Unilever PLC (UL) Earnings Call Transcript & Summary

Good afternoon, everyone. Welcome to the first Capital Markets Day of The Magnum Ice Cream Company. Welcome to those of you on the webcast, and welcome to everyone here in the room. It's great to see such an amazing turnout despite the problems with YouTube this morning. I'm Michèle Negen. I'm the Head of Investor Relations here at Magnum Ice Cream Company. And today, I'll be your moderator. So before I introduce you to today's speakers, let's have a look at the process. Because we're already 18 months into our journey towards becoming a stand-alone listed company, we started the demerger track in March of 2024. And since the 1st of July of this year, we are operating as a stand-alone company within Unilever. At the end of June, we hosted a sell-side analyst visit to Turkey, and it's really great to see so many of you here again with us in the room. We are well on track and the demerger, and the listing process are scheduled for mid-November of this year. I'm really excited to be here today with the full leadership team. We'll have multiple members presenting today. Shortly, I will be joined on stage by Peter, our CEO; Abhijit, our CFO; and Ronald, our CHRO. We will have videos by Julien, our Chief Creative Officer; by Toloy, our President of METSA; and by Sandeep, our Chief Supply Chain Officer. Later on, Gerardo will present on our Americas market. Mustafa will discuss our European market. And last but not least, Wai-Fung will come on stage to show and talk about our Asian region. So let's talk about the program for today. In a few minutes, Peter will come on stage and give you an introduction to The Magnum Ice Cream Company. He will talk about how the ice cream market is large, growing and resilient. He will introduce you to our strategy and how we, as the largest ice cream company in the world, with a heritage of over 160 years, have a portfolio that is well-positioned for growth. We have great brands, leading capabilities and world-class innovations. We will have several videos today showcasing these capabilities and innovations. We will present to you our supply chain management and highlight our away-from-home capabilities and playbook. We'll finish this first part of the day with Ronald taking the stage and talking about people and culture. He will highlight our revamped frontline first organization. Around 2:15, we will pause for a short break. We will invite everyone here in the room to taste and experience more of our amazing products in the [ brand court ] outside of the plenary room. For the webcast, we will go on silent for a little bit. After the break, we will dive into the regions. And as I said, Mustafa, Gerardo and Wai-Fung will present to you the different markets in which we operate in America, Asia and Europe. They will show you how we execute in each specific market on our strategy but also highlight the regional differences. Around 3:30, we will have another break, after which Abhijit will reconvene and get on the stage to present to you our financials and the medium-term outlook. He will show you how our strategic plan is already delivering results. After that, Peter will once more come on stage. We expect to end around 5:15 to wrap up for the day. But before that, because I forget, we will, of course, have another Q&A session where you can ask questions all about the financials because in the end, that's why you're here, right? So I kindly want to ask you to switch off your phones for now. And I do have to reference the safe harbor statement at the end of the presentation. But I think with that, having you all here, it's time to get started. And it's with great excitement that I give the floor to Peter.

