JDE Peet's N.V. (JDE.F) Earnings Call Transcript & Summary

Ladies and gentlemen, please welcome to stage Robin Jansen.

Good morning, ladies and gentlemen, here in this lovely building, [indiscernible] here in Amsterdam. Actually very close to our head office, which is, I would say, a couple of hundred meters away from here. For those of you who don't know me, I'm Robin Jansen. I had Investor Relations function at JDE Peet's. And on behalf of the entire team, I have the pleasure in warmly welcoming you to JDE Peet's strategic update meeting. And I'll have to say I'm very glad that after such a long time, we can finally convene again together here in Amsterdam and don't have to sit behind the screen and interact on the beautiful things that the coffee category can actually bring to us and to you and the entire world. At the event today, we will provide you with an update on our achievements. We will talk about the progress we've made against our strategic roadmap. We will have a snapshot at full year '22, and we'll take a peek into the future and going to share a little bit about what we think 2023 might bring. But before I do that, let me briefly direct your attention to this very interesting page with a lot of important information about non-IFRS measurements as well as forward-looking statements. This slide will be in the decks that we will provide you with during the event. So I would kindly like to ask you to pay attention to this important information. Now, let's have a look at the agenda for today. After my introduction, Fabien will kick it off. And after Fabien; Fiona, our Chief Marketing Officer will zoom into consumer trends, all the, let's say, potential we see and the attractiveness of the coffee category and how we are well positioned with our brands and our innovation capabilities to be a relevant leader in the industry. After those 2 presentations, there's time for Q&A to ask questions you might have about Fabien's and Fiona's presentation. And after that, we will have a break to enjoy a good cup of coffee or tea. After the break, we come back here in the room, and then Laurent Sagarra, the VP Sustainability at JDE Peet's will provide an update on all the progress we're making on our 3 sustainability pillars as well as touch on the -- all the ambitions we have for the coming years. And after his presentation, there is time to ask questions to Laurent about his presentation, and that's before we actually break for lunch. Lunch will be in the same area where you could just enjoy a cup of coffee just before we started today. After lunch, Scott will be on stage. And Scott will give you an update on our capital allocation as well as on how we strengthened our capital structure. And then he will hand over to Fabien with a concluding presentation, which we'll touch upon full year '22 and an outlook for 2023, amongst others. Then we'll have a short break because you might want to digest a little bit of what has been provided during those 2 presentations. And after the short break, we will come back for a concluding Q&A that will be hosted by both Fabien and Scott. I already briefed or I already touched on the -- I briefly touched on the presentations. Just prior to each start of the presentation, we will e-mail you the deck related to the presentation, and those presentations will also be posted simultaneously on the website. With that and without further ado, I wish you all a very engaging and insightful day. And I would like to invite Fabien to come on stage and kick off with the first presentation. Thank you.

Thank you, Robin. Good morning to all of you. And again, a very warm welcome to a full day at JDE Peet's. Last time we had such of a conference, it was virtual, as Robin alluded to, and it was soon after we entered the public market. And back then, we talked about the attractiveness of the coffee and tea category about the attractiveness of JDE Peet's. We touched about some of the challenges we were having, but as well greatly talking about the possibilities. And we introduced our financial mid- to long-term ambition. It's fair to say that over the last 2 years, the world around us has been pretty turbulent. We have had a health crisis. We've had supply chain crisis, inflation crisis, energy crisis and sometimes even a compounding effect in some geography of all of these crisis together. And our agenda over this last 2.5 years has been articulated around 3 things. One was to act as a leader and navigate best with quality, all these external turbulences that the world have been confronted us always. The second thing was to fix some of the challenges where we felt we were not good enough, but as well exit that time by being a stronger company, being a more productive company and being a more sustainable company. And the third things was to position the company into a different and more attractive growth trajectory as we have been, I would say, shared, but as well committed 2 years ago during our last Capital Market Day. Was it around scaling up our capabilities on digital commerce, our innovations or entering into new and very attractive growth pool. And you will see today, we will touch on all of these topics. And I have to say, I'm very proud about what the team has been achieving over the last 2.5 years. I think we have been delivering very well on all these 3 topics. And I think where it positions us today, and still we are totally geared up now with strength to enter and to be successful in these new waves of coffee. And I really -- towards at the end of the day, you will share the same level of confidence on our success, but as well on how it's going to position us to win in coffee in the future -- in a [indiscernible] times. I think we feel fortunate. We feel fortunate to be a focused pure player at scale in a very attractive category. And one of the characteristics of defining an attractive category, it is resilience and relevance over time. Here, what you have on the chart is 30 years of history. I mean the world has seen a couple of crisis over this last 30 years, have been some high lows, very high, very lows, some periods of GDP decline, some periods of high inflation with becoming recurring since nowadays. But there have been on constant during this time horizon, which is a rise of coffee. Whatever the economic cycle has been, coffee has always been on the rise, not only being resilient, but kept its relevance over time as it continues to evolve and to reinvent itself. The second thing that we feel grateful about is the generations of owners and of leaders before us, who over the last 250 years of history, have been going through many crisis, but have enabled us to be where we are today, which is the world's largest pure player of coffee and tea company. Today, we will talk only about coffee. But it's interesting to see on coffee today globally, we are a strong #2 player with about 10.5% market share globally. And in the places where we decided to operate, we're actually at a 14% market share, almost to the size of the next 8 company after us combined. So we are really a very strong player in the coffee and tea place and in coffee in particular. You might recall these slides from 2 years ago where we introduced our new goals and purpose-led strategy, which was articulated around 3 pillars. The first one was a relentless focus to attract consumers with serving markets, serving more premium cups and saving cups in more geographies. The second pillar of that strategy is to fuel and execute our growth with mastery, from farms to where consumers shop and where consumer consumes their coffee without any compromises on quality. And finally, the last pillar is really anchored in a strong belief we have that the only way to have a long-term, enduring sustainable performance is where you don't operate as the expense of your ecosystem, but within and with your ecosystem, and we really want to foster that inclusive ecosystem. Today, we'll touch, I believe, almost on all of these topics. And of course, we'll be very happy to answer any questions if you feel there is one of the topics we have not really touched on. I joined the first time in this company in 2014 up to the beginning of 2019 before returning mid-2020 as CEO. And it's interesting to look back over this time horizon, how much the company moved and evolved. We started really from a European heritage. That's why Europe was representing about 75% to 77% of our revenues back then. But we have been really greatly developing over time. And now we are a global company. Today, Europe is representing about 50% of our revenue, which means there is 50% of the revenue, which is outside of Europe, up to the point that today, our biggest market is not anymore the Dutch market like it was back then, but it's really today is the U.S. market, which is the largest coffee market in the world, and it is very important to ensure we have a very strong foothold there. But what is interesting as well is where we decide to go. We have the ability to win. We have the ability to challenge the incumbents. If I look at the U.S., for example, we have an amazing brand asset with Peet's, that is growing double digit. And where Peet's decide to play, and I will come back much more in detail later on today, it wins. Today, Peet's in the U.S. is the winning premium brands. it's significantly outpacing either on K-Cup or on the Roast & Ground or on Beans, the other players. As we talked about 2 years ago, we said emerging market is very important for us, to serve more in more places, where there is just a start of penetration of coffee, which will be a good reservoir of premiumization going forward. We have been putting a lot of attention and a lot of effort in these geographies, and I'm very pleased to report now in the emerging market where we play, we are winning market shares. We have been gaining 81 points of market share over the last 2 years. We did win market share in 2021. We did win market share in 2022 in emerging markets. Our assets have the ability to travel around the world and to be successful and challenge incumbent and to become a stronger leader going forward. Through our various agenda or organic or inorganic over the years, not only we have been -- now participating in all the category of coffee from Single Serve, Beans, Instant, and Roast & Ground. But very importantly, we have been positioning ourselves to the most attractive part of coffee. We are today over-indexed on the fast-growing category on coffee, which are Single Serve and which are Beans, which means that we will, going forward, attract a fast -- a bigger part of the growth of the industry. So let's look back now over the last 2 years. I think we've never heard that many times the word resilience over the last 2 years. For us, resilience was the opposite of standing still. We had to fix a few things, as I've alluded to at the introductions. But as well, we wanted to ensure we would come out stronger from these last 2 years of very turbulent times. Sometimes crisis can be an opportunity to be stronger, and it's where we wanted to position ourselves. It requires some time for us to be acting even [ beyond ] a player in coffee, but really to play as a leader in coffee. And you will see in the future in some area where we believe we have been leading. Starting first with -- as a leader, we have to invest being our biggest asset, which is brands. I was clear 2 years ago, when I shared some of our starting point, I was really not happy by the way our share of voice has been developing. It was a shortcut to manage bottom line by investing less in our brands. I've committed to restore it and I've said back then, it will take us 2 years. We did it. There in coffee, we are the leader on share of voice. We have a share of voice today, which is almost 2x bigger than the one we had in mid-2020. We have today a share of voice, which is bigger than the one we had even before COVID started. We have a share of voice ahead of our share of voice we had in 2019. And the world of media has been changing a lot during this time. So have we -- we have been disproportionately invested behind digital media, which represent today 40% of our media spend. And we see some of the results, you can see on the bottom right side of the chart here. If we look at the share of visibility of JDE Peet's product in online retailer stores, we come first. We have more than 30% of visibility, which is ahead of peers on these online platforms. The other things we had to cost-correct was our commitment to Single-Serve appliances. We can say on one hand, one of the most attractive parts of coffee is Single-Serve and at the same time, investing less behind it. We have been significantly scaling up our efforts on innovations and investment behind Single-Serve appliance. I will even share later how much more investment we have been putting behind and it is quite meaningful. But it's interesting to look back on the appliances where we participate globally. First, in Europe, Senseo, up to today, is the largest part of Single-Serve coffee appliance used every single day by consumer. And I think Senseo will get even more important given the macroeconomic cycle in which we are entering. Not only Senseo is the most sustainable Single-Serve system today existing in Europe, but it is as well for consumer the most affordable Single-Serve pad solutions, meaningfully lower than the average of a Single-Serve category. And there, we have been innovating. We have been opening new geographies. I think besides an anecdotal Nordics appliance launch a couple of years ago, we have not launched a new appliance, not entered a new market in Senseo for about 10 years. We have now a new appliances. You will have the opportunity to see it at the break, which we call [ Maestro ], which blind tested is giving the same in-cup test experience than an espresso capsules. We have been opening 3 new geographies in Eastern Europe in 2022. We are very happy having Senseo and very grateful adding Senseo in our portfolio. The second Single-Serve appliance that often comes to mind to many people globally outside of the U.S., the biggest parks that exist is Espresso appliance. And on that one, despite a lot of competitive activities over the last few years, we build and we stayed firm on our market share to be the market leader in modern retail and aluminum capsules. We had at a peak about 44% market share, that was really at a peak, we stand for above 40% market share despite a lot of activities that have been happening over the last few years. And we had to do a lot of things for that, a lot of innovation. Fiona will talk about it. We have even launched, I could almost say relaunch, but it's almost a launch, our new appliance Espresso machine, that again, you will have a chance to see at the break here. But I will talk as well a lot more during the course of today, because it is really exceeding our expectations and we will do more of it. Shifting gears to the U.S. By far in the U.S., the largest Single-Serve pack is [indiscernible] machines. And there, there is the one branded winner out of all of them. Many people win, participate, win, but the fastest-growing one is Peet's. In the U.S., Peet's on K-Cup is growing at about 2x the growth of the category. Finally, Tassimo, which was the first multi-beverage drink, which was introduced in Europe before any others. Again, we are taking care of our asset. We have been doing quite a lot of renovations, either on the appliance side or on the SKU we have been offering to consumers. So we have really been recommitted to appliance, and we know that our participation now is the number of appliances which are sold globally are going up and are very meaningful. But doubling share of voice, recommitted, reinvesting behind appliances is not coming for free. How do I say, growth requires investment. But we are very cautious that we had to play our part to self-fund the vast majority of this step-up of investment. And for that, we have been boosted our cost agenda, because we want that cost agenda to have the ability to lift our growth investment. We had really 2 agendas there. One is around focused simplifications and another one is around efficiency and automations. I don't want to enter in always on the slides here. But we have been, for example, over the last 2 years, reduced our number of SKU at a double-digit level, something we have done. We have been reducing by more than 1,000 our employee base over the last 2 years. Very meaningful numbers. We are talking about more than 5% of our global base. And if we would talk -- if we exclude the area which were untouchable, such as field sales, such as digital commerce or innovations, we talk about a greater number [indiscernible]. So a very, very meaningful ambition, which enabled us to reinvest behind our growth. And it is an agenda. Now we have been regaining our cost competitiveness that we really truly intend to protect. And at the end, you would say was it worth it all this for investment, does it work? Yes, it did. We are tracking the health of our brands every quarter now for 2 years. We looked at the progress on unadded awareness or consideration, so all the metrics behind brand salience. We go beyond leading indicators of market share. We go on lagging indicators. What drives it long term? And what drives it is the quality of your portfolio, the health of your brands. And here, you have a metrics that represent countries and brands. And you can see in 8 out of 10 boxes here on metrics, our brands have strengthened. This would have not been the case without investment. But let's not -- I think we should give more credit to the team. It's not only a question of money. It is a question of quality of execution, how you talk to consumer, do you have innovations, do you have relevancy to talk to the consumer that Fiona will be covering. But we are very, very pleased with the quality of our portfolio, which is stronger than it has ever been if we look at these metrics. And why it's important? At time of inflation, one of the most important indicators is do you have pricing power with your brands. By the way, we have been able to turn around the quality of our brands. We have been able to lead on pricing for the category. Here, we have been putting the last 18 months price increase we have been doing across key segments, isolating our pricing, isolating competitors pricing, isolating private pricing. A couple of things you can read here. The first thing is, we took the lead about a quarter, sometimes 2 quarters on pricing. But because this pricing were absolutely justified by cost inflations. Everybody was going there. And you see they are all converging. That is a bit of a lead time, but they are all converging to the same level. We believe with some places where there are some catch-up to be done by some competitors, but we believe it is converging to the right level and to the same level. We are talking about double-digit price increase. We'll talk later when we talk about 2022. It could be seen big percentage-wise. But if you would translate that into a consumer impact, we believe it is pretty responsible and reasonable. We have to be very mindful and careful with averages. But if you would be a consumer that drinks 500 cups per year of JDE Peet's product with inflations, the price increase we put through, the impact, full year of this inflation represents EUR 5. EUR 5 for 500 cups including inflations. That is a price of just 1 cup you can get out-of-home today. That's a belief that we have, that's why and Fiona will talk about it, we think that even in this inflation cycle, it is difficult macroeconomic environment in home coffee will stay as strong as what it is today. Another things which could have been a nice plantations in difficult time will be to scale down ESG effort, either to invest less or not progress on the agenda. We decided not to. We decided not to first because it is not in our belief, in our philosophy on how you run a quality business for the long term. But the same thing is we have no choice. We had no choice. And I had 2 years ago a very direct feedback from one investor in this room. I will not name, but I have 2 things for the directness of the feedback. And the feedback was "we love the category. We love your company." But the best way for me as portfolio manager to improve, to improve, to increase my ESG rating is just to sell my JDE Peet's shares. A tough feedback to is, I can tell you, when you're entering the job. So we looked in detail and actually, it was true. We have not really put any attention so far on ESG rating. And not only we have been looking at 1 only, but we looked really at all of the most meaningful one because we realize they all look at different things. And over the last 2 years, we have been really moving from what we will consider a lagger on ESG to a leader in ESG. And we have not compromised difficult time to not doing it. And I think we are pretty pleased with where we are today. We know it's a non-ending journey. We know the bar is raising every time on the rating and with ambitions to keep high. So these 2 years were really around -- turnaround leadership and they were all at the service of one thing. They are all at the service of growth and elevating our growth into a new trajectory. If you remember 2 years ago, when we had our first Capital Market Day, we talked about opportunities which were unexploited for us. We talked about the largest coffee market in the world in the U.S. We talked about emerging markets and in particular, about the fastest-growing market probably for the next decade being China. We talked about the fastest growing channel, which was online e-commerce, and we talked about appliance. I want to share now what we have been doing on all these 4 topics over the last 2 years and where we are today. Starting with the U.S., an absolute fundamental market for us, our #1 market, which is important. Not only because it's the largest coffee market in the world, because it's a market with a lot of premiumization opportunities, but that's a market where we have the asset to win with Peet's. And today, Peet's is getting greater and bigger. Peet's just crossed the $1 billion and EUR 1 billion, we don't play with currency here, over the last 2 years. It's clearly reached the scale. It increased significantly its household penetrations by 20% over the last 2 years. And we are still very low. It's only at 6.7% at the end of December of 2022 with a lot of headrooms. And where Peet's decide to go, Peet's wins. Peet's is outgoing the other top 3 premium brands on Roast & Ground and Beans. Peet's is growing at double size the rate of the market on K-Cup. Both Peet's and LOR have been climbing now to #3 and #4 positions on Amazon. And as you know, Amazon in the U.S. market, it's about 25% of that category. So it's a very meaningful channel to be powerful at. Next one, the U.S. U.S. has not been a difficult -- an easy round over the last few years. But what's interesting is one of the few categories in China that remained boiling during this time is coffee. And we shared why China is very important for us. And why, although it's in an investment phase for us, we intend to do that. And we do that with having an agenda of penetration and premiumization and an agenda of omnichannel. So if we look at on the in-home side in China, I'm very pleased that in 2022, we have been growing 20% again in-home in China. In China, there has been a change of landscape over the last couple of years with much more momentum growth from local players. We have been keeping the pace of the growth even participating on that with local players ahead of a lot of other international companies. We have been changing our innovation approach. We have been innovating more for China, by China and the pace of China is a digital way for China. We have been as well introducing some of our great premium assets that resonate very well for Chinese consumer, which is L'OR and Moccona. In away-from-home, with Peet's, we have been accelerating. After 5 years, we've reached 13 stores. Over the last 2 years, we have crossed -- well crossed the 100 stores -- at 117 stores at the end of December 2022 without compromising on quality. We have just been rated the best quality coffee chain in China at the end of 2022 for quality of beverage, for quality of service, for quality of stores ahead every other local, regional or international players. We are at the beginning of the journey in China, and we know China will have opportunities to reach our top 5 markets over time. The other one we talked about is online. There is one thing that COVID has been accelerated is really the trend on digital commerce. And we see a confluence sometime of geographic opportunities as well as channel opportunities. We have been doing a lot. We've really stepped up and scaled up on the digital commerce. At the end of 2022, digital commerce represented 9.5% of total JDE Peet's revenue, which is about 2x to 3x bigger than already it was represented a couple of years ago. And what you see as well is the interesting momentum we have on some of the most attractive markets at the same time, playing turbocharging this online performance. In China, 60% of our in-home business is online. In the U.S., more than 25% of our in-home coffee business is online. These 2 numbers are pretty competitive in the consumer goods world. And definitely, digital commerce is a significant accretive growth and growing at a much higher level in the range of the company. The other one is appliance. I talked briefly about appliance before. Here, I want to zoom in a bit on our new crown asset called L'OR Barista, our proprietary espresso system, and you will have a chance to see it outside. I think we added in 2018. But to be honest, it was kind of [indiscernible]. People were not much interested about it. We awaken a sleeping beauty. Why do we think it's a sleeping beauty? It's not us saying it, it's the consumer. We have been very intentional over the last 2 years investing to understand more about it and what consumer were saying on our L'OR Barista machines. Here a couple of data, external data. in the market where we focused first, which are big. Espresso market in the world, France, Spain, Belgium, we are selling between 1.5x to 2x more L'OR Barista machines than other competitors new, fast-growing appliance in the space. But as well, you would see now we have to place a machine to sell and keep our freedom on the capsule side. But on top, we have a return. When we look at the throughput of JDE Peet's capsules in the L'OR Barista system versus other system, it is more than 30% higher. So it's really exceeding our expectations. We are very encouraged with these numbers, and we are rolling it out in a very disciplined way. We started at the end of 2021 to launch it in the Dutch market, and we see already a similar number on the sell-out on machines that we have been seeing on the Espresso market I presented before. And we've just been launching it in the U.K. and in Ireland at the end of 2022. Then I would say when you have your organic growth in order, you can look back and resume more inorganic agenda. And we've been doing that in 2 instances on strategic partnership and on M&A. We have been increasing partnership in the coffee world with some of the most reputable coffee company around the world. So we already had illy where we have significantly expanded numbers of markets over the last 2 years. But we have as well entered a partnership with Smucker's in the U.S. market on [indiscernible] motors in Canada. We have as well been very disciplined unlocking opportunity in the super premium space in Australia with a brand Campos. Again, you will have the opportunity outside later today to see this fantastic brand. And as well on the infusion tea in-house with [indiscernible], which when we acquired it was the #4 infusion brand in the French market. Last read, it's already #2. So we have fantastic assets that we can even turn to move to the next level. So the last 2 years were really around turnaround leadership and becoming stronger, being a more productive company, being a more sustainable company, but as well positioning ourselves into a much higher growth territory, unlocking fueling new growth upside. Before I return later in Q&A or later in the day to talk about how all of that is translating even in numbers in 2022 or even beginning, since the beginning of our journey, I want now to hand over to Fiona, which have some very exciting consumer trends, but as well innovations of JDE Peet's. Thank you.

