Reckitt Benckiser Group plc (RKT) Earnings Call Transcript & Summary

Good afternoon, everybody. I'm delighted to be here, albeit only virtually with Laxman Narasimhan, CEO of Reckitt Benckiser since last September, and a newbie to the Paris Conference.

Laxman, let me start with a shorter-term question, please. In your February presentation, you said that the first phase of rejuvenation would be to stabilize and perform. Since then, you've reported first quarter organic top line growth in the mid-teens, as a lot of your categories are uniquely placed in the face of COVID-19, paving the way for a solid performance in full year '20. Could you talk about the challenges and opportunities of this strong growth, including its implications for the implementation of your restructuring program, please?

Great, Eva. Thank you for having me here at the conference, and I hope you are all well and safe. Clearly, no one expected that things would play out the way they did. And the first priority for all of us was to keep our employees safe; the second, focus on supply and ensure our customers were served; and third, and increasingly, is really to look ahead and see how the situation we're currently facing will sort of play itself out over the medium to long-term and influence the growth and shape of the company. And to that end, the first focus on the safety of our employees, that's particularly accentuated by the fact that the first place that we began seeing what was happening with COVID-19 was in China with our factory in -- just outside of Wuhan in China. And we learned a lot there in terms of keeping supply going and ensuring that we met as much of the volume needs as we could. Clearly, demand had spiked enormously. And just in that factory, by -- through a process of radical simplification of what we made and how we operated the factory with clear assistance from the local government, we ended up in a place where we were able to really ramp up volumes in the factory in China. It's been operating pretty much nonstop ever since, other than for a routine maintenance that happened in the month of April. So that taught us a lot about keeping supply going and ensuring better service line with even though -- and we've sort of scaled that up across various parts of the world. A lot we've learned about this [ bit ] in China. The demand picture that we have seen in many parts of the world have exceeded our ability to supply. So that was the first priority, just in terms of ensuring supply, [indiscernible] . The supply chain team has done a remarkable job in terms of stepping up to the challenge. To your question about growth, and then I'll come to the plan that we had going forward. As I mentioned in February, we think about growth in sort of 4 dimensions. The first is penetration, the second is market share, the third is new places, and the fourth is new growth or new spaces. On the penetration side. What you are seeing is there's a large number of consumers who are coming into the category -- new consumers in the category. And many of them are going and relying on the big brands that they heard of, that they trust. So what we've had to do, of course, is ensure that our core SKUs are available and that we drive growth through increasing penetration. It has meant that we've had to resequence some of the innovation, and we will continue to make investments in innovation in the back half of the year. We know that our marketing -- we have sustained marketing, and we will continue to sustain our investments in marketing, which has not only been focused on enhancing brand equities, but has also been focused on driving behavior change. We have done public service announced ads with a variety of health authorities. And the one example I'd highlight there to you is Dettol and the partnership that we have with Pif Paf in India, where to our TikTok campaign for hand wash, the HandWashChallenge, we have now, at this point in time, reached over 118 billion views. So it's a large number, really driving behavior change to our brands and clearly building equity. On February 27, we also announced our purpose and why we existed as a company. We existed as a company to protect, heal and nurture, with the relentless pursuit of a cleaner and healthier world. And as you can see, this purpose has played itself out. The organization has risen to the challenge. And there clearly are new places that have, therefore, taken us. We're seeing the demand for our products through e-commerce as well as through launches in many new countries and the new CMEs that we had talked about. And additionally, we are seeing opportunities in new spaces, particularly you see one of the announcements we made with Hilton Hotels, where the consumer is highly sensitive to a clear environment and where they could go. And so that's an area of clear growth for us. So what we've done is keep our people safe, focused on ensuring supply is growing, and that we get the right service levels with our customers. Defined what our purpose is, which is what we did in February itself around protect, heal and nurture, and the relentless pursuit of a clean and healthy world. And then drive growth along penetration of market share, new places and new spaces. And the progress on the implementation plan of what we have defined is good. We feel good about the progress. We will have -- take example, on productivity, we've done very well. They're at or above plan. We will need to resequence some of our investments to the latter part of the year. So that's sort of a first half, back half of the year. And we will do that in order to ensure the business gets invested in and we position the company for long-term growth.

Great. Thank you very much, Laxman. If we stay on the subject of COVID-19 for a minute, what's your view on how the consumer behavior is going to change in the longer term? And what are the main challenges and opportunities for you to deal with that longer-term shift in consumer behavior, especially from a brand and from a supply chain point of view? You've alluded to a lot of changes you've already put through, but if you take a longer-term view on that.

