The Procter & Gamble Company (PG) Earnings Call Transcript & Summary

[Audio Gap] will include a number of forward-looking statements. If you will refer to P&G's most recent 10-K, 10-Q and 8-K reports, you will see a discussion of factors that could cause the company's actual results to differ materially from these projections. Additionally, the company has posted on its Investor Relations website, www.pginvestor.com, a full reconciliation of non-GAAP and other financial measures.

As you all likely know, P&G has been a long-time supporter of CAGNY and our conference. And today, we are fortunate to have with us Chairman, President and Chief Executive Officer, Jon Moeller; Chief Financial Officer, Andre Schulten; and Senior Vice President of Investor Relations, John Chevalier. Over the past 5-plus years, perhaps no company at this conference has exemplified consistency of delivery like P&G has. In every year since 2018, P&G has been able to grow or hold share in a majority of its top 50 category/country combinations, while steadily adding to its overall global market share position, momentum that continued through this most recent quarter. At the same time, a focus on cost discipline, productivity and prudent capital allocation has yielded both balanced top and bottom line growth as well as strong free cash flow generation. And the company is by no means complacent, driving forward an integrated growth strategy that aims to empower an increasingly agile organization, relentlessly optimize performance across portfolio choices, and key capabilities in the areas of supply chain and digital competency and ultimately win superiority with consumers. To give us more perspective on P&G's accomplishments and the path ahead, I'm going to turn it over now to Andre.