Thanks, Fabien, and welcome, everybody. Consumers today, we know are facing increasing prices. We know it's kind of tough for consumers today. And as such, it's forcing them to evaluate and reevaluate their buyer behavior. Every day, they need to look at the choices that they are taking. You could say there is a new reality, which is being defined by the consumer, and it's influenced through the lens of uncertainty. Within that context, what we see is that the role of coffee, the resilience of coffee is very clear and very evident despite the disorder that we are seeing. And there's a core reason for this. Put simply, it's because of the role that coffee plays in consumers' lives. It's really important to consumers. Coffee does so much more than just wake us up in the morning. Coffee brings people together. Coffee fuels conversation. It drives decision-making and it inspires creativity. And in the words of Egberts Douwe himself, it adds to the pleasures of our everyday lives. And that is why we, at GDP believe it's amazing what can happen over a cup of coffee. And when we look at the coffee category in totality, it's very clear to see that the relevance and the opportunity of coffee is very evident. Why? It's big. It's growing. It's premiumizing, and it's on trend. In terms of the size of the coffee category, it represents roughly EUR 340 billion worldwide. But I think the size of the coffee category is best understood when we put it into context. It is the third most consumed beverage on the planet. In terms of growth, we have seen growth in the coffee category. And importantly, we see sustained growth in the coffee category. We've seen growth in value, and we also see growth in consumption. And importantly, we also see that our emerging markets are growing at roughly twice the pace of our developed markets. So we see more cups and we also see better cups. Premiumization in coffee, it's real. Consumers have clearly demonstrated that they are prepared to pay more for what they perceive as an elevated experience. And the data supports that whereby we see that within the higher perceived quality categories of Single-Serve and Beans, they are growing at twice the rate of the other parts of the market. And finally, we know that coffee is on trend. This is the case because of the versatility of the drink. Coffee appeals to multiple need states, and it appeals to multiple occasions, and it is drunk by just about everybody. We also know that coffee is a very broad repertoire category. In terms of the repertoire that it covers, it covers a repertoire of channels of formats and of price points. When we look at the repertoire of channels, I said before, EUR 340 billion. This represents approximately 1.2 trillion cups of coffee per year. This is roughly 200 cups of coffee per person on the planet. When we look at the consumption of coffee, it is consumed both in-home as well as away-from-home. Indeed, 80% of the cups are consumed in-home, and we see a slightly inverse relationship with value where we see that 75% of that value comes from the away-from-home channel. The away-from-home channel is important because through that, we can observe many of the trends that are occurring, shifts in consumption patterns and that can also inform our innovation agenda. When we look at the repertoire of formats, there are many different ways to consume and enjoy coffee. Coffee comes in the form of roast and ground, in instant in beans as well as within the single-serve format as well. And we see growth across all of those formats. And as I said before with the accelerated growth within single-serve and beans, we see that those formats start to take up a greater share of their overall place within the total coffee category. And then finally, we see a repertoire of different price points as well. They're very broad at the price points that we see within coffee, whereby you can enter with a cup of roast and ground at roughly EUR 0.06 all the way up to single serve at around EUR 0.35 a cup. This repertoire nature of the category is also commensurate with consumer buying behavior, and that is that consumers tend to buy across different channels, formats and price points. There is a fair degree of promiscuity that exists within coffee and consumers are on a relentless pursuit of finding something different and new at times, and that comes through with these different repertoires. We also know that coffee is consumed all over the world. The coffee is not consumed in the same way all over the world. There's no such thing as a global homogenous coffee consumer. We know that consumer interests and hence, taste preferences do vary in different markets. We know that hot beverages are very much a part of culture in many countries. And therefore, we see that the differences that occur within the different drinking profiles and indeed, taste preferences. As we move forward, we feel very confident about the runway that exists for growth, growth both in volume and value within the coffee category. We estimate around a 4% to 5% long-term growth trajectory within the category. And we see that coming from 3 distinct yet somewhat interdependent drivers. And these drivers are more consumers, more cups and more value. When we look at more consumers, the opportunity to continue to drive penetration within coffee, very definitely exists. You can see here the example of a highly penetrated coffee market at around 79% consumer penetration to a mid-level market such as South Africa, where we see 58% penetration all the way to China, where we see just 16% penetration. So the opportunity to convert consumers to coffee and thus realize incremental penetration still very much exists within the coffee category. We also see growth opportunity through more cups. What do I mean by more cups to enhance the frequency of consumption as well as to cover the occasions that exist within coffee. An example here within Western Europe, where approximately 400 cups consumed per year per person versus Asia, where just 40 cups are consumed per year per person. So there is significant headroom in existence in order to accelerate that frequency of consumption. We also see opportunity in occasions. I already mentioned that coffee does much more than just wake us up in the morning. Coffee increasingly is consumed throughout the day. And indeed, many people navigate their day around their coffee consumption. And we see that coffee can be consumed in the morning, in the afternoon and all the way into the evening occasion as well, and it can be consumed at home, on the go or away from home. We also see there another driver, which is more value. And this is because consumers have clearly demonstrated their preparedness to trade up -- to trade up within a category or to trade up by experiencing a new category. The example that you see here is our own example of Jacobs, where consumers can enjoy a couple of Jacobs instant or roughly EUR 0.07 a cup. And indeed, they can also enjoy a couple of Jacobs specialty mixes at EUR 0.36 a cup. These same consumers sometimes move out or complement their existing instant usage by trying Jacobs' capsules at EUR 0.36 a cup. And then within capsules, you also have the opportunity to trade up to more value with our subrange of Jacobs Barista for around EUR 0.44 a cup. So we certainly see that there is clear runway and headroom for accelerated growth within the coffee category. And one of the further reasons why we believe this is because of the history of this category. Over time, coffee has shown that it has very definitely come a long way. If we go back just approximately 20 years where coffee was dominated by a brown sea of sameness. If we fast forward to today, what we see is a vibrant world of inspiration, aspiration and indeed possibility as well. Through this time, coffee has moved through a number of what are now quite well-known waves as we call them. And through that journey, it's moved from a commodity to a cultural cornerstone. It began with the first wave where consumers valued price and consumption. To the second wave, where we saw the rise and rise of the modern coffee shop. To the third wave, where coffee became something of an art form. We saw the Barista became the hero, and we saw small roasters focused on specialty coffees and origins of where that coffee came from. And then we moved into the fourth wave where we start to hit the cultural cornerstone and where socioeconomic impact and sustainability became more important than ever before. Our ability to understand these waves and indeed project into the future, is dependent upon our ability to understand the consumer, to understand consumer insight and the trends that exist. But right now, things are behaving just a little bit differently. There are a number of different impacts at play in the world today. We know that disorder is fast becoming the new order. And what we're seeing as a consequence of that, is that consumers are experiencing things a little bit differently. Their mindset can behave a little bit differently as we enter into a new macroeconomic cycle, coupled with many of the societal disruptions that we are seeing. As a consequence, disruption is the new normal, and our consumers are experiencing heightened levels of fear and anxiety. The fear and anxiety that our consumers feel it's real. And when they feel that, they look for certain things. They look for what they know, they look for what they trust, they look for familiarity and they look for the benefits of what they find in their local environment. They are also seeking for cognitive ease to ensure that they can make their life as simple as possible. In essence, what consumers are looking for is to feel safe, to feel good and to feel connected. And this then links to what does this mean for the coffee category and what does this mean for our brands at JDE Peet's. For the coffee category, the essential nature and the resilience of coffee is what we start to see. We know that coffee can play a role to help to manage stress and anxiety by helping to manage energy in its purest form. And we also know in these stressful times that consumers crave familiarity, trust and localization. And that positions our own brands, particularly our local or heritage brands very well. Our local brands have long been a sign and symbol of home. And right now, home is assigned and symbol safety, connectedness and a safe harbor for consumers. If we look a little bit more deeply at coffee now, I've already said that coffee plays a role to help manage energy. Coffee can play other roles as well. Coffee can be seen as a pleasurable treat, it can be seen as something that helps us relax and provide us with comfort. And we know that consumers are seeking for just small pleasures in their lives during times of stress. And you see on the chart here, that the third thing that consumers are reaching out for during these times is a good cup of coffee. What you also see here is that coffee is indeed the first consumable that consumers are also reaching out for in order to find just a very small, pleasurable trait. Again, just looking at coffee as a category in totality. This chart again reinforces the role that coffee plays in consumers' lives. I've already said that consumers are needing to make choices every day. What we are seeing is that coffee is remaining in the basket. When consumers need to make trade-offs across the entire basket, the choices will be made and coffee is still seen by greater than 50% of consumers as an essential within the basket. So the consumers desire to trade off against coffee is a lot less than some of the other staples within the basket. What you also see here is that coffee sits at a 25% area here in terms of a treat. And we know that consumers will reach out for a treat during this time as well. So coffee can play both roles very well within the basket choices that are made. On the other side of the chart, if we deep dive into beverages specifically, what we see here is that behind milk, coffee is the one that remains in the basket within the beverage category. So again, reinforces the importance and the role that coffee is playing for our consumers and where it sits in those choices that are being made. What we're also witnessing in coffee at the moment is that consumers are not moving around too much at the moment. There's not a lot of trade-offs being made within the coffee category. Specifically, what you see here is a representation of the share of the different price indexes that exist within coffee from mainstream and mass to premium and super premium and then forward to luxury which sits at the greater than 200 index price point. What you can see on the chart is that within our mature markets, we're not seeing a lot of trading differences occurring. We're seeing a very small movement towards mass and mainstream, but not a great deal of movement essentially is occurring. And then within our emerging markets, again, not a great deal of shifting occurring either. Indeed, what we are seeing is just a very small increase in some of the higher price point indexes within the market. So we do believe that coffee will remain essential and resilient during these times. And then comes the role of our brands, our portfolio of brands. We know that at JDE Peet's, we have some of the world's most globally iconic coffee brands. These brands play a role. They are important within our consumers' lives. We cover the category landscape with these brands, offering affordability, accessibility and availability through covering in full the category landscape. And we know that moving forward, we will be able to deploy a ubiquitous portfolio of price points to ensure that we're best placed to capture any trading up or trading down. We know that we will be able to deploy a unique portfolio of categories to capture any shifts in consumption that may or may not occur. And then we also have our iconic portfolio of brands, which is versatile enough to meet the needs of consumers' desires for familiarity, for localness as well as for trust. So we're very proud of the brands that we have within our portfolio. And then increasingly, as we move forward, we will also be able to bring to life our compelling ESG agenda to ensure that our brands are at the forefront of the role that coffee will play in social consciousness. And to that end, we will selectively bring to life the purpose of our brands, in line with our ESG agenda. The purpose of our brands will complement very well the agenda that we have around nutrition, packaging as well as sourcing. A few examples here. [ Purpose ] can be settled. And Douwe Egberts, as a brand, is a great example of this. Douwe Egberts has always existed to bring people closer together and to create a strong sense of community and what could be more important than that right now. Some of the other brands that we have with Senseo. Senseo has always existed to enable consumers to make choices that matter for themselves. And as Fabien has alluded to, now with Senseo consumers can make choices that matter for the planet as well. Jacobs will exist to stimulate prosperity. L'OR has always existed to unleash pleasure. And moving forward, we're partnering with the World Coffee Research to ensure that we play a role to protect that pleasure for generations to come through the protection of some of the rare arabica species. With Tassimo, Tassimo has always served everyone with happiness. And this is a brand that's earned its right to play within the space of [ D&I ]. And then finally, with Peet's. Peet's as a brand has always been on a relentless pursuit or quest for better, and it will take the lead in our portfolio in the territory of sourcing with impact. We also know that our brands play a key role within our innovation agenda and actually innovation comes to life through our brands. Innovation is very important for our brands because it gives us the opportunity to ensure that our brands remain relevant, they remain modern and they remain timely. We utilize innovation for many reasons within JDE Peet's and for many ways to drive our growth agenda as well. For example, we use innovation to strengthen our leadership. We use innovation to access new profit pools to fuel our channel development. We know that consumers increasingly want to have an omnichannel experience and we can use innovation to ensure that we win where consumers are and where shoppers want to shop. We also use innovation to fuel our geographic expansion, agenda and then finally, to ensure that we have the right level of pricing power within the market and particularly at the moment, that becomes very important. At JDE Peet's, we have a strong track record of success of innovation, and we have a strong track record of disruptive and proprietary technology. We have a portfolio of patents that we use to not only protect our current business, but also to secure our future business as well. A few examples here, and Fabien already mentioned, Senseo, we were the first to bring to the retail environment, a single-serve system within Western Europe. With Tassimo, we were the first to bring an intelligent multi-drink system with a barcode reader capability to Western Europe as well. With our L'OR brand, we were the first to bring the ubiquitous availability of aluminum capsules to the grocery market. And with our free stride instant technology, we were first to bring creamer capability for an elevated experience for our consumers. With our frozen liquid technology, we're the only ones with the frozen liquid technology, which is able to offer rapid and hygienic dispensing within away-from-home environments. So we have -- we do have a track record, and we utilize that track record to inform where we're going in the future as well. And we have been able to identify 6 key innovation platforms which we innovate around in order to drive global scale whilst also and always respecting local relevance. These 6 innovation platforms are our compass for future innovation, and they are agnostic. They cover all our brands, all of our categories, our regions, our countries, they also cover marketing, R&D, technology as well as our grocery and our away-from-home business, too. So what do these platforms mean? Just as a couple of examples. When we look at exciting experiences, this is about being multi sensorial. It's about the new and different, and it's about the surprise and novelty effect for our consumers. Health and wellbeing is an increasingly important territory within coffee and an increasing opportunity within coffee too. And this is where we will balance both mental and physical well-being. When it comes to authenticity, this gives us an opportunity to be able to elevate the consumer experience by focusing quality improvements around freshness, around craftsmanship and [indiscernible]. Mastery for everyone gives our ability to be able to offer our consumer an elevated competency level to ensure that they can enjoy more personalized experiences. At arm's reach is about being available, being where consumers and shoppers are, whether that is indeed in a physical world or a virtual world. And then finally, brewing a better future is very much our sustainability play. And this is where we are focused on ensuring that we are offering the right products, the right packs, the right propositions to create a better future. A few examples where we have innovated against these platforms. So against exciting experiences, we have brought to China a new single-serve cold brew proposition, which is in line with their consumers' heightened desire for novelty. This is also another example of where we're able to work at pace and have a level of agility to ensure again that we have the global scale together with ensuring local relevance. Against authenticity, our L'OR brand really shines against this platform. You see a couple of examples here. One is the launch and the continued launches that we have within limited creations for our L'OR capsules together with L'OR Artiste, which is a recent execution and launch around our instant and holding instant proposition. This is also an example of how we can ensure that our premium or super premium brand is able to travel into all of the categories or formats that exist within coffee. And when it travels to the adjacent categories, it's able to do so at a more premium price point. Another example here is where we are able to combine our health and well-being together with our brewer Better Future platform. Jacobs is the example where we've been focused on reducing fat, sugar and salt content, and this will enable us to ensure that we meet our 2025 nutritional agenda, which forms part of our overall ESG agenda. And then against our Mastery for everyone together with our brewer Better Future platform, we see the Senseo brand. Again, Fabien talked a bit about the role of Senseo in terms of affordability and sustainability. Senseo still holds the largest park in Western Europe, and it really has been at the forefront of our sustainability agenda. Senseo offers compostable pads, certified coffee, pharma projects. It offers appliances that have a greater propensity of recycled materials as well as lower energy usage. So as I said earlier, this is a brand that really is able to ensure that consumers can make choices that matter for the planet, and it's a brand where conscious choices is permeating through everything that we are doing. And then again, on our Mastery for everyone platform. Again, Fabien talked about the launch of L'OR Barista, the success of our L'OR Barista appliance as well. We're very proud of the performance of L'OR Barista. And another example of how our brands can travel into other categories and indeed own the space of appliances as well. And another example of the power of our L'OR brand, a brand where passion and inspiration meets imagination to really create a super premium brand that has the power to captivate our audience. So today, I'm not going to share with you our entire innovation pipeline. But I do want to share with you one new launch that is coming this year. So with our L'OR brand and our success within the espresso part of the market, again mentioned already our ability to hold that #1 share position within espresso capsules. We have successfully done that through focusing on being born from gold. As we move forward into this year, we will complement that with also being born from nature. So I trust that you will be as excited about that launch as we are. As I said, it will be launched this year, and it will complement our very strong performance within the Espresso capsules part of the market and also the strength of our L'OR brand. So in summary, I think at JDE Peet's, we have a clear sense of who we are and why we do what we do. Our vision is clear and compelling. And as the champions of coffee democracy, we will continue to deploy our portfolio of brands, formats, categories, price points and geographies to ensure that no matter who you are, where you are or how you drink it, we have a coffee for every cup. Thank you.