Thank you. It's pretty amazing that you're all here. Some of you I have met at different phases of my life and of course, during the recent outreach. We really appreciate it. As you can imagine, it's an important moment for my team, the company and myself. My name is Peter ter Kulve. I've worked in consumer goods for a long time. I have worked on most continents in many different categories. But I want to highlight 3 experiences that are actually quite relevant for The Magnum Ice Cream Company. First, I built a wellness and supplement business in the U.S. Why is this interesting? Because it's a digital-first business, and there's a lot of knowledge on functional foods, which I believe is interesting also for us. Then I had privilege to lead our huge Home Care business that had a margin problem, sounds familiar. And we got the growth going on the back of some really cool innovation like Wonder Wash and Infinity Clean (sic) [ Infinite Clean ]. And when you don't use that yet, the probiotic product, you should. And last but not least, I was Chief Technology and Transformation Officer in Unilever. To some of you, I presented in Mumbai, Unilever's tech strategy. When you set up a new company, like we do, on a piece of white paper, having a deep understanding of technology and how you need it and how you can apply it in the business is important. But we're here for ice cream. And ice cream is a super interesting category, even for those of you who have kids, it's always cool to say, "I go to an ice cream meeting." Everybody always loves it. But why I got really excited because you don't often get presented an asset that is fundamentally good, good market, good brands, good channel positions, but the business is not doing well. It is below potential, both on profitability as well as growth. And that excited me. It was my inner activist. But before -- we go into the algos, the strategy and all the good stuff, I first want to get you in the mood of ice cream. Can I see the first video? [Presentation]

Around the world, everybody loves ice cream. It's actually pretty amazing, whether I'm in Pakistan or whether you're in Brazil or whether you're in Finland, young, old, rich, poor, everybody loves ice cream. Interestingly, people cannot always explain why. And therefore, we conducted a very serious piece of brain research to find an explanation because that's interesting for our marketing programs. Can I see the video? [Presentation]

So these memory structures are actually really relevant because they make -- a lot of products your parents grew up with, your grandparents grew up with, and to activate those brands because they're so well rooted is, not very expensive. But even more importantly, ice cream is a very competitive product category versus other snacks. And I will say more about that later. But now shifting gear because we are not only here for ice cream. What are the key investment highlights? First, the market is large. It's growing consistently. It's resilient and has attractive returns. Secondly, we are the largest ice cream company in the world with over 160 years of expertise heritage. Our portfolio is well balanced with strong brands, leading capabilities, good channel positions, good geographic positions, and it sets us up for superior growth. We have a clear strategy to unlock this growth, but especially a real detailed plan to unlock productivity. We've revamped the full organization with -- and built a winning culture and an incentive system aligned to the midterm goals. Let me unpack this, and I will start with the market. The market is large, EUR 75 million (sic) [ EUR 75 billion ]. It's part of the broader snacking market, which is sort of EUR 500 billion. Why is it part of? Because the core demand drivers are actually the same. People choose what snack they want to take when they enter the outlet. And snacking has very good returns, ahead of the normal consumer goods market. We did a lot of research on what is now actually market growth, and there are different numbers out there. We looked at all the different models but actually combine that with our very granular market-by-market knowledge and could take high inflation countries and so out. And we believe that the market is growing sort of 3% to 4%, half in volume, half in value year in, year out for a very long period. And what is driving those fundamentals is a snacking occasions. There are countries with lots of ice cream occasions, and there are countries with few ice cream occasions. And as an industry, we build those consumption moments. Then there is availability. There are countries with low availability, countries with high availability. There is a direct correlation. And last but not least, premiumization. And premium not only means more indulgent but can also mean more healthy. Some stats. When you look at these occasions, and we did a very deep occasion study in all the big countries where we are present. In countries with a high consumption, you tend to have lots of ice cream consumption. America is a country where there is ice cream all the time, there's even ice cream in your soda. But there are also countries where there are hardly any ice cream occasions, and it is directly correlated with the size of the market. Then, distribution, actually is a little bit of a no-brainer. When you can't buy it, you probably won't sell it, you won't use it. And there is a huge difference in the sort of