Good morning, everyone. All right. I'll start today with a review of results and the dynamics on the current year, and Jon will discuss strategies, and then we'll have time to answer any questions towards the end. Starting with results. Fiscal 2023 was the fifth consecutive year with 5% or better organic sales growth for us. A strong start to fiscal 2024 with first half organic sales up more than 5%. This keeps us on track to deliver towards the top end of our 4% to 5% guidance range for the year, as market growth rates normalize in the back half. Quarter 2 marked the 22nd consecutive quarter of 4% or better organic sales growth. As expected, last quarter, we saw volume acceleration in North America and Europe Focus Markets as price/mix decelerated, continuing the transition back to a normalized top line growth with more consistent algorithm -- with more consistency with our long-term algorithm. We fully expected a normalization in underlying market growth rates, and we see that in our second quarter results as the market lapped the last wave of cost recovery pricing. For P&G, we expect the pricing contribution to top line growth to reduce by an additional 1 to 2 points in the back half of the year. We will continue to price for new innovations when warranted and to mitigate foreign exchange rate impacts or any new commodity cost increases. We have good momentum across the portfolio with 9 out of 10 categories growing organic sales in the first half of fiscal '24, and good growth across the geographic portfolio. Through the first half, organic sales in Focus Markets are up 5%, and in Enterprise Markets, 10%. Five of 7 regions are growing organic sales in the first half. Over the past 3 months, global aggregate market share is up 30 basis points with 29 of our top 50 category/country combinations holding or growing share. In the U.S., all-outlet value share was up 20 basis points versus prior year. U.S. volume share was up 50 basis points, reflecting strong volume growth. Importantly, we're driving category value growth ahead of our fair share. Value share in European Focus Markets was up 120 basis points over the past 3 months. On the bottom line, consistent earnings growth despite the highest inflationary period in 40 years over the past 2 years. This momentum continues with fiscal year-to-date core earnings per share up 16%, up 19% on a currency-neutral basis; adjusted free cash flow productivity of 96%; very strong organic sales growth with solid margin expansion, core EPS growth and strong cash conversion; strong balanced top line and bottom line growth, combined with cash. During fiscal years 2022 and 2023, we faced historically high inflation pressure, a total gross margin headwind of 820 basis points from commodities, freight and foreign exchange rates. We've offset those headwinds with a combination of productivity improvement and price increases, which lagged the inflation impact by about 6 months. The calendar year '22 and '23 benefit from productivity and pricing was 920 basis points. The strong combination of productivity and pricing has enabled us to increase our investment in innovation and demand creation to grow markets and our brands, while restoring gross margin and operating margin to pre-COVID levels and potentially higher this fiscal year. Our pipeline of productivity opportunities is fully funded, sufficient and growing. Pricing has been a neutral or positive contributor to the top line for 50 of the last 53 quarters or 19 -- 18 out of the last 19 fiscal years. We continue to invest in innovation, and we will continue to price with innovation when warranted. We expect these benefits to continue to fuel gross margin expansion, which in turn fuels investment in superior innovation, retail execution and communication to drive market growth. All-in sales growth over the 5-year period since fiscal 2019 is up 4.6% on average. The strong top line, coupled with a very strong productivity program, has enabled us to increase our investment in demand creation by 6% on average over that same period. Based on our trends this year, advertising spend will be up roughly 70 basis points versus fiscal '19 on a substantially larger sales base. Over these 5 years, we have been getting increasingly more effective and efficient in our consumer targeting, ad placement and copy quality, reinvesting savings and driving higher return on investment along the way. We'll continue to be ROI driven, optimizing reach and frequency, delivering more compelling brand messages to our consumers. Over the same 5-year period, SG&A, excluding advertising, has grown at half the rate of sales growth, about 2.4% with sales at 4.6%. We take a disciplined approach to cost [indiscernible] selling, research and overhead areas; we are investing in new capabilities to make us more productive; and we are using more digital tools to increase the speed and lower the cost of developing and delivering new innovation. A good example is the digitally enabled new molecule development in Fabric Care, which we talked about before, which is improving product formulations, increasing supply assurance and lowering costs, and all of that at increased speed and lower cost as we do this in a digitally enabled way. Over this 5-year period, total SG&A has improved by 120 basis points. This demonstrates our ability to continue to invest to drive demand in our categories and for our brands, while simultaneously and sustainably improving structural economics. We continue to make strong investments in R&D to drive superiority. We spend more on research and development in both absolute dollars and as a percentage of sales versus our peer set average. We have delivered irresistibly superior innovations that have grown markets while accelerating sales and share growth. We are leaner, faster and more effective with our research and development; focused on bigger, more meaningful innovations that grow markets. We will continue to invest to ensure our pipeline is full, not just for the next 3 to 5 years, but a decade or more from now. Strong bottom line results driven by productivity, which enable reinvestment in advertising and innovation to drive demand creation and grow categories. Reigniting underlying category volume growth in the categories we compete in is critical for balanced mid- and long-term growth, and catalysts for this growth are available to us even in the most developed markets. We have opportunities to drive incremental household penetration, identify new jobs to be done with our consumers and encourage incremental usage for better consumer experience. Moving to the cash side. We are continuing our strong record of cash returned to shareowners. We've paid a dividend for 133 consecutive years, and we have raised that dividend for 67 consecutive years. Only 7 U.S. publicly traded companies have paid a dividend more consecutive years than P&G., and only 3 U.S. companies have raised that dividend more consecutive years. Through the December quarter, we've returned over $7 billion of cash to shareowners, $4.5 billion in dividends and $2.5 billion in share repurchase. Last year, at this conference, we committed to returning to our balanced growth algorithm across the top line and the bottom line, which includes consistent margin expansion. We've done this via a combination of productivity and innovation-enabled pricing while building the overall superiority of our brands, a tailored organization across Focus and Enterprise Markets, a broad product portfolio across 10 daily use categories and a diverse yet focused geographic portfolio are key enablers of sustained balanced top and bottom line growth. We expect the environment around us to continue to be volatile and challenging from an input cost standpoint to currencies, to consumer, retailer and geopolitical dynamics. This includes continued market pressure in Greater China and softening underlying market trends in some European enterprise and Asia Pacific, Middle East, Africa countries, such as Egypt, Saudi Arabia and Turkey, following multiple rounds of pricing to offset inflation and due to heightened tension in the Middle East. Despite this volatility, we remain confident that the best path forward is to double down on the strategy that has enabled the strong results to date. And we remain committed to delivering balanced top and bottom line growth and value creation for our shareowners. With that, I'll turn it over to Jon.

