Haleon plc (HLN) Earnings Call Transcript & Summary

Welcome. Hi, everyone here, and welcome to those online. We're delighted today to welcome you to our very first Haleon highlights on Oral Health, giving a bit of a deep dive in terms of the Oral Health business. And we're very excited today to bring together some very experienced and a brilliant team with Jayant Singh, Head of Oral Health, Globally, with Adam Sisson, Head of R&D for the category and also Marcin Zbierski, the Finance Director of Oral Health. A couple of quick housekeeping comments for you. Firstly, this is an educational event. So no new information in terms of current trading, our guidance will be shared. So for anything on that matter, I'd refer you back to the Q3 trading statement. Secondly, for those listening online, you should be able to download the presentation and hopefully, you can access that, and there will be a replay shortly after. And then finally, I'd just like to refer to the usual disclaimer on Slide 2 of the presentation. With that, I'm delighted to pass on to Jayant Singh.

Thank you, Sonya. Good afternoon, and welcome to this Haleon highlight session on oral health. My name is Jayant as Sonya said, and I lead the Global Oral Health category. Adam and I, over the course of the next 45 minutes, will walk you through some of the key highlights of Haleon's Oral Health business. And at the end of these 45 minutes, we'll take some of your questions. So let me start by saying that what we have here as part of our oral health portfolio is a fantastic business. It's a business which has market-leading brands. It's a business which is very attractive as it is in the fastest-growing segment of the market. It is a business with continued opportunity for significant penetration-led growth, and it is a business where we have a proven, repeatable growth model based on our key strengths in deep human understanding, trusted science that drives a winning innovation for us, our strong enduring expert relationships and our in-market differentiated execution focus, which has driven more than 10 years of above-market growth. And then something which is really close to our heart and is embedded in how we operate within Oral Health. And in fact, within overall Haleon is our focus on sustainability and on responsible business, which is at the core of everything we do. We have strong plans in place and frankly, even bigger ambitions because there's just so much more to do in this area. And when we bring this all together, you can very well see why I'm so confident in our ability to continue the outperformance of the market that we've demonstrated over so many years. We'll come back to some of these points towards the end of the discussion. But let me begin by saying that what we do really matters. Our portfolio of brand address important oral health needs for our consumers. And on this slide, I've got a quote from WHO and I quote, "no other disease group affects humanity across the life cycle and across all countries in the way that oral diseases do", and that's the reason why last year in 2022, WHO established that oral health is an important global policy matter, which means that they will work with the various governments around the world to formulate policies which drive awareness and focus on some of the important oral health conditions. Haleon's Oral Health portfolio of products serves about 800 million consumers on an annual basis. But we know that globally, A little more than half of the world's population, world's adult population suffers from one or more of the oral conditions that our brands can help manage, treat or prevent. So you can see why I believe the opportunity for us for continued growth is truly significant. So let's take a look at the oral health market. For our estimates, this is about a $3 billion -- GBP 28 billion market. The largest segment in this is toothpaste at 52%. Historically, this market has driven a growth of about 3% to 4%. That's the normal growth. But we have seen more recent sharp uptick in growth, which has been driven by inflationary pricing. And if you look at within the toothpaste, which is the largest segment of this market, Nearly 1/3 of this is coming from therapeutic toothpaste, which is growing at 2x the rate of the mainstream toothpaste. So market is growing, it's large and therapeutic is driving the growth in this market. Now if you look at Haleon's portfolio, we believe that we are very strongly positioned. 90% of our revenue comes from therapeutic oral health part of the market. And whilst we are the third largest player in overall oral health, we command the #1 position in this fast-growing therapeutic oral health market. We represent around 27% of Haleon revenue and are the largest category. And we've driven a consistent growth of about 6% over the last decade. And if you recall what I told you about the average historical market growth, it's in the 3% to 4% range. So you can see that on an average over the last 10 years, our portfolio of therapeutic oral health has driven a couple of points higher than the average market growth. Our portfolio of oral health products and Haleon is concentrated and focused on what we call power brands. Now power brands are a subset of brands within Haleon, where we invest disproportionately to drive accelerated growth and within Oral Health portfolio, we have 3 of these power brands, Sensodyne, which is the #1 market leader -- global market leader in dentin hypersensitivity. We have Polident, which is, again, market leader by far in the Denture Care segment of oral health. And then Paradontax which is a fast-growing #2 gum care brand in our portfolio. Together, these 3 brands comprise about 87% of our total oral health portfolio. We have a wide geographic footprint, EMEA and LatAm is close to about 50% of our total business, which is followed by North America and then followed by Asia Pacific. We have a global manufacturing footprint with our own manufacturing, plus supported by contract where it makes sense. And as I said before, the 3 power brands are market leader in their respective subsegments. Each of our power brands address a really important oral health condition. They are specialists in these conditions. So Sensodyne is the specialist in dentin hypersensitivity. Pronamel, which is a sub-brand under Sensodyne is the specialist and #1 brand in enamel care. Parodontax , as I said before, is the specialist in gum care and then Polident is our specialist brand, which helps improve the lives of those consumers who've suffered tooth loss and are wearing dentures. Our data suggests that the prevalence of these conditions is only rising as a result of some strong consumer fundamentals. So what are these fundamentals? We all know that with better health care access and all the progress that's happening, people are living longer. And as people live longer and as they age, that presents a certain set of oral health conditions for them, they suffer more from gum issues, they suffer more from dentin hypersensitivity, they suffer more from tooth loss. In many parts of the world, we have a growing middle class. And as people have more disposable income, their dietary habits shift. They consume more healthier, yet acetic foods like fruits, fruit juices and perhaps in some parts of the world, higher sugar consumption. And that brings with it its own set of oral health problems. And then across the world, we have a rising cohort of well-informed health proactive consumers who are more knowledgeable about their conditions, more knowledgeable about the links that are coming across between systemic health and oral health and they're demanding specialist better solutions to treat these conditions. And are willing to pay a premium for it. And that's where the growth of the premium therapeutic oral health portfolio comes from. In our own data, we just recently concluded a European study in some of our key European markets on the incidence of dentin hypersensitivity. And in this study, we found that almost 1 in 2, 45% to be accurate, of adults are suffering from frequent dentin hypersensitivity almost on a weekly basis. And if you go back 10 years back where we had a similar sort of study in 2013, that incidence was about 1 in 3, right? So it's gone up from 30%, 35% to now 45% in our more -- most recent study. So our brands are specialists in these conditions. The prevalence of these conditions is rising from the evidence that we see. And that presents a compelling opportunity for our market-leading brands to serve more consumers to help tackle their oral health needs and to drive penetration. So we have a significant opportunity to drive penetration across our brands. And here are 3 examples. So as I said, nearly 45% of adults suffer from dentin hypersensitivity, yet 60% of them are not using a sensitivity specialist toothpaste. Nearly 1 in 2 people suffer from gum issues like bleeding gums, breadth issues resulting from gum, tartar, gingivitis and eventual tooth loss in many cases, if it goes unchecked. And yet 60% of them don't use a gum specialist toothpaste. And then almost 1 in 5 adult population is wearing a denture or some form of dental appliance in their mouth. And almost 80% of them don't use an adhesive, when we know that even in well-fitted dentures, use of an adhesive can significantly improve the quality of experience. So we have a significant opportunity to serve more consumers with the science and the proposition we have to drive our business growth. Unless you believe that this is only in emerging markets, this is an opportunity across the spectrum of markets that we have. We are under-penetrated even in our large markets like U.S. So you see the gray bar on the left is the average global incidence of sensitivity, which is 45%. The blue bars of 2 of our countries, U.S. and China, indicate the penetration of Sensodyne brand on an annual basis. And you can see in the U.S., it's 21% and in China, in the key A and B cities, which represents a smaller proportion of overall China, for anyone who knows China, it's a vast continent in its own. It's still only 8%, right? So we have a significant opportunity across the wide spectrum of markets that we have to drive growth. And not to mention which is towards the right, our geographic expansion opportunity. For example, on Paradontex, there are only about 10 markets where we are more than $5 million in size. And the same opportunity is across many markets on Sensodyne brand also. So let me just recap what I've taken you so far, okay? What we've shown to you is that oral health is a large market, it serves real important consumer needs. What we've shown to you that the growth in the market is driven by therapeutic oral health. What we've demonstrated is that Haleon's oral health portfolio is 90% therapeutic oral health, which is the faster-growing segment in the market. We have a market-leading portfolio of brands with significant continued opportunity for growth through penetration and capturing geographic expansion. And what we've also demonstrated to you that we've had a proven track record of a decade of above -- or more of above-market growth. And this above-market growth comes from our focus in executing what we call our growth model, which is a repeatable growth model. And now I'll invite Adam, who is my R&D colleague in the category to talk about 2 of the important levers of this growth model, which are our deep human understanding and our focus on trusted science which helps us deliver winning innovation, and I'll come back and share the other 2 levers of our growth model. Welcome, Adam.

