients to be successful in those markets for a long time. We have very strong brands. Much of our growth is volume-driven growth because we're competing very effectively in the online channels in China. We have been successful in China and India for a long time, and that's really the markets that are driving most of that growth. N ot all of it, because it's broad-based, but most of it, and we have the ingredients to be successful in those markets for a long time. we have been successful in china and india for a long time and that's really the markets that are driving most of that growth. n ot all of it because it's broad-based but most of it and we have the ingredients to be successful in those markets for a long time We have very strong brands. we have very strong brands Much of our growth is volume-driven growth because we're competing very effectively in the online channels in China. much of our growth is volume-driven growth because we're competing very effectively in the online channels in china And we're expanding our offline footprint in India. Much of the growth is in health and in intimate wellness, where we are leaders and have a big runway for continued household penetration. So, I'm very happy with the teams we have in place. They really know what they're doing. I think we have some advantaged capabilities. So, for China and India, I feel quite confident that we're going to see continued strong growth. And we're expanding our offline footprint in India. and we're expanding our offline footprint in india Much of the growth is in health and in intimate wellness, where we are leaders and have a big runway for continued household penetration. much of the growth is in health and in intimate wellness where we are leaders and have a big runway for continued household penetration So, I'm very happy with the teams we have in place. so i'm very happy with the teams we have in place They really know what they're doing. they really know what they're doing I think we have some advantaged capabilities. i think we have some advantaged capabilities So, for China and India, I feel quite confident that we're going to see continued strong growth. so for china and india i feel quite confident that we're going to see continued strong growth Then the most exciting part about this footprint to me is the remainder of emerging markets, where we have a cluster of six or seven markets that taken together will be and is of the size of India or China and has the same growth potential. And so actually accelerating those markets is a big priority of ours for the coming years, which will also support the. Then the most exciting part about this footprint to me is the remainder of emerging markets, where we have a cluster of six or seven markets that taken together will be and is of the size of India or China and has the same growth potential. then the most exciting part about this footprint to me is the remainder of emerging markets where we have a cluster of six or seven markets that taken together will be and is of the size of india or china and has the same growth potential And so actually accelerating those markets is a big priority of ours for the coming years, which will also support the. and so actually accelerating those markets is a big priority of ours for the coming years which will also support the

Speaker 3: Which countries would you call out? Is it Colombia? Is it Malaysia? Is it Indonesia? What would be the most exciting? Which countries would you call out? which countries would you call out Is it Colombia? is it colombia Is it Malaysia? is it malaysia Is it Indonesia? is it indonesia What would be the most exciting? what would be the most exciting

Speaker 2: Yeah. So, there's good names in there. So, we have, for us, Malaysia, Vietnam, Sub-Saharan Africa, Colombia, and Mexico and Brazil, where we have nice businesses today. Now, there's more markets than that, but those are the ones that are on my radar in terms of really big growth potential. Yeah. yeah So, there's good names in there. so there's good names in there So, we have, for us, Malaysia, Vietnam, Sub-Saharan Africa, Colombia, and Mexico and Brazil, where we have nice businesses today. so we have for us malaysia vietnam sub-saharan africa colombia and mexico and brazil where we have nice businesses today Now, there's more markets than that, but those are the ones that are on my radar in terms of really big growth potential. now there's more markets than that but those are the ones that are on my radar in terms of really big growth potential

Speaker 3: And how do you seed those markets? How are you actually going about trying to grow them? How do you prioritize? Is it Sub-Saharan Africa versus Indonesia? What's the kind of? And how do you seed those markets? and how do you seed those markets How are you actually going about trying to grow them? how are you actually going about trying to grow them How do you prioritize? how do you prioritize Is it Sub-Saharan Africa versus Indonesia? is it sub-saharan africa versus indonesia What's the kind of? what's the kind of

Speaker 2: Well, we have a lot of conversation about this. I mean, I don't want to prioritize too much because there's so much growth. So, I would like most of it if we can find a way. But obviously, that's already a subset of markets that we've picked. Well, we have a lot of conversation about this. well we have a lot of conversation about this I mean, I don't want to prioritize too much because there's so much growth. i mean i don't want to prioritize too much because there's so much growth So, I would like most of it if we can find a way. so i would like most of it if we can find a way But obviously, that's already a subset of markets that we've picked. but obviously that's already a subset of markets that we've picked The good news is we're not starting from scratch. So, we have pretty good businesses in these markets. They just haven't been, let's say, the biggest priority for the organization. And so that's what we're changing. The good news is we're not starting from scratch. the good news is we're not starting from scratch So, we have pretty good businesses in these markets. so we have pretty good businesses in these markets They just haven't been, let's say, the biggest priority for the organization. they just haven't been let's say the biggest priority for the organization And so that's what we're changing. and so that's what we're changing And what that looks like is investments in the brands and supply chain. In some places, we can have more capable R&D that's a little closer to the market to get the innovation really firing. So, every market is a bit different. But what's exciting about it is our people know how to do this. And what that looks like is investments in the brands and supply chain. and what that looks like is investments in the brands and supply chain In some places, we can have more capable R&D that's a little closer to the market to get the innovation really firing. in some places we can have more capable r&d that's a little closer to the market to get the innovation really firing So, every market is a bit different. so every market is a bit different But what's exciting about it is our people know how to do this. but what's exciting about it is our people know how to do this And so our new structure, where we have emerging markets under one roof with some very capable, experienced leaders, they can start to really spread these capabilities and playbooks in a more effective way. That's probably the thing that I'm most excited about, about our new organization. And so our new structure, where we have emerging markets under one roof with some very capable, experienced leaders, they can start to really spread these capabilities and playbooks in a more effective way. and so our new structure where we have emerging markets under one roof with some very capable experienced leaders they can start to really spread these capabilities and playbooks in a more effective way That's probably the thing that I'm most excited about, about our new organization. that's probably the thing that i'm most excited about about our new organization