Thanks, Andre. Good morning, everyone. Our team continues to execute our strategy with excellence, enabling strong results, as both Steve and Andre said, over each of the last 5 years, pre-COVID, during COVID, through a historic inflationary and pricing cycle and through geopolitical tensions. Our strategy is dynamic and sustainable to the changing needs of consumers, customers and society and is focused on growing markets, creating versus taking business, the most sustainable [indiscernible] most profitable way to grow. We believe the best path forward is to double down on this integrated strategy, which has been delivering strong balanced top and bottom line results. So this strategy is unchanged, a focused portfolio of daily use products and categories where performance drives brand choice. The portfolio is performing, delivering broad-based growth across nearly all categories and most geographies for several years. Next strategy element, ongoing commitment to an investment in, no surprise, Irresistible Superiority, through innovation across the 5 vectors of product, package, brand communication, retail execution and value holistically defined; leveraging that superiority to grow markets and our share in them to jointly create value with retail partners. The plans across the businesses are broader and stronger than any time in the recent past, as each team works to increase their margin of superiority and consumer delight. Superior innovations that are driven by deep consumer insights, communicated to consumers with more effective and efficient marketing programs. Executed in stores and online in conjunction with retailer strategies to grow categories and our brands, and price to deliver superior value across each price tier where we compete. Superior products, smooth tear Charmin Ultra Soft with scalloped edge perforations, a great example of consumer insight driving innovation to improve the end user experience. Consumer response to the new product has been overwhelmingly positive and [indiscernible] [ commendations ] in social media. Let's watch the advertisement. [Presentation]

Charmin Ultra Soft has grown organic sales double digits in the first half of fiscal 2024, with U.S. value share up 30 basis points. This innovation has contributed to the mid-single-digit market growth of both value and volume for U.S. bath tissue. Gillette's superior propositions like GilletteLabs razor with an exfoliating bar that removes dirt and debris before the blades continue to drive growth in the global Grooming category. GilletteLabs has reached shares greater than 20% in markets like Spain and France and is building momentum in the U.S. and in China. Let's watch an ad featuring dad and son TikTok stars. It's our classic father teaches son flip on its head, son teaches father in a very socially relevant manner. [Presentation]

This ad contributed to GilletteLabs growing 62% versus the pre-copy period. The global Grooming category is on track for $1 billion of retail sales growth this fiscal year with Gillette driving 2/3 of the increase, well ahead of our global share. Dawn has delivered outstanding results behind innovation that drives product and packaging superiority such as Dawn Powerwash, which we launched in the U.S. 4 years ago. If Powerwash were a stand-alone brand, it would now be the second largest in the category. We continue innovating to extend this margin of Advantage. In 2022, we launched Dawn EZ-Squeeze in the U.S. and Fairy Max in Europe, superior products with an upgraded formula across the entire lineup. Superior packaging, the no-flip, no-mess cap makes it easy and fast to use from the first squeeze to the last. Let's watch 2 ads that show how we deliver superior communication in different channels for different consumer audiences. [Presentation]

Innovations like Dawn Powerwash and Dawn EZ-Squeeze in the U.S. and Fairy Power Spray and Fairy Max in Europe are disproportionately driving market growth in hand dishwashing with value share in the U.S. approaching 67%, nearly 50% across Europe Focus Markets. Over the past 12 months, the U.S. hand dish market has grown market value high single digits and market [indiscernible] single digits, with Dawn's value share up 0.5 point and volume share up 1 point. Superior products and superior packaging with superior communication, driving market growth. Superior communication, wash hands, have dinner is the most mentioned sentence in Chinese homes. Safeguard leveraged this insight during Chinese New Year, with a long-form digital ad, helping consumers feel that no matter where they spend Chinese New Year, when they hear wash hands, have dinner, they will feel the protection of family around them. Let's watch this copy. [Presentation]