Thank you very much, Jayant, and hello, everyone. It's my pleasure to take us through our 2 competitive strengths of deep human understanding and trusted science. And I'm going to give you a deeper dive into how we see that from an oral health perspective. I'm then going to move on and we're going to use our deep human understanding and trust of science and see how that feeds our repeatable innovation model. So let's dive in and start with deep human understanding. We have a large set of mainly proprietary systems in Haleon that allow us to unlock unique insights and issues when it comes to people's health needs. We do that in oral health, making sure that we understand the perspectives of the consumer, the shopper and the expert. And that's really important. Because it's about understanding those 3 perspectives when it comes to the health need and then be able to sprinkle on our knowledge that we gained over many decades around our science and how we can make the difference to that individual's health need. We then use that consumer research, and that means that we're always on. We're always listening, always watching, and we're always asking. And that links to millions of social media posts that we look at with regards to the conditions and also how people use our products. It means that we execute hundreds of thousands of hours of consumer research around the world, and it means that we talk to tens of thousands of dentists and hygienists. Again, making sure that we understand those 3 unique perspectives. But that's not all. We do our own proprietary research in Haleon, making sure that we understand how our products work, how we can iterate and prototype those products and make sure that we delight consumers against that health need. And we do all that because deep human understanding drives penetration, and make sure we continue to build brand relevance, it helps us have a really strong innovation pipeline and allows us to have excellent powerful advertising that really connects people with the health need and ultimately ask them to act on it to drive our business growth. So secondly, let's talk about trusted science. What I want to do here is give you a better deep dive into 3 areas of trusted science from an oral health perspective. Trusted science is very broad and large. So we're just going to cover 3 areas. And there are highly efficacious formulations, how we take those efficacious formulations and make them scientifically proven and then how we're able to visualize that benefit to consumers and experts try and drive them to act on that need. So let's start with highly efficacious formulations. So we have 2 areas that I want to talk about here around how we make our formulations really highly bioavailable when it comes to the actives. And what we mean by actives is an ingredient or a combination of ingredients within the product itself that acts on the health need that we've uncovered in that deep human understanding. A good example of that is Pronamel. Pronamel matters to deliver on that consumer's health need. And Jayant will give you a wonderful example of that later on in the presentation. Secondly, I'd like to talk about our orally-activated formulations. So we use the body's own processes to make our products work. And a good example of that is our adhesive portfolio. We use the body's own saliva to create both instant and long-lasting hold to make sure that those formulations work and act on that health need. So let's move on to scientifically proven. Here at Haleon, we're incredibly proud that our products are backed by science. Sensodyne alone has over 60 clinical studies supporting its efficacy in dentin hypersensitivity. We are world leaders in the research that we undertake in dentin hypersensitivity and the adhesives and beyond. And we're a significant investor in clinical research in the broader therapeutic oral health segment. We do that because it's important. This is not just any research. This is human subject research that proves the efficacy of our products and its research that's peer reviewed by world-leading academics and dental researchers worldwide. We do that because those worldwide researchers check our robustness and the integrity of our data and that makes sure our products are efficacious. We then go one step further at Haleon because we're so proud of our science, and we publish our science openly and publicly. We do that because it drives trust in our brands, so they work and solve that health need. So let's move on to the third area, visualization. As we go through our products and we talk about the efficacy of those products, it's really important that we're able to visualize to the consumer and the expert and the shopper that those products are working where we say it is. And there's nothing better than doing that through a visualization. And I'll show you some examples in the next area. Sensodyne repair and protect. This is a franchise that we launched in 2011, and it's been incredibly successful for us over the course of that decade and beyond. As Jayant mentioned earlier, we have been world leaders in understanding these conditions. We've run 2 studies on understanding how many people suffer from dentin hypersensitivity. But the prevalence of this condition continues to increase. But not only that, in addition, the vast majority of people will also have some form of an enamel erosion. Those are sprinkled on our trusted science. NovaMin is an incredibly unique formulation for Haleon. It's already activated, which means when you brush your teeth with the formulation, NovaMin creates a cascade of some wonderful ions. And those phosphate and calcium ions create an appetite layer that's able to cover or what we call scientifically occlude the tubules that cause denting hypersensitivity. And you can see that on the screen here in the blue where it's showing really deep occlusion or blocking of those tubules. You'll also see here that, that technology is unique and also incredibly wonderful with regards to how it's able to block more tubules than competitor products. We're very proud of Sensodyne Repair and Protect, and this technology has enabled us to grow this business over the long term and have strong performance over the last decade. So let's go to our second example with Paradontax. We'll start again with the health need, trusted science and then talk about why it's a winning innovation. Under the health need, our extensive research in gingivitis patients has helped us understand them incredibly well. We understand that those people who suffer from gum health issues also have other needs. So they have needs like bad breath and sensitivity as well as on gum health. But when we really dive into that through that triple lens approach between consumers, shoppers and experts, we recognize that if we want to get people to act on that health need, focusing on bad breath was really important. And this is not just focusing on bad breath to mask it with flavors or wonderful mint. This is about acting on bad breath from a therapeutic point of view and making that bad breath better on day 1 versus 3 weeks later. So that's sprinkling again, our trusted science knowledge. And in this formulation is incredibly highly bioavailable across the actives. And we've got actives at play here with regards to zinc, stannous and fluoride, each one uniquely creating a benefit across gum health, bad breath and sensitivity. We were so proud of this formulation, and we believe in it so much that we ran the first gingivitis study in bad breath, and you can see the results on the page here. Without given all the details, I've got time here, but I can show you here, we fundamentally deliver bad breath benefits against the health need in the data that we have showing that you'll have less bad breath using our paste than you would if you use any other. So let's move on to our third example, and we're going to move to Polident. Start with the health need, and we know that one in 5 people have some form of denture. We also know through our triple lens that those people also suffer from other symptoms. they also might have bad breath. They might have some discomfort and they might have some food getting stuck under their denture. I can tell you from the consumers that I've spoken to, when you have food underneath your denture, it's incredibly painful. It's almost like when you bite your cheek when you're eating your own food, incredibly painful. And we use those insights to create our products. In this case, when we sprinkle on our trusted science, what we mean here is around understanding how our products can work against those different needs. So in this situation, we've got a range of products which is around hold because that's a very important needs for denture wearers, but it also adds on freshness, seal and comfort. Those 3 products have unique polymer systems and additional ingredients to make sure that our products act on those needs. And then on top of that, each formulation in our adhesive portfolio is backed by clinical research, and we're very proud to say that our adhesive program is backed by 9 clinical studies to show that it holds and delivers other benefits. So look, over this point, I've shown to you our 2 competitive strengths of deep human understanding and trusted science. I've then brought it to life with 3 innovations where we can show that our competitive strengths deliver within innovation across our portfolio. And with that, I'll hand back to Jayant.