Thank you very much, Fiona and Fabien. So we've now had the first 2 presentations, and I can imagine you might have some questions you would like to raise to either Fabien or Fiona on their presentations. So we will start a Q&A session, and I would kindly like to ask you that if you would like to raise a question, you raise your hand and then somebody will come with a microphone to you. And then if you could state your name and the company you represent and then ask you a question, then we'll take your questions from there. And with that, I would like to invite Fabien and Fiona to come on stage to host the Q&A session. Thank you.

There are no one here in the front. So somebody would come with the mic.

I'm David Hayes from SocGen. So 2 questions from me. Just in terms of the higher pricing that you showed, particularly against the branded companies where it's a fair comparison because obviously private label has a lower cost base. So it looks like you're consistently higher. Is there a reason for that? Is that partly that your financing the investments you've been making through higher prices? Is it that you're more exposed to the spot price? Is there something that drives that delta across each of the different categories you showed? And the second question on China. You showed that the store rollout. I just wonder whether they have been slightly delayed by COVID because that's all happened over the COVID disruption. So would that be even more if you didn't have the lockdowns and so forth? And have you got a number that you're aspiring to in terms of going from the 117 to X in so many years?

So I think on pricing, you had a couple of questions. One is kind of the competitiveness on pricing, did we put more or less percentage, absolute. Here, I think what is a very fundamental and I have seen in some categories where there were sometimes even some suspicions that people put more pricing than what they had to -- on coffee, and we have been very clear about it. Our goal is not to create value by speculating on coffee, putting more pricing than what is necessary related to the commodity side. And it is a pass-through category and will behave both sides. And what we have been putting through is only related to the commodity inflations, nothing more, nothing less. Then you are part of the portfolio where indeed, you may be a bit more exposed than some other parts. If you are more in a roast-and-ground and beans category, because you have, I would say, less packaging, added value compared to series of propositions, the level of pricing we had to put through in this category is much greater than when we had to put through single serve or instant, for example. If you look at what's happening now with more in energy crisis, it is most likely the part of the portfolio that use more energy will have to carry more pricing like instant, for instance. And of course, there is always -- the point of departure is different from absolute price point. But if I would have taken, for instance, roast and ground and beans in EUR 1 per kilo, it could have been other metrics people have presented. We see the exact same level of convergence which is happening across the various players. Second question was around China. Yes, it had been more difficult to open stores during COVID, there is no doubt about it. But we decided to not slow down. We would have not opened more if there would have been no COVID there. But we could have decided to do much less because, of course, today, during COVID, the throughput per store is almost 50% to where it would have been in a normal time. But we decided not to do that because we look long term. We know and we at the time we had no idea when the world -- in China will recover post COVID, but it will reopen. But we know when we it reopened, we want to be ready. And that's why we did not slow down our opening. As a reminder, at the time of the IPO, we said by 2025, we will have more than 50 stores. 2 years later, we are 120, almost. Now the agenda is how we double it? So we will, for sure, be much greater than what we had been originally presented. And we'll give regular update on the pace at which we want to open. We don't have the intent to open too much stores because when you open too much stores, you're very quickly becoming too mass, and we want to protect the premiumness, the very attractive segment that Peet's is carrying, which is a master of roster in the coffee world. And we want to protect that with really being disciplined on the number of stores, on the exclusivity of number of stores, and the premiumization of number of stores. And when that is done, we can go even more aggressively on the omnichannel even with splits. Celine?

Celine Pannuti, JPMorgan. I have two questions. My first one is on the volume in the mass market in Europe, which we've seen has been quite under pressure as a category and I think as well for you. So I wanted to know to which extent this is due to a step-up in consumption, a high base, and if we can quantify that. And how we as well look at that versus the maybe impact from higher pricing. So is it a bit less defensive than you thought given the high level of prices? And my second question is on the comments that you made on premiumization and value. So you seem to say that having a more value offering instant sale, for instance, is quite important for Europe, but at the same time, Peet's plays in the premium. So -- I mean is Peet's under pressure in -- to be to premium now in the U.S., if you could clarify that?

Let me try to answer, and Fiona feel free to add -- to add things more from a consumer standpoint. Let me start with the second part. I think you see, of course, in the world, different trends. And there is no, as Fiona says, no-one-size-fits-all average consumer. And we see all this price point agenda very fundamental, depending if you're driving penetrations, if you're driving premiumization or pending on the consumer tension, which are happening here and there. But on your question on Peet's. Peet's has it absolutely 0 pressure points today on price point. I would -- what the data suggest, I'll take a bit of a shortcut on the way we say it. Today, in the U.S., there are 2 winners that probably explain and illustrate your point. The 2 winners today in the U.S. are private label and Peet's. By winner, I mean, the fastest growing, well, of course, there is multiple winner, multiple going on. But the ones that go at a higher price are both the value side with private label that is growing at a higher price than before. And the second one is Peet's. And that's why playing on various price point is important. And in the U.S., we made the choice to play this premium side of the market, which means that we play smaller, at least from the beginning because when you enter a new market, you can go mass scale because then you go for lower price point. We decided to go premium. And we have an absolute fantastic asset with Peet's that is outperforming in every partition it plays. And now we are even globalizing Peet's by accelerating the presence in China. We have as well just announced at the end of last year a partnership with Americana in the Middle East. We have opened last week or the week before, sorry for the date, I forgot exactly, I think 2 weeks ago, our first Peet's stores in Dubai. And we are expanding -- we are planning to expand even further the footprint of Peet's because in the world of a course for better, more convenience, better taste of coffee, Peet's is really one of the heroic brand. Your second question was around Europe and volumes. I cover that a bit more in detail when I talk about 2022 with very transparent data that is very rarely presented, and you will see. But I would say 2 things at this stage. One is, in Europe, we have been waging a very high [indiscernible] which have been elevated in home consumption, and there have been a form of readjustment in 2022. And at the same time, for some players in particular, including ourselves. I will not hide behind the fact that we have been losing volume, we have been losing market share in Europe. I will even share how much we have been doing that. But for us, we see that a very temporary event because it is one of the consequences of playing the leadership role in pricing. And as competitors are converging to the pricing that is totally justified by commodity inflations, we see a normalization of market share, and I will come back to that later. I see more hands at the same time. I don't know...

My name is Robert Jan Vos, ABN AMRO. I have 2 questions. I think one for Fiona, one for Fabien. The first question is on the L’OR Barista appliance. It's a success, as you have mentioned. What is the distinction between this appliance and, let's say, or the difference -- the main difference between your appliance and the original machines? Is that price? Is that functionality? Or in other words, why is it a success in those markets? And my second question, that was from your presentation, I think, Fiona is the -- what you said on market growth, 4% to 5% medium-term growth, consumption, consumer premiumization, but this percentage is lower than what you've said on your organic sales growth target for medium term of 3% to 5%. So what is the -- can you remind me what the reason for that is, is that maybe the high exposure is still to Europe? Or is there another reason.

Why don't I take the Barista question and you take the other one. If we start with your question on L’OR Barista, so what makes L’OR Barista an attractive proposition for the consumer. The L’OR Barista machine is able to brew espresso capsules. And it has the ability to offer what we call a double-shot double pleasure. So with the L’OR Barista machine, you can brew 2 cups at one time, and you have a level of versatility, which is advanced versus some other propositions. So you can actually brew with a small capsule. So the capsule that we know very well today, and you can also brew with a larger capsule, which gives you that level of versatility around the number of cups that you can brew as well as the size of the drink that you can brew as well. So that's really the key influences that we have on the L’OR Barista appliance. And of course, the power of the brand associated with the appliance as well.

And what I would say to complement is what we've learned in the history of coffee appliances around the world, is a coffee appliances with the highest penetration are the open system appliances because consumer doesn't want to stack up multiple appliances on their kitchen counter. And when they have the belief, the perceptions that the system can offer multiple brands, multiple choice, they are the ones that they will favor. We've learned that with Senseo when it became open. We've learned that with Keurig when it became open. We've learned that with an espresso system when it became more open. On your second question was around the algorithm, and you will see again, I will talk about the outlook for 2023. We have been showing the long-term trend history of coffee, which was around 4% to 5%. I then presented 5% at one of my earlier stage by category, which was partially boosted at COVID towards the end of 2021. But all our agenda, as I was presented before is really to position us the closest, if not higher, on the high side of our original growth rate of 3% to 5%. Historically, we want it. Let's be very clear. If you look back at the history, we were around the 0 type of territories, and we have been moving our portfolio, our agenda, our investment, our innovations to ensure we will be more anchored towards this high side of growth rate in difficult time, for pricing because we should not underestimate having able to do, yes, elevated organic growth at the time of inflations come with pricing, but you need to ensure your brands can carry that and you don't have the negative effect on too much on the volume side on the long term, but it can be as well in, I would say, easier time when you have your innovation and your portfolio, supporting growth and our intention is to elevate it and it's all the reason of what we have been doing over the last 2 years. Why? Because we are clear that what drives value long term is growth of quality.

It's Jerry Fialko, HSBC. I've just got one question, which is about your kind of online versus off-line market share. So you've given the total, I think which was 9.5%, you gave a bit of data for China and the U.S. So could you perhaps give us a bit more information about your kind of online versus off-line shares in some of the other markets where you think you're sort of underweight, overweight and what you think you can do to close the gap if you are underweight.

It's a question whether it was -- your question was around market share online off-line, right? So market share, definitely offline, we all read the same data. Although sometimes you have a subset, we have the full read and I will come back as well on that later on. And on the online, we feel much better on where we are now, not only on the market share, where we feel now we are competitive, and we don't see us being underrepresented there. But as well on the profitability side because growing is always easy. Growing profitably sometimes it's a bit more challenging, and we have had to do quite a lot to ensure that it was not dilutive anymore. And now we feel and on market share and on the profitability, good with our omnichannel approach.