This copy resulted in our highest ever consumer engagement in China with reach of over 200 million consumers and more than 27 million earned media impressions. Over the past 12 months, P&G share in the China hand cleansing category is up 80 basis points, and our Safeguard premium body wash has grown organic sales by 40%. Next, superior retail execution. Six years ago, we acquired Native deodorants. It was a direct-to-consumer, online-only natural deodorant at a premium price point. It was an acquisition that delivered a natural deodorant offering, which our Old Spice and Secret brands didn't have. We spent time learning from Native what the brand means to consumers and the value it provided them. We learned more about their successful direct-to-consumer model. We first tested taking this digitally native brand into stores with one retailer. Our superior retail execution of strong retail partnerships enabled us to bring Native into national in-store distribution and step change value and market growth in the deodorants category, from low single digits to mid-teens. Native's price point is a significant premium to the category average, trading consumers up to Native drive significant category growth for our retail partners. Native is approaching $0.5 billion in sales and is launched into several other categories, Hair Care, body wash and body lotion. Native is leading U.S. category growth in each of its categories, driving Native's value share up 1 to 3 points in each category across all time periods. Superior retail execution and value. Hair Care Mexico has been on a decade-long journey to deliver category growth by serving the most demanding consumers with superiority across price tiers. From product innovations on the base classic products, to new premium product innovations that expand consumers' regimen, both in and out of the shower, Hair Care Mexico has driven category growth 1.5x their fair share over the past 4 years. Pantene's 3 Minute Miracle Conditioner and it's combing crème are incremental products for the consumers that want softer, shinier hair, that's easy to comb and style. Consumers are willing to pay a price premium for these benefits. Superior retail execution has grown consumption by making these product innovations more visible in-store, with premium displays and offering multiple sizes to make them more accessible to value price points. P&G is the #1 hair care company in Mexico and value share, and has grown value and volume share over the past 12 months, reaching record-high shares in shampoo in December 2023. Mexico Hair Care organic sales are growing over 25% in the first half of fiscal 2024, and value share is up 70 basis points over the past 12 months. There are many more opportunities to delight consumers and grow markets. Let's look at an example. U.S. fabric enhancers' organic sales have grown double digits on average for the past 7 years. Despite strong sustained growth, there remains significant upside potential in household penetration across all forms, liquid fabric enhancers, scent beads and dryer sheets. And once we were present in a consumer's household, significant opportunity exists in load penetration, which is illustrated by the table on the right. Growth opportunities, as you can see, exists in all categories. Another example, Baby Care. U.S. Ninjamas is driving over 40% market growth in the youth pants segment. With our more recent launches in Germany and France, the bedwetting category is growing double digits, and Ninjamas is the main contributor. Dawn Powerwash and Downy Rinse, incremental products to the dishwashing and laundry regimen that solve previously met -- unmet consumer needs. Third strategy element, productivity improvement in all of our operations to fund investments in innovation, brand building and market growth to mitigate cost and currency challenges and to expand margins and generate cash. We're reaccelerating productivity back to pre-COVID levels with an objective for gross savings and cost of goods sold [indiscernible] $1.5 billion before tax. Visibility to more savings opportunities is increasing, enabled by platform programs with global application across categories like Supply Chain 3.0. We're working in a new way with retailers on the totality of the supply chain, end-to-end versus simply trying to optimize each piece. One example using data and machine learning algorithms to optimize truck scheduling to minimize the time for drivers. We're also using AI tools to optimize fill rates and for dynamic routing and sourcing optimization. $200 million to $300 million of savings opportunity in just these areas. We have line of sight to savings from improved marketing productivity, more efficiency and greater effectiveness, avoiding excess frequency and reducing waste while increasing reach. We're taking targeted steps to reduce overhead as we digitize more of our operations. The team has delivered strong cost savings in the first half of the year, and we plan to build on this momentum. Next, constructive disruption of ourselves in our industry, a willingness to change, adapt, create new tools, technologies and capabilities that will shape the future of our industry and extend our competitive advantage. We continue to be a constructive disruptor of brand building, in-housing more of the media planning and placement activity using our proprietary tools and consumer data to increase effectiveness and efficiency of our communication. We're disrupting traditional lab-based innovation models to dramatically increase the speed and breadth of discovery. Last but not least, we designed and continue to refine an empowered, agile and accountable organization, an increasingly diverse organization, enabling us to better serve an increasingly diverse set of consumers. Strong progress across all strategic pillars with significant opportunity ahead of us, no reason to stand still as illustrated by the 4 focus areas we've outlined previously. First, Supply Chain 3.0, which is delivering productivity as talked. We're also driving improved capacity planning, greater supply agility, flexibility, data transparency, scale and resilience all the way up and down the supply chain, inclusive of our retail partners. All of this is driving higher quality, increased supply assurance and higher on-shelf availability of products and, of course, better cash and cost structures. These programs improve superiority with consumers and further strengthen what is already the top-ranked supply chain by our retail partners and third-party industry surveys. Next, environmental sustainability: superior propositions for consumers, customers and shareowners that are sustainable; driving sales and profitability while reducing the footprint of our operations; enabling consumers to reduce their footprint; and innovating to deliver cross-industry solutions for some of our most pressing challenges. A good example is the 4-chamber Ariel Platinum PODS innovation that we launched in a new cardboard package, extending our superiority advantage and product performance, while improving sustainability by enabling great wash results even in cold water, already contributing to a 2-degree Celsius reduction in wash temperatures in Europe against the 5-degree target. Also extending packaging superiority with a more attractive and more sustainable cardboard box. Let's watch this copy. [Presentation]