Thank you, Adam. So Adam covered 2 of the key performance levers of our repeatable growth model, which is deep human understanding and trusted science that helps us deliver really meaningful innovations for our consumers, and that drives preference for our consumers, but not just for the consumers, it also drives preference for our experts, which is the third part of our growth model around building strong, enduring relationships with expert. Dental health care professionals or oral health experts are the most important source of advice for consumers when it comes to their oral health. On this slide, you'll see that it is the #1 reason why people use a sensitivity toothpaste for the first time, right? And that's why our focus on this very important source of influence when it comes to therapeutic oral health focus. Our engagement model with experts is rooted in strong fundamentals of science. We've made significant investments in advancing our knowledge about these conditions and Adam shared a few of those examples with you of knowledge of dentin hypersensitivity, knowledge of gum issues, knowledge of denture where we are the world leaders in the research studies. And not just the knowledge and awareness of these conditions, but also generating a significant body of evidence through our human clinical program, which is really important from the dental health care professional point of view, because they want to see not just the in vitro, which is in lab evidence but actually in vivo, which is with humans as to how that is translating into real benefits. Since 2018, we have conducted more than 20 clinicals on our portfolio, which then leads -- has led to more than 80 peer-reviewed papers, which we presented to experts in various leading dental congresses. When we reach experts, we reach them through what we call an omnichannel model. We have feet on street, really a strong group of well-informed science-based individuals who go and talk to these dental professionals about these conditions, about the research we have about our products. We reach them through digital and remote means where they are. And we also have this unique proprietary platform called Haleon Health Portal. This is a platform unique to us that we have invested in. As we -- as I speak, we've got more than 400,000 dentists registered on this platform. All our years of research into the conditions that we have and the body of evidence that we have which leads to proprietary content is hosted on these platforms, which is 24/7 accessible to these experts. And this platform also serves as a key vehicle for continuous professional development of these experts through the webinars that we host with our key opinion leaders, through the learning programs that we host for our experts. So this strong body of evidence, the clinical program that we have, that drives significant trust that experts have in our science, our portfolio of products. And that makes them confident to recommend them to their patients because we know that the single most important motivator for an expert is to resolve the health need for the patient. And that's why in about 80% of our markets, Sensodyne is the #1 recommended brand for dentin hypersensitivity. So we've taken you through 3 of the levers of our growth model, which is deep human understanding, trusted science drives winning innovation and our strong and enduring expert relationships, experts being the key influencer within therapeutic oral health. And now on to the fourth one, which is our focus on end market execution. The strength of our brands and the fact that they are market leaders in their respective subsegments gives us strong access and presence to mass market retail, which is an important channel for oral health. Now Haleon, the group has a wider portfolio than just oral health. We have OTC products. We have VMS. And that gives us unique and differentiated access to a very important channel, which is pharmacy and drugstore, which is important from the point of view of therapeutic oral health. And then in many of our markets, our online share or our digital commerce share on our portfolio of brands is higher than brick-and-mortar share. Even in a market like U.S., we have higher share, which is a really developed retail market for us, which indicates the focus that we put on this strong and fast-growing channel. Now I'll share with you some key examples of how this all comes together to drive superior growth for our portfolio across the various markets. But before I do that, let me just recap the model for you. So our growth model is deep human understanding plus trusted signs which helps us deliver winning innovation in the market, which drives consumer preference for our portfolio because we serve real consumer needs through this -- through our innovation and brands. Our engagement model with experts, which is rooted in science, unique Haleon health partner portal that we have, the strong body of clinical evidence that we have that generates strong expert advocacy, which drives product recommendations. And then the strength of our overall Haleon portfolio, comprising therapeutic oral health, OTC, VMS, gives us unique and differentiated access across different channels, be it mass market, pharmacy and drug store or digital commerce. And this combination of these 4 performance levers as we execute in the marketplace that drives a superior performance. Market-leading performance over the course of the last decade. That's what I'm talking about. So let me share with you a few of these examples. And the first one is a very recent launch in quarter 1 of 2023. We had the launch of this new innovation called Sensodyne Pronamel Active Enamel Shield. I would say that majority in this room would be suffering from some form of enamel erosion because the data suggests our largest study in Europe showed that 98% of adults are suffering from some form of enamel erosion. But many of us would be unaware of that. It's natural because the early signs of enamel erosion are almost invisible. But if left unchecked, it can lead to dentin hypersensitivity, it can lead to cavities. And that's why the relevance of this product. Adam spoke about how our formulation is unique and deeper absorption of fluoride and the visual in the center is essentially the deeper absorption of fluoride visual that you see. So if you focus on the center of the slide, there are 2 visuals. The one on the left is a hugely magnified electron microscopy visual of fluoride penetrating into the enamel layer. And the red is what the fluoride represents. And towards the right, the visual is that of a competitive product. And you can see that Pronamel Active Enamel Shield formulation penetrates far deeper into enamel. Thus, it forms a barrier and that's the reason why we're naming it Shield against further enamel erosion and against -- and provides cavity protection against attacks like sugar and all that. We launched this with strong activation in quarter 1 of this year. And I say it with tremendous pride that 2 of the Sensodyne innovations, which is Sensodyne Sensitivity, Gum and Enamel and this one, which is Sensodyne Pronamel Active Enamel Shield are 2 of the top performing 1 and 2 -- #1 and 2 in