Danone S.A. (BN) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Danone H1 2026 Results Webcast and Conference Call. [Operator Instructions] Please be advised that this conference is being recorded. I would now like to hand the conference over to your speaker today, Paul Avis, Investor Relations Director. Please go ahead.

Good morning, everyone, for speaking. Thank you for being with us this morning for Danone's H1 2026 Results Call. I'm here with our CEO, Antoine de Saint-Affrique; and our CFO, Juergen Esser, who will go through some prepared remarks before taking your questions. And before we start, I draw your attention to the disclaimer on Slide 32 of the presentation related to forward-looking statements and the definition of financial indicators that we will refer to during the presentation. And with that, let me hand over to Antoine.

Thank you, Paul. Good morning, everyone, and a warm welcome to you all. Thank you for joining Juergen and me for our H1 2016 results presentation. As you will have seen in the headline of our press release this morning, we are pleased to share with you another set of solid high-quality results. Let's start with Slide 3 and our like-for-like sales growth in the second quarter. As you can see on the chart, we delivered strong growth in quarter 2 with like-for-like sales up plus 4.2% at group level. Juergen will come back to the details later, but this performance was broad-based across both categories and geographies. These strong results are delivered in what remains obviously a challenging and volatile external environment. It once again demonstrates the relevance of our health-focused portfolio, and the strength of our multi-engine growth model. It also reflects the hard work, the commitment and the passion of the dinners around the world. Their focus on serving consumers, driving execution excellence and continuously improving our business remains at the heart of our performance. And I would really like to take this opportunity to thank them for their contribution. With the strong quarter 2 performance, we closed a solid first half once again delivering on our business model. Let's move now to Slide 4. Looking at the first half as a whole, we delivered like-for-like sales growth of plus 3.5%, despite a first quarter, which was 4% from business as usual. Growth was well balanced in H1 with volume mix contributing plus 1.7%. Disciplined execution across the organization and strong productivity gains drove a 12 basis point improvement in the recurring operating margin year-on-year, reaching 13.3%. Importantly, this was achieved while continuing to invest behind our capabilities, behind our brands, behind our science and our innovation. Our solid operational performance and strong financial discipline, also translated into recurring earnings per share of EUR 1.92, up 0.9% versus last year, while free cash flow generation reached EUR 0.9 billion. The quality of our H1 performance further demonstrates the resilience of our business model and reflects our ability to capitalize on the favorable structural trends that continue to reshape the food industry. Moving to Slide 5. As I have said before, the food industry is at a tipping point, and health through food has never been more relevant. Donald is uniquely positioned at the intersection of attractive health-focused categories supported by powerful long-term demand trends. Around the world, consumers are placing ureter and prices on health nutrition and healthy aggression. And we continue to see strong demand across our winning platforms. Our science-based approach combined with a relentless focus on product superiority and innovation allows us to offer nutritional solutions that support people at every stage of life. Our science is now concretely translating into powerful innovation. In dairy, high-protein products remain a key growth driver across all regions. -- from North America to Europe, Latin America and Asia Pacific, growing double digits everywhere. Our more recent platforms such as Key and Kefir are also gaining strong traction with consumers, growing double digits in Europe in H1. We continue to expand them both within and beyond Europe. In plant-based, Alpro continued to deliver high single-digit growth in Europe with innovation remaining a key growth driver. Our high protein and Greek-style plant-based yogurt tranches continue to perform very well, while we are progressively rolling out newer proposition such as mutual to go across Europe following its successful launch in Germany. The product addresses growing demand for convenience and nutritious meal solutions. We also recently launched a new matcha coconut, our ready-to-drink offering, which has seen very positive consumer response so far. If you haven't tried, I only can encourage you to do so. Another area where we continue to see strong momentum in H1 across the region is Medical Nutrition. Favorable demographic trends and increasing diagnosis rates continue to support both our adult and our pediatric businesses. This is reflected in the strong performance of our flagship brands, Nutrison, Fortimel and Neocate, which delivered a high single to double-digit growth in H1. As these platforms continue to scale, they make an increasingly meaningful contribution to both the quality and the strength of our growth profile. Importantly, they also drive our exposure to attractive channels that continue to outgrow traditional retail. Across strategic channels, such as away-from-home, hospitals, pharmacies and home care, we continue to grow 2 to 3x faster