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

Ladies and gentlemen, welcome. My name is Isabelle Esser, I'm the Chief Research &Innovation, Quality and Food Safety Officer at Danone. I joined Danone a year ago from 30 years of a career in research and innovation and HR. So welcome to this Global Research Innovation Center here in Paris-Saclay. I'm very proud and happy to welcome you in this very special place, where we moved beginning of this year and which was inaugurated on the 6th of February in the presence of Madame Élisabeth Borne, the French Prime Minister. This center, together with it's twin located in Utrecht, Netherlands, at Danone science hubs dedicated to Health. As you can see, it is a state-of-the-art building, which was conceived to inspire, innovate and impact. A building forward-looking that has achieved unique environmental credentials. It has the capacity to welcome around 500 scientists, expert technologies, product and packaging designers. It is a flagship of Danone Research & Innovation centers dedicated to science and technology for dairy, plant-based and waters, and it is home to broad consumer and scientific capabilities,, absolute core to innovation, such as consumer and patient insights, fermentation and biotics, right to fast and robust prototyping up scale with a state-of-the-art, fully flexible pilot plant. Our pilot plant is the largest in Danone. We are anchored here in Saclay in a very rich, diverse and vibrant innovation cluster, one of the world's largest, concentrating up to 30% of the fresh funding on Research & Innovation. Paris-Saclay is in the top-tier academic cluster, it has 16 position in Shanghai Ranking and which houses 65,000 students and around 6,000 PhD. So a very diverse and rich ecosystem. It also has excellent public and private research facilities with Paris-Saclay University and the [indiscernible] both of them internationally recognized with hundreds of highly ranked publication. And of course, a flurry of private research facilities, such as ODF and ENGIE, Renault, [indiscernible], Servier, [indiscernible] ], just to name a few. We are also having here more than 500 start-ups. We are connecting to this diverse ecosystem of academia, start-up and industry player to innovate, serving our mission of bringing health through food to as many people as possible. We are also leveraging strategic alliances and participating in public-private partnership and consortia in core scientific fields around the world. We have very powerful assets, building on a long-standing history. We have a wide network of scientists, technologists and designers located all around the world. This geographical footprint is critically important as it allows us to be closer to the different consumer and the businesses, but also gets us closer to the science and technological ecosystem in order to leverage and exploit them. We have one global research and innovation center located in 2 locations: Paris-Saclay, France here and Utrecht in the Netherlands with six specialized hubs on core capabilities such as, for example, in Evian on water, analytics and packaging. In Singapore, on digital health. In Spain, Madrid on industrial processing. In the U.S.A. and Belgium on plant-based. And in Shanghai, on infant nutrition and healthy aging. Research & Innovation are in the DNA of our company. Our roots are in science. Isaac Carasso, the founder of Danone was struck by the level of malnutrition and disease among local children in Barcelona. He was inspired by the research on dairy ferment for a healthy and long life of biologists and Nobel Prize winner, Ilya Mechnikov, the father of immunology. And Isaac, mixing fresh milk with ferment created what became the first Danone yogurt and he sold it as [ half ] food in pharmacies across Barcelona in 1919. Ever since doctors still recommend Danone's yogurt during antibiotic treatment to support gut microbiota. Rooted in health and science since 1919, we have continued to build a unique and leading expertise in ferment, good health and biotics. This is a unique asset offering us countless opportunities to serve consumers and continuing the story of Isaac Carasso. I will come back to that later. Our Specialized Nutrition story begins in the Netherlands in 1896 when two brothers founded Nutricia and began developing infant formula at a time of very high infant mortality. Soon after, Nutricia moved on and created its first nutritional product for diabetic patients. So over a century, we developed a rich and deep expertise in immunity, energy management and infant and medical nutrition. Our water story starts in 1789, a French nobleman, the Marquis de Lessert, discovered a natural new mineral water source in Evian and found it so pleasing to drink that he drank it regularly. He suffered from liver and kidney problem and found that these ailment was significantly alleviated. So quickly, the benefit of Evian natural mineral water spreads and doctors started to prescribe it. Evian water was, in fact, sold exclusively in pharmacy until 1964. So we continue to develop a deep expertise in hydration and water science coupled with the analytics to ensure the purity of our source and of course, heart packaging. From its origin, Danone has innovated to bring consumer and patient healthy food and water fueled by over a century of groundbreaking nutrition, hydration and fermentation research. Our deeply rooted evidence-based science and technology enable us to design and offer superior product to consumer and patients all across the world. Science-based for more than a century, Danone has continuously explored new horizon in Nutrition to support health for today and for the future. This very entrepreneurial approach from our founding founders to the latest nutritional science has changed the lives of millions of people around the world. Our science is evidence-based, demonstrating the benefit of our technology and products to impact on consumer and patients' lives. And we published in high-impact peer-reviewed journal and international congresses. We continue to strengthen this capability of demonstrating the benefits of our products in local context, generating very high quality, robust data which allows us, in turn, to obtain registration in regulated categories and segments such as medical nutrition, but also to claim the benefits of our products to consumer in less regulated categories. This evidence-based science and our ability to turn it into product is covered by a very strong portfolio of patents, covering all our categories from dairy to plant-based to infant formula and medical nutrition. So we have real tangible science and technology asset rooted in our history. And yet, the reality is that we have been underleveraging them over the last few years, being patchy at best and forgetting all together at worst. On the left-hand side of this chart, you will recognize some of the messages shared by Antoine a little bit more than a year ago during our capital market event in Evian. The drivers of underperformance at Danone resonate very much with what happened at the level of Research & Innovation. But that means that we have meaningful opportunities to step up our game. First, by bringing more focus in what we do, focusing our resources and efforts on the right scientific field and asset to address the consumer and patient need that offer the most compelling long-term growth opportunities and are totally aligned with the Danone Renew strategy, not only focus, but also consistency in method in our execution, particularly having a more systematic and disciplined approach to product superiority and consumer preference moving from social media opinion on consumer preference to a robust methodology to identify consumer preference attributes. Consistency, it's also about bringing back benefits demonstration and systematically exploiting those demonstration and leveraging all our platforms, all our assets. Consistency and focus. Now we also need to bring more impact. Over the last few years, our innovation were not impacting growth. It was even extremely tactical in our dairy categories following the latest trends. Not only did it not result in growth, but it created complexity and diluted our brands. Even today, a large number of consumers don't know anymore, the nutritional benefits of our yogurt. We have to turn the tide. Impact is also the name of the game in delivering bigger, more focused innovation at scale leveraging science and technology to the maximum. Consumer-centric innovation that has a positive impact on consumer and patients, categories and the P&L. And finally, we have an opportunity to bring more long-term vision and investment. Here, it is about bringing more balance between the short-term pipeline management over the last few years and the mid- to long-term vision to invest in the new frontier of science and technology and shape our company's future. One thing, very important point I'd like to make. The most important opportunity we have is to restore confidence. Confidence in our research