distribution depth between countries. And for us, very interestingly and also to be expected in many emerging markets, ice cream distribution is far off where we believe it should be. There's a big upside potential. And then the premium part of the market grows faster than the value and the mainstream part. Everything is growing, value, mainstream, approximately 3%, but 5% growth in premium. Interestingly, when you look at the channel structure, there is basically grocery sales and there is away-from-home sales and there is e-com. The big growth-driving channel is e-com. And this is, of course, also logic. It's especially fast commerce and the delivery -- food delivery services because all of a sudden, you bring an impulse product as ice cream on thumb's reach of desire. And the digital channel grows almost 10% a year and historically has been growing even faster. And when you look at the market competitively, there are 2 global players. There's, of course, The Magnum Ice Cream Company and Froneri. We have a larger share at 21%. And then you have smaller players, all below sort of 4%, 5%, and you have some real regional players like Amul is strong in India, Yili is strong in China. But it's basically a concentrated market. Now many industries that you study get disrupted by new companies who come up with some amazing benefit. They scale it to EUR 1 billion, like Liquid I.V., like Unilever has done with Liquid I.V. You don't see that in ice cream because it's very easy to start an ice cream company and be the king of your village or the king of your neighborhood. But to scale it, you actually need expensive factory, skilled factory, you need expensive distribution. And what you see is that people get to sort of EUR 60 million, EUR 70 million, and then they start to stop growing, or they sell out, or they sometimes invest too much and go bankrupt. But it's a very concentrated industry for a reason. Then I often get the question, like, ice cream, "Can I eat all this ice cream?" It's actually quite interesting that the caloric profile of ice cream is very different from its competing snacks, chocolate, potato chips, even rich cookies. They tend to be 400 to 600 cal per 100 gram. A very loaded Ben & Jerry's or Magnum is around 350, 300, and we go to water ice cream, 230. This choice is, of course, fantastic. But in the current discussion of GLP-1 and nutrition, it's even more relevant. I know that there are question on GLP-1 and the impact and the long-term impact on our industry. Let me first say, it's a field in development. The drugs are in development. There's a lot of innovation, application, usage, benefits, problems, but we luckily have real data. Penetration in Europe and the U.K. is still very low, but in the U.S., we have sort of 6% of the people on the drug. And what do we see? A, people tend to consume, and we discussed this not only internally and with our scientists, but especially also with our customers because as you can imagine, our customers are super interested in this space. So what do we see? People on the drug consume less volume. especially less munching volume. Ice cream is slightly less impacted because we are more special occasions. There is a lot of choice in ice cream, low cal to high cal. And what we see is that for every 12% of penetration, on the modeling in the U.S., on the data that we have, we sort of -- the market sort of loses 0.5% of volume. But there are also opportunities. I think a no-regret move, you would probably all agree with me, is portion control, and we do that big time in the Magnum Bonbon. My wife and I don't want to eat a Magnum every evening, but a Bonbon in front of Yellowstone or MobLand is actually not that bad. So portion control works for everyone. Then, protein. A couple of years ago, we bought Yasso, and Yasso has actually been a really good acquisition. It has grown more than 20% a year for the last 5 years. And of course, the whole GLP-1 and the protein range helps. But we also have Breyers Carb Smart, a high-protein proposition that we developed ourselves and is delivering for a long time. Then there's a lot we can do on the nutritional profile of ice cream. Over the years, we got 21,000 tons of sugar out of our formulation. And increasingly, we apply technology to take more sugar out because in ice cream, sugar is not only flavor; it's also a structuring agent, and there are new opportunities popping up, especially applying modern biotech science. And then last but not least, it's evolving. Nobody really knows what's happening. And together with our customers, we are fully on top of every research, publication, every tent and every piece of data because the reality is we need to be quick on our feet. But the immediate impact even when penetration levels would double is actually not that high. It doesn't mean it's not important, but we stay on top of it. So switching gear from the market to the company. This is a very beautiful photo. It's the Wall's store. Wall's was a sausage maker that ultimately got bought by Unilever. And in 1922, they diversified into ice cream. No, we are not going to diversify into sausages. Don't you worry. We have no plans in that space. But this business has a lot of heritage and experience. I find it really humbling to think that in 1866, Breyers was founded in Philadelphia in the state. You know how many generations have been enjoying the purity pledge of Mr. Breyers? Wall's, '22; Popsicle, born