Superior innovation leading [indiscernible] grew organic sales high single digits in fiscal year 2023 and was up double digits in the first half of fiscal 2024. Another example, Head & Shoulders BARE, delivers superior anti-dandruff performance with the bare minimum of ingredients, 9 to be exact, in an eco bottle with 45% less plastic versus our regular bottle. Global Head & Shoulders is growing organic sales 8% fiscal year-to-date. Next focus area, digital acumen, leveraging data and digitization to delight consumers, streamline the supply chain, increase quality, drive productivity, all driving shareowner value. Andre mentioned the improvement we've delivered in ad copy qualification and media buying with proprietary digital tools we've developed and the digital molecule development work in Fabric Care. But we've built similar tools to drive faster, cheaper and better innovation in perfume, which benefits almost every product category in the company. We're also digitizing more of our back-office work processes to lower costs and drive efficiencies while delivering higher-quality output. Each of these examples has obvious cost benefits, but they're also driving product and package superiority, superior brand communication to consumers, superior retail execution in-stores and online, stronger internal controls and jobs that enable people to focus on higher order tasks with greater business impacts. [indiscernible] superior value equation for all employees, inclusive of all genders, races, ethnicities, sexual orientations, ages and abilities for all roles to ensure we continue to attract, retain and develop the best talent and are best positioned to serve all consumers. These 4 focus areas are not new or separate strategies, they simply strengthen our ability to execute the existing strategy. Our strategic choices on portfolio, superiority, productivity, constructive disruption on organization, reinforce and build on each other. We continue to believe that there's merit in doubling down on this integrated strategy, starting with a commitment to deliver irresistibly superior propositions to consumers and retail partners fueled by productivity. We remain as confident as ever in this strategy and our ability to drive market growth and to deliver balanced growth and value creation to delight consumers, customers, employees, society and shareowners. With that, we're happy to take your questions.

So Jon, can you just give us an update on your expectations for category growth going forward? Obviously, we've had a period of excess pricing in the last couple of years here and thoughts around pricing versus volume and the volume recovery we see going forward? And then maybe also just touch on the competitive environment around the world that you're seeing in terms of promotion as things normalize on a post-COVID post sort of price increase basis here.