Speaker 3: Okay. Maybe back to you, Shannon. As we're staying on the geographical tour, maybe we can turn back to Europe. I think you said that the Q1 stage, Europe would be kind of up low single digits. It ended up being flat. So, that was one of the few areas that was a little bit behind what you had thought. Okay. okay Maybe back to you, Shannon. maybe back to you shannon As we're staying on the geographical tour, maybe we can turn back to Europe. as we're staying on the geographical tour maybe we can turn back to europe I think you said that the Q1 stage, Europe would be kind of up low single digits. i think you said that the q1 stage europe would be kind of up low single digits It ended up being flat. it ended up being flat So, that was one of the few areas that was a little bit behind what you had thought. so that was one of the few areas that was a little bit behind what you had thought Can you maybe outline why that was? And where do you see kind of category growth in Europe share? Do you expect Europe to be back into positive territory in the back half, as Kris does, from North America in Europe? Can you maybe outline why that was? can you maybe outline why that was And where do you see kind of category growth in Europe share? and where do you see kind of category growth in europe share Do you expect Europe to be back into positive territory in the back half, as Kris does, from North America in Europe? do you expect europe to be back into positive territory in the back half as kris does from north america in europe

Speaker 1: Sure. So Europe, I mean, I'll start with your last point. We do expect Europe to be back into growth in the back half. I think the dynamic we saw in Europe in the front half, there were a couple aspects to it. One is we certainly saw category growth rates declining. If you go back to January and sort of map that out through the front half, we do feel like that's now stabilized. Sure. sure So Europe, I mean, I'll start with your last point. so europe i mean i'll start with your last point We do expect Europe to be back into growth in the back half. we do expect europe to be back into growth in the back half I think the dynamic we saw in Europe in the front half, there were a couple aspects to it. i think the dynamic we saw in europe in the front half there were a couple aspects to it One is we certainly saw category growth rates declining. one is we certainly saw category growth rates declining If you go back to January and sort of map that out through the front half, we do feel like that's now stabilized. if you go back to january and sort of map that out through the front half we do feel like that's now stabilized And so when we look at category growth rates today in Europe, we're seeing them pretty flat. But we see that as stabilizing. We talked about the fact in our half one results, from a share standpoint, we feel good about what we're delivering in Europe. We talked about it's the first time that we've been market leader for Finish and all large European markets. And so when we look at category growth rates today in Europe, we're seeing them pretty flat. and so when we look at category growth rates today in europe we're seeing them pretty flat But we see that as stabilizing. but we see that as stabilizing We talked about the fact in our half one results, from a share standpoint, we feel good about what we're delivering in Europe. we talked about the fact in our half one results from a share standpoint we feel good about what we're delivering in europe We talked about it's the first time that we've been market leader for Finish and all large European markets. we talked about it's the first time that we've been market leader for finish and all large european markets So, we feel like we're getting to a place where we're showing up very competitively for the consumer. We have some good innovation. We've been talking about intimate wellness in Europe and innovation there. And so I think as we look to the back half, we see sell-in and sell-out should be converging in Europe. And even with very low to flat category growth rates, we're confident that we'll be delivering growth in the back half. So, we feel like we're getting to a place where we're showing up very competitively for the consumer. so we feel like we're getting to a place where we're showing up very competitively for the consumer We have some good innovation. we have some good innovation We've been talking about intimate wellness in Europe and innovation there. we've been talking about intimate wellness in europe and innovation there And so I think as we look to the back half, we see sell-in and sell-out should be converging in Europe. and so i think as we look to the back half we see sell-in and sell-out should be converging in europe And even with very low to flat category growth rates, we're confident that we'll be delivering growth in the back half. and even with very low to flat category growth rates we're confident that we'll be delivering growth in the back half

Speaker 3: And you touched on Finish, Shannon. So, I want to ask you one about that. It's one of your biggest brands. And what we're seeing are some different dynamics in the U.S. versus Europe. In the U.S., it's obviously you're up against a big competitor. And you touched on Finish, Shannon. and you touched on finish shannon So, I want to ask you one about that. so i want to ask you one about that It's one of your biggest brands. it's one of your biggest brands And what we're seeing are some different dynamics in the U.S. versus Europe. and what we're seeing are some different dynamics in the u.s versus europe In the U.S., it's obviously you're up against a big competitor. in the u.s it's obviously you're up against a big competitor