Patrick Folan from Barclays here. Just two questions. The first one I ask the reduction program. Can you kind of elaborate on how much of group sales the SKU reduction program is representing. And have we seen an impact over the last 6 to 9 months and maybe how that could evolve over the next 6 to 12 months? And then the second question is on the Senseo system in terms of what you've seen in terms of market share gains over the last 6 months considering the current macro pressure.

Do you want me to start? Maybe I'll start with the latest one, which is the market share of Senseo. I think market share last 6 months, you have to be careful to not over read into it. I think we alluded to that with the question from Celine. There had been some disruptions in Western Europe as we have been leading on pricing. But I have to say, if I were not at the longer time horizon, let's take a 2- to 3-year time horizon, our market share of Senseo have been continuing to go up. So we've been very pleased with that and mostly on the back on innovation and also back of execution, which has been strengthening. Your other question was around SKU, was it on innovation? Was it on the rationalization? I'm not sure. On the innovation part.

No. The reduction part...

On the reduction, sorry. Yes, so on the reduction side. So to be transparent, we had -- when we started the journey 2 years ago, we had almost 8,000 SKU. And at the end of 2022, we are below 7,000. So it was very, very significant. We have seen -- I think it represented less than 2% of our volume. But we know this agenda is not finished. We have fixed ourself very aggressive target, and we give us 2 years for that. I think a very good piece is done now, but we feel we have another opportunity that we expect to be completed in 2023. I think in the middle -- those are all have been risen for quite some time.

John Ennis from Goldman. Just one question for me. Fabien on Slide 10, you showed the market growth up until 2021. So excludes a lot of the 2022 volatility that we've seen. And if you look at where you're positioned, your market weighted growth is around 6%. But when we look at JDE Peet's performance admittedly since 2018, it looks like your growth has been closer to 2%. So can you help bridge that gap between the 2% and the 6%. The 2% might be wrong because we don't have the '16, '17 data, of course. But can you help bridge that gap between regional mix, channel mix, market share loss, just high level to help us square the 2 points.

So I'll pick a generic answer because that alone can be a bit of a complicated story. If I would exclude the part of 2022, which is short-term failure on market channels and again, I will be transparent about that later on. We have been gaining market share during this time horizon. And we've seen it in emerging markets. We've seen it in the U.S. So the only piece which is missing is Europe. And again, I will be transparent on that one. We do have -- over the last, if I take 7, 8 years, I think the growth of the category on coffee was about 4%, 4.2%, if my memory is correct. So the 5% was in the shorter time horizon with a boost 2020 and 2021 related to COVID. So it was more around the 4%. It doesn't change much, I think your question is. We had to evolve our portfolio during this time horizon to ensure a geographic level, at channel level but as well as at category level that will be well positioned to capture it. We were not really 5 years ago and over time, we are getting closer to it. Where we do have some gap is global presence. We've said one of our agenda beside penetration transition, is globalization. We are global, but we feel global enough and that is capturing a small growth, which is not today in our reach, but we want to progressively be there. That's why we have been intentional over the last 2 years. So I think it was more a transition period, but I think we are entering now into the most attractive phase, which is the one we have been very transparently at the time of the IPO and reconfirmed 2 years ago, we want to be to the 3% to 5% when you think the last 10 year was 4%. Of course, there is a period, we want to be at a higher level, like we have been this year and we'll talk as well on how we see 2023 happening. Go ahead. Sorry. Question for a long time.

Brilliant. Faham Baig, Credit Suisse. Two questions for me, please. Number one, on the share of voice. Your share of voice is now I guess, higher than levels in 2018 and 2019 that you depicted. But if I look at your advertising and promotion spend, since that period, it's down high single digits. So I'd love to understand how you've been able to improve the return on investment in that marketing area. And then second question. In 2021, you also alluded to expanding in the ready-to-drink coffee subcategory. But I know it was excluded in most of your slides thus far. One of your closest peers sees it as a driving agenda in emerging markets, particularly Asia to grow the penetration of the category. Could we get an update where you are on ready-to-drink and the plans you have there?

I can take the read-to-drink and maybe Fiona can take the advertising and share of voice part. Although, I think, I have not said 2 years ago that ready-to-drink was a priority for us. I think it's -- what I've said is ready-to-drink it's a place which requires different capabilities. It requires beyond being a branded players in coffee, being roasters. It requires bottlers type of capabilities and we don't have these capabilities. Sometimes you have to be clear on what you are good at, what you're not good at. And the question is, do you want to be -- become good at what you're not good yet. Ready-to-drink, I don't think it's a place where we will deploy a lot of resources. But when we would go there, we would go there with partnership. And we see there are places indeed where ready-to-drink is important. I'm thinking about Japan, I'm thinking about Southeast Asia, I'm thinking about U.S., but it's not really universal. And it is a very, very difficult place to be profitable. For that, you need a lot of scale and a lot of capabilities. That's why it's not an accident if many players who go there are going with partnerships. And we have partnerships. If I take the Dutch market, we do have partnership. And actually, we are the market leader of ready-to-drink on our brands in the Dutch market. In the U.S. market, we decided to partner with KDP because we tried to have our own system, our own food chain did not work out. We stopped it and decided to go with ready-to-drink. And now we do have a Peet's ready-to-drink offer in the U.S. market. And that's the way we'll approach it. Your second question was share of voice, advertising.

Yes. So the first question was around share of voice and the increase that we've been able to achieve in share of voice over time? And I think how do we evaluate that? Or how do we measure that as well. I think share of voice is one metric around our advertising and promotion investments. It's a very important metric and it's obviously the metric that gives us an ability to understand our competitive position. And as Fabien showed, we've significantly improved in that area. We've also improved in a number of other areas to focus on both the balance of effectiveness as well as efficiency within our advertising and promotion investments. So to be specific, we look at other input measures as well, such as what are the portfolio choices that we are making behind what do we want to invest, which brands, which categories, which countries. We also look at sufficiency metrics to ensure that we have the right levels of investment behind our brands to ensure that we achieve the reach impacts and the cut throughs that we require within specific countries. And then, of course, the effectiveness of our copy and our content is another key input metric to that as well. So we've been able to improve over time, not just on the output metric almost of the share of voice but as well as some of those other input metrics that I just mentioned. And of course, the effectiveness of the copy content is really key to ensure that the investments that we are putting behind our brands are in the best place to work as a consequence of having compelling copy content behind those brands.

Fabien -- sorry Fabien, Fiona in view of time, I would like to suggest that you take 2 last questions.

Last question. I just want to complement the last question. You had a specific point around in absolute is not the case. I don't want to enter too much into 2022 trading. We'll do that later today, and we'll have an opportunity on the 22nd of February. But you will see in absolute euro it is greater. I see one hand -- Jon, any questions, the mic here as well. Yes, sorry...

I've got a mic, so I'm going to quickly jump in there. Jon Cox with Kepler Chevreux. You did nicely mention the percent A&P, my colleague asked you. I think you're about 6.7%, you've been trying a lot of stuff on investment there. Just wondering what your A&P was last year. I'm sure you'll give it to us maybe later. But more seeing in the cost savings. 1,000 people is quite a big number. The 4 factories about 10% of your factory network, I wonder if you can just give us a bit more details on that. And I guess the broader question is really you had a 19% plus operating margin 3 years ago. You're probably going to be 400 basis points lower than that in 2022. How should we think about that rebuild of margin over the last couple of years? And was this effort we've already seen maybe in 2022 with 1,000 staff and the 4 factories, et cetera, et cetera. Is that part of that rebuild? And can you ever get back to that sort of margin over the next couple of years?

Look, Jon, I think, again, without entering into the detail of 2022 here, I think your 2 questions had a common theme, which is around percentage. And what I want to remind and encourage people is when you are looking in coffee in detail, don't overly focus on percentage. Because there is a lot of volatility on the input cost, which doesn't mean you have volatility on the P&L in absolute. The way we run the business is more in number of cups in absolute gross profit per cap, in EBIT per cap, in absolute free cash flow, not in percentage. Percentage can vary widely. But it doesn't mean that if you have a higher percentage, you have a stronger business. So we have to be very, very mindful of that. But of course, you are comparing times where coffee price was very low, then as a consequence, the percentage were high. We know and I've said that 6 months ago, coffee price was higher than the cost of production, that it will normalize. Then as a consequence on percentages would materialize, but it will not mean that the business is better or worse because of this percentage.

Warren Ackerman at Barclays. So a few questions. In terms of consumer behavior, we're picking up the other companies were talking about appliance sales being under pressure. Are you seeing any evidence that, not necessarily coffee machines, but in other sectors we've been picking up that consumers are really putting back on appliance sales. Are you seeing any evidence of that. We're seeing that Nestle, for example, moving to kind of $100 new Nespresso machines. So there does seem to be arguably a little bit of price competition. Is there a risk later down the road that, you talked about innovation that we could start to see a bit of a price war in terms of the applied or the installed coffee base and coffee machines. What's your view on that? And the second one is just on delistings. I know you might kind of touch on this later when you talk about the outlook, but you said that you've suffered because of your price leadership and that there was a temporary impact on market share. Just wondering whether you can give any more color on what you mean temporary impacts? And are we seeing any evidence of relistings? Just trying to understand when do you expect the volume impacts to trough in Europe? And when are we going to see it in the data.

I will start with the second, not answering now, but I will answer later today in a very transparent way. And we will show the case, we prove the case, why we limit temporary, and you will see in a very transparent way. On the first question on appliances, what we have seen is, for sure, during COVID, where home was a retreat, a significant acceleration well above past trend on appliance sale. So there is a period where we are comparing ourself to this inflated level. But it coincide at the same time for us at the moment where we're recommitted to it. So on our side, actually, and I will be as well transparent a bit later. We are investing more behind appliance and for us being meaning -- investing more behind appliance, being receiving more appliance. And the L’OR Barista one is being a very positive impact into that longer time horizon, number of appliances. Of course, we have to be mindful. There is a danger on appliance to try to load the market with appliances with low price points because when you do too much of that what is happening, it's becoming a gift of something that stays somewhere either for 2 weeks in your kitchen and then moved to your seller very quickly. And we want to be very mindful of that, and we want to ensure that we are protecting the value that went with it. And at the same time, when we talk about inflation, there have been inflations on plastic, on component, on energy, that has an impact on the appliance. So we see a bit -- these two dynamics, some price increases because of inflation, at the same time, some more competitions with some lower pricing, and we need to find all the times, the right balance in between to avoid having what we call a [ dormant pack ], which is not the type of business model you want to build. [Break]

Welcome back, everybody. I hope you could enjoy a nice cup of tea or a nice cup of coffee during the break and had some conversations with the presenters. We will continue with our next presentation, which will be hosted by Laurent Sagarra, our VP Sustainability and he will tell you all the ins and outs about the progress we've made on sustainability as well as the ambitions we have for the coming years. And with that, Laurent, I would like to invite you to come to the stage. Thank you.

Good morning, everybody. Very happy to be here today to take you through actually our progress in 2022, but also to give you already some insight about 2023 and where we are heading in our sustainability journey. So let's start. As mentioned by Fabien, I mean, coffee and tea are a great category to be, not only from a financial perspective, but also from a nonfinancial perspective. And as you can see here, we start from a very favorable position. First of all, when you look at climate, I mean, you will see that coffee and tea actually have a much lower carbon footprint than many other beverage categories, which put us again in a favorable position. And we are working within JDE to actually take this carbon footprint to Net Zero by 2050 and to eradicate all our emissions. The other part is around the living of people. Coffee and tea is a great category, in the sense that they create living for hundreds of millions of farmers and their family today around the world. They are spread across 70 countries in the intertropical area. And at the end, both together, coffee and tea is a huge category, which impacts -- which generate more than $400 billion of revenue. And finally, as was mentioned also by Fiona, it delivers to key consumer attributes. You've all enjoyed a cup of coffee a few minutes ago. I mean it brings positive energy. It brings relaxation. It allows us to unwind. And all that with 0 calories. So in a healthy way, contributing to your healthy lifestyle. And at the end, it's an inclusive beverage. In the sense that, it's one of the most drink beverage in the planet, but it's also one of the most affordable one, allowing all income level to actually access tea and coffee. So this is why in JDE Peet's for more than 300 years, tea and coffee is who we are and what we do. And this is why through common ground, we are investing in our supply chain, in our operation to ensure that we continue to enjoy coffee in the year to come. And this is why we are living our purpose today to ensure that we create a better future for the people, for the planet, but also for JDE Peet's. So when we talk about creating a better future for a lot of people, it's not always clear what we mean by that. And for us at JDE Peet's, what is a better future? Well, first of all, it's a future where farmers are prosperous and prosperous in a way that is respectful of nature, not at the detriment of nature. It's a future where our rivers, our oceans are free from waste and pollution. A future where us, at JDE Peet's, we use energy that is clean, and we ensure that the air you breath remain clear also. And finally, it's a future where community thrives. When people can be who they are and grow and develop. And of course, for all of that to happen, I mean, a greater future is a future where JDE Peet's deliver sustainable growth because without sustainable growth, all that won't be able to happen, so that we can create value for our shareholders and for our stakeholders. So how are we going to deliver all that? By living our purpose and by leveraging the power of our brands. Our brands are the ambassadors of our journey, and they will allow us to deliver with every cap, this great purpose. And we will do that, first of all, in a regenerative way. We will work on our greenhouse gas emission. We will promote circularity of our products. And above all, we will work on regenerative actual practices for our farmers. We will contribute to build this tea and coffee resilient industry. We will do that in the way we do everything in JDE Peet's, in an authentic way. Meaning we will be transparent. We will walk the talk, and we will make sure that we deliver true change and impact because this is -- when you think about sustainability, it's all about impact. And finally, the last way is around inclusivity. How do we ensure that as we progress in our journey, we embark with us the entire supply chain? We empower farmers, we engage the full value chain, suppliers, our operations, our customers to actually support the wellbeing and promote equal opportunity for all of us. So this is how we will approach the whole project. So now let me tell you about 2022. I mean we have done a lot of progress this year, and I will take you through our 3 pillars. So the first pillar is the responsible sourcing. You've heard in April, May this year, we announced that we will leapfrog to 100% responsibly sourced coffee. And actually, we did it. We delivered it and we moved from 30% responsibly source coffee in JDE Peet's to actually 77% of responsibly sourced coffee. This is a huge step towards our 100% target. And this adds some other impacts. It force -- it makes us actually increase tremendously the amount of farmers we reached. Because where we make the difference is through the engagement we do with farmers. And last year, we actually reached nearly 0.25 million farmers. And if you remember, we had this 0.5 million farmer target to reach by 2025. Well, actually, we've exceeded this target this last year, at the end of last year. So we are actually now working with more than 0.5 million farmers and what we expect by 2025 is actually to reach around 1 million farmers. The other part, of course, is the minimized footprint. In 2021, we committed to our SBTi target. And actually, this year, we progress on our road map. First of all, on our Scope 1 and 2, which are the emission from our operations, you can see that we've decreased by 15% of our emission. This is 3x the target we have. And this was accelerated due also to the situation on energy costs and so on. So because we brought back some investment, and I will give you more detail afterwards. And also what we started this year is our journey on the Scope 3 emissions, which are the rest of the supply chain, where we delivered 1% decrease. And finally, on connecting people, we also launched in 2021, our road map. And I'm very pleased to announce that this year, we measured for the first time our pay equity gap in JDE Peet's, and we actually landed below 1%. And this below 1% is actually considered as no gap, which is a fantastic performance that reflect all the efforts that have been done by our teams over the years. And in addition to that, also, we joined last year, the UN Global Compact to actually accelerate our journey on human rights. As mentioned by Fabien, this, of course, was reflected in our investor ratings on ESG. And you saw that we moved position today, which is at parity or even in a leadership position versus our competition. And this was achieved by having a very structured approach to that. First of all, filling all the gaps. If you've been on our website in the past few months, you've seen that we launched our human right policy, our climate strategy. We worked on animal welfare. So we feel all the gap that we had in our strategy. We've also expanded the scope of our approach and we start, of course, delivering results. And this is why we've seen our results increasing, and we expect further improvement also moving forward as we release our annual reports in March this year. So let's start by the first pillar, which is responsible sourcing. Responsible sourcing is our most challenging pillar but also the one where there is the most opportunities because this is where we create better livelihood for our farmers and where do we ensure our supply chain -- our supply of coffee and tea for the years to come. So if I go through in more detail through the achievement, as I said before, we're on our way to 100% responsibly sourced coffee, and we reached 77% this year. And as I said, we are more than doubling actually our impact on farmers. And from an investment perspective, we are also on track with our investment with $150 million that we had planned for the next 4 years. And today, we are around 80% run rate at this stage one our responsible sourcing. But -- you will tell me, how do you manage that? How do you achieve this huge leapfrog in 1 year? Well, let me tell you about it. When you look at responsible sourcing, you have 2 ways to approach that. You have the traditional way that we all used, I would say, in the past through certification. And the way certification works, it's a compliance process. So farmers are being audited versus the coffee reference code. And if farmers pass the audit, they will get certified. They will pay their fee, and they will be able to supply certified coffee. Of course, this approach was very innovative when it was launched more than 20 years ago, but it has its limits. First of all, not all the farmers can access certification because it has a cost. But above all, the requirement for certification are getting stricter and stricter every year, meaning that the pool of farmers that can actually comply with the standard is getting smaller. And this is why in 2019, Peet's worked with Enveritas, an American NGO, whose purpose is really to improve farmer livelihood through industry engagement. They're starting this collaboration to actually drive this distinctive approach that we call address -- assess, address progress, which is a continuous improvement process, and this process allows us actually to reach the small farmers. The one that actually needs support and which are excluded today from the certification approach. And this is what we've launched actually at JDE level last year to deliver this progress. And let me get into a little bit more detail to explain to you what it means. The first thing that we did is the assess stage. Meaning that farmers are being assessed by Enveritas at no cost for them. And based on that, we get data about the issue at origin, did give us full transparency of what are the challenge and the opportunity that we can solve. And if you see the example here about Africa, on our African sourcing, we have about 200,000 farmers. And out of those 200,000 farmers, 15,000 farmers were actually approached and evaluated this year. Enveritas identified some gaps and opportunity, and we were requested to implement 45,000 farmer trainings and activities to actually bridge the gap. And what we delivered this year, actually, just for Africa, it wasn't 45,000, it was nearly 160,000 farmer reach. So actually, went above and beyond the request. And this is the assessing step. And of course, to answer the gap, what we do is that we implement programs. And those programs today, they are happening all over the world. We have about 50 projects in JDE Peet's running, and those programs are addressing the issue identified Enveritas. And finally, the last step is the progress because it's nice to identify issues. It's nice to put program in place, but you have to ensure that you deliver impact. And this is what we do through the progress stage where Enveritas is actually checking our project, ensuring that they are implemented at the scale that was required and of course, also checking the impact. And when you put those 3 phases together, this is the, assess, address, progress protocol that allows us to access actually the responsibly sourced status delivered by the global coffee platform. And to show you in more detail actually what this progress step means, I would like to show you a small video about one of our initiatives in Tanzania. [Presentation]