in California, '23; the [ $0.05 ] Duo-Stick product. We ourselves launched Cornetto. We bought businesses. We launched Magnum. More recently, we bought Yasso. A long heritage. But more importantly, I think this is one of the things where you really have to admire Unilever. They helped us to build an unbelievable portfolio of brands around the world. We are #1. We are almost EUR 8 billion business, EUR 1.3 billion EBITDA. We have a 21% global market share. We are the #1 in away-from-home with 3 million cabinets, which de facto is 4 million square meters of prime real estate. And 4 out of the 5 largest brands in the industry are ours. You'll say, "Okay. You're #1, so what?" Of course, its scale, there is moat in scale, but there is also an enormous moat in these cabinets, in these brands, in basically, our global infrastructure. Very, very difficult to replicate. This is not an easy supplement businesses where with all kinds of third parties, you can do that. You really need the assets, and we have them. We're #1. Then we're #1 in all regions. We're #1 in the Americas. We have also great regional brands like Breyers, like Talenti, like Yasso, Klondike, what would you do for a Klondike Bar? 90% market share, EUR 3 billion business -- Europe, EUR 3 billion business. In ANZ, we have the famous brand, Golden Gaytime. We have Carte D'Or, we have Twister. And we have EUR 2 million (sic) [ EUR 2 billion ] in the fast-growing AMEA region. There is an extra message here that this is a hard currency business. 70% of our turnover is hard currency. But Turkey, we de facto run as a dollar business. So in reality, 80% of our turnover is hard currency, and that pleases us a lot because it gives a lot of robustness to the business. Then we have this global leadership. Ultimately, in an industry like ours, it's often about local leadership. We have local leadership in most markets. How often do you find a business like this, honestly? We are #2 in China. I worked for 5 years in China. We were #5. Over the years, we have become #2. China is a super competitive company -- country. We overtook Mengniu. We have Yili really ahead of us. So I asked Wai-Fung a difficult question, "How long it's going to take?" They're quite a lot bigger. So it will take some while. And we have Amul in India, a dairy cooperative who is the #1 in India, but we're also making really good progress now in our Indian business. Our footprint, the market is sort of 35% emerging market, 65% developed markets. The Magnum Ice Cream Company sort of reflects that. We're a little bit larger in the developed markets. Our largest competitor have a different footprint. So we are actually well-positioned to outperform the industry on growth. Then, we were a very brand-oriented business. We were not always a very customer-oriented business, but we still have a very good position. We are category captain with most large retailers in the world and especially in the... [Technical Difficulty] Is there a mic? I'm back. So especially in the United States, category captain really matters because you help shape portfolio, promotional schedules, et cetera. Also in Europe, large category captainship. I already told you, we have doubled the amount of cabinets than our nearby competitor, also an enormous moat. And then very proudly, over the last couple of years, we developed ice cream in e-commerce, and we are category captain with all large e-commerce players. I meet the leaders. I have my business reviews with Tony Xu of DoorDash. We work with the Chinese players, Indian players. And ice cream at a thumb's length of desire is really, really important, and we know how to play this space. You will hear a little bit more later. Then we have these really huge global brands, like Wall's, Langnese, Algida, however they are called, Heluxue in China. We have Nectar, which we built to EUR 2 billion. We have Ben & Jerry's, over EUR 1 billion. We have Cornetto, almost EUR 1 billion. And then we have licensed brands, licensed brands with confectionery players, but also with entertainment companies, like Disney. We have brands that are still local and are ready for international expansion. And we have real local brands. And these real local brands are really important because these are the brands deeply rooted in all these memory structures. They're affordable to activate, and they give us scale and depth in all markets where we operate. And for all the Dutch here, the Rocket, my favorite ice cream, is our cheapest water ice cream. It's absolutely delicious. I don't know why I believe it's delicious, but it's my ice cream. In pieces, it's the largest ice cream in the country. And recently, the city of Amsterdam celebrated its 750th birthday. What they asked, "Can you make an Amsterdam 750 Rocket?" And we did. But also Klondike, "What would you do for Klondike Bar?" or "Grom in Italy? Amazing portfolio. And we own our brands. And why is owning your brands important? Because we actually built them, and we invest our money in advertising instead of license fees. I also, not every 5 years, have a scary discussion, "Will I keep my license fee because somebody else is bidding on them?" or "Will I keep it all with a change of ownership clause? Will I lose it when I sell the company?" We like owning and building our own brands. I already said the market is premiumizing. We have a really premium portfolio. 