and innovation assets. For far too long, we have been under leveraging our science and capability in research and innovation, believing that we could not make compelling claim. These days are over. I've been here in Danone for more than 1 year. This last 12 months, I've had the opportunity to understand the depth of our expertise and knowledge, to assess our capabilities which will allow me with my team to develop a focused research and innovation strategy fully aligned with Danone renewed strategy defined by Antoine, and this strategy is fully attuned to our mission of bringing health through food to as many people as possible. Hence, it starts and ends with consumer and patients. Like 100 years ago, everything we do is about delivering to the need of the consumer and patients throughout the life span. Our mission of bringing health through food to as many people as possible is people-centric. Hence, our strategy in research and innovation is also people-centric. It all starts with consumer and patient-centric design to deliver superior product and solution fit for purpose, providing the benefit people need and want. For example, we are understanding the product journey at every touch point for the consumer and what are the product attributes that are drivers of liking or lead to patient adhering to their diet. These products and solutions are sustainable by design, fully in line with our recently relaunched Danone impact journey. On Health & Nutrition, we want to offer tastier and healthier food and drinks, provide healthier choice and provide positive nutrition and hydration. And on packaging, we drive low carbon alternatives and circularity. From its origin, Danone has innovated to bring consumer and patients healthy food and water, fueled by over a century of groundbreaking nutrition, hydration and fermentation research. We will continue to explore the frontier of this research field to make an impact on people's health and well-being. To invest in differentiating and breakthrough technology to design and offer superior product to consumer and patients across the world. And we will use to do that the powerful ecosystem, multiplying our own assets. Data, artificial intelligence, machine learning and digital service play an essential role, not only in the way we operate, but also in the relationship with consumer and patients. Jean-Marc and Bruno will showcase some examples later. Finally, we are nothing without the talent of one global research and innovation team fully interconnected and connected to the ecosystem. So our strategy is clear and built on differentiating science and technology to design superior product and solution. As I mentioned earlier, Danone, in essence. is rooted in science. However, always addressing a consumer or a patient need. These needs are enduring. They were there yesterday, they are here today. They will be there tomorrow. So we've articulated them across clearly defined consumer and patient health benefit platform of everyday nutrition and hydration, children growth, immunity analogy, good health, physical energy and performance, mental well-being and brain health, and recovery. This health benefit platforms are underpinned by our world-class capabilities in specific and chosen scientific and technological field of biotechnology and functional ingredients, biotics and fermentation, nutrition, hydration and water science, pack decarbonation and circularity, cognitive and behavioral science and artificial intelligence and digital. Now these science and technology assets are all individually extremely interesting. However, addressing a specific consumer need or solving a tangible patient pain point will require to combine them. And this is the magic, thanks to our capabilities in fast prototyping, product design and development, we know exactly how to do that. The execution in this benefit platform is category agnostic. As an example, we deliver immunity product through dairy, plant-based and specialized nutrition. Again, this is key because it allows us to leverage and exploit our assets across categories and geographies. Now before we go further, let me do a quick deep dive on one important consumer and patient benefit platform. Gut health. In fact, the foundational platform of Danone, in essence. The science and technology assets underpinning this platform are multiple. However, the main one is fermentation and biotics. Gut health is a new. Back in 1919, it was an important topic for public health and for Danone. Over the century, the knowledge has vastly expanded, and it is now acknowledged and demonstrated that the microbiome, the trillions of microorganism living in your gut has a direct impact on people's well-being and has through our life stages. We know now that the microbiome matures in early life, and so the importance of the first 1,000 days and it continues to evolve across our life span. It is impacted by diet but also by events in life, such as stress or antibiotics. So understanding the dynamic of the gut microbiota, both in health and disease is critical to develop solutions that can impact it positively. Gut health and microbiome is also gaining massive traction with both consumer and the medical community. And as you can see, Gut is now searched on Google as much as brain. There is a renewed interest in the microbiome and it has become an extremely active field of research and publication. Gut -- enhance gut microbiome is seen as the second brain. Today, we know that brain and gut are physically connected by the enteric nervous system and there is more and more evidence that gut and microbiome affects brain function. From its beginning, Danone has pioneered gut health and has been a leader in the field of fermentation and biotics. We have built a unique and differentiating propriety strained collection of biotechs, mass of the fermentation process and the understanding of the ecology and biology of the biotics. It allows us to develop unique formulation, delivering specific functionalities and benefits and being able to impact the microbiome. The opportunities are multiple when it comes to leverage this strain collection, the biotechs and the expertise we acquire. From gut health to children growth, from everyday nutrition to immunity, allergy and recovery, we are leveraging this expertise to develop unique and differentiated products across our categories. from Danone and Activia to Aptamil and Actimel and Neocate, just to name a few of our brands. And we have been doing this for years, launching many first successful product based on our expertise in ferments and biotechs. We are expanding our pipeline exploiting our assets to their full potential in the next few years, accelerating the development and building the next generation. So let me conclude with the message of optimist. We have been moving to the front foot for 12 months now, and it is already showing. Aptamil is winning in the market, demonstrate that every feeding journey count and that a truly baby-centric infant formula proposition makes a difference to both babies and parents. In pediatric, specialties, Fortimel and Neocate have every day, a positive impact on children's health by helping them to address malnutrition, weight loss or allergy. In dairy, we are progressively back to claiming the benefit of our product from Actimel on immunity, to Activia on gut health. And by the way, we are also bringing gut health to plant-based lovers with Alpro. Using our unique know-how to compact proteins, we are helping oncology patients get the nutrients they need but also providing consumer with daily high-protein products supporting their energy and performance requirements. Last but not least, we are also delivering superior hydration to people across the world with our brands like Evian, Aqua and Mizone. And while we are actively impacting growth short-term, we also have a clear road map to the next years, very much in line with the renewed Danone agenda. It is about winning where we are, by leveraging and exploiting our strong and differentiating asset, focusing on our core engines and boosting our winning platform. It is expanding where we should be by leveraging assets to their full potential across categories and geographies. This includes the new areas of biotechnology. Importantly, we want to scale our platform further from Danacol to Activia, Souvenaid and Fortimel, we have really meaningful large opportunities. And finally, it's about seating the future. And here, let me reconnect with my earlier message. The entrepreneurial approach from our founding founders to the latest nutritional science has changed the lives of millions of people around the world. The future will be as much about what Danone knows and master as it will be about exploring new [ fonte ] to remain at the forefront of science and technology, exploring avenues such as precision fermentation or cell-based culture. It will also be about digital health and personalization, exploiting and leveraging our assets, always the consumer and the patient at the heart of our science.