So this project is just one example of how we make impact at origin. And as I mentioned before, we have about 50 projects today running in parallel. And actually, from March this year, when you will log on our website, you will be able to see all the detail of all those initiatives per country with the impact that they're having. So this is really how we make the difference today. We invest at origin to tackle the issues that we identified and remediate to them in a sustainable way. And as I said, here, you saw the example of Tanzania. We have project in Ethiopia also in rejuvenation. And we generally adapt the project to the need -- to the local need of the population. Typically, if I look at Honduras. Honduras, we focus more on the labor issues. This is why we start renovating and building school in Honduras to ensure that when workers come to work with their children, there is a school to leave the children during the day while they are picking coffee. And this is how we make impact at origin. The other area where we are focusing is on the long term of coffee. What is the future of coffee? And Fiona mentioned our collaboration with the World Coffee Research. Today, we are one of the largest funding part of the World Coffee Research. And this organization is actually developing the coffee varieties of the future. Coffee that will deliver more yield, coffee that will deliver more quality, coffee that will be resistant to climate change. That will be resistant to pest, so that the farmers have access to those more resilient coffee routes. Because when you plant the coffee tree, it will stay in your farm for 20, 30 years. So you need to make sure that you put in place the right coffee plant because it's your asset for the future. So of course, a lot of the challenges that we identify at the origin are not specific to JDE Peet's supply chain. There are systemic challenges that the entire industry is facing. And that's why we're very happy to see that other company actually -- joining us in our approach with Enveritas and typically, recently, Dunkin Donuts, Smucker, Tchibo in Germany and Tim Hortons have some of the few large -- some of the large companies that have joined the initiative to actually make more impact at origin. But of course, we not limit our work on coffee. We are progressing on teas. And one of the major challenge that we had on tea was our recent acquisition in Ofçay in Turkey. And we actually, this year, partnered with Rainforest Alliance to actually implement a program similar to what we do with Enveritas to drive also the responsible sourcing journey with our coffee farmers. And this will allow us actually to reach our 100% responsibly sourced tea by 2025. On palm oil, we announced last year that we had reached 100% responsibly sourced palm oil and we, of course, continue with this level of responsible sourcing. And this year, we launched a new KPI on the responsible sourcing, it's around animal welfare. And we made public actually our commitment last year, and we are now progressing on our cage-free eggs journey. So you can see we're only at 3% because it's the first year on it. And you might ask yourself, why do they use eggs? Well, today, we have 2 entities in JDE Peet's using eggs in the sandwich that you eat at Peet's, but also in the noodles that we manufacture in Old Town business. And again, we were one of the first company in Southeast Asia also to engage in these commitments against cage-free eggs, and we're very proud of the difference we're making there to ensure not only the well-being of people but also ensuring that on the animal side, there is no views in the supply chain. The second pillar of our common ground program is minimizing footprint, which deals with our climate strategy and also with our activities to reduce waste and pollution on the planet. So as I mentioned before, we've made significant progress in reducing our Scope 1 and 2 emissions, which are the one under our control with 15% reductions since 2020. So in 2 years, which is far above the 5% that we were targeted. And of course, we're also starting our journey on Scope 3. And how did we deliver all those changes? Well, first of all at the manufacturing level, we made substantial investment to actually move to low carbon energy. So we invested in biomass burner for the spend coffee. But also in some other geography like in Turkey, we went for a more innovative approach where actually we also have biomass burner, which are using the herbs from the hazelnut industry. We also improved our instant coffee process to be more energy efficient. And across operations, there is a foultitude of small initiatives to actually always drive efficiency. Because at the end, efficiency and sustainability works together because it's all about not wasting resources, whether it's energy, packaging or others. We progressed also in our procurement journey. I mean, we reached nearly more than 40% of renewable electricity purchase in JDE Peet's and all of Europe and Brazil are now in renewable electricity, and we are progressing with the other regions. And finally, we've also initiated our program with our vendors because at the end, the -- our carbon ambition is a domino effect. We need to engage every step of the supply chain into this journey to be able to deliver our ambition. And so we have commitments from our largest suppliers also to move to SBTi, so then they can contribute with us to this full journey. On logistic part, we've also implemented a lot of change. And what is interesting with logistics, they were the first part of organization who had carbon accounting. And it means that for 2 years now, the logistics team have been adamant to optimize the route, to optimize the type of logistic transport they're using between train and boat and road to deliver incredible improvement and reduction in their carbon emission, but also in a financially positive way. And finally, the two last points are quite critical on the responsible sourcing. We will release this year our deforestation policy. But we're already acting on it on several aspects through programs in Indonesia, but also in Peru. And one other things which is critical, we had a pretty competitive project with USA than USDA this year, along with Nestle and Lavazza, where we define the rules for the calculation of the carbon footprint for green coffee because that was something that we didn't have in the industry properly defined. So we all work together to come out to a consensus on the methodology so that we all measure it in the same way. And of course, finally, the research and development team in JDE Peet's has a huge role to play. They've been delivering already disruptive innovation on the sustainability side on Senseo, on our pad material. This year, we transitioned our tea bag in Pickwick to compostable material and also the touch of Senseo. And we're also progressing on our nutritional journey because when you reduce sugar, you reduce carbon. So all those activity this year has contributed to the delivery of our ambition. Of course, to deliver all that, well, you need people. And this is why our people journey is so important because through the passion for tea and coffee of all our associates, we're able to deliver this journey. And of course, if you want to take care of the planet, you need to take care of your people. And that's what we do for our connected people pillar. And the focus last year was on 2 aspects that I would like to emphasize here. First of all, on the human right and then on our diversity, equity and inclusion journey. You've heard last year that we committed to our UN Global Compact. And following this commitment, we actually increased our engagement. We made public our human right policy. And then we deploy our due diligence program. This means that through Sedex, we actually implemented in our plant, but also with our suppliers, excluding tea and coffee, a whole program to identify risk, to assess those risks and then to implement remediation activities. And on the coffee and tea sourcing, of course, we did a similar approach but with our own on the ground partner like Rainforest Alliance, Enveritas of Fairtrade tools to identify and remediate our issues. So there was a lot of progress on this side made in 2022. And we will continue moving forward to remediate to the issue identified. And of course, the second part is our commitment to close gender gap. And when we speak about gender gaps, in JDE Peet's, we look at 2 things. First of all, ensuring that we have -- that our proportion of women in leadership position is at the same level as in the rest of our workforce. And what you can see on the slides here is actually now we are a 41% women leadership position in JDE Peet's versus 43% across all our employees. So we have nearly bridged this gap between the representation of women in leadership position, which is a great progress. And as I said before, not only did we bridge the ratio, but we also ensure that this is done, ensuring that there is no gender pay gap. And this number of below 1% might not be very meaningful for you, but as I said before, it means no gap. And if you compare it to the rest of the world, the gender pay up in the U.S. is around 17%, in Europe, it's 13%, and in the rest of the world it's 23%. And in the new EU directive that is going to be elected very soon, the target to implement action is when you are above 5%. So this result is something we are extremely proud of because it also reflects all the work that has been done within JDE with our people team to actually close the gender gap over the past year. So that's a fantastic achievement for us. And the last point, we did a lot of things in our supply chain with our farmers, and other people, but we did that without compromising on the quality of our products and to ensure the satisfaction of our consumers. We've progressed on our nutrition strategy to ensure that we deliver healthy product every day. And now 75% of our full portfolio is compliant to our guidelines. And we also did that ensuring that our products are safe because this is critical when you sell food. And today, out of our 100-plus manufacturing sites internally and externally, 75% are already certified at the highest standard of food safety. And as I said before, on the compromise on quality, we continue to deliver exceptional quality performance in the company. And this year, we actually reached the best performance ever with below 4 complaints per million units sold, which is a fantastic performance for the group. So what's next? Well, today, our next challenge is to prepare for the Net Zero future. So this is key for us to ensure that we continue our journey and we have this positive impact on the planet and protect our farmers. So in 2022, we committed to a 2-degree pathway. And following that, we defined a full road map in terms of investment, in terms of initiatives. We embed those investments into a value creation plan. And we've developed, actually, it's being launched this month our tool to actually measure our performance when it comes to carbon. And now in this current position, we are ready to commit to a 1.5-degree pathway that will take us to this net zero future. So how are we going to do that? Well, as I said, we have a clear road map. You can see here on the slide, our emissions Scope 1 and 2 and 3 and where we need to go by 2050. So first of all, on the Scope 1 and 2, we will continue to invest in our biomass burner. We continue to transition to cleaner energy. We also complete our journey to 100% renewable electricity. And of course, we are also investigating new technologies because we need to find solutions for roasting, for extraction, using renewable source of energy. So this is the next challenge where our R&D teams are working off. We'll also transition part of our fleet to electric vehicle. And all that will take our Scope 1 and 2 to this net zero target. On Scope 3, as I mentioned before, our priority is farmers. We need to ensure that our sourcing of coffee is deforestation free because this is the first driver of carbon in green coffee. We need to drive agricultural practices that do not damage nature. And this is all the regenerative practices program. We need to get more coffee actually from the same piece of land. When you look at coffee farmers today, some coffee farmers generate 100-kilo of coffee per hectare. Some coffee farmer in Brazil generate 4,000 kilos of coffee per hectare. When you see the gap, you also see the opportunity to increase the revenue and the yield per hectare for the farmers at 100, and this will allow us to ensure a resilient and sustainable future without having to deforest, improving the revenue of the farmers and also stabilizing the price of coffee by having better yield. The other part also which is fantastic when you work in tea and coffee is, coffee or tea are a plant. And by default, plant absorb carbon. Today, the millions and the billions of coffee tree on the planets actually contributing to decarbonizing the planet. So in the berries, in the leaves, in the trunks, they capture carbon from the atmosphere. The only -- the huge opportunity we have today actually is how do we ensure that this carbon when we harvest the coffee instead of being released when we burn the coffee is actually being captured. And now we are working with different research institute on groundbreaking technology to be able to capture this carbon and actually inset carbons at the farm level so that the coffee plantation can contribute to actually the decarbonization of the planet, which is a huge opportunity for coffee. Under Scope 3, we'll continue our innovation journey. We'll continue to reduce packaging. We'll continue to move to recyclable or compostable packaging, we'll improve the nutrition of our product. And then the last thing also we'll work on our portfolio to ensure that we move to a low carbon portfolio. So all those initiatives will also take us to our net zero. And I would say at the end of the journey, when we reached the last 10% then we will look at offsetting to be able to reach the zero carbon. So to support us in this journey, I mentioned at the beginning, we talked about impact and impact equal data. And we are very pleased because this year, we've developed with our team in-house tool that will allow us to deliver carbon accounting. And this tool is based on all our internal system, whether it's SAP for ERP, our Sphera Reporting system, our specification systems, our vendor data tool, and it pulls all the data from the system to actually automatically generate carbon footprinting of all our product. And for every SKU we sell the same way we have the GP per cup or the revenue per cup, we have the carbon per cup. And then we can, of course, go from the cup -- the SKU to the market, to the category, to the country, to the customer. And this allows us to actually embed carbon into our decision processes. So that's when we move forward, when we develop innovation, when we do CapEx investment, when we do promotion, we can understand the financial impact and the nonfinancial impact of the decision and takes the best solution -- the best decision for JDE Peet's. And this is what we are launching this month within JDE, this full carbon accounting, and it will really contribute to the direct support of our strategy and to deliver our ambition. I wanted to give you some example of what carbon footprinting means. And then -- well, the first one is on portfolio management. You can see here the Kenco portfolio on instant coffee. And you see today, it's a mix between jar, glass jar, small refill and big refill. And by moving -- by playing with your portfolio through promotion, through pricing, you can actually have a direct impact of your carbon. And the test portfolio that is being evaluated by our team locally, will actually lead just by changing this portfolio balance to 3.5% of reduction. So no innovation, no long development or change of packaging, simply understanding the impact of the product. And this is why we're also pushing our team now is to understand how do you manipulate your portfolio to actually optimize your revenue, but also your carbon. Another example is around nutrition. As I say, sugar is carbon. And we had a fantastic program in APAC to actually reduce the sugar from our products to improve the health of our consumer to also reduce our exposure to sugar tax. And this led not only to the reduction of sugar, as you can see on this example here. But actually, by reducing the sugar, we also reduced by nearly 9% or 8.5% our carbon emissions. So again, all that goes together to create a better future. And the last example is around what our sales team are doing in actually optimizing not just the product but also how we sell the product. And today, our team in the U.K. is actually moving from point-of-sale method which are made of cardboard and plastic to actually pure cardboard. So first of all, that allows us to decrease waste, especially plastic waste. It had a positive financial impact, annual reduction of the carbon. So again, you see that financial and nonfinancial goes together because it's about reducing waste, understanding your impact and taking the right decision. So to complete, well, today, as I said at the beginning, coffee, tea are great drinks for the world. We are in a fantastic category, and we are thriving to make it better day after day in JDE Peet's. I mean we want to leverage and to unleash the possibility of coffee and tea to create a better future. And we will do that in a regenerative, authentic and inclusive way. We've made already great progress for 2022. We have more to come in 2023. And as mentioned by Fabien, this is a nonstop journey. This is a journey that at the end will take us to this climate-neutral future. And finally, we are ready for this net zero commitment. Our tool are in place, our road map is in place, and we'll work to make this public in the coming months. And this is how at the end how JDE Peet's altogether, we are creating a better future. So it's the sum of all those actions in all the functions across the organization that put together will deliver this better future for the people, for the planet and for JDE Peet's. So I'll be happy to take your questions on the topic. And before we move to our lunch break.