that order in U.S. this year in the entire toothpaste category, not just for Haleon Oral Health, but in the entire toothpaste category. As per the Circana retail sales data over the last 52 weeks that we've got. So our innovations are the #1 and #2 performing innovations in U.S. this year. The second example is a very proud example for me from Sensodyne in India, and it's proud example because back in 2011, when Sensodyne was launched in India in the beginning, I was there. We've created this category in India. It did not exist before us. We focused our efforts not just on promoting the brand Sensodyne, but actually driving condition education, making people more aware, making even the expert, the dental health care experts more aware about these conditions of sensitivity and how they should be diagnosing sensitivity for their consumers. And that's been the focus on this market for us. We've carried out more than 1 million innovative, what we call chill tests in retail. And I personally carried these tests out in some of these retail environments. It's a very simple test. And I would ask each one of you as you go back home to do it. It's a very simple test, just sip really icy cold water. And if you feel a twinge initially, right, then you are on the onset of dentin hypersensitivity, right? And some of you will be because 45% of adults suffer from these frequent twinges, which is the dentin hypersensitivity. And as you can see, we've driven strong performance in India from nothing to more than GBP 100 million last year, and India with its emerging market -- a growing middle class and with prevalence of this condition continues to be a very important market of focus for us for continued growth. And then the final example of that from Paradontex, which is our Gum Care brand in our developed market, which is France, we've more than doubled our revenue in this market in the last 5 years. And this is a great example of how we've leveraged our unique and single-minded focus on this condition of Gum Care, which is bleeding gums and bad breath and gingivitis and everything that comes with it. With our experts building very strong expert equity and then providing wider access through expansion into mass channels. In fact, in the period 2019 to 2021, Paradontax was the single biggest contributor to mass channel growth. We've got 58% new consumers over the course of the last 2 years and heart of the press just last night, in European FE in Belgium my team was there, I wasn't there but my team was there to receive a bronze FE award for consistent above-market performance on this brand. So these are few example of when we bring -- as we execute our proven growth model with consistency and with the repeatability, we drive above-market performance. Now I'll come to something which is really close to everyone, close to the heart of everyone who works with Haleon and for everyone who works in oral health, which is our purpose. At Haleon, our purpose is to deliver better everyday health with humanity. And therefore, sustainability, responsible business, health inclusivity, these are issues which are core of our business, and we are passionate about it. We have employees, we have our organization, really wanting to do more and more in this area. We have very clear goals across recyclability, across virgin plastic reduction, across reducing our net carbon footprint and ensuring sustainable sourcing of our ingredients. In the middle of the slide, you can see that this year, we've delivered more than $1 billion of our toothpaste tubes in a recyclable laminate tube technology. And wherever in the world, a collection program exists for this, this toothpaste tube is fully recyclable. Now mint is a very important ingredient across our toothpaste formulations. And 80% of global mint population is through small farmers. So we're committed to building a healthy mint supply chain, which aims to uphold health and safety standards in this as well as improve small farmers' livelihoods. As we embed more sustainable production and sourcing practices into the supply chain. And finally, to our health inclusivity agenda. Group-wide, we have an aim to make 50 million people a year by 2025, more included in better everyday health opportunities. And everyone in oral health is really passionate about this. On the slide are 3 examples of where we are helping serve some of the weakest socioeconomic parts of our society, whilst being core to our growth model. The first one is an example of Polident in Thailand and Philippines, where we are providing access to dentures. Second one is our program in India, where we are helping deserving students through academic and living expenses scholarship through their dentistry education throughout the 4 years. And then finally, the one that I want to spend a little bit more time on is our long-standing partnership with Smile Train. Smile Train is a global organization dedicated to helping improve the quality of life of those with cleft patients. Many of the children born with cleft a simple operation in the start can really get rid of that issue and help these children go on and enjoy all the possibilities in life. Our efforts with Smile Train, the partnership together focuses on reducing the barriers to access for health care, funding transformative cleft surgeries, providing comprehensive cleft care because many of these patients need care beyond just the operation and providing infrastructure and training support for future access for the patients. This is very personal to me because I sat in the home of a young girl, and I saw the transformation that this program meant for her as we supported her through the cleft surgery, not just for her but for our mother and our family in terms of gaining their confidence back in the community. And every life transformed is a life transformed full of possibilities. But so far in this partnership, we've helped 26,722 families go through this life transformative surgery, and train more than 4,400 professionals to continue to serve these patients, responsible business agenda. But as I said, we have ambitions to do more because there is never enough in this area. So let me bring you back to where I started. I am confident in our ability to continue our trajectory of outperforming the market with our Haleon Oral Health portfolio. We have an amazing portfolio, 90% therapeutic oral health, which is the fastest-growing segment of the market. We have a concentrated portfolio of important consumer need focused, market-leading brands in their respective subsegment, but with continued opportunity to serve more consumers, drive penetration and capture geographic expansion. And most importantly, we have a proven and repeatable model based on our strengths of deep human understanding, trusted science driving innovation, enduring expert relationships and differentiated access to the different end market execution channels. That has driven growth, not just in the short term, not just for 1 or 2 years, but consistently over the course of a decade and more. With this, I'll close by saying that this is a fantastic business, and I'm privileged to be leading it. Thank you very much for listening, and I'll now hand over to Sonya.