Good morning. I'm Jean-Marc Magnaudet, President, Danone Specialized Nutrition. At Danone Specialized Nutrition, we bring health through food to as many people as possible by creating sustainable, innovative science and needs-based nutritional solutions. Our science helps to improve the health and well-being of people around the world at key moments of life. I will share with you how we learned our portfolio superiority, leveraging our science to create sustainable value. Our science is at the heart of our business model to impact consumers and patient health throughout the lifespan. We provide nutritional solution throughout the life cycle from early life serving healthy babies and vulnerable babies, children and kids to adults with disease-related malnutrition. For example, cancer or stroke. And for age-related conditions, for instance, mental and physical frailty. We operate in 3 main categories: early life nutrition, adult medical nutrition, for example, cancer, stroke, condition of aging like frailty and pediatric medical nutrition in challenged growth, in allergy, metabolics and epilepsy. We valorize our science around multiple Danone Health benefit platforms, which are founded on the latest science and technology assets. We are designing engines and leveraging our existing engines in a continuous development and life cycle management approach to bring and sustain superiority in our different categories. These engines are integrated into consumer and patient-centric solutions of our [ hero ] brands in order to support the nutritional needs of our consumers and patients. For instance, Neocate, world-leading allergy brand, designed to treat cow's milk allergy. Neocate is supported by our unique synbiotics engine. Another example, Souvenaid, our memory product with the [indiscernible] engine has been supported by 10 years of clinical data, which has enabled us to pilot the launch of Souvenaid in targeted states in the U.S. Another example is Fortimel advanced, one of our [ hero ] products leveraging ActiSyn, our unique engine to support mobility. Based on our business model, we have built proven capabilities to understand our consumer and patient need states. This with health partners, capabilities to design superior engines and safe nutritional solutions with data and clinical evidence. Capabilities to bring them to market with a registration track record everywhere in the world, capabilities to create and contribute to treatment guidelines. Generating local evidence and local activation through healthcare professional, leveraging the adequate route to market through multichannel engagement in hospital, in home care settings, pharmacies online with community healthcare professional and at congresses. This discipline to innovation is sustainable and competitive with true assets and it is now being applied to other Danone categories beyond specialized nutrition with a cross-fertilization mindset. Now I'm going to take six examples to illustrate how we valorize our science. First example is our science-based, need-based portfolio approach in early life. Aptamil, with a range of products targeting the different consumer needs, different feeding journeys, when the market features ingredients. We propose a differentiated, unique portfolio with proven health impact. Aptamil reduces infections by 30% and brings functional benefits like 8x less colics. The Aptamil feeding range targets moms who want to breastfeed and use the formula in some occasions. This specialty design range brings better tolerance. 21% of babies are C-section born babies in 2021, with an expectation to reach 29% in 2030. They have a need of stronger immunity. There are 8x less skin symptoms using Aptamil C-section. We also strive for a holistic science-based approach from products to digital health solution that makes the impact of our products visible and to support parents and build their parental confidence. In the area of gut health, we have developed a stool tracker, a patented tracker developed in our lab, validated with experts as an indicator of children health. How does it work? Parents go on our digital ecosystem. They take a picture of the stools, send a picture which is treated in our China lab for China moms or in Singapore labs for the rest of the world. We have an algorithm, which look at stool consistency and the parents receive a report and a call to action. What are the benefits? With this, we built a data house. We have more than 400,000 pictures of stools. We can share data and build evidence with healthcare professionals. And parents have the reassurance when they use Aptamil, that they do the right thing and they can choose the formula, a different formula to soften the stools of their baby. In China, this has shown 10% incremental sales. For sustainable growth, a science-based product development is a pre-requisite to ensure a robust life cycle management of our [indiscernible] brands. It's a capability, it's a mindset, it's a process. Based on the latest scientific insights, we continuously develop our product portfolio, our brand positioning and equity, building a claim road map. Let's take the example of our Aptamil brand, which has been #1 in brand equity across markets. We own superiority with our heritage and scientific quest to be as close as possible to breastmilk. Next step will be -- the next breakthrough engine, Nuturis, which will bring our portfolio even closer to breastmilk with a formula which will feel, smell, look and act like breastmilk. This is supported by clinical data and will be shown at ESPGHAN, this week, the pediatric Congress. Also, science is highly relevant to address the nutritional needs of the growing pool of adult patients. We have prioritized cancer, stroke and condition of aging like mental and physical frailty. The prevalence of these diseases is huge and growing year-on-year. We have 20 million new cases of cancer per year. In Europe, around 5 million new cases per year. 70% of cancer patients lose weight. The recent guidelines recommend to provide medical nutrition when a patient has lost 10% of its weight. Today, in Europe, only 1 out of 3 patients received medical nutrition. A similar opportunity for stroke and frailty with a large population of patients and a real category penetration opportunity with specific products covering our medical nutrition portfolio have proven health benefits resulting into improved quality of life, including nutritional status, energy and physical performance, and gut health. As I said earlier, there are 20 million new cancer patients every year. Weight loss is a key symptom. Weaker patients are unable to follow their treatment. In the area of oncology, we have pioneered with solutions such as compactization of medical nutrition products to optimize nutritional intake. Renovation target sensory adaptation seen in patients undergoing chemo or radiation therapy. Our latest innovation with 40 ml Omega-3 onco sensation is specifically designed to target weight and muscle loss in cancer patients. We have built capabilities to bring our science-based solutions to the market. Multichannel engagement is at the core for business and engagement model to activate our science through education and engagement of healthcare professionals. We demonstrate superior health benefits with over 150 scientific publication and poster presentation at scientific congresses annually. Supported by solid scientific evidence and health impact. We educate healthcare community with multiple global virtual conferences. Dedicated healthcare professional educational platforms and strong presence in scientific congresses. At a recent global Nutricia Conference, we had over 21,000 registered healthcare professionals. Cow's milk allergy affects between 5% and 8% of babies, this is a difficult experience for babies and for the parents. Diagnostic is too late and not at scale. Penetration is below 20%. We have a world-leading brand with Neocate, with a unique engine and proven benefits, which shows that science drives superiority and also to demonstrate health impact. Neocate, key specific engine, Syneo has been proven to reduce the burden of infants suffering from allergy such as cow's milk allergy. The proven health benefits published in scientific peer review journals have been shown to reduce the healthcare burden of the management of cow's milk allergy for the healthcare system and is also associated with cost savings. In conclusion, we have superior science. We designed superior portfolio solutions with capabilities to execute in the market, and we create health and economic value.