than in March Retail. While the structural growth driver keep boosting our winning platforms, we remain equally focused on the areas where further progress is needed. In North America, we have previously discussed our dissatisfaction with the competitiveness of parts of our EDP portfolio. We saw some improvements in performance during Q2, which is encouraging. That said, we are only at the beginning of the journey, and we remain focused on sequentially executing the initiatives that are needed to deliver a sustained improvement in performance over time. In our yogurt, as we have already shared, additional production lines are coming online throughout enabling us to further strengthen our own shelf execution and better self demand, while progressively reactivating segment, on ralpotein and obviously, leveraging the breadth of our portfolio. Looking ahead, we have a comprehensive innovation road map planned across H2 '26 and into '27. This includes activating Activia by leveraging successful learnings from Japan on functional claims and from Europe on fiber-based innovation, while expanding our presence in formats and segments, such as nourishing everyday yogurts and tubs with Oikos and therefore, addressing the gaps in our portfolio. And there is more to come, including additional initiatives and that leveraging the strong page and equity of the Danone brand. And there, you will have to stay tuned. In our [indiscernible], we will continue to support the ongoing improvement of international is through innovation and innovation in '27, including upgraded core recipes and new products designed to capture the fast-growing clean label train. In plant-based as part of our efforts to reposition our sale from a plant-based brand to a plant-powered nutritional complement to DRA. We have recently expanded our pre-range with the launch of Sil [ sealed ] protein yogurt and [ sealed ]protein shakes. As said, all of these initiatives will be all progressively to support a gradual improvement in our North America EDP performance over the coming quarters. In our EMEA in the IMF category, we are now back to a normal situation in terms of presence on shelf. Our focus has now shifted from restoring supply to rebuilding trust in the category. Our sales teams are engaging closely with maternity hospital and health care professionals, and we are giving parents greater visibility into how our products are made to enforce confidence in our brand, virtually opening our factories, showcasing our quality processes and highlighting the extensive testing beyond our products. In quarter 3, we will launch a new campaign to support these efforts and remind consumers of the quoting nutrition and expertise that comes with our 50 years of early life nutrition research. Although the disruption affecting IMF market continued into quarter 2, we expect the market to progressively normalize throughout the remainder of the year. Let's now move to Slide 6. Our business model is predicated on quality organic growth, and this remains our top priority. At the same time, as part of Renew Danone Chapter 2, we have also made clear our ambition to be more active on M&A. Our approach remains highly disciplined and is guided by 3 clear filters. First, strong strategic fit, focusing on opportunities within our core categories or adjacencies. Second, strict financial discipline with value creation at the core and maintaining structurally double-digit ROIC as a key priority. And third, but equally important, execution capabilities, ensuring we have the capabilities and the teams required to successfully leverage acquisitions. The transactions signed during the first half are strong illustrations of this approach. They further enhance our health focused portfolio and support our value creation ambition. As our older discussed in quarter the contemplated acquisition of Huel will extend our presence in the premium complete nutrition space. June is a well-established player in nutritionally balanced mill with a sizable business in Europe and the U.S., positioned in a highly complementary segment to our portfolio. Beyond the category opportunity, they bring extensive capabilities in direct-to-consumer channels, digital marketing and community engagement while operating at the intersection of health and convenience. In parallel, we announced a new chapter for Argentinian dairy business. Together with our long-term partner, Arcor, we are creating a joint venture that combines our portfolio to allow the full potential of their markets in the region. While the transaction will technically deconsolidate our Argentinian dairy business, we expect the synergies generated by the joint venture to be EPS accretive over time. Finally, in June, we signed the acquisition of MADE Group, expanding our presence in the fast-growing healthy nutrition space in Asia Pac. MADE brings a well-established portfolio of brands spanning high-protein ready-to-go products, gut health yogurts and coconut-based products aligned with our health focused strategy. The transaction would strengthen our presence across Australia, New Zealand and Southeast Asia, together with the acquisition of the remnant of our Australian fresh dairy joint venture it would double the size of our EDP business in APAC, adding more than EUR 400 million of sales made would be accretive to both operating margin and EPS from year 1. We expect to close all this transaction in the second half of the year. So as you see, we keep moving at pace organically and inorganically. And with that, I'll hand over to Juergen. Juergen?