Speaker 1: We are. We are. we are

Speaker 3: Can you maybe sort of just outline where market share trends are for Finish in the U.S. and Europe, what you're trying to do to improve it where it's not currently there? And then sort of a second one on Finish as well. The other thing that really struck me at the CMD, I think you said that you sell Finish to 27 million Australians, more than the 4.8 billion Asian consumers. Can you maybe sort of just outline where market share trends are for Finish in the U.S. and Europe, what you're trying to do to improve it where it's not currently there? can you maybe sort of just outline where market share trends are for finish in the u.s and europe what you're trying to do to improve it where it's not currently there And then sort of a second one on Finish as well. and then sort of a second one on finish as well The other thing that really struck me at the CMD, I think you said that you sell Finish to 27 million Australians, more than the 4.8 billion Asian consumers. the other thing that really struck me at the cmd i think you said that you sell finish to 27 million australians more than the 4.8 billion asian consumers So, that kind of shows you the potential that a brand has in some of those other EMs. But how do you actually think about playing? How do you actually crack those markets? Is it just about dishwasher penetration? Or how do you drive the category? So one about the Europe-U.S., one about EM on Finish specifically. So, that kind of shows you the potential that a brand has in some of those other EMs. so that kind of shows you the potential that a brand has in some of those other ems But how do you actually think about playing? but how do you actually think about playing How do you actually crack those markets? how do you actually crack those markets Is it just about dishwasher penetration? is it just about dishwasher penetration Or how do you drive the category? or how do you drive the category So one about the Europe-U.S., one about EM on Finish specifically. so one about the europe-u.s one about em on finish specifically

Speaker 1: Yep. So Europe-U.S., I mean, you have to remember the competitive dynamic is totally different. So in Europe, we're the market share leader, as I just said, market share leader in all large European markets. In the U.S., we're obviously in the challenger position. And so the activities across Finish, though, are quite similar. I mean, it's a brand where it's really important to make sure from a media standpoint, we're supporting the brand in the right way. Yep. yep So Europe-U.S., I mean, you have to remember the competitive dynamic is totally different. so europe-u.s i mean you have to remember the competitive dynamic is totally different So in Europe, we're the market share leader, as I just said, market share leader in all large European markets. so in europe we're the market share leader as i just said market share leader in all large european markets In the U.S., we're obviously in the challenger position. in the u.s we're obviously in the challenger position And so the activities across Finish, though, are quite similar. and so the activities across finish though are quite similar I mean, it's a brand where it's really important to make sure from a media standpoint, we're supporting the brand in the right way. i mean it's a brand where it's really important to make sure from a media standpoint we're supporting the brand in the right way But almost even more importantly, that every day when consumers go into retailers, that we're showing up in a competitive way. And so starting in the back half of 2024, we were talking about the need, particularly in Europe, to really make sure we had the right level of promo, right frequency, right depth. But almost even more importantly, that every day when consumers go into retailers, that we're showing up in a competitive way. but almost even more importantly that every day when consumers go into retailers that we're showing up in a competitive way And so starting in the back half of 2024, we were talking about the need, particularly in Europe, to really make sure we had the right level of promo, right frequency, right depth. and so starting in the back half of 2024 we were talking about the need particularly in europe to really make sure we had the right level of promo right frequency right depth As we got that right, market by market by market in Europe, that's when we really started to see the share results turn around. So it's a very different dynamic. A good part of being a challenger in North America is that even when we're not gaining share, we can be growing revenue quite nicely. As we got that right, market by market by market in Europe, that's when we really started to see the share results turn around. as we got that right market by market by market in europe that's when we really started to see the share results turn around So it's a very different dynamic. A good part of being a challenger in North America is that even when we're not gaining share, we can be growing revenue quite nicely. so it's a very different dynamic. a good part of being a challenger in north america is that even when we're not gaining share we can be growing revenue quite nicely Of course, our intention is we want to be gaining share. It's the same levers that we saw in Europe that we're playing with in the U.S. to try and get to that place. Of course, our intention is we want to be gaining share. of course our intention is we want to be gaining share It's the same levers that we saw in Europe that we're playing with in the U.S. to try and get to that place. it's the same levers that we saw in europe that we're playing with in the u.s to try and get to that place From a long-term potential of the business, I mean, this is one we talk about as having decades of runway. When you go country by country and look at dishwasher penetration, I mean, it's very surprising to even see in developed markets, you have markets where the penetration is well below 20%. From a long-term potential of the business, I mean, this is one we talk about as having decades of runway. from a long-term potential of the business i mean this is one we talk about as having decades of runway When you go country by country and look at dishwasher penetration, I mean, it's very surprising to even see in developed markets, you have markets where the penetration is well below 20%. when you go country by country and look at dishwasher penetration i mean it's very surprising to even see in developed markets you have markets where the penetration is well below 20% That will be one of the key enablers for long-term growth for Finish as we see that dishwasher penetration move forward. We're very focused on making sure we're there. We're partnering with the manufacturers of the machines so that we're really the first brand that new consumers to the category are learning from and growing with. That will be one of the key enablers for long-term growth for Finish as we see that dishwasher penetration move forward. that will be one of the key enablers for long-term growth for finish as we see that dishwasher penetration move forward We're very focused on making sure we're there. we're very focused on making sure we're there We're partnering with the manufacturers of the machines so that we're really the first brand that new consumers to the category are learning from and growing with. we're partnering with the manufacturers of the machines so that we're really the first brand that new consumers to the category are learning from and growing with