The classic Dara Mohsenian question. We expect that, to your point, market growth rates will revert to pretty much their historical norm, which in our categories has generally been somewhere between 4% and 5%. Volumes will have to be a stronger component of that, if we expect to realize that on a sustainable basis. The good news there is we're beginning to see strong volume progress. We mentioned on the call in North America, obviously, our largest market, last 5 quarters, volume versus a year ago, minus 3% flat, plus 2%, plus 3%, plus 4%. We're also seeing good volume growth in Europe. When you look at the aggregate numbers, it's not as obvious, that's driven by China [indiscernible] partly. But generally, very strong progress. Andre mentioned our volume share progress as well, which is encouraging. So we expect that growth will continue, we expect to grow ahead of the market, and we expect to continue to work to influence the rate of market growth. In terms of promotion, we're still seeing levels, this is aggregate data, of course, of volume moved on promotion below pre-COVID levels. It's come up a little bit, but it's still meaningfully below what it was. Andre, I don't know if you have anything you want to add to that.

No. I think we're looking at 85 indices versus pre-COVID levels that are stable in the biggest markets, Europe focus and North America. We see a bit of increase in Latin America, as we mentioned, Brazil, Mexico, local competition as well as multinationals. We remain competitive, but again, our best response is Irresistible Superiority.

And as far as our own desire, we would rather invest $1 in innovation or $1 in brand building any day of the week before we invest in promotion. And why is that? Because those first 2 investments offer the potential of proprietary advantage, promotion does not. Having said that, we strive to be competitive and we'll endeavor to do that. Nik?

Jon, maybe we can just go back to the AI and specifically in terms of innovation and marketing. And so you talked about speeding up the pace of discovery. Does that -- how does that change your innovation strategy? Does that mean you'll be able to launch more products? And I know obviously, you have to manage the supply chain and complexity, but would love your thoughts on that just going forward. And then how far is PG away from being able to do customized, personalized video marketing to consumers at scale?

Clearly, the new tools -- well, first of all, I want to clarify one thing. It's very important. I don't really care about AI or blockchain or machine learning or any of that. That's not to denigrate your question. Your question is a good question. But what we care deeply about and what we've both talked about today is consumer delight, customer delight, employee delight, all done in a societally responsible way that creates value for shareowners. And if these tools can help us advance that endeavor, we will clearly embrace them. And where they don't, we need to stay away from them. Now in terms of -- I just got an important mindset given some of the conversations I've had in the hallways and at dinner, et cetera. AI is not an objective for us. Consumer, customer, employee, society, shareholder delight. The combination of new technologies is allowing significant innovation opportunities, which both speed the rate of innovation, also free up our larger parts of our innovation team further up the innovation pipeline to really work on those big ideas that Andre was talking about that drive markets. So it allows a reallocation of resources as well as more productivity for each resource that's dedicated. I'll give you one example, packaging design. Sounds simple but has been one of our thorniest, most difficult jobs. And part of that is simply that we have manufacturing lines across the world that are differently configured and do relatively better or worse jobs at running variations in, for example, bottle sizes. Also, our retail partner shelves are different across the world and within a market, and they're changing all the time. So the old process required us to test a change that a package designer wanted to make across each of those manufacturing platforms to make sure it could run and across each of the existing retail shelving configurations. And now that's all digitized. I was just out in the labs 2 weeks ago where they were showing me this. That takes the design time line down from something like 18 months to something that's much shorter than that, and again offers the opportunity not just for more productivity but reallocation of resources. I'm going to leave it there so I can give others a chance to ask a question. But we can catch up on the second one in the hallway. [ Catherine ]?

My question relates to breaking free from societal constraints and pursuing one stream despite gender and the Board's role in succession planning. So on your website, it says, "For more than 185 years, we've challenged the norm and inspired the future." On the one hand, P&G's Board has made extraordinary efforts to diversify its Board and leading relative to many peers. Yet on the other hand, despite all the Tide laundry completion and pamper -- diaper changes, we've never seen a female CEO. Why is that?