Thank you, Antoine, and good morning to all of you. Let me start our financial review with our Q2 sales performance on Slide #8. As you heard from Antoine, we have seen a return to strong quality growth in the second quarter with like-for-like sales up plus 4.2%. Growth was actually well balanced across our 3 regions and across all our categories. While we will dive into regional details shortly, let me comment briefly on our categories. Our EDP business delivered solid like-for-like growth of plus 3.8% in the quarter. While our protein and other functional yogurt platforms continue to be the primary growth driver, we have also seen increasing contribution from core brands such as Danone and Activia with promising results of our recently introduced fiber and KFR innovations. In Specialized Nutrition, like-for-like sales grew plus 4.5% in the period. Growth was supported by the continued strength of our Medical Nutrition business across all regions. At the same moment, we can report a progressive recovery of our infant formula in Europe and the Middle East. That started mid-second quarter and we see pricing in. And finally, our water business that delivered plus 4.7% like-for-like growth, notably driven by a strong start to the season in Europe and here, especially for the Volvic brand as well as driven by an accelerated momentum of [ Aqua ] brand in Indonesia. Let me now turn to our traditional sales bridge for the second quarter on Slide #9. Within the plus 4.2% like-for-like growth that I just described, volume mix played once again a key role contributing plus 1.9%. We Importantly, volume mix was positive in all regions and in all categories, reflecting the relevance of our portfolio. For the first time in several quarters, reported sales growth exceeded like-for-like growth in Q2. Scope contributed plus 0.8% and reflecting the acquisition of Kate Farms last year and the consolidation of our dairy joint venture in Australia. At the same time, the currency impact moderated to minus 1% in the quarter. As a result of those movements, reported sales reached EUR 7.2 billion, up plus 4.4% versus last year. Let's now take a closer look at the performance of each region, starting with Europe, Middle East, Africa on Slide #10. The Momentum in the EMEA region improved in Q2 as our infant milk formula business progressively recovers. And as our EDP and Water businesses continued to deliver solid growth. Altogether, like-for-like sales were up plus 3.6% and driven by 2.2% volume mix. Let me start with Specialized Nutrition that is back to growth with around plus 3% in the second quarter. A few comments first on our IMF business. In the Middle East, we saw actually a far catch-up in Q2 following a Q1 that was impacted by both the recall and the onset of the conflict. In Europe, while our on-shelf availability returned to normal in the month of June, the first part of the quarter was still impacted by disruptions. The category in Europe was still somewhat soft, although trends have improved sequentially towards the quarter. Our teams are mobilized to read the trust among health care professionals and consumers, and we are confident that the category will gradually return to normal. In EDP, we continued to deliver strong performance across the region in dairy, high protein, Skyr and Kefir all posted double-digit growth. Activia extended its positive momentum, posting growth for the third consecutive quarter in Europe. And our pro plant-based brands also continued to perform very well consistently delivering competitive growth and driving the category through innovation. Finally, our water business that delivered a solid start to the season, notably driven by our Volvic and Evian brands with both plain water and recent Aqua Drinks innovation under the Volvic brand growing very fast. For the first semester, the EMEA region grew sales plus 2.1% on a like-for-like basis and saw its recurring operating margin stable at 10.4%, the solid achievement in the context of the IMF record. Let's now move to the Americas region on Slide 11. The Americas region delivered plus 4.3% like-for-like sales growth accelerating versus previous quarters. Within debt performance, North America also improved with plus 2.6% growth in the second quarter. Within North America, the performance of our EDP business continues to improve. In Q2, we saw again strong growth in high protein under the Oikos brand with an acceleration in our drinkable product formats. We have, at the same moment seen a stabilization of our Creamers business under the International Delight brand. As Antoine mentioned earlier, we are confident in our ability to further restore competitiveness in those categories, supported