Yes. When I talked in February 27, we had already highlighted the fact that hygiene was the foundation for health and for wellness. And we're clearly seeing that hygiene, being the foundation for health, has played itself out. And we're going to see a continuation of that. As people are more sensitized to the need for hygiene, you will see consumer behavior shift in that direction. You're also seeing that people are looking for wellness solution because they realize that being well is important and being fit well is -- it's very important. So you do see people essentially spend on products that actually will keep them well. So you see that as a fundamental shift in consumer behavior at a higher level than maybe what it was before. The second thing you are seeing is the growth of e-commerce. I was on the phone yesterday with a retailer in one of our important geographies. And they talked about how they achieved, during the peak moments in time, almost a 500% increase in the e-commerce sales. But of course, now it's settling down to more like 150% to 200% of where it was normally. So you're seeing consumer move heavily digital. And so it's not just us; you're seeing that with a variety of other companies that are playing in this space and how digital and particularly pharmas becomes quite important. The third thing you would see, of course, is the importance of value. As you head beyond what we are facing now into an environment where the economies will have to recover, disposable income, what's available, how people spend, is going to be an important criteria. Clearly, something we know, we understand and we respond to well. And we're going to see these 3 shifts play themselves out in the way consumers behave.

On that last issue that you've pointed to consumers wanting to get better value given the economic environment. Historically -- and I think even last year, we've seen implications of Reckitt sometimes being too aggressive on pricing. Do you think that, that is something that has been addressed over the last few months and the portfolio lends itself for a consumer that's more value conscious?

What we have done as part of our plan is we have made investments in competitiveness in a few geographies, in a few products that we thought were important. And I think we have seen the results of that in terms of market share in many of the geographies. And I feel comfortable about that. As you look at what we have, particularly on price and price architecture, there's no question that what we are focused on is ensuring we have the right price architecture available in various markets and in various channels. So that is a clear area of focus. We have the capability in order to do that. And we are making the right investments in order to ensure that we are prepared for a time when -- where the world will sort of look for value even more than they are now.

And coming back to that previous point you made on digital. You now have about 10% of your sales coming from e-commerce. How do you benchmark yourselves versus your peers? And what are the next steps in further enhancing the digital presence?

As you said as well in our Q1 results, very strong growth in e-commerce. I think, as I said, even when I presented it at the end of February, the -- when I look at our capabilities in e-commerce, the playbooks we have and how we execute, it's actually very strong on the transactional side. The playbooks were built in China. We have a big business in China, including in e-commerce. And how we think about managing across channels, how we manage partnerships, the minority investments we have in a variety of partners, all of these help us in building and refining these playbooks that we are now scaling up worldwide, which is why we've organized it the way we have. I believe the brand building continues to be an opportunity for us on the digital side. And what we are doing as a consequence of that is we're actually -- as part of the reorganization that we will have early July, we're actually bringing together the digital brand-building capabilities and our e-commerce team together into what we call ERB. And we continue to invest in this. And you're going to see us continue to make the right and appropriate investments with the digital capabilities, in the digital core because we see this as a big area of opportunity for us.

Great. In your observation of RB being a good house, you pointed to the strong execution team and the can-do attitude of your employees. How do you get the best out of this culture while limiting the rest, i.e., the risk of the engine running too hot again? When you presented your turnaround plan to RB's employees, what was the reaction on the inside, including on the hygiene side of things where a few might have anticipated independence from the rest of the group?