That's a question for the Board. I expect that someday, you will. I'd be very surprised if you wouldn't. But just generally on this topic, it is very important and fundamental to our company, and it has everything to do with serving and delighting consumers. Last February, we just crossed a very important milestone. It's no reason to stop the work. But we now have more than 50% of our roles -- our manager roles across the world staffed by women, which is huge in my mind, not because of the numbers, and we can turn some box on a chart from yellow to green, but because a disproportionate number of our consumers are women. And we're better positioned to serve them and win when we have the representation that we want. I'll give you another example of why this is important. How do we sustain superiority without some degree of superior talent? I just don't know how that's possible. It runs against a lot of physics. So we need to attract, retain and develop better talent than our competitors, the best talent in the world. And how can you do that without a superior employee value proposition? And how do you have a superior value proposition for all employees that doesn't include equality? There has to be something in it for everyone. So we are -- we continue to be very committed. I know that the Board as well. I know Andre and John are. And hopefully, we can continue to make progress primarily -- and if we could change this dialogue, [ Catherine ] from, if you will, social justice to winning. I think it's such a more powerful proposition because it doesn't allow anybody to opt out. In the current construct, I can say, well, that's not something that I care about. That's not something that I historically contributed to, whatever. Once we hand it on no, no, no, this is fundamental to winning. You don't care about that. I've got a door to show you, right? So I think we're really making significant progress both in terms of representation, our thinking on the importance of this is linked to winning for the business. We're increasingly serving a more and more diverse group of consumers. 100% of the growth in North America is going to be multicultural consumers in the next decade. We need to position ourselves from an empathy standpoint, from an understanding standpoint, from an effectiveness standpoint to win with each of them. Yes, Andrea?

You mentioned like you're getting this product on the margin, and you've been amazing at innovating in value-accretive categories and creating growth to the categories. Are you seeing -- and I think the margin that we all [ need is one ] probably appreciate the margin progression that it had and understand that you have a lot more FX pressures coming your way. But if you were to think about how the negotiations with your retailers have come through fruition, is there any pressure as part of like the promotional trends coming back? Is there any pressure to give back some of these? Or that is not something that...

Well, that's always part of the discussion, but it's not a very predominant part of the discussion. By far, the most predominant part of the discussion is, what can we do working together to increase market size? I had a conversation with one of our retail partners 2 or 3 years ago. And I was visiting them with a couple of other manufacturer CEOs, and they were talking about market share, market share, market share. I finally got frustrated and stood up and said, "The truth is, I don't care about your market share. And the truth is, you don't care about my market share. Let's just be honest with each other. What benefits us both is market growth." Now you can't just have that conversation and expect the world to change, you have to deliver against it. And I've just given you a number of examples where we've successfully done that. If we can continue to do that on more category/country combinations, unless that's going to be the conversation. One more here.

Chris Carey, Wells Fargo. So a consistent message today around the focus portfolio, daily use performance drives brand choice, also a consistent message around Irresistible Superiority. One of the themes we've heard this week at CAGNY from some of your larger multinational peers is just the substantial growth that remains in international and emerging markets. I wonder if you canvass the world, where you see those types of opportunities as sort of like the most tangible form. Where are those international opportunities nearest to you? And just in general, how would you characterize this per capita trade-up opportunity in global markets, again, on the deals we've heard from some of your larger peers this week?

Well, as Andre shared with you earlier this morning, what we call our Enterprise Markets, which are essentially the non-North America, non-Europe, non-Northeast Asia are growing -- have been growing and continue to grow at very good, strong rates, roughly 1/3 to twice as high as the Focus Markets. But we can't get trapped in growth rates and percentages. We need to be focused on where the dollars are, right? So this is always a struggle internally on smaller brands, for example. Yes, I can grow this brand at 20%, and I can only grow Tide 10%. Yes, but what's the value of Tide growth of 10% worth. It's huge. And so while there are international opportunities, the biggest opportunities in absolute terms are right outside this building and increasingly in Europe. And I think we can do it all. We need to be disciplined. You've seen us make some disciplined portfolio choices in terms of our presence or our business model in Argentina, in Nigeria, previously in Venezuela. But there are more opportunities than problems, and that's true across Focus Markets and Enterprise Markets. But thanks for your question.

I think with that, we will move over to the breakout room. Please join me in thanking P&G for their longstanding support of our conference.