by a strong pipeline of innovation for the quarters ahead. Beyond EDP, Specialized Nutrition performed well across the region. The infant make formula business in Latin America was particularly strong, growing double digits, driven by the Aptamil brand. In North America, our medical nutrition business further accelerated in Q2, and those numbers do not include Kate Farms, which continues to perform strongly and which will enter the like-for-like perimeter from Q3 onwards. Overall, for the first half, the Americas region delivered plus 3.9% like-for-like growth and plus 31 basis points of recurring operating margin expansion. Turning now to our Asia Pacific region on Slide #12. The region delivered plus 5.2% like-for-like sales growth in Q2, again, largely driven by volume mix. We see solid momentum in Special Nutrition, which accounts for 2/3 of the region's sales. In IMF China, we delivered competitive growth in a category that has been normalizing and against high level of comps of last year. the teams are focused on executing our premiumization strategy with a continued strong momentum of our [ Sensis range ]. In the rest of Asia, our IFF business is performing strongly, and that we highlight especially the business sales in India as well as in Vietnam. In Medical Nutrition, we saw continued strong demand for both Dice Medical Nutrition as well as baby medical nutrition. While still relatively small, we are particularly pleased by the momentum of our oral Solutions business, just gaining scale rapidly across both China and Australia and New Zealand. In Japan, our EDP business is delivering another quarter of double-digit growth. Both Oikos and Activia performed strongly, supported by effective activation and execution. The full consolidation of our dairy joint venture in Australia represents a meaningful addition to the EGP category in the region and will start contributing to like-for-like performance from next year onwards. In Waters, performance was more contrasted across our 2 main brands. In China, Mizone started soft into the season in a slow category environment and despite market shares that are well oriented. On the other hand, we posted very strong results in Aqua Indonesia in the quarter on the back of a dynamic water category. Overall, for the first half, the APAC zone delivered plus 5.6% like-for-like sales growth and recurring operating margin of 24.7%, slightly as of last year. Let's now turn the margin bridge for the first half of year 2026 on Slide 3. Our recurrent operating margin increased by 12 basis points in the first half of year 2026 to 13.3%. The IMF recall as well as the increase of some commodity indexes following the Middle East conflict impacted our margin from operations in the first 6 months of the year. Thanks to several cost initiatives launched over the last quarters, our teams around the world were able to counter those headwinds with an elevated level of productivity and efficiency gains. An immediate step-up in savings has been important to deliver our business model. As you know, we believe in the value creation model driven by quality growth and fueled by consistent investments into future growth and efficiency initiatives. Let's move to the next slide, Slide 14 to look at our EPS and cash generation over the period. The strong operational performance, which we just went remained the primary driver of EPS growth in H1, contributing plus 8.3%. This was offset largely by a negative currency impact of minus 7%. The remaining items had a limited impact with higher refinancing costs compensated by tax associates and minorities. As a result, recurring EPS increased by 0.9% in the first semester to EUR 1.92. This leads me to another key indicator of our value creation journey, our cash generation. We delivered free cash flow of EUR 0.9 billion in the first half, supported by our strong operational performance. This was achieved while continuing to invest into the business and despite a temporary increase of security stocks to ensure customer service levels. This concludes the financial review for the first half of the year. And so let me turn to the next page, Page #15. And here, let me first thank our teams whose commitment and excellence in execution enabled us to deliver those solid results in the first semester despite the challenging environment. is reinforcing our confidence to continue delivering competitive growth and value creation in the future. We are, therefore, today confirming our financial guidance for year 2026, with plus 3% to plus 5% like-for-like sales growth and recurring operating income to grow faster than sales. And with that, let me hand it back to Antoine for the conclusion.