My name is [ Lelia from Triodos ]. I have a couple of questions. I was just wondering, a couple of questions on the supply chain. So the first one would be, whether if you can tell us some of the main issues that have been identified in the supply chain. You mentioned that Sedex did an evaluation. The second one would be on -- if you are considering targets for...

I can barely hear you on the stage.

Can you hear me now?

Yes. Better.

Okay. So the first question is regarding the main challenges identified in the supply chain. The second one is regarding target for leading wages for farmers. And the third one is whether you already evaluated how much of the sourced coffee or tea comes from the forested areas.

Okay. So when it comes to the issues, I mean, the issues are really and the challenge are very region dependent. So every area has different issues. And when you will actually log on our website from March, you will be able to see for each sourcing area, what are the challenges and the opportunities that we've identified. So we have 9 key, I would say, what we call focus area, on which we work in on JDE Peet's. You mentioned deforestation, biodiversity. That's one of them. We work on the agricultural practices when it comes to yield. We work on labor issues. So we work also on -- well, there's 9 of them all put together on livelihood and so on. So you will be able to have all the detail and really see place-by-place what it is. If I take, for example, the big one like Vietnam, today, the larger challenges in Vietnam is around agricultural practices and the use of agrochemicals. And to answer that, well, we have a specific program called ecoffee, which is a pretty competitive program with [indiscernible] and a lot of other companies where we're actually working with farmers to again do education on agrochemical usage and so on. So it's very region specific. So it's not a one-size-fits-all. That's why it's very important for us to understand what are the specific issue in all our sourcing areas. And this is the transparency we get for Enveritas. And based on that, implement action to actually address those issues and drive improvement. So that's where we are on issue. So you will have all the detail and all the transparency in the coming months. When it comes to the living wage, when we look at the revenue of farmers, first of all, there is -- as we always say, there is a lot of people growing coffee, but there is very few coffee farmers. If you exclude big countries like Brazil and Vietnam, where they have real coffee farmers who live from coffee farming, in a lot of the other region, the revenue of the farmers comes from a pool of activities. I mean, the average size of our farmers is around -- well actually it's below 1.5 hectares per farmer. So it's quite small. And the coffee is one of the component of the living wage of farmers. And what we're doing on the living wage, as I said before, when I quote the yield in Africa, and African farmers get around 100 kilo of coffee per hectare. So you can -- the best way to improve the living wage of those farmers is to work on the productivity. Because if you bring the yield from 100 to 200, you double the revenue it gets from Coffee. And this is really where we are getting engaged today is how do we improve the yield of those farmers because this is where we have the largest opportunity. This is where we will bring also durable improvement on the livelihood because they will be able to get a better yield, to sell more coffee and to get more out of it. So this is really where we want to make the difference and why we also engage on the grounds in all those initiatives to train farmers, to educate farmers because you give them an asset, something nobody can ever take from them. They will be able to get better income from the land. And we had a huge initiative in Uganda over 3 years, where we educate farmers on yield, and we've reached an average, and that's the average, a 70% increase in the yield with some farmers having up to 300% increase. And for us, this is how we do lasting improvement in the livelihood of farmers, by educating them, by giving them the right coffee seedlings. As I said, when you plant a coffee seedling, it's there for 20 years. Meaning that if you plant the wrong one, you will also be stuck with a low yield for 20 years. So this is all those initiatives we do around the wages of the farmers. And then when it comes to deforestation, the biggest concern with deforestation today is to measure it. So the EU is defining clear guideline now on what deforestation means. It means more than 0.5 hectare of forest that is above 5 meters. The question is how do we measure it? So we are partnering also with Enveritas and also pretty competitively through the European Coffee Federation, to actually assess technologies to, a, be able to get some satellite picture, which are being analyzed. So we'd like to know, if here, there may be something. But then when you see something on a satellite picture, you need to send somebody on the ground to actually check that it's really deforestation. Because when we did the first evaluation, we realized that when farmers were cutting their coffee tree to renew them because you renew the coffee tree every 10, 20 years, well, actually, this was accounting for deforestation. So we're having initiatives within the coffee industry to measure deforestation properly. And then, of course, when you measure it properly, we will be able to implement programs. So we already have a program in some area where we know there is deforestation like Indonesia. So we have reforestation program. We have a restoration program. And something in Peru where we are replanting large acreage of trees to compensate for past deforestation. So this one, we know it. And on the rest, we're progressing with the industry to really evaluate what is the situation. And that's where all the data we get by putting together satellite pictures with the -- on the ground assessment by our different partners will help us to actually map exactly where is the deforestation in coffee.

Bruno Monteyne from Bernstein. You've put out a statistic there that you went from 30% responsibly sourced to 77%. So that's nearly half your farmers have moved from irresponsible sourcing to responsible farming. That's such an enormous leap in 1 year. It makes you wonder how we can have such a dramatic impact on half of all your farmers. So is that really a matter of reclassification? Or is it really a substantial change to these people's lives, given that you have half your farmers? And the second and sort of related to -- because from your answer on the living income or living wage question, I think I can deduce that earning a living income, which is one of the human rights, is not part of being responsibly sourced. So why is your farmers earning a living income not part of responsibly sourcing because I think if it was, you'd be a lot lower?

Okay. So to answer your first question on the on the how do we move from 30% to 77%, they were not irresponsible sourcing. First of all, it's, the first thing is we had no data. So that's the work we did is all the responsible sourcing is, it's a due diligence process when you assess your farmers and either those farmers are compliant. And in this case, they can be certified or they are not compliant yet. And in this case, you invest in program to help those farmers to become compliant. That's what means responsible sourcing. And so what we did to move from 30% to 77% is actually invest in getting those assessment of the farmers, meaning that now 77% of the volumes that we have been -- have been assessed to understand what are the issues and either move through certification or through the assessment program to actually implement action to solve the issues. So that's what it means. It means we are acting responsibly by understanding the issues at the origin, implementing actions to remediate the issues and then measure the impact. And if you look at the definition of responsible sourcing in the green deal of the EU, this is exactly what they defined. This continuous improvement cycle where you assess issues, you address issues and you progress. And acting responsibly means that we understand our issue today on 77% of our volume, we addressed those issue and we are progressing. This is how we move on this journey, and this is completely also aligned with the green deal requirement on addressing problem and fixing problem. So that's on the 30% and 77%. On the living wage, I don't -- I'm not saying that we don't work on living wage because we're identified for our sourcing. It's just that the way we remediate to living wage is by bringing sustainable solutions to farmers, by improving their education so that to improve the yield, by supplying them with seedlings that will deliver higher yield, resistant to climate change, resistant to disease for the future, by building schools so that the workers can take their children to the school while they are picking coffee. This is how we make the difference on the ground. By actually, bringing those durable assets that will -- that they will keep for the rest of their life to generate a better coffee farming. That's where we make the difference because this will generate at the end, a better living for the farmers and contribute to their livelihood. So this is completely part of our journey, improving the livelihood but also at the same time, making sure that we improve it in a way that is respectful of the nature. Because you can improve the yield by deforesting and planting more coffee but you can improve the yield by improving the quantity of coffee you actually get on your existing plant, and this is how we target it.

Jon Cox from Kepler Cheuvreux, again. Just a question on the -- you keep saying that you're ready for net zero. When are you actually going to sign on the dotted line in terms of the SBTi and net zero, because you've been sort of getting ready for a long time? Just wondering what is stopping you from actually, we are now officially committed and everything is documented, where you have been lagging some of your peers? Second question, just on the financials. And I know you have given out some financials. I think there was a press release a year or so ago about the programs and what you were doing and how much you'd spend. Maybe you could elaborate a little bit more on that? And also in terms of the offset, you obviously are putting out less sugar or less whatever, then obviously, you're saving money as well. And I'm wondering if there's any way to move to a net zero in terms of the financial expense involved? And then the last one, just on the carbon offset, which you said would be about 10% of the total when you get down to net zero, there's been a lot of stuff in the press saying that carbon offsets are just a total waste of time and don't do anything. Just on a broader level, just wondering what your thoughts are on that as a sustainability specialist?

Okay. Thank you. So to start with the commitment, we already have a SBTi target. Just that has been validated since January 2022. But when -- the way -- when you look at the SBTi target, you have different level of targets. And the targets we have is what we call the 2-degree pathway. So this is the target that got approved in 2022 and validated by SBTi. And now we are moving to the 1.5-degree pathway. So a more stringent target, and this is also part of the SBTi requirement. So we are committed. It's just that we are going to increase our ambition to move from a well below 2 degrees to a 1.5 degree. And the reason why we started with well below 2 degrees, climate -- our climate strategy is something new for us. We started, as I said, 1.5 years ago, and we say -- we started with this 2-degree because this was -- we wanted to have, slightly optimistic. Let's start by understanding what it means, building our road map, embedding it in our company because it's nice to put a very high target. But at the end if people have no idea how they're going to deliver it, it can be very demotivating because when you look at how you manage sustainability, it's also a mindset change in an organization. You need to actually embed next to the financial, all those nonfinancial KPIs. And that's why we say, let's start with a well below 2-degree commitment, what we did, so that we could put the tool in place, educate people, show them some first success to actually drive engagement. And when you see the performance on the Scope 1 and 2 of our organization, it's incredible what they have done. They've embraced the journey. And now the road map is defined, the tools are ready, and this is why from our initial well below 2-degrees commitment, we're going to move to a 1.5-degree commitment, which is fully aligned with the net zero strategy. So that's the big change. But we are committed already. It's just we're going to commit to a more stringent level, which is aligned with the net zero. Concerning the financial, on the EUR 150 million financial, this is purely on the responsible sourcing. And this covers the cost associated with all the actions in the program that we have on the ground to be able to assess and address the issues. And as I mentioned, we've already reached 80% run rate. And by 2024 -- end of 2024, we'll be at 100% responsibly sourced. And in this case, we'll be at the full run rate. On the offsetting, today, within the scope of SBTi, we are authorized at the end of the journey and only at the end of the journey, to actually offset 10% of our emission because there will be some emission that we won't be able to inset. And that's why the whole SBTi framework allows us to this 10% offsetting. And this is something that we use only at the end where we have no choice. Because at the end, when you inset, you drive productivity, you drive efficiency and so on, whereas if you start off setting, you just spend money. And this is why today we will only keep it as the last resource at the end to bridge the gap on those 10%. But this is definitely not a strategy that we have to make noise around climate neutral claim. Because if you -- there is 2 type of communication you see on companies today, there is companies who are claiming to be climate neutral, but who are literally offsetting all their carbon emission. It means they are not improving their efficiency. They're not reducing their consumption of energy. They're just paying to get carbon neutral claim. And there is us, where we are investing in our supply chain to be more efficient, because at the end it's about reducing waste, making sure that we have the right equipment so that we can be more efficient and inset our emission. And that's why on this one, we will only use the offsetting at the end of the journey when we reach the last 10%. And within SBTi, in any case, we are not allowed to use offsetting. If we offset, we will just waste money because it will not count in our carbon footprint. That's why the first thing is drive the change, drive the improvement across your entire value chain to save on all the different parameters that affect your carbon footprint. I think that was -- did I miss anything, Jon?

If you're saving money on plastic, is there a possibility to offset all of the spending you need in terms of -- I'm talking about the greater journey to net zero. We've seen some of your competitors talk about, we need to spend EUR 1 billion over the next 5 years. You seem to be a bit more progressive, I don't want to use a Unilever-esque Paul Polman sort of like, if you have less reductions you save costs?

Yes. And but as I said at the beginning, it's -- our approach is authentic. I mean we want to have an impact. And that's why also we were late to start, but I think we are very quick to catch up. And a lot of the initiatives we are implementing today not only driving sustainability but also driving efficiency and productivity. And it's not about being the first, but it's about doing the right things, and that's really where we are today. I mean, we have integrated sustainability in our decision process. So when our teams, for example, are doing an investment they will look at the return on investment, but they will also look at it not only just financial, but they will look at carbon emission and they will look at water usage. So you start looking at that thing in a different way to make sure that at the end it ticks all the box. So it's not profit or sustainability, it's sustainable profit put together. And that's where really our approach is different in the sense that we look at the full picture to take the right decision for the planet, for the people, but also for JDE. And that's where we are today, and that's where we're moving to make sure we combine both, and to be able to combine both, you need to have data, you need to have systems and that's why we were extremely happy when we launched at the beginning of the month, our new carbon accounting because it allows us to have this transparency internally to take the right decision. [Music]

Welcome back, everybody, for the second part of the day, bit shorter than the first part. We will have 2 more presentations, 1 from Scott's, 1 from Fabien. And because it took a bit more time than we had initially expected, we will not do the break after Fabien's presentation. But after Fabien's presentation, we will go directly into Q&A to save a bit of time and to make sure that you can still, let's say, be part of the entire program and then still catch any flight or transportation that you need to take. So without further ado, I would like to invite Scott to come to the stage for his presentation. Thank you.