Good morning. My name is Bruno Chevot, and I'm in charge of the China, North Asia and Oceania zone. The plan for today is to give you an update on how we leverage our global and local science to accelerate growth across categories in China. I will also take this opportunity to explain how our investment in science is driving the competitiveness and ultimately, the resilience of our China business. The objective of this presentation is to provide concrete example on how we leverage science as a performance driver to strengthen our brand leadership, to build competitive edge in highly regulated China specialized nutrition categories and to take advantage of China unique digital ecosystem to future-proof our business model, be ready to unlock new growth opportunities in China. First, let's take a closer look at where we play today. We are certainly very familiar with the fact that we operate in China across four large and highly valorized categories. Each of them offering different dynamics and growth opportunities for Danone. Starting first with the infant milk formula where China accounts for nearly half of the world consumption. In the IMF category, we obviously anticipate headwinds from the negative birth rate, but we are also exiting this new [ GB ] registration process with an even stronger portfolio. Our innovation pipeline is setting us on the right trajectory to gain value chair and to benefit from market consolidation. Closely linked to infant milk formula we have this pediatric specialty segment, which is expected to remain dynamic, growing high single digit over the coming years with significant penetration gain and Danone as the allergy treatment leader is well-positioned to lead the category expansion. Within specialized nutrition space, the Adult Nutrition is set on a solid growth trajectory, structurally helped by the aging population. Danone as the leader in enteral feeding will continue to shape the category, demonstrating to healthcare professional the importance of adult medical nutrition for treating patients with severe medical condition. And we will patiently expand the category consumption outside of hospital to improve patients' recovery. Finally, the last platform, we operated a large ready-to-drink beverage category, which we believe will keep on delivering solid mid-digit growth in line with China GDP projection. This is a category where innovation and functionality are critical value creation drivers. And with Mizone back to competitive growth, we are now well-positioned to accelerate adding a stronger, less regulated leg to our China operation. As hinted before, we have built four solid business platform with distinctive assets and we operate at scale in China with a very tight brand portfolio. The Early Life Nutrition is our largest platform with Aptamil, a mega brand used by millions of Chinese babies. Aptamil is the second largest brand overall and the most successful global infant formula brand in China. Well positioned to address prevalent health issues in China, the Danone Medical Nutrition team is mastering the patients and medical engagement. The team has gained respect of healthcare professional and established an undisputable leadership on two very targeted and highly relevant therapeutic areas, the pediatric allergy and the adult tube feeding in a hospital. We are leading the pediatric allergy management with our flagship global brand Neocate. Mastering patient and medical engagement is essential, as doctor recommendation is the first point of entry in the category before parents are self-purchasing the brand in mother and baby store for the rest of the journey. With allergy becoming a growing concern in urban China, we have a unique opportunity to expand our portfolio to holistically support kids allergy management journey and also to address other conditions. Within the adult space, the adult medical nutrition, our brand Nutrison is a leader of enteral tube feeding, and the brand is present in more than 80% of top-tier hospitals. This first -- this part of the business belongs to a pharma-regulated specific category. It is produced locally, ready to harvest with demographic dividends from an aging population. More predictable than fast-moving consumer groups, it has delivered consistently double-digit growth over the past 10 years and has potential to expand further, reaching out to more patients in smaller hospital or expanding into community with supposedly charged self-based solution. Last but not least, our Danone Beverage China platform is a hyper efficient business model. The Mizone brand is consumed by more than 350 million urban Chinese. It's the #1 brand in Vitamin beverages and occupies the fifth position within the very large beverage ready-to-drink category. It's got a massive manufacturing footprint, which is delivering industry-leading productivity. It has a cost efficient route to market serving convenience stores, traditional trade, we have with Mizone, a platform ready to be stretched into multiple category health portfolio. Science which is the heart of our discussion today is at the heart also of our business model. Since we opened in 2020, the Danone Open Science Research Center in Shanghai, we are now well equipped to best leverage our global R&I network generating the local science and evidence required to address local consumers, HCPs or regulator needs. This glocal approach is a company asset, an important performance driver and it has been instrumental to our ability to drive brand leadership to communicate the superiority of our value proposition in a more convincing manner with strong evidence-based claim. It's instrumental also to our ability to navigate through the complexity of registration process and be a leading force within the industry. The quality of the science, the quality of the technology behind our dosage has been recognized by authorities and has allowed Danone to manage the infant milk formula registrations and also the pharma licensing renewal processes in a competitive way. And finally, it's instrumental to innovate beyond products, embracing digital health tech as a very powerful way to showcase our brand's functional benefit in a more tangible way to consumers facilitating also the real-world dividend generation for HCPs. The investment in science is paying off, following Danone to gain respect from science and regulatory communities creating condition for communicating sharper claims behind our brands, better segmenting our portfolio to better match consumer needs, protecting also our freedom to operate with glocal patents and position in China as a leading innovation hub for digital health services. Zooming in now on how we power our SN brand platform with evidence-based claim to drive superiority in the eyes of consumers and HCPs. Starting with the infant formula category, where we demonstrate our long-lasting immune system on C-section babies in China helping to secure the most recommended status by healthcare professionals in Hong Kong for C-section and this has been filed with a patent. Supporting also Aptamil Platinum immunity to the gut benefit showing our unique Syneo engine, which combines pre- and probiotiocs is contributing to better get immune functions versus regular IMF. We have evidence that babies fed with Aptamil Syneo formula are from benefiting from an improved microbiome with up to 60x of good bacteria present in their gut. Within the pediatric specialty category, our glocal science has allowed our advanced medical team to work very closely with the Ministry of Health to shape the allergy treatment guideline for healthcare professional reaching a consensus to use amino acid first, Neocate first as the most efficient way to diagnose cow's milk allergy with infant. We are also starting to accumulate evidence that infants outgrow allergy when treated during the right window with our Neocate formula. 62% of them tolerates cow's milk better in 2 years. Within the adult medical nutrition category, our science is also showing very encouraging results with a better survival rates in oncology and faster recovery. With critical nutrient absorption improvement for gastro intensive care patients versus regulatory feeding. That's pepticate, accelerating also the positive charge helping the speed of recovery. But we know that a large part of our business depends on infant milk formula. And I must say that I'm very happy to say that we are closing the new [ GB registration ] process with a dramatically strengthened portfolio. Not only securing business continuity, but also step changing our ability to segment our offer as we are getting ready to gradually introduce 7 innovations under the Aptamil franchise. Aptamil Essensis, the dark blue one that you see in the middle of the slide was first launched as a foreign label in cross-border e-commerce. We are preparing, as you can see, the introduction of Aptamil Essnensis under China labor with a very comprehensive range aiming at targeting different consumer needs. Bringing more sophisticated and segmented value proposition will allow Aptamil to become a stronger player in the ultra-premium segment moving up significantly the price ladder. This will be a major upgrade of our Aptamil portfolio from only two range today, as you can see at the bottom of the chart. As you know, Aptamil equity has been built over the past 50 years, under the relentless scientific quest to be nutritionally as close as possible to breast feeding or to breastmilk. Our patented Syneo engine of pre-and probiotics is allowing Aptamil to get one step closer. But we are also gearing up to introduce our most advanced Nuturis engine that will probably be seen as the next generation of infant milk formula which will allow to satisfy without any doubt the needs of the most demanding Chinese parents. Moving to a very important subsegment, the pediatric specialties as a leader of the pediatric allergy treatment, which must lead and shape the category to ensure that all babies at risk of facing cow's milk allergy are diagnosed and treated using amino-acid Neocate formula. With the newly approved Neocate eHF, we'll be able to keep patients longer within Neocate franchise, supporting them in the process of developing tolerance to protein or fighting gastroenteric condition. Following a similar approach, we leverage our demand creation model behind the challenged growth opportunity. That's the right part of the slide, and will drive infant [indiscernible] complete nutrition to strengthen our leadership within the pediatric specialty segment. We are -- when it comes to adult medical, we are amongst the player able to secure drug license, which is allowing us to compete within the hospital tender process. Educating HCPs on the important health benefit of [indiscernible] over parenteral nutrition. We have also registered 3 new liquid recipes to step into the adult food for medical purposes, and this is a big opportunity. These products have been engineered to nutritionally support Chinese patients. They are convenient when patients are de-charged from hospital and they do cater local test preference and will allow us to expand faster outside of hospital harvesting an interesting growth opportunity. Digital healthcare is very important within China ecosystem. And our SN China is a digital native business. One of the few sizable business, which started as a pure e-commerce model 10 years ago. Certainly explain why we can count on leading digital assets to better engage with consumers or to generate local real-world scientific evidence super fast. Digital Health Tech, rooted in global science is a sustainable competitive advantage. And it makes consumability benefit more visible. It creates the best condition to engage HCPs and bring them on board for a real-world evidence study. Generate also convincing claims, as I mentioned before, faster. You have here on the left -- on the right part of the slide, key example on our Health Tech services already in market, such as the Stool tracker mentioned by Jean-Marc before, which is now used by almost 1.3 million Chinese parents, we are assuring them by making immunities [indiscernible] visible whilst delivering a significant business impact showing the superiority of Aptamil. Let's take now a closer look at our latest digital services, Apta Essensis U, which has been designed in partnership with [indiscernible] leading Chinese DNA company. It's a very advanced and patent filed DNA power personal maternal nutrition coach to optimize prenatal nutrition and set babies on the right health trajectory. It's not yet a revenue stream per se, but we are starting to charge for the premium version. The DNA test helps with early diagnosis of specific genetic needs related to nutrition and encourage mother to take a proactive action. For example, some requires [ more phthalates ] and it is needed, and it's coming from a common genetic polymorphine issues. 30% of global population needs actually 1/3 [ more phthalates]. Apta Essensis U comes with our Eat Right assistant that helps users to scan their food intake and offer recommendation to address potential nutritional gaps. But Video will do a better job than 1,000 words. So let's look at the video now. [Presentation]