Thanks, Jayant. Thanks, everyone. So we're just going to have a tiny pause. For those online, if you want to ask questions, there is a facility online for you to enter questions. And for those in the room, we're just going to get everyone back on the stage on stools. Before we take your Q&A. So just give us 2 seconds. Thank you. [Break]

Thanks, everyone, and welcome back. I guess if we start probably taking some questions from the room, and then we'll take some questions online shortly afterwards.

So maybe, Guillaume do you want to start?

Hello, everyone. Thank you very much for the very interesting presentation. So I've got 2 questions. The first one is on your level of competition you're facing, because now therapeutic is becoming big enough that is definitely attracting interest from the 2 large players in this space. They are increasingly encroaching on your therapeutic segments. They're even coming up with dedicated brands for the therapeutic segment. What does it mean for you? Is it your cost of doing business going up, so more A&P more investments being required? Or it's your level of outperformance that gets eroded a little bit? And then my second question on Sensodyne in India. I couldn't help but notice that the sales of Sensodyne really accelerated it seems from in 2019, which is when I think Sensodyne started to be distributed by Hindustan. So wondering what the loss of that partnership and Hindustan distributing your brands in India will mean going forward?

Sure. So let me tackle the second question first because that's what I remember, and we'll come back to the first question. So I think the Sensodyne growth has been consistent across the number of years. And I think the Unilever partnership was a strategic partnership, which happened when we were part of the GSK. I think we see significant opportunities owning our own sales force in this very, very important market for us because I think when we are a part of the Unilever partnership, we are a part of a huge large portfolio, right? In terms of overall focus, you could argue that you suffer from a little bit of that. But with the way we are going right now, we'll be the masters of our own destiny. And we'll have the right focus on -- of this part of the business that we have, right? So I would say that there are strong positives and we're confident in the positives of the new direction that we are going forward in terms of our growth trajectory in India, which continues to be strong across the years, and we've been winning share across the year against the competition. So yes, I mean, moving on to your second question. Look, I think what we've demonstrated to you is that we know how to do therapeutic oral health. We have a strong body of evidence. We have a real proven growth model in this side of the business. And the oral health market has always been competitive, right? I think 62.5% of the overall share is owned by 5 top competitors. But if anybody knows how to do therapeutic oral health and do it consistently and with the science that we have and I just gave you the evidence of 2 of the strongest-performing innovation and perhaps one of the most competitive marketplaces in toothpaste world, which is U.S. is coming from Sensodyne, right? And even in the current environment of high inflation, Sensodyne is delivering faster growth than the market. So I think the evidence speaks for itself in terms of our ability to continue to outperform the market. Now we are never going to be complacent and our focus on these strengths that we have highlighted, will continue to be the core driver of our future growth.

Got one question on R&D. While looking at Slide 15 and 22. From the outside, obviously, it's quite hard to understand how far ahead you are from your competitors. So essentially question is how many years do you think you have? Or is It a question of month? I mean you show us some pretty convincing pictures, but I'm not really able to judge. And also, how much do you spend in absolute terms on R&D? And does it change something that you are as Haleon compared to when you were under GSK.

So let's take the first bit. So our spend in R&D is disclosed in our annual statements, and as you look at those with regards to the percentage of amount we spend on R&D. Oral health is obviously important to us. And therefore, we disproportionately spend R&D investments in oral health versus the broader Haleon portfolio. When it comes to our competitive advantages, certainly, we don't want to disclose where we're going for the future for obvious reasons. But what I would say is I believe that we still have a wonderful competitive advantage across both deep human understanding and trusted science. And specifically within trusted science, our ability to do great formulas, clinical evidence and visualization. And I think to give some more color to that, it is not easy to do clinical research in therapeutic oral health conditions. It takes decades of years working across the industry to understand how you do those studies, and we're uniquely placed to do that, and we'll continue to do that for the future.

The only thing I would add to that is that this is not a point of time standing still conversation, right? We are also building on our scientific program and evidence just as I'm sure, competitor is building in. But this is a very, very important focus area for us. Trusted Science is one of our key proven levers in our growth model. So we continually build -- continue to build on this.

The last part of what's changed since splitting from GSK?

Yes. I think, look, GSK was also a phenomenal owner of this business. we've driven strong growth with GSK on this business as well. I think what the separation journey gives us is far more focus and agility in terms of our portfolio. We were a small part of a very large business. Now we are a large part of a good business. And that brings with it its own focus and also its own performance and things like that. So just to give you an example, right, I think previously, we were having to adhere to a very strict pharma standard across most of the things we did. So if we wanted to change the flavor of a toothpaste or change from one manufacturing batch to other, you would have to shut up the entire line for a full day or so, just in line with the OTC measures that you had to take. But that's not required from an oral health point of view. But we have to do that because that was one standard. And now we don't have to do that. So I think that's just a small example of how we can be more agile as we operate as a stand-alone company, in this environment.

We've got to Chris, perhaps.

Chris Pitcher from Redburn Atlantic. Can I just understand the opportunity for Sensodyne and Paradontax. If I look at Sensodyne, 20-plus years ago, you went down this marketing route of identifying the problem and Sensodyne as the solution, and sort of less than 10 years ago with gum health, I think you adopted a similar marketing approach. On your numbers there, more people have gum health issues than sensitive teeth issues. So by extension, almost the Parodontax opportunity is bigger than the Sensodyne opportunity, even though Parodontax today is probably where Sensodyne was 20 years ago. What I'm trying to understand is most people -- do most people suffer from both because people aren't going to use 2 toothpastes. Are you better off building gum health into Sensodyne than growing Parodontax? Or could it be, I'm trying to understand how you capped the 2? Can Parodontax be as big as Sensodyne, I suppose, is what I'm asking.

No, that's a very astute question is what I would say in terms of, look, I think across both these brands, and we play into what we call as a premium and specialist portfolio. We won these brands rooted in these conditions. But many consumers suffer from more than one condition, as I said. So we have clear evidence that nearly 55% of our sensitivity sufferers also suffer from gum conditions, right? And that's the reason why we have sensitivity and gum as an innovation in the marketplace. We also know that if 98% of the people are suffering from enamel erosion, highly likely a lot of our sensitivity sufferers are also suffering from enamel erosion. That's why we have the Sensodyne Sensitivity Gum and Enamel, which is the #1 performing innovation in U.S. So I think whilst being rooted in their specialism, we clearly see the opportunity for both these brands to expand into more segments, more of these benefits to really drive more relevance to our consumers. Now you're very right in terms of the gum segment, equal amount of people or more suffer from some of these gum issues and that's the education journey that we have to continue. Sensodyne went on that education journey sometime back. Parodontax is doing it, but for a less period of time than Sensodyne. So that's why I believe the opportunity with Parodontax is also significant in our portfolio. And then combined together, the opportunity for the portfolio is really significant. That's why it's a fantastic business.

David Hayes from Jefferies. Two for me. First one just on China regulation. I think there was an update on regulation in China a month or so ago. I just wonder if you can talk us through that and whether that's an opportunity or a threat, specifically for your brands. And the second one, just on the Slide 10, you showed 45% of people with sensitive teeth, 21% household penetration for Sensodyne. If you add it on to the competition with sensitive teeth products, is that getting up towards everyone with sensitive teeth is being treated? Or is there a big gap with the competition including?

Let me answer the second one first, and then Adam will take your question on the China regulation. I think even if you looked at the category, we put the category figure in the slide before, which said 45% people suffer, but 60% still don't use, so that holds true for almost for U.S. as well in some of our -- in one of our developed markets. So it's true that not even in the U.S., everyone is using a sensitivity toothpaste. So that is a continued opportunity for Sensodyne to drive penetration. And we generally start the category growth. We have built this sensitivity category in many of our markets. So yes, on to the second question, China.