Speaker 3: Okay. Thank you. Kris, talk about intimate wellness. It's your star category. We've seen a step-changing growth. What's driving that? How sustainable is it? It sounds like it's adjacencies. And particularly your China business, your market share was, I'm not going to say nowhere, but five years ago was much lower than it is today. You're a clear market leader. And the brand Durex is a billion in revenues. Okay. okay Thank you. thank you Kris, talk about intimate wellness. kris talk about intimate wellness It's your star category. it's your star category We've seen a step-changing growth. we've seen a step-changing growth What's driving that? what's driving that How sustainable is it? how sustainable is it It sounds like it's adjacencies. it sounds like it's adjacencies And particularly your China business, your market share was, I'm not going to say nowhere, but five years ago was much lower than it is today. and particularly your china business your market share was i'm not going to say nowhere but five years ago was much lower than it is today You're a clear market leader. you're a clear market leader And the brand Durex is a billion in revenues. and the brand durex is a billion in revenues What is the real potential for this brand? If you look out, crystal ball, how big could this brand be? What is the real potential for this brand? what is the real potential for this brand If you look out, crystal ball, how big could this brand be? if you look out crystal ball how big could this brand be

Speaker 2: It could be very big, but obviously, we have to do the hard work to get it there. So, I think Durex is maybe one of those brands that exemplify what we talked about before, which is the power of strong R&D and breakthrough innovation. It could be very big, but obviously, we have to do the hard work to get it there. S o, I think Durex is maybe one of those brands that exemplify what we talked about before, which is the power of strong R&D and breakthrough innovation. it could be very big but obviously we have to do the hard work to get it there. s o i think durex is maybe one of those brands that exemplify what we talked about before which is the power of strong r&d and breakthrough innovation We have really made big strides in our IP, our capabilities as it pertains to materials innovation, and in condoms, it's really all about materials and what benefits they bring, and so we are now clearly global leaders again, and that's where I want us to stay. We have really made big strides in our IP, our capabilities as it pertains to materials innovation, and in condoms, it's really all about materials and what benefits they bring, and so we are now clearly global leaders again, and that's where I want us to stay. we have really made big strides in our ip our capabilities as it pertains to materials innovation and in condoms it's really all about materials and what benefits they bring and so we are now clearly global leaders again and that's where i want us to stay We have a big runway for growth. It's actually not just China. I mean, Durex is growing double-digit in many emerging markets, and it's got a big runway for growth in emerging markets, kind of similar to Finish. I mean, really, the category needs to be built and we're the right people to build it. We have a big runway for growth. we have a big runway for growth It's actually not just China. it's actually not just china I mean, Durex is growing double-digit in many emerging markets, and it's got a big runway for growth in emerging markets, kind of similar to Finish. i mean durex is growing double-digit in many emerging markets and it's got a big runway for growth in emerging markets kind of similar to finish I mean, really, the category needs to be built and we're the right people to build it. i mean really the category needs to be built and we're the right people to build it Then we also have adjacencies. So, female intimate wellness is a growing space. And we have a really great brand called Intima, which is indeed now growing very fast in China from European roots. Then we also have adjacencies. then we also have adjacencies So, female intimate wellness is a growing space. so female intimate wellness is a growing space And we have a really great brand called Intima, which is indeed now growing very fast in China from European roots. and we have a really great brand called intima which is indeed now growing very fast in china from european roots

Speaker 3: You've hit double digit, isn't it? You've hit double digit, isn't it? you've hit double digit isn't it

Speaker 2: Yeah. So it's fast. So, now we can't sustain necessarily that kind of growth rate. But it's just an indication back to your question. I mean, how big can this be? I think it's just a function of how good of a job we do to create categories. I don't think there's really a clear ceiling. Yeah. yeah So it's fast. so it's fast So, now we can't sustain necessarily that kind of growth rate. so now we can't sustain necessarily that kind of growth rate But it's just an indication back to your question. but it's just an indication back to your question I mean, how big can this be? i mean how big can this be I think it's just a function of how good of a job we do to create categories. i think it's just a function of how good of a job we do to create categories I don't think there's really a clear ceiling. i don't think there's really a clear ceiling It's a question of category adoption, education, capturing people at the right age to teach them about how to be healthy and safe with this category. So, we have a lot of work to do there. It's a question of category adoption, education, capturing people at the right age to teach them about how to be healthy and safe with this category. it's a question of category adoption education capturing people at the right age to teach them about how to be healthy and safe with this category So, we have a lot of work to do there. so we have a lot of work to do there

Speaker 3: Thank you. I also want to touch on brand stretch because one of the big things that came out for me at the CMD was your Dettol brand and the performance in India is incredible, and it's also in 13 subcategories. Thank you. thank you I also want to touch on brand stretch because one of the big things that came out for me at the CMD was your Dettol brand and the performance in India is incredible, and it's also in 13 subcategories. i also want to touch on brand stretch because one of the big things that came out for me at the cmd was your dettol brand and the performance in india is incredible and it's also in 13 subcategories

Speaker 2: Yeah, so we've expanded it significantly. Yeah, so we've expanded it significantly. yeah so we've expanded it significantly

Speaker 3: But I mean, most of your others are in two or three subcategories. So, why is Dettol an outlier? And can you replicate that playbook with some of your other power brands? Or is there something about Dettol that's different? And if you can replicate it, which of the power brands would you like to stretch more into adjacencies? But I mean, most of your others are in two or three subcategories. but i mean most of your others are in two or three subcategories So, why is Dettol an outlier? so why is dettol an outlier And can you replicate that playbook with some of your other power brands? and can you replicate that playbook with some of your other power brands Or is there something about Dettol that's different? or is there something about dettol that's different And if you can replicate it, which of the power brands would you like to stretch more into adjacencies? and if you can replicate it which of the power brands would you like to stretch more into adjacencies