On Slide 16. Thank you, Juergen. So before we open the floor to questions, I would like to leave you with a few final thoughts. As you've seen today, we delivered another half year of solid high-quality results. And as I told you, this performance reflects the relevance of our health-focused portfolio, the strength of our growth platforms and the commitment of our teams around the world. While we are obviously happy with these results, we also renew clear eyes about the work that still lies ahead. We are encouraged by the progress we are seeing in some areas but we continue to operate with a mindset of constructive dissatisfaction and a relentless focus on execution. As you have heard me say many times before, we believe the food industry is at a tipping point. Consumer and patients are increasingly looking for science-based nutritional solutions that support their health and well-being with our unique portfolio in health-focused categories, our strong science capabilities and our commitment to quality, I believe we are uniquely positioned to benefit from these long-term trends. Our priority remains to deliver consistent performance while continuing to transform the company. We will continue to strengthen our portfolio through innovation, disciplined investments and selective acquisition, positioning Danone for long-term sustainable growth. And with that, let me hand back to Paul to start the Q&A question. Paul, over to you.

Great. Thank you very much, Antoine and Juergen. So now we'll start the Q&A session with the first question coming from Guillaume Delmas at UBS.

A couple of questions for me, please. The first one on CNAO. So China, North Asia, Oceania. Volume mix slowed quite significantly between Q1 and Q2. I think Q1, we were at 10.5%, and now it's more 1.5% volume mix. I appreciate comps were a bit tougher in the quarter. But could you maybe shed some light on this slowdown and what's driving it in terms of division, category or country. And then looking ahead, I mean, it's not like comps get any easier. In fact, they're slightly tougher going forward. So are you confident you'll be able to maintain a positive volume mix in the back half of the year in CNAO? And then my second question on North America. Antoine, you said during the presentation that we are still at the beginning of the journey. I mean, you're clearly trying to signal the improvement will be progressive. Patients may be required. My question here is, is the turnaround of North America may be taking a bit more time than you initially expected? And when we think about the key drivers, the creamers, traditional yogurt, plant-based beverages, where do you expect the fastest progress being visible very quickly? And what could take a little bit longer?

Guillaume, we probably do a duet with Juergen on that. Let me start first I'm super happy with the performance of CNAO, I mean the quality of what they are doing, the quality actually of the delivery on competitors that are, as you said, very, very tough, is really good in the market when it comes to IMF that has been normalizing. So happy with our performance. I mean the key driver of volume mix is my zone and the Water category. The category itself is going down in the quarter. But all in all, pretty confident that we will keep delivering in CNAO. Juergen?

Yes. Just to reiterate our confidence in very solid growth patterns, including on volume mix in the region because it's true that Mizone has created a little bit of volatility in the second quarter, but what is really reassuring is the very competitive performance of our IMF business in China. And I think we've been discussing at length the exciting opportunity in Medical Nutrition. So I think they are well set for the quarters to come in CNAO.

So on your question on North America, no, it doesn't take longer than what I expect. But as we said, capacity in will come progressively. So it's not opening of a new factory, but it's line by line over the coming quarters. This is enabling us to start reactivating the rest of the portfolio. So it doesn't happen from one day to the other. What we have in the pipeline from an innovation standpoint and what will help remarking the brands that we haven't been supporting because of our capacity been very strong. You will see the start of it in H2 with Activia. You will see some new formats coming on to Oikos, and more to come in the following year. And we will do things in an orderly fashion. So that I mean, it is a solid and building competitive advantage for the long term. In the short term, I'm very happy to stabilization of our creamers. As we've discussed, it's step 1. We also need to allot the emerging consumer trends and the naturally it takes a bit more time, but the first indications on our creamers are encouraging. By the way, everything that is our protein is absolutely, absolutely flat. So are deploying as per plan. are really confident with what I'm seeing. But indeed, it's going to be progressive.

Our next question is from Nicolas Ceron at Bank of America.

Can I ask just one question on North America to follow up? We're all trying to understand to what extent it's really the capacity constraint that's impacting your performance. So maybe if you could just clarify what kind of volume growth you're seeing in yogurt in North America in your business. Are you seeing volume flat, as you would expect for capacity constraint? Or are you seeing volume going down? And the second question would be on the China clinical nutrition business. Are you seeing some pricing pressure from the government linked to volume-based purchasing? Because I know some of your competitors have been talking about that, and I was wondering if that impacts your business as well.

Nicolas, on our -- listen, on North America as we said, on everything that is protein actually a consistent, consistent growth. The rest of the portfolio was under quota. So as we progress in release capacity, we will leverage, as we said, that capacity to do 2 things: keep delivering to the protein growth because they are still more growth to be taken out of protein and starting to read not the rest of portfolio. Juergen?

Yes. The only element -- I mean, I think there's a lot of excitement watching Nielsen data, especially for North America, and you have seen that Nielsen data, especially the last revised ones for our yogurt business. The U.S. are moving in direct directions. So I think which is a good a good indication that things are performing as we want them to perform basically.

There was a bit of revaluation by Nielsen on the end on the way they measure things and it starts looking more like what we see in our own data. On Medical Nutrition in China, it is a very exciting market. Now more, it's a very exciting market because in the place where we are the absolute leader, which is our tube we can go deeper in Tier 2, Tier 3 hospitals. There is a huge commercial work done when it comes to moving from the [indiscernible]. We are super excited with what we see in by the way other subcategories where we are only scratching the surface. We are -- I mean, pediatrics, we have -- I mean, large business that is growing very, very fast. In oral nutrition, which is growing very fast, we are only at the start of the journey. When it comes to our volume-based pricing, to be honest, it's not new. I mean that's the thing that is happening everywhere in the world. we have been handling that in about every country in the world. So for us, it's pretty much business as usual.

Thank you, Nicolas. Our next question is from Jon Cox, Kepler.