So I think, Eva, first of all, I talked about RB being a good house in a great neighborhood, and it's reflective of the portfolio we have. I also talked about the strong execution gene that the company had. And the fact that it has been actually amazing to me to see how agile this company is. And I think it's really played itself out in a way where the company has responded to the pandemic. So the strengths have, in fact, been amplified even more. But what's really happened is that, as we announced the purpose and we announced -- which is, as I said, protect, heal and nurture, in the relentless pursuit of a cleaner and healthier world, and we defined what we call our fight, our fight is for access, high-quality products, information that drives behavior change and availability. And given the environment around us and what has changed, the organization has risen really well to this purpose and to this fight. We've taken 1% of our operating profit, and we have actually put that into supporting frontline key workers, organizations that frankly make a big difference in the local markets. And this is all consistent with the purpose of the fight, organizations like the NHS here in the U.K., the International Refugee Commission and what they're doing in the emerging markets, the work in the Middle East to ensure -- and Africa to ensure products available, including products for AIDS and HIV-infected patients. The work in India to give away soap, and also work in the local markets with Harpic and Lizol. The work in China in Wuhan, including with frontline care workers, with the CDC in the U.S. I think what has happened is you've seen with this situation we're facing, a pretty radical move in the culture of the company. People realize that there's something out there that is happening that is bigger than us. At the same time, what we are doing is we are investing in the engine room or in the chassis for the business. And that is very important given where the company was at and given the growth opportunity that the company has. We know that we are inefficient in some areas, and we're working on that, too. And in productivity, as I said, at this point in time, is ahead of plan. The employees really understand and have really embraced this turnaround plan. The reaction on the inside, including in the Hygiene division that you particularly pointed out, is having people have really grasp the idea, hygiene is the foundation for health. And I think you've seen that in the conversations we're having, even in brands like Lysol, the Lizol in India and in other geographies where the public health dimension, what Lysol brings in, is bringing to very -- a clear focus, the importance that hygiene has as a foundation to health. So I think given all of that and given the way we have embraced the purpose and the fight for the company and why we really exist, I think the adoption of the company has been very quick. Much quicker than, frankly, I had initially thought. But obviously, given the environment and how it's changed, it has helped cement the organization around what we're trying to do and has begun making both and now 3 businesses work much closely together.

Great. I want to come back on the health and hygiene point in a minute. But before we do that, can you maybe talk a little bit about the Executive Board, which you have changed pretty dramatically? Are you happy with the team you've put together? And can you maybe talk about the slight change in mandate for Kris, who's moved from Chief Transformation Officer to President of Health and Customers; and Aditya Sehgal, who's moved from Health to being President of Nutrition and ERB and Greater China?

Great. Well, our executive team is filling up nicely. It's a combination of internal people we are promoting as well as targeted external hires who are bringing a combination of experience as well as talent and raw skills to shake up the whole company overall as we go ahead and do what we're trying to do. If you look at the executive team, Jeff Carr brings a vast amount of experience, a record of performance and transformation at Ahold Delhaize, with background in RB, and he's come back to the company to help provide leadership as CFO. Ranjay Radhakrishnan, who's a world-class CFO, and he's come into the organization, former CHRO or Chief People Officer for a FTSE company, and again, brings a broad global experience, having worked in the Middle East, having worked in Europe, having worked in India, but also having worked in the U.K. on a global basis. And he has been hired in order to help us truly build our talent, and lead a great legacy of a company that has outstanding people and a great culture. We announced yesterday a new Chief Supply Chain Officer. His name is Sami Naffakh, and Sami joins us from Arla, where he was Chief Supply Officer. And before that, he has experience at places like Danone, at Unilever, at Estée Lauder, and pre previous to that at RB. He comes back in to be the Chief Supply Officer for the company. As far as Kris and Adi go, Kris came into the Chief Transformation Officer role. I view that role as a landing place for talent, and he's come in there. Obviously helps us with creating the strategy, building the transformation plan. And on July 1, he transitions to be the President of Health. And with his operating skills as well as with the strategic thinking, I feel confidence he will do a great job in putting the Health business back on a growth trajectory. Adi was involved in the integration of Mead Johnson. He actually has spent a lot of time in China and helped build the ERB playbooks for us, having built the e-commerce business in China. You put all that together, he is the right person to run Nutrition ERB in China as the third leg for what we have. So -- and again, combines people who are in the business, with experience and expertise, have it on the book, for example, the CFO of the Hygiene business, who has now stepped up to be the President of the Hygiene business in RB, coupled with new hires, targeted hires, as well as a couple of people returning to RB after many years. That sort of builds this team, all of whom have an appreciation for the culture of this company and how we're going to evolve it over time. So I feel good about the progress we have made on the Executive Board. It isn't just at that level though. And if you go 1 or even 2 levels below, we're systematically looking for ways for us to elevate our internal talent, and in a very targeted way, bringing the few people from the outside who can bring experience and expertise.

Great. Thank you very much. Now going back to the subject of hygiene. You supply quite a few people to keep it under the same roof as has in nutrition. And at the time, you cited the importance of scale. And what's become very clear in this conversation is that you very much see hygiene as a base for health. What can you do in the future to ensure that the organization does well on both sides and you don't risk losing focus as was the case in the past on that side of the business?