Speaker 2: So, most power brands have the ability to stretch because they are trusted. They are the number one equity. They're well known. And they deliver. So, I would never say that any of our power brands cannot stretch. They can all stretch. The question is how far, how many categories can we sort of straddle? And when is the right time? What's the right product proposition? Because again, efficacy is everything. So it has to deliver. So, most power brands have the ability to stretch because they are trusted. so most power brands have the ability to stretch because they are trusted They are the number one equity. they are the number one equity They're well known. they're well known And they deliver. and they deliver So, I would never say that any of our power brands cannot stretch. so i would never say that any of our power brands cannot stretch They can all stretch. they can all stretch The question is how far, how many categories can we sort of straddle? the question is how far how many categories can we sort of straddle And when is the right time? and when is the right time What's the right product proposition? what's the right product proposition Because again, efficacy is everything. because again efficacy is everything So it has to deliver. so it has to deliver So, Dettol is the brand that we've successfully stretched across the most categories. It is a phenomenal equity. And in that part of the world, it's really a beloved brand. But look at Lysol. We've stretched Lysol into multiple categories. Durex, we've stretched into multiple categories. Finish is both auto dish tablets, but it's also cleaners and other things. So, I would hesitate to say that we have any brand that can't stretch. So, Dettol is the brand that we've successfully stretched across the most categories. so dettol is the brand that we've successfully stretched across the most categories It is a phenomenal equity. it is a phenomenal equity And in that part of the world, it's really a beloved brand. and in that part of the world it's really a beloved brand But look at Lysol. but look at lysol We've stretched Lysol into multiple categories. we've stretched lysol into multiple categories Durex, we've stretched into multiple categories. durex we've stretched into multiple categories Finish is both auto dish tablets, but it's also cleaners and other things. finish is both auto dish tablets but it's also cleaners and other things So, I would hesitate to say that we have any brand that can't stretch. so i would hesitate to say that we have any brand that can't stretch And if I showed you our strategic plan for growth for the next three or four years, unsurprisingly, brand stretch and category expansion is a huge part of our growth. So, we have big plans, I would say, for every one of our brands to stretch into new categories. And if I showed you our strategic plan for growth for the next three or four years, unsurprisingly, brand stretch and category expansion is a huge part of our growth. and if i showed you our strategic plan for growth for the next three or four years unsurprisingly brand stretch and category expansion is a huge part of our growth So, we have big plans, I would say, for every one of our brands to stretch into new categories. so we have big plans i would say for every one of our brands to stretch into new categories Probably Dettol is always going to be the shiniest example that we have. But that's okay. We don't need 13 categories for each brand. We just need to successfully stretch into. Probably Dettol is always going to be the shiniest example that we have. probably dettol is always going to be the shiniest example that we have But that's okay. but that's okay We don't need 13 categories for each brand. we don't need 13 categories for each brand We just need to successfully stretch into. we just need to successfully stretch into

Speaker 3: What's the brand doing in India now in Dettol? Where's the growth? How big was it like 10 years ago? Where is it now? Where's it going? Is it still growing? Because it's been around for a long time. What's the brand doing in India now in Dettol? what's the brand doing in india now in dettol Where's the growth? where's the growth How big was it like 10 years ago? how big was it like 10 years ago Where is it now? where is it now Where's it going? where's it going Is it still growing? is it still growing Because it's been around for a long time. because it's been around for a long time

Speaker 2: It's growing. It's growing. it's growing

Speaker 3: Where is it growing? Where is it growing? where is it growing

Speaker 2: Yeah, so we develop new formats and do line extensions. Dettol in India is a very mature business. It's been around for 100 years. It's bar soap. It's ASL, antiseptic liquid. That's the core of the brand, but then we're extending it into new formats and new benefits. Yeah, so we develop new formats and do line extensions. yeah so we develop new formats and do line extensions Dettol in India is a very mature business. dettol in india is a very mature business It's been around for 100 years. it's been around for 100 years It's bar soap. it's bar soap It's ASL, antiseptic liquid. it's asl antiseptic liquid That's the core of the brand, but then we're extending it into new formats and new benefits. that's the core of the brand but then we're extending it into new formats and new benefits In bar soap, we've been selling Dettol bar soap forever, but now we have our Cool platform that's driven some great growth, and we do other things that's more dermatological that will also bring good growth. But actually, Dettol, the best case example for what Dettol can do is China. Because in China, we've really stretched the brand far beyond even what we managed to do in India, and that's where the 13 subcategories happens. In bar soap, we've been selling Dettol bar soap forever, but now we have our Cool platform that's driven some great growth, and we do other things that's more dermatological that will also bring good growth. in bar soap we've been selling dettol bar soap forever but now we have our cool platform that's driven some great growth and we do other things that's more dermatological that will also bring good growth But actually, Dettol, the best case example for what Dettol can do is China. B ecause in China, we've really stretched the brand far beyond even what we managed to do in India, and that's where the 13 subcategories happens. but actually dettol the best case example for what dettol can do is china. b ecause in china we've really stretched the brand far beyond even what we managed to do in india and that's where the 13 subcategories happens

Speaker 3: Why is that? What is it about, Shannon? Why is that? why is that What is it about, Shannon? what is it about shannon