Our science model, as you have seen, is obviously very SN-centric. But the experience that we have accumulated around SN categories will is -- already traveling as we apply this science model to unlock new growth opportunities in more FMCGs, fast-moving consumer goods categories. We know, for example, that Mizone brand is all about hydration and restoration. And we have run a simple experiment asking consumers and at the heat of a very hot summer day to pass a validated reaction tap test, and results were impressive as we show a 40% improvement reaction time when tested before drinking Mizone and tested again 30 minutes after. Following the same logic, we are asking consumers of our recently introduced GanMai products to self-monitor their gut health and 95% of them are seeing an improvement. Putting things in a bigger context, it is striking to see how Danone frame of action, and our priorities are in full sync with the Chinese authority vision, to promote healthy aging and disease prevention, to support healthcare evolution, to accelerate innovation, demonstrating that our activities are not only delivering economic performance, but contributing as well to healthy and beautiful China agenda will allow Danone to be true to its dual project DNA and at the same time, increase our resilience in one of our most important markets. Leveraging scientific evidence we will relentlessly work to demonstrate that our activities are not only improving consumers and patient health but also making a positive impact to health economics. And finally, I would like to leave you -- you to take away with the fact that our leading position, the complementary of our platforms across early life nutrition, beverages and medical nutrition are providing unique opportunities to expand into promising categories at scale. We will leverage our global science and local model to expand where we should be, introducing innovations that deliver proven health benefit, reshape well-established categories to unlock growth at China scale. Most importantly, it's the quality, the experience, the resilience of our 8,000 Danoners in China that will enable us to accelerate and bring value to Chinese families,, to Chinese society and to investors all over the world. As you can see from the last pictures, we have a truly global collaborative model in action. Over the past 2 months, we have the privilege to -- of the visit from the Chinese Minister of MofCom, Ministry of Commerce, and we have Danone Global team coming to Shanghai to support our efforts to generate science in China, for China and the world. I thank you very much for your attention, and I'm looking forward to discussing further with you later today. Thank you very much.