First of all, I think the first thing we're doing is looking for ways to drive the full benefits of the scale. If you look at the operating business, the operating business is performing much better even before COVID. So if you look at the progress we've made on supply, even until February, systematically speaking, I remember a time at one of the customers, we had a problem with 46 SKUs. By February 15, we had 40 solved; and by March 6, we had all 46 taken care of; and we were in a very good shape. Of course, demand fundamentally changed after that. And we're continuing to build the capacity and scale in order to meet the demand. The underlying business is performing much better functionally. So that's one example. And I think our customer relationships have fundamentally changed, benefiting from the scale of both businesses. We see better collaboration, better execution across both businesses in many, many markets, and I feel good about that. So the first thing is, how do we derive actually the true benefits of scale? And that is something that we're doing. The other point you make is about not losing focus. I think it's very clear that when you look at what's happening in the world outside, and you do recognize that hygiene is, in fact, the foundation for health, it is going to get all the attention that it needs in order for us to ensure we maximize the value from it. If you look at some of the capacity investments, and you look at what we are doing in terms of unlocking capacity, you take a look at the lifestyle performance in the first quarter that we talked about, very significant. And I think part of it is coming from the fact that we are unafraid about investing in the hygiene part of the business, and we will continue to do so because we see great potential there. So I think that when you look at the external world, look at the opportunities and look at where growth comes from, we are looking for -- obviously for opportunities to invest across the portfolio. And that is what we are doing. So I do not expect -- also given the structure of the business, with the 3 pillars, as we talked about at the end of February, I feel good about the fact that we will not lose focus, because each of these pillars are focused, they have the team, they're responsible for the P&L, and they are driving execution.

You talked separately about unafraid to invest in hygiene. Can you maybe talk a little bit about where you see the growth pillars coming from? I mean hygiene for a long time was a business that was very developed, market-focused. How do you see that changing over the coming years?

Well, as I mentioned before, the framework we have in growth is looking at penetration, market share, new places and new spaces. And I think it's really playing itself out in hygiene. We are seeing a whole bunch of new customers coming, new consumers come into the business. So on the penetration side, we're making the right investments. We had to reduce SKUs in order to maximize supply. So we're going back in and ensuring that the portfolio, the food portfolio is well-represented. We're investing in brand equity in the Hygiene business, both from an equity standpoint, but also in a behavior change standpoint. In order to ensure there's growth, we're expanding to more category market units, like I talked about, I mean Hygiene has an opportunity. And they used to manage the business very tightly. But if you just expanded it a bit, you actually see that the underlying growth is good when it's invested behind. And that's where we are putting some of the savings from productivity that we're generating in Hygiene back into the business in order for us to grow. So there's new places that we are going into. And if do look at some of the innovations, particularly in the professional area, hygiene is central to it. So we are investing behind this business, and we know that there's a lot of play and a lot of upside, just given the portfolio of the brands. I mean we are the world's largest portfolio of surface care brands with Lysol, with Nappy San, with News in Japan. And on the health side, the health hygiene side, you have Dettol. So looking across an entire portfolio, there's investments going in, in order to maximize the opportunity as you see it now.

Great. If we could move to health, it's fair to that many of RB's issues in the past have originated there. Exacerbated obviously by previous management, focused on the integration of Mead Johnson and the implementation of RB 2.0. You are assuming medium-term growth of 4% to 6% for the division yet RB's own costs, and that of most competitors has been far from that over the last few years. Can you maybe talk a little bit about how you see underlying category growth? And how you are going to resume the outperformance of the category that you have historically had? And what do you see as the potential returns, including underperformance from some of the smaller brands in that business?

I think that the definition of health for us is different from how it might be defined in some of the other businesses. The way we have health is it has a -- so the comparability question is one to reflect on. If you look at the -- our business in health, what we have in it is the health hygiene business, Dettol, we have sexual wellbeing and we have nutrition. If you look at the underlying growth in these businesses, the Health Hygiene business is -- we feel comfortable with a mid-single-digit growth, our aspiration for that business yet again, given its developing markets for [indiscernible] as well as its presence in developed markets. If you look at the sexual wellbeing business, in recent times, there has been a challenge just because of -- I'm talking this year because of the lockdowns and the lack of -- let's just call it social connection. And as a consequence of that, Durex has had a tough start to the year. So we feel very good about the business. We feel very good about the innovation pipeline that is emerging. We have actually made some good innovations and executed them in Europe. But just given the lockdown in places like Italy or Spain, you'll see the impact of that. Now having said that, we feel good about it, and we feel that in the medium term, the business is large. We have, again, some of the best brands in the category. And we believe that a mid- to higher-end of mid-single digits is something that's clearly possible in the case of sexual wellbeing. In the case of the nutrition business, it's a broader definition, not just the infant line, so it's a broader definition of it. And given what you have in infant as well as with the expansion into adults as well as some of the wellness spaces, I think we see the opportunity for us to be at the lower end of, mid single digits growth. So I think to me, that portfolio of Health Hygiene, to the mid-single digits. Yes, sexual wellbeing sort of at the higher end of mid-single digits and nutrition being at the sort of lower end of it, sort of roughly gives you a business that is going to be growing in the range of 4% to 6% in the medium to longer term. The OTC business, of course, we see as being at the lower end of mid-single digits growth, much like I think a lot of people can see it. So that portfolio works for us across the board.