Speaker 2: Yeah. I think we cracked the code on some really good propositions. In China, we have found a way to engage with consumers that's highly impactful. So, we can explain to them a new proposition, and Chinese consumers are really engaged in our categories. It's probably one of the, if not the most curious and well-informed consumers we meet anywhere in the world. Yeah. yeah I think we cracked the code on some really good propositions. i think we cracked the code on some really good propositions In China, we have found a way to engage with consumers that's highly impactful. So, we can explain to them a new proposition, and Chinese consumers are really engaged in our categories. in china we have found a way to engage with consumers that's highly impactful. so we can explain to them a new proposition and chinese consumers are really engaged in our categories It's probably one of the, if not the most curious and well-informed consumers we meet anywhere in the world. it's probably one of the if not the most curious and well-informed consumers we meet anywhere in the world And we've cracked the code on how to connect with them online to explain the benefits of new categories, new products, and that's really helping. A nd we've cracked the code on how to connect with them online to explain the benefits of new categories, new products, and that's really helping. a nd we've cracked the code on how to connect with them online to explain the benefits of new categories new products and that's really helping

Speaker 3: Shannon, I want to turn back to you and ask you a question on free cash flow conversion, free cash flow yield. I think free cash flow conversion was only 54% in the first half. I know there were some one-offs in there. But we normally would expect Reckitt to be 90%, 100%. Even if I X out the one-offs, it was still a little bit lower than that level. Shannon, I want to turn back to you and ask you a question on free cash flow conversion, free cash flow yield. shannon i want to turn back to you and ask you a question on free cash flow conversion free cash flow yield I think free cash flow conversion was only 54% in the first half. i think free cash flow conversion was only 54% in the first half I know there were some one-offs in there. i know there were some one-offs in there But we normally would expect Reckitt to be 90%, 100%. but we normally would expect reckitt to be 90% 100% Even if I X out the one-offs, it was still a little bit lower than that level. even if i x out the one-offs it was still a little bit lower than that level Were you disappointed by that performance on the free cash flow conversion? And maybe what should we expect for the full year? And maybe can you maybe pass out for us the phasing of the restructuring costs and where you see the biggest opportunities to improve free cash flow? Because I imagine exiting Essential Home may be a bit of a drag on the cash. Were you disappointed by that performance on the free cash flow conversion? were you disappointed by that performance on the free cash flow conversion And maybe what should we expect for the full year? and maybe what should we expect for the full year And maybe can you maybe pass out for us the phasing of the restructuring costs and where you see the biggest opportunities to improve free cash flow? and maybe can you maybe pass out for us the phasing of the restructuring costs and where you see the biggest opportunities to improve free cash flow Because I imagine exiting Essential Home may be a bit of a drag on the cash. because i imagine exiting essential home may be a bit of a drag on the cash So, when you sort of take a step back and look through the ups and the downs, and I know there's lots of moving pieces, how are you feeling about the underlying free cash flow generation of the company? So, when you sort of take a step back and look through the ups and the downs, and I know there's lots of moving pieces, how are you feeling about the underlying free cash flow generation of the company? so when you sort of take a step back and look through the ups and the downs and i know there's lots of moving pieces how are you feeling about the underlying free cash flow generation of the company

Speaker 1: Sure. So, I'll start at the end. So we feel good about the underlying cash flow generation of the company, for sure. I mean, it's one of the hallmarks of the investment case of Reckitt, is our free cash flow. From a free cash flow conversion standpoint, the biggest driver far and away of that decline is, in fact, the restructuring costs and those one-off costs. Sure. sure So, I'll start at the end. so i'll start at the end So we feel good about the underlying cash flow generation of the company, for sure. so we feel good about the underlying cash flow generation of the company for sure I mean, it's one of the hallmarks of the investment case of Reckitt, is our free cash flow. i mean it's one of the hallmarks of the investment case of reckitt is our free cash flow From a free cash flow conversion standpoint, the biggest driver far and away of that decline is, in fact, the restructuring costs and those one-off costs. from a free cash flow conversion standpoint the biggest driver far and away of that decline is in fact the restructuring costs and those one-off costs Expectation is that those will continue in 2026 and be a substantive headwind in 2026. I would expect that to really be tailing off in 2027. I fully expect that when you get through that restructuring program, Reckitt, core Reckitt free cash flow should be back up into the 90% plus, which is much more in line with historical levels. Expectation is that those will continue in 2026 and be a substantive headwind in 2026. expectation is that those will continue in 2026 and be a substantive headwind in 2026 I would expect that to really be tailing off in 2027. i would expect that to really be tailing off in 2027 I fully expect that when you get through that restructuring program, Reckitt, core Reckitt free cash flow should be back up into the 90% plus, which is much more in line with historical levels. i fully expect that when you get through that restructuring program reckitt core reckitt free cash flow should be back up into the 90% plus which is much more in line with historical levels

Speaker 3: Okay. And the final one for you, Kris. And it's about the kind of guidance and the 11 power brands. You've got these 11 power brands. You've got the target of four to five. You raised the guide to about four already. Okay. okay And the final one for you, Kris. and the final one for you kris And it's about the kind of guidance and the 11 power brands. and it's about the kind of guidance and the 11 power brands You've got these 11 power brands. you've got these 11 power brands You've got the target of four to five. you've got the target of four to five You raised the guide to about four already. you raised the guide to about four already