Good. Well, first, a big, big thank you to Isabelle, to Jean-Marc and to Bruno and to all the teams. I think that you can see that there is lots of expertise, also lots and lots of passion at Comex level and deep down in the organization. And I'm sure you've realized how much the teams are passionate and upbeat about the future. I wanted to share a few thoughts with you before we open the floor to questions. But first, I have to thank you because you took quite a bit of your time to be with us yesterday night and today. And this means a lot for us, but also it's very important for us because you can see firsthand actually what we do and get a deeper look at what we are doing. I hope, by the way, that you realized by now how cutting edge and how unique our science and our technology assets are and I hope that beyond or above and beyond the tours and our presentation, as I said, you can sense our collective enthusiasm at the idea of doing much more of them. As you might recall, one of the first decision I made when joining Danone was to bring our Research & Innovation at the Executive Committee under the leadership of Isabelle. The intention was clearly to step change the way we leverage our science and technology assets at the service of our patients and our consumer. I mean consumers and patients are now back at the heart of everything we are doing. It starts obviously with our genuinely understanding their needs, turning them with the help of science and technology into differentiated product and value-adding solutions. The benefit platforms you saw today states how we look at the areas where our Danone has not only the right to play, given our history, our assets, our science, but we believe also the ability to win in a consistent and sustainable way. These benefits our platforms reflect deep trends. They present a significant pockets of demand for our truly differentiated product. Importantly, by the way, this center is a testimony to -- we have engaged into very, very different ways of working, obsessed with the priority and differentiation or better leveraging our proprietary assets. We're also more open to a whole ecosystem of our partners from academics to our suppliers, to universities to start-ups. So as I said, it is about our putting consumers and patient first. It is about leveraging our unique science and technology, but it is also about execution of our discipline. I think the beauty of our focused portfolio is that these 3 dimensions are now being deployed across all our categories and our brands. And here, let me reiterate what was said all along. Science is not only about Specialized Nutrition. I mean you saw it during the visit and Isabelle illustrated it in our presentation. We have significant opportunities in reclaiming superiority and differentiation of our entire portfolio. Thanks to this renewed mindset. We have made meaningful progress over the last 12 months or everywhere, but notably in our dairy and our plant-based. But this is only, obviously, the beginning. All our categories are moving to the front foot, when it comes to developing superior differentiated products supported by clinical evidence in some cases and strong claims. Isabelle has spoken extensively not only about the sizable opportunities we have, but also about bringing more discipline in the way we execute our innovation. There too, we have made our substantial progress from bringing a superiority imperative in our innovation through delivering fewer, more scaled and accretive innovation. Just a few figures to demonstrate this focus. We made 33% less launches last year in '22 compared to the previous year. 70% of our innovations were made on out of 5 brands and are now over 60% of our launches are multi-countries launches. But as you know, execution goes way beyond our research and innovation. It is truly about our end-trend discipline. Rightly so, Isabelle mentioned the work she is leading together also with our Vikram in operation. Their collaboration, for example, on the rationalization of product platforms has been certainly yielding some of the savings and some of the productivity you saw in last year's results. And obviously, it's only the beginning. We are not going to stop there. You won't be surprised as well, hearing me talk again and again about our sales and marketing execution from the quality of advertising and some of you asked me the question. The consistency and the quantum of our marketing investments or the quality of what we do at the point of sales. Winning in the end is about strong innovation together with our consistent execution. We have been -- since last year, stepping up our game across the value chain, by actually putting consumer and patients at the center of everything we do. By increasing investments and by being more disciplined in the way we use and in the way we allocate resource. This gives us our confidence that we are well on our way to build a resilient and a sustainable value creation model, delivering on our Renew Danone commitment. So in a word, Danone is starting to move to the next level. All the pieces of our renewed Danone framework are coming one-by-one in place. We told you one year ago that our intention with Renew Danone's was to bring Danone to a position of performance in line with its market before it can accelerate further. We are in line with our road map, and we feel confident on our ability to deliver on the fixing part before telling you more probably or early next year in a place that needs to be determined about the acceleration part. So that's what I wanted to say as a word of conclusion. Before I hand over to Mathilde, and I ask my -- friends and colleagues to come and sit with me so that we can answer, I'm sure your multiple questions. Thank you.

So now it's time for the Q&A. So to answer all your questions. As you can see, you will have today 3 speakers. So Isabelle, Jean-Marc, Bruno, but also our CEO, Antoine de Saint-Affrique, and our Deputy CEO in charge of Finance Technology and Data Juergen Esser. So today is really the opportunity to discuss in more detail about all the cutting-edge science assets that were presented to you today. So we will focus on that for the next 45 minutes. And as you know, there will be plenty of other opportunity to discuss non-related topics in other occasions. So we can start. Guillaume, UBS.

Couple of questions for me. So a lot of focus on protein today went from pretty much nothing to EUR 0.5 billion in revenues last year. Wondering where the ceiling is for protein. So how big can it become over the next few years? And big picture-wise, what gives you the confidence the protein trend is, well, a trend and not a fad. And second question is on the innovation engine. So Isabelle, since you've been appointed, you've been trying to reengineer [indiscernible] of this innovation engine of Danone. When do you think you'll be reaching cruising altitude. So you have the right number of large successful innovations. And if I can squeeze in one last. You talked about superior differentiated products. Today, roughly speaking, how much of your portfolio is derived from superior and differentiated products?