77% of our portfolio is premium, and we are still growing that. And I will explain later that we actually do the whole price pyramid, but premium brands is really our strength. And this is underpinned by a very strong R&D capability. Making ice cream -- you can make it in the kitchen. And when you eat it immediately, it's actually delicious. We do it at home. But making ice cream is actually really tough. You need to control the base, making sure that microstructure is good, a lot of science, the blending, the forming, a lot of ice creams are very complex. assembly, an ice cream factory, some of you have seen it. There's a lot of robotics in an ice cream factory. It is an assembled products, packaging systems, selling systems, increasingly digitizing, I will say a little bit later, and Toloy will show you some stuff. We have lots of patents, research agreements, design registrations and trade secrets like the Magnum Chocolate. We have an unbelievable footprint. This is a food product. Safety is super important. And I'm very proud that we can make quality safe ice cream around the whole world. Our factory in Pakistan is as good as our factory in Sweden. Our factory in Pakistan is as good as our factory in Sweden. That requires an enormous system to get that to a level. We have 36 factories. We have 210 warehouses around the world, 2,000 distributors in every main market, development capability and a state-of-the-art research center in Colworth between Oxford and Cambridge. And we're the only one with a serious research capability in ice cream. So we have a growth advantage portfolio. We have world-class premium brands. They grow faster than normal brands. We have a footprint in emerging markets. They grow faster than the rest of the world. And we have a fantastic growth advantage channel footprint. And now the big question for you all this is, "Why did you need a focused stand-alone ice cream company when everything is so great?" It's the key question. I often get asked that question. We believe that -- and Unilever believes, Fernando believes, and Jemma is sitting here, she believes, that actually a more focused Unilever is good for Unilever. For us, this has been such an unbelievable game changer. I worked in Ice Cream when I was very young with lots of hair, when Ice Cream was run as a stand-alone business owned by Unilever. I run with an integrated business, and now I'm running a stand-alone business again. The freedom to set your own strategy. In our case, stepping up growth, unlocking profitability, to resource allocation: "Where do you put your people? Which people do you want to have? What type of capabilities? Where do you put -- how much do you invest and where?" and an operating model. That is not an operating model made to do lipstick, home care, [ Hellmann’'s ] and ice cream, but an operating model only for ice cream and with people who wake up and go to bed only thinking about ice cream. Think about it. When you have -- when you -- imagine you're a Unilever salesperson, you have all these categories. And now all of a sudden, you only think about ice cream. So to unpack that a little bit because it's a big question, where do we see the benefits? Because we're now 1.5 years in, dedicated sales force, dedicated sales force, only ice cream, real expertise. Also the customers love this because they need people to help drive the category. We can reinvest again in out-of-home, in away-from-home system. We basically set up a supply chain that works for a frozen relatively low-margin product, where actually logistic costs are as high as manufacturing costs. With an investment algorithm, and Abhijit will take you through, that is aligned with the snacking industry and this business. And with people who are rewarded and solely rewarded, like myself, for making a success out of ice cream. And we can integrate it now, integrate all the functions only around ice cream. You knew that it was not working. Now market share have been in a decline stable for a 10-year period. Profitability was flat for a 10-year period. But I will take you through the strategy a little bit later. The new focus is starting to work. Last year was the first year we stepped up market share, volume, profit. And as you know, it has continued to improve in the first half of this year. And you'll say, "I was living in the U.K., it was very hot." Guys, I look at market share. And I can explain you the weather, but the U.K. weather, unfortunately, was not everywhere. Otherwise, I would really have had a problem for next year. So the performance step-up is really happening. So what's now the strategy that unlocks this profitability and this growth. Basically, we believe in the magical powers of ice cream. It's truly a transformational product, and we believe that life tastes better with ice cream. As a global market leader, our job is to grow the market. This is what our customers expect. This is where we hold ourselves to account. Also, when you grow the market, you tend to take most share, but the objective is not share. It's actually growing the market. We have a growth strategy, a productivity strategy, a reinvestment strategy underpinned by a tech strategy. It's really interesting. When you set up a new company like we did, you can apply new technology. As Chief Technology Officer, and you will know that from your own businesses, the biggest challenge is actually not the technology, but it's actually getting people to work with the new technology. We