Yes. Let's talk about regulations first, and then I'll come to the China piece. So Haleon works in a regulated environment across the whole of the portfolio. We're very good in navigating regulations, and we've done that for many decades. And we're very diligent about how we understand how the regulations will change and we're very good with regards to intelligence of how that will happen. With regards to China specifically, we're very confident that we'll be able to navigate the changes in China with regards to toothpaste and the regulations from a therapeutic or a health point of view. And certainly, we'll be able to navigate that as they come through and our portfolio that will remain competitive in China.

Should I maybe take a couple actually online, and then we can come back to Floor. So I've got one from [indiscernible], which is what is the opportunity for a D2C subscription business in Sensodyne?

That's an important one. Look, I think we haven't seen strong D2C in overall toothpaste, right? We've seen growth in d-commerce, as I said, and in many of our -- in some of our markets like China, we have seen strong growth in social commerce. Douyin has become an important channel in China, and we are investing in that market. So when -- possibly when we consider D2C, we will consider D2C as an enterprise play where Sensodyne can become a part of it, but not from a singular category alone. So we'll continue scanning the environment. And if we believe that it's an important -- it's an area we need to invest in, we'll invest in it.

And maybe if I ask a second one from [indiscernible] which is how do you think about the price elasticity of the higher-end Sensodyne products as they reach over GBP 5 to GBP 2?

Yes. So look, I think the price elasticity exact is kind of a difficult conversation because it depends upon so many things in terms of promotions and competitor availability and things like that. But what I would bring us back to is that in as much as we solve real, important oral health conditions for our consumers. But when you are suffering from frequent sensitivity twinge when you have an ice cream or a cold beer or a hot tea, that can be very disconcerting and you want to act upon it, right? When you have bleeding gum or a bad breadth or gingivitis condition, right? Which can impact your social confidence, you want to act on it. So in that sense, our portfolio of products is less impacted by consumers having a number of substitutes to kind of go after. So that's what I would possibly say now individual elasticity at different price points is a subject of a lot of other factors, including competitive presence and promotions and all that thing.

I think the other thing I'd say back to that is do remember within Sensodyne there's the price ladder in terms of base Sensodyne and the innovation come in at a slightly higher price points. Maybe if we go back in the room for a couple more.

Max Herrmann from Stifel. Just one on innovation. I appreciate you can't give us too much information in terms of what new innovations you're looking at. But perhaps you can enlighten us on the sort of rate of innovation that you're seeing? And then also kind of the rollout of that innovation, what you see over maybe the next 3 or 4 years in this space? Is it just refreshing brands by combining different existing actives? Or are there new actives in your pipeline that you're quite excited about?

So there are 2 parts to the question. One is the active and...

So let's talk about rate of innovation. The rate of innovation in Oral Health has a cadence and we see that to be different across different markets. We're very good at navigating that and making sure that we have the right pace of innovation to drive the business in a sustainable manner. It's important that you don't deliver too much innovation because what happens then is you get churn and we don't drive business growth. So we try to make sure the cadence of innovation is right for the market. We believe certainly within therapeutic oral health, the rate of innovation, we think we've matched that correctly versus competitors to make sure that we remain competitive, and we have our advantages where we need that. The rate of innovation in therapeutic oral health is not the same as general oral health. That's very important. It's not the same rate. So we obviously are in therapeutic oral health, and we have a right cadence for that business. So I suppose somebody want to say right cadence of innovation tailored to the market to deliver on the health need that we see in for the consumer.

The thing I would add to that is that there are different definitions of innovations with different companies use. So it's hard to kind of compare. We have our own definition of real innovation that we talk about. As I demonstrated to you through the example of 2 of the strongest performing #1 and #2, not the strong -- #1 and #2 innovation in the U.S. is from Sensodyne. So generally, we focus on innovation that sticks better in the marketplace. So rate of innovation is one KPI, but the innovation and the sales that it delivers and how long it sticks in the marketplace is an important KPI as well. And we try and balance the boat. Now even though our brands are global, there are different clusters of markets, right? So not one innovation, does not necessarily travel across all the markets in the same time period. So we have a phasing of innovation in terms of what the innovation that starts in a lead market like, let's say, like U.S. could over a period of 12 to 18 months, travel to the other parts of the market, really depending upon what portfolio we want to have in that market. If the market is at a very initial stage of understanding of the segment, then we want to make sure that our focus is more on educating the people and not so much on offering a lot of innovation in that marketplace. So although we have a global business, we do look at different clusters and the consumer needs and what's the right rollout for our innovation.

Maybe the one thing I'd also just add on that is the one comment Brian and [indiscernible] be saying is that pipeline looking out for the next 3 years in terms of innovation is as strong as it's ever been.

As strong as it has ever been.

Tom Sykes from Deutsche. Could you maybe just say something about the supply side of your business. You mentioned the owned manufacturing sites versus the third-party sites. And I wonder could you just say how many manufacturing sites do you have? Where are they? And how large is the use of third-party manufacturers, please?

Can I check with Sonya if that information is a disclosed information or not, I am not aware.

I'm fine with you giving some color on that.

Absolutely. So look, we work with a mix of both our own sites and there is a regionalization that we do because in line with our goals of having sustainable manufacturing and reducing our footprint, it's important that we have regional sites and not one large kind of stuff. So we do have a site in Slovakia, which is Levice, one of our really strong performing sites. We have sites in Asia Pacific. We have sites dedicated to U.S. And possibly, typically, we'll have a 2/3, 1/3 ratio in terms of owned versus subcontract manufacturing and the decision is based on technologies that we want to protect and own. That's one decision. The cost of manufacturing is another decision if there are formulations which are not proprietary and the cost of subcontract manufacturing is better for our overall economics, we do that. So I think that's the kind of mix we use as we look at our supply chain. But global footprint, regionalization to drive stronger sustainability profile and cost manage this, and then making sure that proprietary formulations are held in-house to just protect our intellectual property to drive strong growth.

Okay. But sorry, just in addition to that, then much of your sales that are sold where you don't have a manufacturing footprint? I'm trying to understand the transactional FX sort of impact that you might have? And also, whether you do sell everything in the currency in which -- in the local currency, is there any cross-border like you sell in, I don't know, U.S. dollars into somewhere in LatAm also?

Yes. I mean I think I'd come back to at the end of the day, as Jayant just said, there are factories we tend to try and manufacture within regions. So we minimalize anything in terms of FX exposure and match in that regard. So there's nothing we'd necessarily call out in terms of oral health on that front.

A couple of quick questions just on -- you talked about the sort of 2 U.S. leading innovations. Can you just sort of talk about which channels those came in. So who is benefiting? And how we -- I suppose the question we always get on Sensodyne is how do we keep track on this because all we get to see is Nielsen? And then the other question I had was just the Parodontax slide showed a more fragmented business at the moment. But how should we expect that to sort of leverage over the years? And how should we see that exhibited?