Thanks, Robin. All right. So I hope everybody is having a good session so far. Had a good lunch. So I enjoyed the conversations. I now have the opportunity to discuss with you, give you an update on our capital allocation and our capital structure. So actually, almost 2 years ago, actually, at this very forum, we shared with you the first time our capital allocation framework. And we had, had the capital allocation framework in place since just after the IPO, that was the first time that we were able to share it with you. So it has not changed since we shared it with you last time but I just want to remind you of the priorities. So our first priority is organic growth. It's investing behind the opportunities within our existing business. And as we reviewed what we have done over the last couple of years versus what we committed to do and where our strategic priorities are and what Fabien took you through, you can see that that's where we invested, that was priority #1, stepping up on a lot of our intentional investments behind these key strategic priorities. Our second priority is our optimal leverage, and we target to maintain our optimal leverage at around 2.5x. Now this may be a little bit different than other people in terms of what we mean by our optimal leverage. This is not a target that we select for a particular ratings category or particular commitment. This is actually the level of leverage that we should run the company at in order to maximize the theoretical equity value of the company. This comes from our financial models, and we do refresh and it's in the range of 2.4 to 2.6x. Now this doesn't mean that we can't deviate and increase our leverage above 2.5x, we can, for a short period of time but of course, to pursue a strategic opportunity. But the key is, we always have to have a line of sight to get back down to 2.5x without too much delay. And if we were to get caught off, caught offsides for too long, theoretically, we would destroy some value. So we always are incentivized to get our optimal leverage to around 2.5x. And if our leverage drops below that level, you don't want it to have it too far below, of course, because that's the efficient level, but that creates additional financial flexibility. Our third priority is inorganic growth, and as you've seen, and Fabien was talking about the formation of the company, the history of the company, of course, M&A has played an important role in building what is currently JDE Peet's. And here in terms of our priority #3, it's not just M&A, it's also strategic partnerships. But we are also conservative with our balance sheet. And as you've seen, we're quite selective when doing our M&As. And we have had a couple of acquisitions and several partnerships since our last strategic update. And then our next priority is return of cash to shareholders, which we do primarily via a stable dividend flow, which we expect to grow over time. Now when you look at the potential of the category, the fundamentals of the business and if you add to it our financial discipline, we have the -- a very strong financial profile. And this discipline is applied across the P&L, across the cash flow statement and throughout the balance sheet. And if you look at our first pillar of our financial strategy, it's to protect our gross profit, and this is about making sure that we have the right level of visibility on our inflation that we price through at SKU level, all of our inflation and we manage and we make sure to protect our gross profit. So that's pillar #1. The second pillar of our financial strategy is to have strict cost control. And we, of course, tried to have strict cost control across all of our lines. But this is, by containing our cost, and as we've talked about some of our cost initiatives already by containing our cost, this gives us the ability to be intentional about having step-ups in investments behind our strategic priorities. Now if you were to look at our SG&A and you were to isolate the step-up behind our strategic investments, some of the FX and M&A scopes and you looked at our core SG&A over the last couple of years, its actually declining net of inflation, but of course, we're stepping up on our investment level. Then our next pillar of our financial strategy is strong cash flow management. And this is driving our cash flow across all of the lines, and I'll come back to that in a moment. And lastly, we seek to have a very strong balance sheet and always to have sufficient liquidity. Now all of this creates financial flexibility and our capital allocation framework is what governs and prioritizes our financial flexibility. And I'll come back to that. But first, I want to go, as we've talked about it a little bit, and we'll come back to gross profit, we've talked about our strict cost control. I want to go into a little bit of detail on our cash flow management. So here, you can see that on the left-hand side, if you look at a rolling 3-year average, this allows you to go through full cycles on cash flow, on working cap, et cetera, you can see that taking a 3-year average, as of year-end '21, we generated EUR 1.1 billion of free cash flow. So again, the potential of the company to deliver a lot of free cash flow. If you update it through the last reporting period, which is the half of 2022, the 3-year average moved to EUR 1.2 billion. And I'm very happy to say that for full year '22, we expect we are going to deliver more than EUR 1.3 billion of free cash flow, which means our 3-year average stays at EUR 1.2 billion. Now in order to look at the efficiency of dropping our EBITDA and converting it into free cash flow, we look at cash conversion. And in order to make that relative because all companies have a little bit different metric for cash conversion, our cash conversion, it's operational cash flow, minus CapEx and here for cash conversion as a percentage of EBITDA, if you put our full peer set by the same metric, just to compare it, you can see that as of year-end '21, we had 73% cash conversion as of the most recent reporting period as we shared with you. 77% free cash flow conversion. And with our most recent, with 2022 cash flow, it will stay at 77%. And this is above our medium-term to long-term range of 70% cash conversion that over time we expect to be around. If you go back to peer-set you can see that we perform much better in terms of cash conversion than peers at those 2 periods, respectively, at 59% and 60%. And this is all supported by our consistently competitive negative working capital. And of course, it can go through a little bit of cycles with commodity inflation, et cetera. But you can see that it's quite consistent and actually when you look at it, the trend is even a little bit negative here as we continue to improve and optimize. So now I want to go through a little bit of the status of our balance sheet and look at our liquidity. So if you look at the time of the IPO, first of all, we had a very different capital structure. And today, looking at the bottom, you can see that we've improved our capital structure quite a bit. And the capital structure at the time of the IPO, we had quite a concentration of debt, particularly in the 1.5- to 3-year bucket with 80% of the debt in the one bucket, and that was with the loans. And since then, we've smoothed out our debt maturities. So you can see the profile has improved on the bottom half. And also, we have doubled our liquidity from EUR 1.2 billion to EUR 2.4 billion. And we have improved our cost of debt from what was an attractive level of cost of debt at 2.4%, but now we have, our cost of debt is 0.5%. And if you look at the bottom debt maturity profile, you can see that we don't have any debt coming due within the next 1.5 years. So we don't need to do any refinancings. And the amount of liquidity that we have, EUR 2.4 billion is actually enough to cover all of our maturities through 2027. So quite a strong capital structure. If we were to open up that concentration of maturities, the way we look at it, in rolling 12-month increments, so we always look to see, do we have any concentration, those towers tend to be around EUR 500 million to EUR 750 million in any 12-month rolling basis. And if you go back to the free cash flow that we generate using the 3-year average, EUR 1.2 billion obviously, our free cash flow easily services in any stress environment, any debt coming due. And if you look at our cost of debt, 0.5%, obviously, that also gives us a very low net interest expense as well. So we're very efficient in terms of our -- below free cash flow even down to net cash on hand and also we have very little risk in the profile. So a strong capital structure. And if we chart this versus peers, just to say how does this position us on a relative basis, if you look at the-Y axis here, where we've charged cost of debt, the X-axis is the amount of debt that needs to be refinanced within the next 18 months. You can see with cost of debt, we're at the leading end of that with one of the lowest cost of debt. And in terms of the amount of debt we need to refinance, we don't have any debt that we need to refinance in the 18 months. So we're in the low-end range here. So very competitive versus a broad spectrum of CPG peers. And importantly, we entered the current inflationary environment, rising rate environment with a very strong hand because we had finished our capital structure and well positioned going into this environment that we saw coming. So all of this creates a lot of flexibility because we're very efficient all the way down to net cash. And our capital allocation framework governs how we deploy this cash. So I'm going to go into a little bit more detail now on our capital allocation framework. So back to this, and I'm going to go through it. And the best way to look at how we use -- how our capital allocation framework governs the deployment of cash is actually to look at our track record and to look at the last few years in terms of how we've deployed that cash. I think that's the most effective way. And now that we've had a couple of years since the last time we shared it, we can now look back. And you can see that we do what we say we're going to do, and it's the way that we behave. So starting at the top, in terms of organic growth. So investing behind the growth opportunities in the existing business. Just to demonstrate it a little bit on a couple of examples here, this is always where we start. We always make sure that we have the right investments to fuel our long-term ambition. And a couple of ways to demonstrate this on the left-hand side, for example, if you look at since 2020, when we said we wanted to step up on our A&P, and here, I put our investments in our working media and also the investments behind our appliances. And if you look at the 2-year CAGR since 2020, when we said we were going to do that, it's grown by 23%. So that's the 2-year CAGR, the step up there. If you look another way to demonstrate fueling our organic growth and investing priority #1, is if you look at our CapEx, and here, again, I used a 3-year average. And you can see that if you look at our CapEx in the last 3 years, on average, 20% of our CapEx is for maintenance CapEx. This is the core CapEx, the sustaining CapEx. And we have good control of our core CapEx. We have quite a centralized process, and that allows us to be efficient on our maintenance CapEx and importantly, allows us to allocate more of our CapEx envelope to growth. So in the last 3 years, on average, 80% of our CapEx has been allocated to growth. This is for capacity expansion. This is for expansion, for example, of our footprint of our China stores, these type of investments. And I know everybody likes to look at CapEx as a percentage of sales, so I added that here as well. And you can see that on average, the last 3 years, our CapEx has been 3.7% of our sales which is quite an efficient level, but the important thing is that 80% of it has been allocated to growth. So that's priority #1. Now if you look at priority #2, our leverage around 2.5x. I want to show you our track record of leverage over the last few years, but as the other priorities come after that, I want to show those also in the context of leverage because we start with leverage and those things happen at the same time and after that priority. So I'm going to walk you through it all together here. So if we step back to before the IPO, so as of December 2019, our net leverage, so this was legacy JDE was 3.1x net debt-to-EBITDA. And a lot of times, when people talk about M&A, recent bolt-on M&As, they forget one of the biggest bolt-on M&As in the history of the company, which is Peet's, the acquisition of Peet's. So this was an important M&A for JDE Peet's and that took us to 3.4x leverage as of June 20. This is right after the IPO. So with the IPO, with some additional deleveraging, we landed at 3.4x. And at that time, we gave a public commitment to reduce our leverage to below 3x by the middle of 2021. And as you will recall, we delivered on that commitment. So as of June 2021, we were actually slightly below 3x. And all during this time of deleveraging, you can see on the upper right-hand corner, we continued to step up our investments on A&P and growth CapEx investments. So we didn't put that behind the leverage. Of course, we continue to invest in organic growth, and that's key. And we didn't stop there. We continued to deleverage. And we -- by the -- in the middle of 2022, we got to 2.5x leverage, so optimal leverage. Now this is pro forma without share buyback, and I'm going to come back to that, and I'll explain why I show it that way. So actually, as of around May, we were at 2.5x and so pro forma for June, we were 2.5x. But as we're deleveraging we get to 2.5x, in the background, we can still do M&As. So we did 2 bolt-on M&As during this period of time and getting to our optimal leverage. We did our acquisition of Campos in Australia, Les 2 Marmottes, in France. And so you're able to try one of those out during the break. So we continue to do bolt-on M&As, and we'll consistently do that because of our strong free cash flow generation, it gives us a lot of financial flexibility. Our next priority is return of cash to shareholders. So we also implemented a stable dividend flow, and you can see our 4 installments here and our dividend flow. And importantly, we built a cadence that fit our cash flow profile. And then, as I mentioned, in May of '22, we did a EUR 500 million share buyback that increased our leverage by 0.3x to just under 2.8x. And I'm happy to say that with the strong free cash flow generation that we have for full year '22, that we're going to look at in a moment, that we expect to finish our year in terms of leverage at 2.65x, which is actually a little bit below where we started the year. So once again, following the cycle, and we are almost to our optimal leverage range, which is around 2.4x to 2.6x, the midpoint being 2.5x. So you can see our consistent delivery. We follow our framework. So we adhere to it in terms of our capital -- our cash flow deployments, and we do what we say we are going to do. So this gives us a strengthened business and financial profile. And actually, if you step back and you think about what we've gone through today, what Fabien talked about in terms of our improved fundamentals, Fiona talked about, Laurent talked about in terms of our improving fundamentals, we have a significantly strengthened business and financial profile. And if you were to look at, again versus peers and you were to look at some operational metrics, some cash metrics versus a broad peer set, and here, I broke it up in terms of beverage, broader CPG and then brought it together in terms of a total group average here. You can see here that this data is since the IPO, since the middle of 2020 for most metrics, we're looking at a LTM on a 2-year basis, up until the most recent reporting period for consistency. So this is with H1 data. And you can here, if you look at the top line and you look at the revenue CAGR, JDE Peet's delivered 9.7% revenue growth. And that compares almost to the level of beverage peers and ahead of the all peer median, here for this time frame. If you look at the bottom line, looking at underlying EPS growth as a proxy, you can see here that also we are ahead of the all peer median here as well. Now if you look at cash metrics, and we put free cash flow yield here, looking at the average free cash flow yield during this period of time. And I just talked about our strong free cash flow generation. We're best-in-class in terms of free cash flow yield, leading the peer set and using return of cash to shareholders, using dividend yield as a proxy here, you can see that we have a competitive dividend yield. Now despite that, if you were to look at valuations, we're at the low end of the range versus this broad peer set, whether you look at EV-to-EBITDA multiple or P/E ratios. But of course, our job is not to focus on valuations. Our job is to focus on improving the fundamentals of the business. We focus on operating the business. And we know that if we continue to do that and improve our fundamentals and we have consistent delivery over time, we will narrow the gap to our peer set. So I'm going to stop there. And at this point, actually, I'm going to hand it back over to Fabien, who is going to give you a preview of our 2022 results, and he's going to look at the outlook and then we're going to rejoin for a Q&A. So on that note, Fabien. [Music]