need to learn full stop new. So this is a fantastic moment to apply on the new processes immediately the new technology, a focused ESG agenda and a new culture, the ice-cream way. And Ronald will unpack that after me. So what is the growth model? First, we build occasions with innovation. You price yourself competitively in the broader snacking market because we are not alone. So certainly, we roll out our international premium brands. It's a proven way for us to premiumize the market. We move to a digital, dynamic demand creation system. Later, Julien will unpack this. And we are very focused on driving availability. That is share of shelf, share of promo and of course, also share in away-from-home. So at a high level, how does our marketing model work? We look at the macro trends in snacking, whether that is comfort, indulgence, chocolate, cookies, but also in control and wellness: protein, zero everything, energy, hydration and all the celebration products, the release products. And we take those big trends, and apply it to our occasion-led market development model, where we are very specific on the who, where, when, why question. And we have mapped this for all markets around the world. And then when we know who to target, where to target, when to target, we develop a marketing mix to unlock that occasion, okay? I'll get back to that and explain it a little bit more. So we were always big in sort of indulgence, chocolate, cream, cookies, but we actually look at the snacking and refreshment market, and you know that because this is your job, you do that every day. Where is the mega growth? Where has it been? Protein? Probiotics? Zero sugar? Hydration? Energy? And where did you see that in the ice cream market? Where did you see all these benefits. [ Subzero ]. So what do we do? You find an occasion. So we mapped all these occasions around the world. And then we say, "Okay. Ramadan is an ice cream moment. Christmas is an ice cream moment. 4th of July is an ice cream moment. Easter is an ice cream moment. But Diwali in India has not yet an ice cream moment." And then we say, "Okay. How can we unlock Diwali in India for ice cream? Do we need special products? Do we do promotions with retailers? Do we have a special Diwali festival of light ad?" And you build that over time, and you create an ice cream moment. Ramadan did not used to be an ice cream moment 15 years ago. Now it is in all the Muslim countries, an ice cream peak period. Movie night on the beach for us, very normal. Pakistanis don't eat ice cream on the beach. Crazy. They should eat ice cream on the beach. Italians do. We learned the Turkish too eat ice cream on the beach. So how do we do that in Pakistan? Then pricing. So how we go about pricing is that we map at coinage level, all the snacks in the country, from very cheap to sort of a little bit more expensive, to very expensive. Then we say, "Where is the bulk in the market, volume and value?" And then we say, "Okay. When this is how people consume snacks, how do we put an ice cream portfolio against it, at the right price points?" And then you try to create ice creams that are competitive in that space. We export -- so from the occasion, a lot of work on premiumization and driving the premium brands, it works. Ben & Jerry's, Cornetto, Magnum have grown ahead of category and ahead of our own growth for many, many years. And there are other products we can do that with. Twister is a premium water ice. It's a combination of sort of dairy and sorbet. We're now bringing it to the rest of the world, with the same success as we are driving Magnum over to the rest of the world. Lots of work on innovation. I think -- I'm an innovation guy. I always love this. That's why I love the supplement space. We need to get out of flavor renovation. Flavor renovations are very important because it activates the category. My first job was in an ice cream parlor when I was 12. And people would ask, "Pete, what's new?" And I said, "Okay. We have this and this and this and this." "Yes, give me a chocolate and vanilla." It still goes like that, but you need to have the new because otherwise, you're just a boring company. So -- but formats like the bonbons or bringing Magnum from the stick, into the cone, in the pint, in the bites, stretching the brand. Yasso, famous for its sticks, next year also in a pint, high protein, very low cal, delicious products. Really new experiments, like Hydro:ICE, you can taste it here, which is sort of attempt to create a sort of liquid ice in an ice cream format, bringing Ben & Jerry's from pints to other formats. And the Ice Balls in Thailand. I've tasted them, they're great as [indiscernible] you want to know more. But before I close the bucket of marketing, I would like to hand over to Julien, who is our CMO, long history in marketing, Unilever, but also a long history in L'Oreal. And he will explain you a little bit how do we do marketing in the ice cream company. Julien, over to you. [Presentation]