Sure. So let me understand your first question. Are you talking about what channels is this innovation in? So it's across all the channels. It's on digital commerce. It's on the mass retail, it's in pharmacy. It's the channels that we that we service. And the figure that I quoted is the figure from Circana, which is the U.S. retail sales that we get from, and it includes majority of the channels, but it doesn't include some channels like Costco that you already know. So it's a like-to-like basis performing in majority of the channels is the figure I quoted. I think in terms of Parodontax yes, you're absolutely right. And that's the reason why we are calling it out as a strong opportunity from a geographic expansion point of view. It's only in about 10 markets that we have a business of more than GBP 5 million, right? And it's very, very clear to us that we have a strong opportunity because then the gum incidence is equally high in several of the other markets. So we clearly want to make sure that we go after this opportunity to really drive Parodontax growth.

And I guess, and lastly, how does the margin leverage of that work? [indiscernible] Cost building [indiscernible] what is the average for all the existing business?

So I think what we have is that we have a -- do you want to cover that a little bit or -- so I'll begin and you'll jump in. Look, I think from a point of view of our business model, and we don't disclose margins by category and things like that. But we believe we have a virtuous cycle that we call it, which is we are premium players. We have good margins. We invest well in -- our group investment ratios are in the 18% to 19% as has been disclosed and oral health has 3 of the power brands of the group within it. So oral health investments in terms of A&P are materially higher than this 18% to 19%, right? So I think we have the fuel to really go after this opportunity without diluting the overall Haleon margin, yes.

Well, I'll just take a couple actually online. So I've got the same question from someone twice as well, from 2 differently people. So from [indiscernible] and also [indiscernible], which is, today's presentation focused a lot obviously in the power brands. How do you think about nonstrategic brands like Aquafresh?

Yes, indeed. So look, I think Aquafresh, right now, is about 10% of our total portfolio. It used to be in mid-teens some years back. Outside of a few markets in Europe, it is not relevant in many of our markets. So therefore, from a global oral health -- therapeutic oral health portfolio point of view, I would say, Aquafresh is not a global strategic priority.

And then second one I would ask about is, it's a question from the web. So can you comment on recent movements in raw materials and how we should think about impact for margin in oral health? Marcin, do you want to take that?

Yes, I can take that question. So thank you for the question, Sonya. So I think as you expect still and hear that, the raw materials prices remain elevated. Of course, if you look raw material by raw material, that will vary, the dynamic will change, right? Some materials coming down, other materials going up, especially in labor. So of course, we want to recover and we're doing that in terms of any shortfall in our gross margin and as you would expect, and you see that at the group level as well, the gross margin remains robust. So we are confident in our ability to continue the journey. I think our positioning as a therapeutic and premium brand gives us that confidence. And we see consumers continue to buy our products. And I think the last thing, I would say, innovation is a big part of that. So how you do that, I think, really, really matters in terms of the quality of the results.

I think about innovation and pricing. Can you comment on what level of price mix you're expecting to be able to derive from the level of innovation driving right now?

Yes. So probably wouldn't give -- I wouldn't be able to give a specific -- but innovation is a key driver of premiumization, I think for us in terms of -- whenever we are launching innovation, we are launching at a premium to some of the products.

Let me try a different way then. Is the level of price mix similar to the level of volume growth you're targeting? Are there sort of both equal opportunities in your growth target?

Sure. So look, if you look at this year, as I said, we've -- the market saw a recent sharp uptick in growth, and that was led by inflationary pricing. And our growth is also skewed towards pricing, although our volume is positive, which is an important consideration given the kind of price increases that we've seen. Now we don't expect this kind of pricing to continue, although raw materials are still at an elevated level, but the rate of inflation is falling down, right? And I think we believe that the market will normalize. When it does, how soon it does, you can -- one can debate, but it will normalize to the 3%, 4% that we've seen historically. And I think our mix in terms of growth will also get more balanced with price and volume in that sense.

So you're just saying that you're expecting to normalize to 3%, 4%. Is that the 3%, 4% pricing you're talking about?

The total growth is what I'm talking about, which then -- if you look at the overall portfolio, it's kind of half and half pricing and volume, when you get to that 3% to 4% kind of growth. So that's been the normal trajectory.

It's Nick from Artemis. What would it take to double and double again revenue in India and China?

Very interesting question. I think -- look, the opportunity is -- continues to be quite significant, as you've seen. And I think what it would take is consistent execution of our growth model. What it would probably take is ensuring that we continue to put winning innovations and our focus on education of the consumer, large consumer base that we have there. But these are all the things in our control, right? And we -- as we look at our future growth trajectory, we continue looking at which areas of the world do we really see stronger opportunities to accelerate. And emerging markets are certainly one such big opportunity because if you look at our overall health portfolio, we had about 30% emerging markets, whereas oral health is 50% as a total category. So significant opportunity to drive the growth.

It's Jeremy Fialko, HSBC. A couple of questions. So the first one is if you could talk a bit more about your kind of medical detailing or the sort of salesforce you've got going out to the dentist in terms of kind of how many people they've got, kind of what their way of working is, how often they'll visit the dentist, what they find is the most effective way of demonstrating why they should be recommending your products to the patients? That's first thing. And secondly, can you talk about any sort of therapy -- you've got the 3 big therapeutic areas? Is there another therapeutic area which you don't play in, you feel that you want to play in or will be kind of interesting kind of fourth leg for the business?

Surely, you don't expect me to give out our marketing secrets to you. So look, as I said, it is an omnichannel model, right? And I think what we've seen in the last 3, 4 years is the acceleration in digital and all that stuff, especially with COVID, right? I think that has helped transform some of the access stuff. We do have our unique Haleon health partner portal, which gives a strong and meaningful engagement with these experts. It houses all our proprietary content. It's available 24/7. We have, as I said, a number of dentists registered on this, they can pursue their continuous professional development. So we have several ways in which we really service the right needs for our experts together with the body of evidence that we generate, I think, our clinical programs and the body of evidence that we have are a strong source of why these experts are advocates of what we do. So that's what I would say in response to what we do and how we approach these experts. Now if you could repeat the second part of your question, I'll probably answer.

Yes, it was on additional therapeutic areas where you feel that might be interesting for you to sort of take a more active interest?