Speaker 2: For the year, yeah. For the year, yeah. for the year yeah

Speaker 3: For the year. So you're on track. You're kind of on the journey. When you look at that four to five, how would you compare that to market growth? What would you expect? I know it differs year by year, but the split between volume, price, and mix to be. For the year. for the year So you're on track. so you're on track You're kind of on the journey. you're kind of on the journey When you look at that four to five, how would you compare that to market growth? when you look at that four to five how would you compare that to market growth What would you expect? what would you expect I know it differs year by year, but the split between volume, price, and mix to be. i know it differs year by year but the split between volume price and mix to be And when you've got these 11 brands, which of them do you think has the biggest potential? And then which of the non-power brands? Because you've got lots of non-power brands, like things like Biofreeze. And when you've got these 11 brands, which of them do you think has the biggest potential? and when you've got these 11 brands which of them do you think has the biggest potential And then which of the non-power brands? and then which of the non-power brands Because you've got lots of non-power brands, like things like Biofreeze. because you've got lots of non-power brands like things like biofreeze

Speaker 2: Yeah. Yeah. yeah

Speaker 3: Which could be the next power brands for the future? So, a little bit about getting comfortable with the four to five, and then a little bit also around some of these other jewels that maybe we don't hear as much about. Which could be the next power brands for the future? which could be the next power brands for the future So, a little bit about getting comfortable with the four to five, and then a little bit also around some of these other jewels that maybe we don't hear as much about. so a little bit about getting comfortable with the four to five and then a little bit also around some of these other jewels that maybe we don't hear as much about

Speaker 2: Yeah. So, I think for the power brands, it's a terrific portfolio. It is a portfolio that's designed to grow and grow for a long time. We said the four to five. We feel good about that. As you said, different years, different dynamics. Yeah. yeah So, I think for the power brands, it's a terrific portfolio. so i think for the power brands it's a terrific portfolio It is a portfolio that's designed to grow and grow for a long time. it is a portfolio that's designed to grow and grow for a long time We said the four to five. we said the four to five We feel good about that. we feel good about that As you said, different years, different dynamics. as you said different years different dynamics Obviously, this year is quite unusual. But our medium-term framework is four to five. I feel good about that. I think if everything goes right, we can beat that. And that's probably a good place to be so that we can deliver consistently. Obviously, this year is quite unusual. obviously this year is quite unusual But our medium-term framework is four to five. but our medium-term framework is four to five I feel good about that. i feel good about that I think if everything goes right, we can beat that. i think if everything goes right we can beat that And that's probably a good place to be so that we can deliver consistently. and that's probably a good place to be so that we can deliver consistently And then sometimes we might be able to beat. So that's how we thought about that. I think in terms of the algorithm, it's a balanced algorithm that we want. Two points of growth, two points of pricing, a little bit of mix. This would imply slight outperformance in our categories. And then sometimes we might be able to beat. and then sometimes we might be able to beat So that's how we thought about that. so that's how we thought about that I think in terms of the algorithm, it's a balanced algorithm that we want. i think in terms of the algorithm it's a balanced algorithm that we want Two points of growth, two points of pricing, a little bit of mix. two points of growth two points of pricing a little bit of mix This would imply slight outperformance in our categories. this would imply slight outperformance in our categories But we don't have to do anything extraordinary to deliver in that algorithm vis-à-vis category growth. So I feel like it's good. It's solid. And we can work with that. In terms of the smaller brands that we have, we do have some smaller brands. And we don't have a lot. So we're 80% power brands now. So we're quite concentrated. But we don't have to do anything extraordinary to deliver in that algorithm vis-à-vis category growth. but we don't have to do anything extraordinary to deliver in that algorithm vis-à-vis category growth So I feel like it's good. so i feel like it's good It's solid. it's solid And we can work with that. and we can work with that In terms of the smaller brands that we have, we do have some smaller brands. in terms of the smaller brands that we have we do have some smaller brands And we don't have a lot. and we don't have a lot So we're 80% power brands now. so we're 80% power brands now So we're quite concentrated. so we're quite concentrated The things that we didn't divest were things that we wanted to keep for a reason. So a lot of the things there are health businesses that are not as big but can be big one day. Biofreeze is one. Obviously, topical analgesics has slowed down as a category. But Biofreeze is a great brand. The things that we didn't divest were things that we wanted to keep for a reason. the things that we didn't divest were things that we wanted to keep for a reason So a lot of the things there are health businesses that are not as big but can be big one day. so a lot of the things there are health businesses that are not as big but can be big one day Biofreeze is one. biofreeze is one Obviously, topical analgesics has slowed down as a category. obviously topical analgesics has slowed down as a category But Biofreeze is a great brand. but biofreeze is a great brand I think once we get out of this economic cycle that we're in right now and the consumer is sort of freed up a bit to spend again, I think topical analgesics will grow fast, and I think Biofreeze will do well. I think once we get out of this economic cycle that we're in right now and the consumer is sort of freed up a bit to spend again, I think topical analgesics will grow fast, and I think Biofreeze will do well. i think once we get out of this economic cycle that we're in right now and the consumer is sort of freed up a bit to spend again i think topical analgesics will grow fast and i think biofreeze will do well We have some other health businesses that are small but growing so fast that soon they can become power brands. Some of our VMS brands are in that camp. Who knows? Intima, if it keeps growing like this one day, Intima might be a power brand. We have some other health businesses that are small but growing so fast that soon they can become power brands. we have some other health businesses that are small but growing so fast that soon they can become power brands Some of our VMS brands are in that camp. some of our vms brands are in that camp Who knows? who knows Intima, if it keeps growing like this one day, Intima might be a power brand. intima if it keeps growing like this one day intima might be a power brand