Thank you, Scott. Can you hear me? Well, okay, Perfect. So we thought it would be appropriate being close to end of January to share with you our preliminary number for 2022. But of course, we don't want to convert a Capital Market Day into a trading update neither. So we will not share more information than the ones that I will disclose now because we have been keeping our 22nd of February date to talk more about our results as well about our outlook, but you will see a pretty good level already now. 2022 was a year of choice, and they were choice to be made. You could have choices to go in full of pricing, being the first of pricing, paying a bit of the price of being the first of pricing. You could have a choice to say, I'm going to wait for somebody else, and I'm going to follow. A choice to put less pricing than what was needed, hoping maybe to get more volume and gaining market share as a consequence. It could be a year of not pricing in full, but as a consequence, we had to slow down the investment to deliver bottom line at any cost, possibly even to play with quality. Actually, we made choices for the long term. I've been saying it earlier, at the time of lunch break, I'm committed here for the long term. And when you're committed for the long term, you're committed to do the right things and not looking after any shortcut to manage your financials. What are the choices we made, is, first, to not compromise on the quality of the business and our fundamentals. What do we mean by that? And Laurent has been -- alluded a bit to that. In 2022, it was, we kept very high our customer service level with on-time in full level above 98% consistently. In 2022, it was the lowest ever consumer complaint on JDE product. In 2022, it was the best ever safety performance across our factory. In 2022, we refused to play some game which sometimes happening on coffee, to change the blend, to go to lower-grade coffee, to manage your cost, but not to deliver the same value to customers and to consumers. You have seen throughout this morning, we refused to slow down the investment we had to catch up on working media, on appliance, on sustainability, on innovations. By that it means that when you make the choice, it implies you have no other option than to be absolutely ruthless to protect your absolute gross profit, the profit per cup. And for that, you have to be a bit aggressive on your cost side, and we have been sharing what we have been doing there, but as well alluding on pricing. I stand behind these choices because these choices makes us stronger. Knowing what has been happening throughout the year, if I would have to do it again, I would do exactly the same choices because we know these choices are making us stronger. And I know these choices as well is making us delivering on our commitment. Here, you can see what we have been delivering in 2022. You see on the left part of the slide, what we committed to at the beginning of the year. To be honest, we did not knew how bad the year would turn with a lot of external events which have been happening. Nevertheless, we have not changed our outlook. And we said we would deliver a double-digit organic sales growth being very disciplined on pricing. We know already we had to be very disciplined on pricing. We said as well that we will defend our absolute gross profit. We said that we committed to reinvest in the business. We committed to and managed the short term and prepared to get a better long term that we have for that to invest behind strategic growth opportunities. And I trust you have seen today where we have been deploying this investment. And finally, we said we would deliver a minimum of EUR 1 billion of free cash flow for 2020. What have we done? We've done what we said we would do. We have been increasing our sales by 16.4%, with double-digit organic sales growth of 11.3%, with pricing playing the biggest part there of 15.8%. We have been improving our absolute gross profit by 3.3%. We have been increasing our SG&A investment, and we wanted to share really the detail of that on our working media and our appliances throughout the day. And our SG&A has been stepping up by 10.6%. And to the earlier question, you will see on the P&L absolutely greater than where they were even in 2019. And consequently, our adjusted EBIT has been decreasing by 5.9% and organically by 9.3% as we have been stepping up our investment for long-term growth. And on free cash flow, we generated more than EUR 1.3 billion of free cash flow in 2022 and achieving, as Scott has been talking to, net debt leverage of 2.65x. I want to share a couple of more information, especially to answer some of the questions we have had this morning, and I know it has been a lot written about over the last couple of months about pricing, volume, Europe share, in one simple slide. How we break down this 11.3% organic sales growth in 2022, 15.8% pricing, minus 4.5% on volume mix. And this volume mix part has been very, very much coming from Europe. And here, we are showing some things that I think isn't really disclosed from any company. It's very transparently, month by month in 2022, our volume sell-in in 2022. What do you see? You see a period of little gap. You see a period of a little gap in July, in August, in September, in October. Yes, it is the case. Yes, it is true. It is where we were on our last wave of negotiation on 2022, which was difficult. We have been delisted in many places. Of course, when you're delisted, you lose market share. Of course, when you're delisted, your volume is going down. But what's important is not that. What's important is when you are long-term focused what's happening when you're relisted again. And you can see our November volume selling in Europe, you can see our December volume selling in Europe is back. You don't get to see it on the Nielsen report because you have about 1 month lead time between the sell in and the sell out. I promise you, it's going to come back, on the next week you're going to see on market share, Nielsen. We have been in the meantime, losing market share. We were prepared for it. We knew it. We've seen that 2 times in similar cycle in the past. And if we look from July to the latest market share we had in November, which coincide exactly to this low windows with a 1-month delay, we have been losing 79 basis points of market share in Europe. That is correct. We don't yet have the full consolidation number at the end of December, but we have markets we are starting to share some very good results at the end of December. We will share again in a very transparent way, our market share at the end of December during our presentation on the 22nd of February. But we know already, it's recovering. And that is the choice we made and we stand, again, behind this choice because we know the exact share of the company is stronger. Now looking at the channel level, our organic sales growth between in-home and away-from-home as well, we're going to be very transparent here. We continue to recover on our away-from-home business, which have had a 21%, almost 22% organic sales growth in 2022. And we see, when we do have recovery on top line in away-from-home, given the hard work we have been doing on the cost side, given the operational leverage the additional growth is giving that our bottom line is growing at a much faster pace than the top line. But at the same time, we have to acknowledge in 2022, COVID in China continued to have an impact. We have to acknowledge that there had been a far more sticking work-from-home behavior than what we have been anticipating. I got that wrong. 2.5 years ago, I said it will most likely take 3 years to come back to pre-COVID level. I was right that it's going to take time. I was wrong on the exit. We thought it would be around 95% to 90%, it's below that. On the coffee store side, it's mostly impacted by China, and we know what's happening in China. We are expecting to see further recovery. We know on other channels where we are exposed, we are below 80%, which we'll provide, of course, further upside when it's going to happen. But we'll continue to work on our cost side if we see that not happening. And if I look back, now over 2.5 years. So since we became public, what has been our performance, because it has been alluded to about some of the numbers which were since IPO, but from middle of the year because we don't have data yet for other companies on the full year 2022. But I have to say, we have been delivering a pretty good performance. I would say we've been delivering a superior performance on our operational metrics. On revenue growth, 18% bigger company today than where we were at the time of the IPO and 7% compounding annual growth rate. Of course, there is pricing into it. But we have had as well already last year, some volume mix momentum. And this year, we should not think that doing pricing is easy. You need to ensure your brands can carry this pricing, and they had. We have been increasing our bottom line at a faster pace than our top line with an earnings per share, 21% higher than when they were in June of 2020, which gives a compounding level of -- at double-digit level. But what is very important for me is one on the second column here. We have not delivered this number without shortcut. We could have got that number bigger. We could have got our bottom line bigger in 2022. We made the choices to ensure we would be a well-invested company. So for investors, when they look at JDE Peet's, when they look at the company, they can be totally reinsured. It is a well-invested company. We have restored that. We have our shareholder's voice today is above 40%. We have been investing more than 44% behind our appliances, and we have been explaining which appliances we have invested behind a bit earlier, no shortcut made in the business. And we have been returning cash to shareholders. We have been returning EUR 1 billion cash to shareholders. Over the last 2.5 years, we generated about -- between EUR 2.18 billion and EUR 3 billion free cash flow in 2.5 years. We have returned cash to shareholders at the same time as reducing our net debt by EUR 1.1 billion. Very important in our strategic framework is the inclusiveness of our performance. And we are as well very pleased on what Laurent has been presented on the step-up we have been doing on sustainability. We have not been improving our performance at the expense of our ecosystem but we have been improving our impact on the ecosystem with a reduction of 15% on our Scope 1 and our Scope 2 with significant step-up on visibility on our sourcing on coffee, moving to 77% responsibly sourced coffee. How does it lead to? It led us to being reinsured that we have a stronger company. And as a consequence, our long-term algorithm impact remains unchanged. You have seen it. It is exactly the same that what we have been presenting in the past. What does it mean for 2023? How do we look at it? And we had a question a little bit earlier. We believe that in 2023, we are well positioned to be on the high side on our organic sales growth as a algorithm. So we believe we are going to be on the high end of it. We are going to go back to positive organic adjusted EBIT that we are, at this stage, estimated on the low single-digit level, again, without compromising on the quality, without compromising on the investment, with what we call moderate SG&A investment, because I would say the reset is completed. The reset is done. But as we continue to evolve into new growth pool, we need to ensure we continue to support our investment and stable dividend for 2023. We want to be as well very transparent that we see the year as a year of 2 halves. We see the year of negative EBIT -- adjusted EBIT in H1 and a year of positive adjusted EBIT in H2, but the balance of the 2 are going to be positive. We usually never present our outlook in 2 halves, but it's -- we thought that for the sake of transparency and avoiding any surprises, we want it to be transparent here. Now that leads me actually to my conclusions of this day before we go into Q&A. I believe we are a much stronger company than we have ever been. I request that you took the key messages we have been trying to convey today, which are, on the one hand, we have been delivering on our outlook in 2021. We have been delivering on our outlook in 2022. We have been delivering on what we said, we what to reinvest in the business. We have been delivering on what we said to be more intentional behind the new growth pool. And actually, we have been delivering all of that despite turbulences and without making any compromises on the fundamental of the business. The second thing is, we have been transforming the company as well. A company that is today, I've used many times that we're stronger, but is correctly invested. A company that is more productive and a company that is more sustainable and more inclusive. But it is not sufficient for -- to move us up to the next level. And it was very critical that at the same time, we're managing disruptions, strengthening the company, positioning ourself to much better growth in the future. And we have been doing that by really fueling new growth pool for us. We are successful and outgrowing in the U.S. We are successful and outgrowing in the emerging markets and in China, in particular. We have significantly stepped up our capabilities on digital commerce. We have stepped up our intentionality and our agenda on appliances. I'm sure you've seen from Fiona some impressive things on innovations that we really have backed now, not in one specific category, but across consumer needs that we have very well identified beyond which we are innovating. And if you put all of that together, we are very confident that we have all the assets to win in the category, to win in the new wave that is coming in front of us. And we have as well a very, very strong capital structure that will enable us to fuel this organic growth but at the same time to see the opportunity or to seize opportunity, sorry, when we are going to see them arising. I trust that during this full day, you are sharing the same conclusion on the journey of what we have been doing, I would say here, over the last 2.5 years, and we are expecting a further exciting journey ahead. Thank you. Now we'll probably do a few seconds break, however, we'll not, we'll go straight to Q&A. Okay, let's go straight to Q&A. And maybe I'll invite Scott back on stage.

I will just ask, as I've been sharing before, to be mindful, it is not a trading update of the company, try to focus more on the overall day, important questions you may have. And of course, if there are questions that we have not answered today, we will be very happy to have some follow-up with Robin, offline.

Faham Baig, Credit Suisse. I want to go back to the chart you showed on the improving performance that we haven't seen in the Nielsen data yet. Could you just elaborate how you've managed to potentially turn the corner in terms of both volume declines and share growth? Is it as simple as resolving the delisting? And if so, how have you been able to do that? Have you had to give back on some of the price increases you've taken? And secondly, you mentioned competition normally comes back with the price increases 1 quarter or 2 quarters later. Have you seen that play out in the recent data as well?

I will start maybe with the second part. I believe we have been answering that one this morning when we have been showing that there is a convergence now of price increase, which has been happening throughout the industry. Of course, there could always be some adjustment or catch up to be done here and there, but I believe there is really a convergence. And that has been led to your first question, which is what have we done? We just stayed firm. And that's why this dip was not a weak dip. In some markets, it has been 4 months dip, because we stayed firm. When you increase at the same time, your innovation pipeline, the strength of your brands, you're still being on air, you're still being visible, you're still being creating a pool for your consumer, you're coming back on shelf. And because you've come back on shelf, you're growing your numbers back and your market share is back. We did not had to compromise, if it's maybe what you were alluding to, to come back. If it would have taken 1 month more, it would have taken 1 month more.

Celine Pannuti, JPMorgan. So I want to come back to the same question I asked you this morning. So organically, basically, you're saying that your volumes are back. What is the volume in the industry? Do we still have to comp a high level of at-home consumption? Are we seeing more elasticity? And maybe I don't know if you will answer that, but I am a bit surprised of your 3% to 5% or top end of 3% to 5% for this year. So does it mean there is no volume bounce back that you're expecting in '23?

So remind me, the first part was about the volume, yes, the volume in Europe, in particular. It is fair if you look at Nielsen data, across peers, in Europe, if I recall that data, it's about minus 6%, minus 7% volume. And I would say this is even before any some impact on some volume and from negotiation. We believe that is purely a readjustment and a post-COVID phenomena that you see back, by the way, in most majority, in the recovery, in volume in away-from-from, even in our business. So we don't see a trade-off of down there. Then your second question was on the sales guidance, sorry. Again, we have to be careful. We will answer more of these questions on the 22nd of February. But we are expecting, I would say, healthy structure of our organic sales growth in 2022. It's still a year where you have had some different comparison. We have pricing, you have delisting, so all these things together. But we are expecting to have a healthy organic sales growth, I would say, more balanced organic sales growth than the one we have had in 2022.

Patrick from Barclays. [indiscernible] results. Well done, managing the volatility in the past year. But looking forward ahead, can you talk about the phasing, H1 versus H2 on the organic EBIT side. And I guess, second of all, I guess, the top end of 3% to 5%, can you give us some of the parts behind that? I think some of the risk was in terms of the pricing being rolled back, how do we see that kind of going through into the second half of next year, considering the tough comps this year and maybe the negotiations you're going to have with retailers?

So there is a lot of that I can't answer, and I don't want to answer at this stage. But just to give some direction still. You see, there is some ease on the commodity side. But at the same time, you see that there are still some underlying inflation on services, on labor, on energy, although there have been some short-term positive impact, on currency, if you look year-on-year. So there are still underlying input costs, which are happening, which might be at a different time when you have it, I would say, when you read it on the newspaper and when you have it in the P&L. But at the same time, what I've said earlier, we are -- we want to be known by the retailer as a company that will behave on the various cycle, on the commodity coffee side in particular. When coffee goes up, we'll be relentless, we'll be difficult because we know what we do is the right thing for the entire industry to price. And when we will have tailwind, we will share this tailwind with the retailers. But of course, we do that in a mutual way. And we need to ensure that there is either from a timing or intensity standpoint, the similar thing happening in -- I mean the reverse happening in 2023 of what has been happening in 2022. And as far as H1, H2, I don't want to enter too much into that conversation today, but they are comparison basis, there are inflation basis, pricing basis, investment phasing basis, I'm sure you are doing all your computing work to get an estimate between H1 and H2 of 2022 of our investment. It's probably most likely going to be a bit more balanced next year, which have a different impact, H1 and H2, which are the main driver, but nothing really fancy beyond this for 2023.

It's Thomas Sykes from Deutsche. Just in terms of the variability of the cost lines, I suppose, it's in addition to the last question and particularly on energy and freight, which obviously have been coming down, but I think you're probably fixed quite far ahead. Is that something that you think will be -- would those be a benefit to 2023 as it stands? Or is the main benefit on profitability going to be sort of holding your volumes and your sales as the green coffee price comes off? And then what's the sort of further outlook of out-of-home or away-from-home versus at-home improvement, please? Because can you still generate operational leverage out of your away-from-home business in 2023, please?

Great question. I will start maybe with the second one. And Scott, if you want to answer the first one. So on away-from-home, I think it's one topic to be absolutely frank, we don't have full clarity about at this stage. We believe they are going to be most likely some recovery on the coffee store side, in particular in China, and we feel very pleased about it because we have not slowed down our store openings. On the working from home, working in offices, it's so much in balance today. We are here in company today. We are forcing people to come back. We are hearing, company as well stay all at home, sometimes in the same country, in the same industry and services. So it's very difficult to have a point of view. And we don't want to have our operational performance relying on hope or things we don't know. So we will continue to do our job. Either when we see a faster recovery, we'll participate into it and provide operational leverage or we don't, and we'll continue to work on our cost structures. Of course, as time progress, we'll know more, most likely around April, May of this month -- of this year, we will know more, but we are preparing for both agenda as we speak.

And then I'll take the first question. And so I believe your question was on energy and freight and what is coming through with some of the market trends that you see there. On energy, it depends a little bit by market as well because some of those markets saw a little bit less in '22, and then that inflation comes in '23, depending upon if it's a regulated market or not and how that gets passed through. So some of the markets we know, it's actually in '23 where you have that inflation and some of the markets where it's open and it's more -- you can buy spot and you can do hedging. We have some of that also locked in. And so that's not going to come into the first half in some markets, maybe in the latter part of the year, when we'll get a little bit more visibility there as we go forward. So that's a little bit H1, H2. And also in terms of ocean freight, you're right that you do need to secure things upfront. So you do have some tenders that cover a portion of the year. So we still have some inflation that's coming through with the lag effect there. But we do have and let's see if that also continues with the current trend, but we do see freight coming down, and that could come through a little bit in the second half, but it's a little bit early to share. And I don't want to give too much in terms of what's locked in and what's unlocked at this point, but that would be latter in the year for the areas that we see some benefits, but there's a lag on that.

It's Jeremy Fialko from HSBC. Again, can you share a bit more on your views about single serve in 2023? And if you're like lapping some quite high basis there or you've got a bit of kind of COVID stuff still to come out. Does that mean that you could have a certain element of negative mix in your business if that's a part of your business and perhaps declining quicker just because of the base effect versus others? So maybe you could give us a bit more perspective on that.

I will not say on that more, talking about the past and the future because it can be a bit more commercial sensitive. But when we look at 2022 in the second part of the year and in Europe in particular, it's just impossible to look what is volume, what is mix driven. Because when you're delisting with the retailers, it is absolutely everything. So it's very difficult to say, do I see a trend happening on my mix or not. But we are expecting all of that to normalize and as it normalize, I think consumers are back to their normal routine and where we see disproportionate growth on single serve, on beans, on premium instant and versus the rest of the portfolio.

Fabien, Scott, in view of time, I would like to take the last question from -- yes, so basically because there are some people who have to catch the planes so then we can wrap it up.

So David Hayes at SocGen too. Just a couple of bits on the 23% increase in working media and appliances '20 to 2022. So just so I understand that, just to check, that's all OpEx, isn't that? There's no, really, you can't capitalize any of the appliances, I think.

Correct.

And then just to -- I kind of just want to check out what you said. The biggest step-up in investment is done. So that's about the number, will be much lower in '23. Was that the point that you were saying?

Yes. The step-up of investment, the reset of investment is completed by now. Yes.

But you can't quantify the estimated percentage of...

That's why we talked about the moderate increase next year. I think, as I always say, growth requires investment, ESG requires investment, and you always have to ensure that you're putting the right money, especially when you see an attractive opportunity.

Okay. And then the last one from me.

That was a 2-year CAGR reported step-up.

Okay. And then the last one would be just on the terms of the delistings and the recovery. So we understand a lot of companies that, you go from 100%, delisted to 0, and it takes, let's say, 12 weeks to get back to 95%, actually you can never get back to 100% immediately. Is that what you would say, would you concur with that? And therefore, this is still towards the back end of the year, you're going back from 0 towards 100% in that November, December number, and therefore, it should build through the first half of '23?

I think in reality, there have been multiple wave of negotiations throughout the years, which means that you have some markets where you've got 100%, you have some markets where you've got 95%. There are always sometimes some retaliations, but you have as well as a market when you come 105%. And we have a bit of a combination of all of that. And I think it's probably getting closer to the average of 100% across the market. It doesn't mean it's absolutely perfect everywhere. We still have few areas here and there where we are not totally satisfied with the recovery. But all in all, very much so. Next one. Jon, I think had a question around here. No? Nothing more, I answered your question already, right, Jon? No. Have we answered it? Okay. Perfect. So I think we see all have been and probably have to stop here. So look, I will -- I don't want to do another conclusion after doing a conclusion, and I see some people have to really catch a flight. I would say thank you very much for coming over. Thank you very much for your interest in JDE Peet's. You can see that we have been doing our best to answer most of the questions, which have been arising throughout the company over the last year. Is it, the wait in Europe? Is it impact on pricing? Is it investment recovery of the company? To give a lot of transparency, we thought we deemed to share that with you as investors or as analysts. We might have not answered yet all the questions. We'll have another window of opportunity on the 22nd of February. We'll be very pleased to share in more detail our results. But if in the meantime, we -- you think that there is really a burning question we have not answered, we'll be very happy with Robin to answer it. So a big thank you for your interest and for coming over today. Thank you.

Thank you.