Okay. And can you maybe, while we're on the subject of your health business, talk a little bit about how you think about the vitamins and supplements business? Is that something where you have to give us the size as it is? Is that something where you foresee room and need for consolidation in the future?

I think the consumer need for wellness is strong, and it's showing up in the underlying performance of some of the categories in that space. Not all the brands are performing great, but some are. And I think we continue to look at our portfolio. We feel generally good about the broad shape of the portfolio of what we have. There are some rocket brands in that space, like UpSpring, for example, which is a very small brand that we bought, but we are now scaling up. And it's targeted at mothers who are pregnant as well as breastfeeding mothers, with the kind of supplements that we might offer them. So we're clearly expanding on the edge. But I think our portfolio is good. We've launched Neuriva as well. That came out of the science of Mead Johnson. I think what you'll continue to see us is that part of the business is more digital than most in terms of the growth. And you will see us continue to play with the portfolio we have, optimize it where appropriate, create new brands where we need to and just continue to grow in that space.

And if we look at the other side of nutrition, your IFCN or Nutrition business, as you define it, despite slower than originally expected consumption in China, you see it as an attractive business going forward. Can you maybe talk about the challenges in this business, notably in China and the smaller markets of Latin America and Southeast Asia? What you're doing there to fix the situation? And how you see you're all developing over the longer term? You've obviously done a tremendous job in the U.S. over the last 3 years based on innovation. So if you could touch on the other markets, that would be great.

Sure. As most of you know, we wrote down the value of the business at the end of February. And the reason we did it was -- is a reflection of the decline in birth rates, but also the shift in local regulation and local competition and just our perspectives and how we believe that business will continue to grow. We also mentioned then and in the first quarter results that the first half of this year for us in the infant business will reflect a transition, a transition in 2 places. A transition in the first half in China, that we've introduced a preview product, and it's slowly been built up as the consumer life cycle grows in that space, given the regulation around factories and so on, and where we actually produce the product. And think about a planned transition in Latin America of one of our dryers. So given that, we had a transition in the first half of the year for the business, and we clearly expect better performance as we go through the back half of the year. If you look at our performance ex the U.S., so just maybe just 5 seconds in the U.S. Business is performing well. IRI Pacesetters defined one of our innovations to be one of the best innovations in food and beverage recently. So we feel good about the business and how we're doing there. If you look at the Aston business, the business has strengthened executionally over the last 6 months. And I think we're beginning to see the progress in the investments as well as the execution focus that we have in that market. And the business has strengthened. In the case of Latin America, if you look at it just pre the drier transition, the planned drier transition, what you had there was -- the market shares in Mexico were increasing. And we feel good about the level of innovation, the level of connect that the brands have with their consumers. So we feel good about the progress in that business. And we're hoping in the back half of the year, therefore, that we'll continue to see the results of that improved execution. If you go to China, what's happened in China over the last few years has been -- we've actually performed fine. We've had a supply issue in 2018. We were still recovering from it in 2019. It took longer for us to recover than we thought. And the market dynamics changed quite significantly as the local players did very well with what they have in the business models that they run. What we're seeing right now is we see 2 things happen. One is our Mainland China business is doing better, and we'll talk about that over time, I'm sure. As we focused on off-line execution in stores as well as online, and what we do with e-commerce in that business has been particularly important as you think about what's happened with COVID-19 and our performance for that period. Hong Kong has been an issue in the back half of the year last year, and it continues to be an issue right now. And it will reflect a bit on our first half performance. But as we go forward, what we expect is, hopefully, with the normalization of that business and the continued stronger execution in Mainland China, as our e-commerce continues to fire and fire better, our investments in social commerce as well as continuous relationship marketing with consumers, the investments in price competitiveness and just the overall better execution of that business on innovation front, I think we feel good about the performance of the business in China and the fact that it will be a steady growth business. The business is, of course, attractive overall because of its margin structure. So overall, there's no change to what we said in the end of February about how we see this business.