Speaker 3: Okay. And maybe just in self-care, I mean, we don't hear that much about brands like Gaviscon and Strepsils. What are the plans for those kind of brands? Okay. okay And maybe just in self-care, I mean, we don't hear that much about brands like Gaviscon and Strepsils. and maybe just in self-care i mean we don't hear that much about brands like gaviscon and strepsils What are the plans for those kind of brands? what are the plans for those kind of brands

Speaker 2: Gaviscon and Strepsils are sort of slightly unsung heroes of our portfolio. They have grown steadily, and they have grown fast, much faster than OTC averages. Part of that is because they're growing in emerging markets. Gaviscon and Strepsils are sort of slightly unsung heroes of our portfolio. gaviscon and strepsils are sort of slightly unsung heroes of our portfolio They have grown steadily, and they have grown fast, much faster than OTC averages. they have grown steadily and they have grown fast much faster than otc averages Part of that is because they're growing in emerging markets. part of that is because they're growing in emerging markets Gaviscon, for a while, we grew faster than we could actually supply. That's moderated a bit, but still, these are growth businesses. For each of them, we have a plan for brand stretch, category expansion, geographic expansion. Emerging markets remains a really big part of that growth. Gaviscon, for a while, we grew faster than we could actually supply. gaviscon for a while we grew faster than we could actually supply That's moderated a bit, but still, these are growth businesses. that's moderated a bit but still these are growth businesses For each of them, we have a plan for brand stretch, category expansion, geographic expansion. for each of them we have a plan for brand stretch category expansion geographic expansion Emerging markets remains a really big part of that growth. emerging markets remains a really big part of that growth

Speaker 3: Within that, with all the hopefully the growth that's coming through, do you think the manufacturing configuration is such that you can supply the demand? Because historically, I know you've had issues with bottlenecking. Sometimes it's been more the supply than the demand issue. Can you maybe explain what you're doing to actually ensure that the manufacturing footprint is optimized for that higher growth? Within that, with all the hopefully the growth that's coming through, do you think the manufacturing configuration is such that you can supply the demand? within that with all the hopefully the growth that's coming through do you think the manufacturing configuration is such that you can supply the demand Because historically, I know you've had issues with bottlenecking. because historically i know you've had issues with bottlenecking Sometimes it's been more the supply than the demand issue. sometimes it's been more the supply than the demand issue Can you maybe explain what you're doing to actually ensure that the manufacturing footprint is optimized for that higher growth? can you maybe explain what you're doing to actually ensure that the manufacturing footprint is optimized for that higher growth

Speaker 2: This is my favorite question of the day. This is a topic I'm very passionate about. So, I say to our team all the time, you're only as good as your supply chain. At the end of the day, we're selling consumer packaged goods. We're selling products in boxes and cans, and they need to be available. This is my favorite question of the day. this is my favorite question of the day This is a topic I'm very passionate about. S o, I say to our team all the time, you're only as good as your supply chain. this is a topic i'm very passionate about. s o i say to our team all the time you're only as good as your supply chain At the end of the day, we're selling consumer packaged goods. at the end of the day we're selling consumer packaged goods We're selling products in boxes and cans, and they need to be available. we're selling products in boxes and cans and they need to be available And we have historically not invested enough in our manufacturing footprint as a company, and we have been on a journey to change that. So, we're building a big anchor facility for a health business in North America. We built a mega factory in China. And we have historically not invested enough in our manufacturing footprint as a company, and we have been on a journey to change that. S o, we're building a big anchor facility for a health business in North America. and we have historically not invested enough in our manufacturing footprint as a company and we have been on a journey to change that. s o we're building a big anchor facility for a health business in north america We built a mega factory in China. we built a mega factory in china There's more CapEx coming, more investments in that manufacturing backbone, and it's critical for growth, and it does drive growth. I'm really happy that we've seen over the past year a sharp recovery in our service levels. There's more CapEx coming, more investments in that manufacturing backbone, and it's critical for growth, and it does drive growth. there's more capex coming more investments in that manufacturing backbone and it's critical for growth and it does drive growth I'm really happy that we've seen over the past year a sharp recovery in our service levels. i'm really happy that we've seen over the past year a sharp recovery in our service levels So, I feel that our supply chain team is very much on this. And they're doing a nice job. But we have years of improvements to make. And every time we can deploy CapEx in a good way, that strengthens manufacturing and the footprint, we can grow off of that. And we can get some good productivity. So, I feel that our supply chain team is very much on this. so i feel that our supply chain team is very much on this And they're doing a nice job. and they're doing a nice job But we have years of improvements to make. but we have years of improvements to make And every time we can deploy CapEx in a good way, that strengthens manufacturing and the footprint, we can grow off of that. and every time we can deploy capex in a good way that strengthens manufacturing and the footprint we can grow off of that And we can get some good productivity. and we can get some good productivity

Speaker 3: I'm glad I asked your favorite question last. We are actually on the buzzer, so thank you, Shannon, and thank you, Kris. Thank you, everybody, for listening, and we've got a breakout next door for 15 minutes. If you want to join us, thank you. I'm glad I asked your favorite question last. i'm glad i asked your favorite question last We are actually on the buzzer, so thank you, Shannon, and thank you, Kris. we are actually on the buzzer so thank you shannon and thank you kris Thank you, everybody, for listening, and we've got a breakout next door for 15 minutes. thank you everybody for listening and we've got a breakout next door for 15 minutes If you want to join us, thank you. if you want to join us thank you

Speaker 1: Thank you. Thank you. thank you