Sure. So look, I think the first thing I would tell you is that we are in the largest therapeutic barriers, okay? Dentin hypersensitivity 45% of adults suffer, more than 50% suffer through gum issues, 98% enamel erosion, and we have brands focused 1 in 5 denture. We have brands focused towards serving these needs. So I think from a focus point of view, we have enough growth available for a continued number of years by driving execution of our proven repeatable growth model with the assets that we have. Now having said that, there are these areas that I talked about, which is 55% of sensitivity sufferers also suffer from gum issues. We talked about a lot of the people who suffer from gum issues also suffer from bad breath, right? And these are the territories that whilst being rooted in our core conditions, we will expand through innovation. So we showed you an example of Parodontax gum breath and sensitivity. We shared example of Sensodyne Gum Enamel and Sensitivity. So I think that's one of the ways that we will drive more associated conditions, but the first thing that we have to do is that we have significant and continued opportunity in these oral conditions that we know a lot of, we have scientific body of evidence and we have a proven growth model that has driven strong growth over the last 10 years.

Just 2 other quick questions. Just on the -- the France Parodontax example. I mean, is that a profit-making category market combination at that level? Or is that something that you'd lose money at this stage why you continue to build that growth? And then secondly, just coming back to the A&P spend discussion. I know, are you higher in terms of digital spend than the average for the group? And I guess are you higher return. It feels like it's a very specific search sensitivity to equal Sensodyne. Is that kind of how it works? Have you got metrics that show that your return on that investment is better than perhaps the rest of the business?

Sure. So I don't know the first question. Is that something that I can answer country-wise, profitability...

I won't give numbers, but you give general.

Okay. So I think we are profitable in France is the first thing I would say. I think in terms of digital, I mean, we are upping up our digital spend and more than spend our digital competency. This is a journey which a lot of the companies are going ahead with. And I don't have the competitive figures, so I'll hesitate from saying we are better or worse than competition, frankly. I don't have the evidence to kind of say that -- give that data. But all I can say is that there is a consistent increase across the years in our digital spend. And in some of our important markets where digital commerce and the consumers are much more on the digital channels, our spends on digital is far in excess of what a traditional TV spend and things like that. And these will be markets like U.S., China, Douyin, for example, social commerce is a massive booming channel in China, and we are investing in that channel, right? So I think Investment is one thing. We are continuously upping, but the second thing that we are also continuously upping is our digital competency across the organization through training programs, focus on really understanding these channels, retail media networks, the TikToks of the world, how do we make sure that we're producing the right content for some of these channels.

Couple of follow-up questions, please. On -- to go back to Aquafresh you mentioned it was only relevant in a few European markets. What role does it actually play? Because obviously, one of the group level objectives is to deleverage, but how important is Aquafresh? Because obviously, it's a drag on your growth.

As I said, I'll probably repeat the same answer, which is in some -- in some markets, it's highly relevant. It provides a total portfolio. It's our family brand. And in the recent past, with the increase in inflation and the cost of living crisis that is happening, the brand is performing well in many parts -- in many of these countries that it's highly relevant. From outside of these European countries, it is a very small part of our portfolio and therefore, is not a global strategic priority. But it's a brand doing well.

Rashad?

Rashad Kawan from Morgan Stanley. Just a 2-part question for me. When you talk about new markets as an exciting opportunity for future growth and Parodontax being key to that. I mean, what have you seen in terms of new markets where you've entered with Parodontax and Sensodyne as a market leader? What have you seen in terms of share dynamics from Sensodyne? I guess I'm trying to see where you're getting the new consumer from? Is it educating unaware consumers or getting consumers that are already aware of the sensitivities? And then second part is what kind of markets -- I know you touched on India, but what other markets kind of excites you most in terms of new market entries?

Sure. So look, I mean, our research clearly shows that in those markets where there is a good amount of gum education present with sensitivity, gum and sensitivity are 2 different partitions. So consumer either enters through recognizes themselves as I am a gum sufferer or a bleeding gum sufferer, right? So I want a gum toothpaste or I'm a dentin hypersensitivity sufferer and therefore, I want a sensitivity toothpaste. Which means that in those markets where these brands coexist, we see not too much interplay, not out of ordinary. There is a fair share into play, which happens with every brand, but it's not something which is out of ordinary. And that's coming from a partition that these 2 belong to different partitions in that sense. I think in many of the markets which are small in scale for Parodontax, we've got to do the job of educating people about the gum conditions and the gum health. Although 50% of people suffer from this condition, but they're not necessarily aware of what this is. And it's like, yes, I had a bleeding gum, so it bled in the sink, but it could be because of I brushed too hard, right? Or it will go away kind of stuff. I might have eaten something which got stuck in my toothpaste kind of stuff. So there's a lot of the scoping behavior as well, which is happening in these households that doing some home remedy gargling with salt water and these kinds of things. So I think our core job in many of these markets, in line with our proven model is to grow this category and to grow the category to educate the consumer around this condition. So that's the job we have to do, and we are excited about that opportunity because we know how to do that job. We've done that job with Sensodyne.

And the market is excited about?

Yes. Sorry, the second bit of the question, yes. So look, I think -- so one is that we have significant opportunity across both developed and new markets. I would draw your attention to that. I mean, U.S. is a big market for us, and it's performing really well for us in a highly competitive marketplace, right? But equally, I shared with you the data that overall, 50% of oral health comes from emerging markets. That's where the population is and the India, China, that part of the world, right? But only 30% of our portfolio comes from that part of the world. So I think we have a significant opportunity to drive our business in these emerging markets, where the prevalence of the condition remains as high as in some of the developed world. So I'm excited about our opportunity, both in the developed part of the world as well as in the new emerging markets.

Maybe we take one more from the room, Tom?

Could I just follow up on the comments on digital and maybe I missed the nuances of some of what you were saying. But I think in the slides, you say the e-comm share is higher than the bricks-and-mortar market share, including the U.S., which presumably means that your -- the majority of your e-commerce is -- at the group level is coming through your division. Is your market share higher online than it is offline? And then I guess, following up on the comment about the digital spend, would you imagine that your digital spend would have to go up as a percentage of sales to maintain that online market share presumably, that may get more competitive?

Yes. So look, we don't get the e-commerce market share in all parts of the world. There are specific important countries where e-commerce is a more developed channel and we get market share. So what I can tell you with confidence that in these important markets, our online share is higher than our offline share. So that should address hopefully the first question in terms of is that higher? Yes, it is higher. I think the digital is a continued journey. I think we -- as I said, we are upping the digital spend in many of our markets, and that follows the consumer behavior, right? If we find more consumers searching through online and digital channels. We invest more. In many of our -- in our markets like U.S. and China, our digital spends are higher than our traditional TV spends, right? But that is based on our media strategy of where we see we need to go more consumers are. But suffice it to say, and that is the trajectory we are that our digital spends are only increasing, but spend is one bit. The other bit is digital competency of the organization, and we are really focused on building the digital competency of the organization so that we drive high ROI behind the digital spends that we are putting in.

Thank. Can you wrap it up there. I think it reminds me to say thank you to our speakers. So thank you, Adam, thank you, Jayant and thank you Marcin, for joining us today and running through everything. Thanks to those joining online and everyone for turning up. And if you have any questions, as always, let us know in IR. Thanks a lot.

Thank you.