A couple of questions, if I can. One on the free cash flow. And when I dig into your half year report, I see the inventories of about EUR 250 million, which is a fair chunk probably of what we're seeing is maybe a light print on the free cash flow. Do you think this will unwind in the second half of the year? You're talking about the Middle East? And also maybe just on the CapEx is a little bit higher maybe you can talk a little bit about free cash flow and CapEx. You've said that now maybe you're starting to obviously spend more on new plants and things like that. And the second question, just on the profitability. Again, looking at the EDP business, the margin is off 70 basis points year-on-year versus a year ago. Just wondering what's going on there? I think a lot of us still think that, that business should start to see better profitability. And I can see the 0 to 10 basis points beat was driven by actually by Waters which is up almost 200 basis points.

Juergen? .

Yes. Look, on the free cash flow, you say it. We decision in the first half of the year to increase our security stocks internally because it's fair to say that global supply chains are a bit disrupted, especially when going through the Middle East region. And this is true actually for finished products as much as for some of the raw materials. So as a precautionary measure, we increased security stocks that will fade away in the quarters to come. So it's really just temporary elements. The rest of the free cash flow, very strong, and especially coming from our operational performance. CapEx is slightly increasing, but I think we talk EUR 40 million, EUR 50 million in the semester. As we discussed actually over the last quarters as a result of the investments we are doing into medical nutrition and high protein. So nothing new to report on that front. EDP margin in H1 is a bit down, you are absolutely right, very -- actually, it's relatively easy to explain because the inflation kicked in from the second quarter onwards. And we will see, as usual, a bit of lag between inflation and price. So pricing, we will increase prices selectively across the regions as we go through the third quarter already. so that will be balanced. So don't look at the EDP margin isolated in the first semester. I think it's not really selling because we share your belief that the EDP margin is going to increase over time.

And the second thing is, I mean, we keep investing and we keep investing behind our winning innovations. So we'll put high protein with Skyr, we push Kefir, we'll push our plant-based offering is of it, making sure that we list them, making sure that we make them visible. So there, there is also a dimension of our consistent investments, Jon.

Our next question is from David Roux at Morgan Stanley.

Well done on a very solid set of results. I've just got 2 quick questions. Can we just go back to North America EPD and just remind me on your protein shake ambitions. Is that something that you guys will revisit once the additional yogurt capacity comes online because that's gotten somewhat quiet the last couple of quarters? And then the second one is just a more broader question on emerging markets. It's a theme that we've seen in the last couple of quarters, strength in emerging markets. How sustainable do you think this is? Do you think that there's been somewhat of a pool for of demand given concerns around supply chains, et cetera? Or do you see a sustained sort of underlying strength there? I think partly the concern or the question comes from concern over those consumers possibly getting squeezed a bit more on higher energy costs, et cetera, but we haven't really seen that play out yet.

David, thanks. I mean, yet again probably a duet with Juergen. On North America shakes, we'll keep growing as fast as we can. And whenever we have capacity available, we will seize every opportunity there is. So we don't talk specifically about shakes, but altogether, the trend is positive and things are going rather well. And we'll keep pushing the growth -- we keep pushing the growth there. So I'm not saying really special to import except that we are quite happy with the performance.

Yes. Just one element to add, which I think we stick to what we said. First priority is bringing back our Europe business to where it belongs. And the second and really after, we are going to pre acceleration button on protein shakes. So that's very clear. But what is very reassuring is that despite the fact that we have not been allocating a lot of resources into protein shakes, we are quite sticky on shelf. I'm sure you can see that when you go to the stores in North America. So yes, there's an opportunity in front of us.

So yes, the core and the innovation, but the core, the core, the core. On emerging markets, and we do that also do it with Juergen, if you step back and if you look at Danone's actually a quite balanced footprint. And historically, actually, a pretty large footprint in emerging markets. And the performance that you see in emerging markets has been actually quite consistent over time. So not everything goes well everywhere all the time. But by and large, we got some pool, and we've got pool that is not topical as you were worried of but a pool that is very, very structural. I mean you take a country like Indonesia, if you take one of our largest emerging market markets. I mean, we offer great value at every price point. And in a market that has been, frankly, under pressure from a consumer standpoint for a long time, we are delivering a fairly solid performance. So we target all of the despite the ups and downs of our emerging markets. You see that in Latin America. You see that in places like Morocco, you see that in places like Indonesia or Vietnam, for that matter.