So let me take 1 and 3, and Isabelle will take #2 and 3 are a certain amount, but not enough is the answer. So I'm not happy with where we are. We have a number of very good products step by step by step, we are reviewing in a very disciplined and scientific with our portfolio. I'm sure Isabelle can talk about it. And I mean, raising the floor of our product to, I mean, a sizable check. Otherwise, we wouldn't be competitive in the market, but not enough. On the first one, we made the choice today to illustrate -- I mean, our science, our technology and what we do through our Gut Health and through protein. So we talked a lot about protein. We talked a lot about Gut Health. We could have spoken or chosen a number of other fields, but we would have needed more than a -- more than 2 or 3 of the [ state. ] I think the key points is, number one, we have deep, deep science. We have differentiated trends, and the science is translating into -- into products. And you've seen while, you've been through an explanation of why protein matter and why the body doesn't produce protein by itself. You've seen how unique we are in not only competing, but associating protein. Out of that, you can do medical products, you can do consumer goods product. We are only at the start of the journey. We are extremely successful with HiPRO and YoPRO, but it's not hold out everywhere and it's not hold out in every format that is [ element. ] So more to come and more to do there. There are 20 million new cancer patients every year. They need the very specific blend of protein before they go on to surgery, so that they go into good stage into our surgery and can recover faster, then you'll eat after to recover faster, then you'll eat before chemo. So that -- as Catherine was saying, we can go sharper in terms of killing cancer. And then they need it after for recovery. There's only a fraction of the patients that are into those products. And those products are making a difference. Actually, we are using them with our families. So we are only at the very beginning of the journey there. Giving you a number behind the potential, I mean, it is what we will make out of it. We have to do it in a disciplined way, both beyond YoPRO and beyond what we do in oncology, but there is a huge potential there grounded in our technology. Isabelle, on the innovation engine? Is the innovation is the innovation engine at the cruising speed you want?

No, absolutely not. So as you've seen and what I presented, actually, we have lots of science and technology assets, but the beauty of it is how do we combine them into making superior products are delivered to the consumer and patients' needs. And that is what we're trying to get back into the engine. We have quite a few histories, where it actually works, but we now need to make it in a systematic way, and that's what we will be doing. And we've started that journey -- started that journey with the fantastic scientist you have in this center, but also across the world. And by doing that, we're now getting into combining those, valorizing those, making the product working with the brand and the businesses in geographies and categories to land them at scale.

Warren from Barclays.

So a couple of questions for Bruno actually just on China. I was just interested to know a little bit more about -- you talked a little bit about HMOs, but where are we on HMO in China? And you talked a little bit about the next generation or generally, there was a discussion about Nuturis, which I think is being presented to a symposium in the next couple of weeks. Maybe you can sort of elaborate a little bit, why that's superior to HMOs and whether that's something that Danone has a first-mover advantage in? And is it something that has been approved outside of China? Just trying to understand how quickly that might be implemented in new products? And then related to that, well, in China, you talked about more resilience in China generally. Can you maybe tell us how big is an adult nutrition and kind of non-infant milk formula as a percentage of China. And you talked about 7 different Aptamil launches and more valorization. So there's been a long-standing question mark about margins in China. It sounds like if you're doing more valorization and we get more news on HMO, if anything, would you agree that possibly margins in China as you're valorizing could even go up, not down? Just interested to understand. When you talk about resilience, what do you mean by that?

So I mean I'll start and then, obviously, Bruno will play the question on China. But I wanted to do 2 things. I mean the first thing is, as you've heard, both from Isabelle, from Jean-Marc and from Bruno, we have taken an approach, when it comes to infant milk formula of segmentation by children needs and by patient journey. We have been actually inventing HMOs. So having HMOs is not really the point. I mean you have 15 grams of HMO in breast milk. Having 1 gram is good for claim, but doesn't make a difference, which is why what we are doing from a science standpoint driving to being ever closer to breast milk is fundamentally important. And the way we claim it and it's true for China, it's true elsewhere is actually closer to breast milk, including and making reference to our ingredients, of which HMO is one at a relevant level, by the way, but not only. So just making that point because they are -- we need to go beyond marketing into -- back into science. The second thing, answering your question so that Bruno doesn't have to. As we've said very consistently, the adult or medical nutrition in China is sizable, but it's still below or the average level in the company. So what we said is in the company, it's about 40% of total specialized nutrition, lesser in China, growing fast. And that's about what we'll see on numbers. Bruno, over to you.

Thank you, Antoine. You help make my life easier because it was multiple questions with multiple angles and I could elaborate on that for ages. A few words are connected source to what you just said on our adult business. It's a business, which has been growing from nothing almost 17 years ago to now being a very sizable one and material to our operation in China. It's a business, which has potential to grow further, which has room to grow in terms of penetration. And it's a business which is delivering the same level of profitability as infant milk formula. So we are already definitely putting significant effort to accelerate the second leg to our Specialized Nutrition business in China. The point related to HMOs, probably the one element that I would like probably to flag is that it's in the way, we try to market infant milk formula all across the world and in China is to demonstrate that we are getting as close as possible to breast milk. And it cannot be a story of one single ingredient. Having said that, HMO is something that we have had within our portfolio for many years, something actually that one of our scientist has discovered almost 25 years ago. And it's something that we have introduced through cross-border e-commerce already in China 3 years ago. We don't have it yet in China label because it's an ingredient which is not yet authorized in the context of China. Then you had a point on Nuturis, which is our latest breakthrough engines. And here, it's mimicking breast milk through the fat structure, the fat globulose and the process that we are using are helping our products to look, feel, taste and behave through clinical studies as close as possible to be a true second best after breast. And it's something which -- for which we have designed a dossier and the dossier has been approved. The launch timing is something that we are working on for the moment because as you can see, we're going to be very busy moving up the price ladder in the categories. And it's going to be the last dimension, I think that you wanted me to elaborate on -- so in our case, it's all about fighting headwinds of declining birth rates, but being equipped to consolidate our position in the market, because one of the objective of the registration is to reduce the number of players to eliminate the small scale players that existed in the past, and we are best positioned to play a market share value game. The objective as well from a P&L shape standpoint is to maintain our margin because this product is going to be more valorized obviously, but we're going to also invest more behind our brands in order to help consumers to understand our segmentation approach and the superiority of our proposition. But thank you very much for the question.

Okay. So next question is from Jeremy, HSBC.

I just got one question on plant-based. So I think there's this concept of moving away from, say, the single ingredients towards more just like holistic multi-ingredient like milk substitute. So can you talk about, I guess, first of all, how big that is in your portfolio at the moment as a -- maybe as a percentage of plant-based. Secondly, what you think the kind of potential is? And then also maybe talk about why you think that you've got the right to win, what you think the kind of the competition and the degree of differentiation is within that marketplace?

So maybe we'll do -- direct to Isabelle on the scientific part and everything we can do with plant-based. Let me say 1 or 2 words on plant-based. You've heard me say that we need progressively to move from an approach that was the way the plant-based beverage specifically market was launched, which was an ingredient-driven approach towards benefit-driven approach. You see that with what we started doing with segmentation of our plant-based beverage talk about [ by Star ] you start -- you're seeing things about the quality, the nature of the ingredients and what they are -- and what they are bringing. You see that with not milk, but you're start seeing that as well. I mean the example of the YoPRO that we just launched in China is a good example, where it's not plant-based. It's the best of both worlds. So it's plants for digestibility. Dairy for our impact and the combination of the 2. So the name of the game is progressively moving from units to benefit. Name of the game is continue doing that in a profitable way. So making sure that it's a profitable business. And name of the game, as we do that, is underpinned that with, again, real science and real science on how we deliver benefits through plants. Do you want to say a word about?