We have obviously heard about a significant margin reset in the February presentation. And in the course of this conversation, you've alluded to various areas where you have spent more or where, depending on the timing of it, you intend to spend more. One being greater investment behind your brands in both areas of the business. Over the medium-term, you would expect margins to go back into the mid-20s. How do you think about ensuring the right balance that allows the business to grow, and that prevents from happening -- what happened before that margins become more critical to the way the business is being run?

So first of all, I think we generally feel good about the earnings model and the mix of what we have at the sort of highest level. And we intend all the efficiency gains that we get to be reinvested back in the business in order for us to drive growth, because growth is, in fact, where we see long-term value being created for the business. So for example, if you look at brand equity investment, we're comfortable with the shape, with the profile of it. There will be mix shifts that happen over time. We continue to see opportunities to enhance the efficiency of our brand equity spend, with new tools as well as new approaches for us to ensure that, that is being spent efficiently. And we'll expect to continue to spend in it. So I think the BEI number would be roughly in the same ballpark as what we had before even though the mix may change. And that is true across all 3 businesses. If I look at the manufacturing and supply planning, it's clearly an area of investment. What we are doing though is we clearly are finding productivity opportunities. And as I mentioned, we are at or above plan on productivity. And we're taking that, and we're reinvesting it back in manufacturing and in supply planning as well as in what we're doing with feet on the street and with customers going forward. We are not looking at new growth -- we're looking at growth opportunities, by the way, that if I looked at them in a steady state sense, the gross margin and the operating margin for this business in a steady state sense are roughly similar to what we have right now, even if in the short-term, we will need to invest. We bring capacity or depreciation or -- of that equity investment in new places that actually gets us the ability to go after new growth opportunities. But in the steady state, in the medium-term, we see them all coming back to what we think it is. There's no question for me, by the way, that the biggest driver for our value is in growth. And what we intend to do is be extremely disciplined about this and execute well. But at the same time, there's nothing out there that's going to come in the way of making us make the appropriate growth investment because we realize that's where the value of the stock is. We see no difference, by the way, therefore, I think -- we think in the next 5 years, we'll be in the 20s range on margins, but we know the growth is what drives it.

Okay. Perfect. As we're getting close to the end of our session, Laxman, one thing that investors have been very curious to hear about is now that you've been in the business for 9 months, has there anything -- has there been anything that surprised you either positively or negatively that you hadn't anticipated when you came into the job? And related to that, what is the one thing that makes you worried at night and that makes you think this could derail my medium-term plan?

Sure. I think what has surprised me positively is the fact that the can-do attitude of our employees, of our colleagues has been remarkable, and that something really played itself out in this pandemic situation. Secondly, as we've looked to rebuild some of the functional muscle, be it in sales or be it in commercial execution, we have conversations around, what if we did it this way? And somebody would say, "Gee, we actually did it that way several years ago." And then you realize there's actually a playbook, there is actually a muscle memory. There is, in fact, a gee around how it was done before. And actually, there are several things you're bringing back from many years ago that have actually stayed inside the organization, that perhaps have not been executed to that level over the last many years. And so I've been surprised by some of that, the conversations around that. Now I speak very well. The one thing that worries me, as I think it worries most leaders at this point in time, is really how the situation outside externally will influence what we do. And we have a terrific portfolio for the current environment and for the long-term environment as health and hygiene are important for consumers. And so we clearly see that in the demand that we are seeing out there. But making it happen requires agility, which this organization has, capability, which we're investing behind, as well as people in leadership. Again, great internal people as well as select external hires, all that wrapped in a purpose of protect, heal and nurture, in the relentless pursuit of a clean and healthier world, which the organization has adopted, a fight that is key, and a culture of the organization. At the heart of which is, do the right thing. It's about putting consumers and customers first. It is about being very entrepreneurial, big muscle for this organization and how entrepreneurial it is. It is about building shared success. And it's about striving for excellence and building the capabilities in order to do that. That sort of cultural adoption by the company is what will help us navigate an environment that's volatile, uncertain, but where our portfolio is very well-placed.

Great. Thank you very much, Laxman. It was very interesting, and we'll certainly be watching with great interest the next step as the organization goes down its new path. So thank you very much for joining us here, and we look forward to hearing from you in July.

Thank you, Eva. Stay safe and stay well. Take care, and thank you for the time.