Yes. And actually, that's the whole point of it is from the benefits, then you go into the science and the technology that can deliver those benefits. So what it is actually to be [indiscernible] they needs to be creamy, creaminess doesn't come from the ingredient. It comes from other things and the way we process it in order to do that. So it becomes then a competitive advantage as well. As we define those benefits, we start defining what is the need and therefore, define the science and technology that will deliver to that need. And that is the way to valorize our plant-based approach. And then we go further. We also go into the nutritional -- Advanced Nutrition on plant-based.

So next question from Celine, JPMorgan.

I'm sorry. My first question is on EDP. I think we are already discussing a bit of that, but given all the science that you bring in, but in a category that you've seen about more taste, maybe more commoditized, how do we reconcile your vision that you're showing today versus a marketplace that seems to be a bit more ingredient-driven on the milk side. And so what kind of dwell of claims can you make so that consumer will -- be willing to pay a premium for your product? And that brings me to my second question. I think while you've been showing today about the science and the technology, but as well the willing to premiumize and to valorize the portfolio. So can we get a number of what percentage of your portfolio you think is valorized? Where would you want to be? And what is the mix benefit that you think you can add to the group? I don't know maybe that's part of the accelerated Danone. But what is that contribution that we should be looking for?

Yes. So on your last question, I'm not going to put a number behind it. But maybe let me give you a couple of blocks. You want to differentiate at every price point. So the -- I mean, Danone yogurt is not a yogurt. It's a Danone yogurt. I mean when I was a kid in France, but there was the case in Spain. It was the case in a number of places. When you are getting an antibiotic treatment, you were prescribed Danone yogurt, because it was helping to restore your [ Flora. ] You would give our yogurt because it was Danone yogurt because of the ferments, because of the way it was crafted, it was helping the release of calcium and the digestion or the transmission of it at a price that is very affordable price. So the name of the game in -- or the name of the game in EDP is not only just go for the premium. And we have a super nice premium thing that we haven't leveraged. So our Danacol is an example of it, which is not leverage enough. But we have been consistent on Activia, as you know. But it is also about loading in meaning our brands at every level. On claims, and I will let Isabelle response, but a number of you -- have asked me whether we can claim and be differentiating and referring to something that happened, we just saw 12 years ago. This is the best way to get Isabelle and I jumping up and down. So I'll give the floor to Isabelle on that one. But the answer is plenty we can do.

Absolutely. So first of all, I mean, we discussed it before, but there is a regulatory framework, and there are things that you can actually claim depending on the geography in which you are. So the FFA claim is history. So we are going back to claim things on good health. We are going back to claim things on immunity, and it will depend as well on the level of claims we do on the regulatory framework, where we can do it. We have evidence. We're starting with building that evidence and then making dossiers in order to claim. So it is the whole claim piano that we need to play for everything, everyday nutrition of Danone yogurt, today, we can prove it. We can claim it. We need to get the brands as well and working with each of the businesses in order to deleverage and valorize the assets we have, and we do that all together. And that's how we've seen medical nutrition, for example, Specialized Nutrition, really working well. So we're learning and getting all of this back into the core of how we do things.

By the way, it's health and taste, both at the same time, and that's one of our strengths. I mean, the knowledge and taste is traveling to -- is traveling to SN. The knowledge of claims and support and dossier is traveling from SN. So actually, it's the beauty of the model having broken the walls and having put the entire R&D under Isabelle.

So next question, Tom, from Deutsche Bank.

Just -- do you think when you look at the way the end market sort of evolving that you're in a -- that the weighted average end market growth that you're selling into is now faster than you thought it was 12 months ago at all? Or is it about you taking share in markets that longer term, you still see as similar when you launched your strategy 12 months ago? And then just on the level of elasticity associated with innovation and of the products you've launched in the last 24, 36 months as you've presumably put up prices in those as well over the last 12 months. Can you sort of give any kind of qualitative or quantitative answer as to the sort of level of elasticities you've seen on sort of recently innovated products versus others, please?

So on your first question, there are 2 -- I mean, there are 2 levels of answer. I mean level of answer number one is, and I said it at new Danone, there is no growth issue in our categories. We weren't just capturing the both of our categories. So we are in the journey of getting back to that competitive level, where we are growing at least in sync with our categories. That's step number -- I mean, that's a step #1. The second dimension, I mean you've seen that this morning, is with the know-how we have, with the brands we have, with the technology we have, in some ways, the trend is our friend. I mean, if you have 20 million of new oncology case every year, if you have 12 million stroke every year or if you have our people that have more and more difficulty to access safe water or if you have people that have problem of unbalanced nutrition. And I remind you, we have in terms of ATNI score, the best core in the -- in the industry, we are smack on the trends. We are smack on the trends, and we are equipped for the trends. So name of the game then is what we do about that and which is all the sense of what we are doing in silence, in consumer understanding and in marketing. On your second question and -- I mean, I'm sure that Juergen will open it. We have reinstated the discipline when you launch, you need to get the premium out of what you're launching. So you drive -- I mean, you drive accretion.

Yes. On the innovation element, Antoine mentioned it. I mean, we've been launching 1/3 of less products vis-a-vis the past, which is a lot. And one of the very important KPIs, is your innovation still alive and on track with the business case 12 months after? Because you remember, they have been proliferating our innovations a lot. And our issue was that we have not been supporting. And hence, many of those innovations were disappearing after 6 to 12 months on the shelf. So today, we have a very strong discipline in launching and supporting and making sure that in terms of penetration and frequency as well as distribution, we are tracking very carefully in order to make our innovations big. One of the elements on innovation we put in place is, we put in place a certain thresholds, under which we do not launch in innovation, which means if you do not respect a certain minimum of incremental sales or certain level of profitability in year 3, you will not launch. And that's something, which has a very strong impact. We have seen that not yet so much into the financials of year '22, because it's a relatively recent discipline we are putting in place. But I'm sure that is going to impact our numbers moving forward.

So James, RBC.