You caught me in the act. I always crave for something sweet at 2:00. On that topic, did you know that more than 75% of adult snack daily and over half of us snack at least twice a day? If we can identify the right occasion where we can be relevant to our consumers, we can generate more demand. More on that in a second, but first, let's give you a quick tour of the world ice cream. We are the largest ice cream company in the world, made up of iconic brands with a rich heritage: Magnum, Cornetto, Ben & Jerry's, Breyers, Viennetta and more. We live in most of the markets we operate in, and we are not stopping there. As a global leader in ice cream, we grow by expanding the markets, our brands, product range and innovation funnel caters to a wide array of consumer needs. Our brands are loved. And in 12 months, they'll be even bigger because we are transforming the way we market: faster, smarter, always-on. We've built a marketing model made for today's world: social-first, AI-powered, data-driven. Today, the brands that win aren't just seen. They shape culture. And we've learned, people engage most with brands that feel like part of their world, from viral moments, to everyday rituals. This is what we call culture that converts. It's how we generate demand, always relevant, always driving sales because people don't think in campaigns, they think in moments, a late-night treat, an indulgence after-lunch, a birthday surprise. With collective intelligence, we understand the when, the where and why behind each craving. So that we turn occasions into demand and demand into conversion. Take out Magnum Mini Bonbon, launched across 12 markets. They tapped straight into the snacking trend and helped us exceed our volume targets by over 40%. According to Nielsen, in '25, every EUR 9 out of EUR 10 of ice cream bite-size segments growth came from Magnum Bonbons. Or look at how we tapped into the birthday occasions in the Philippines, a simple idea, made powerful through flavors, consistent communications and strong trade execution. The result? A 15% volume increase and 13% contribution to total ice cream sales in the market. We are constantly creating magic with flavor. From global hits, like the Dubai-style chocolate and cherry gianduja, to local agents like Magnum Chili in Mexico. Ice cream that taps into culture and taste, driving more than 70% growth versus target and more than 60 million views on TikTok. Behind these successes is a market-making innovation engine. We hold more than 1,000 patents, more than 125 register designs, more than 150 research agreements and more than 70 trade secrets. From microstructure control to precision assembly, to multi-sensorial formats. Our innovation cover every angle: best-in-class ingredients, culinary craftmanship, breakthrough formats and groundbreaking packaging. Our innovation system doesn't just drive growth; it redefines the category. We are pioneers in packaging, both for the consumer experience and for the planet. From Magnum Crack pints, to Cornetto cones, to Calippo tubes or Talenti jars that speak for themselves. We are creating packaging that drives visibility, unlocks occasions and builds rituals. And we're making it sustainable, eliminating over 6,000 tonnes of virgin plastics from our ecosystem. And we're not just innovating the product, we are building the future of marketing with AI and technology. This is our Dynamic Demand Generation System, an AI-powered engine that enables end-to-end marketing execution: real-time insights, GenAI creative asset generation, smart media plans, dynamic optimization and social commerce that connects content to conversion. For marketers, that means faster decisions and better outcomes. For consumers, it means relevant, culturally connected content. And for the business, it means higher return on investment, at scale. We are scaling this approach across our brands and markets, globally and locally. This is the future of marketing at The Magnum Ice Cream Company, where data fuels insight, creativity is enhanced by AI and culture drives conversion. And this is just the beginning.

You make everything sound better with a French accent. You have to deal with my [ Denglisch ]. We were always a good marketing company. I think we're stepping up. We are actually stepping in the digital age. We are sort of building up the marketing systems that I'm used to in Nutrafol and [indiscernible], and all these, Liquid I.V., way more, way more, way more digital. But actually, the big step-up for us as a business. So marketing, we can do better. But what we could really do better was sales. In in-home, we built a focused organization, people that only do ice cream. We added 1,000 sales reps. Our overheads, by the way, still go down. We built up a strong net revenue management capability and have way better discussions with our retail partners on their category development plans. In digital commerce, which we were leading, I think the Chinese now really know how to do all these TikTok stores, and we are rolling this out to the rest of the world. EQSR, there's still a lot of opportunities, and we can invest consistently year in, year out and do it as the first investment. In away-from-home, we start reinvesting in our cabinets but especially build a very strong digital ecosystem around them. And for that, I will hand over to Toloy in a video. [Presentation]

Right here at this exact moment is where the magic happens. Away-from-home is not just a channel; it's a retail network that we own and one of our biggest assets. Today, it makes up around 40% of our global ice cream turnover, with 3 million cabinets in more than 50 countries, operating 4 million square meters of prime branded retail space. The away-from-home business is different. It has faster consumption cycles and stronger brand visibility at point of sale, and it delivers higher margins. It's a consumer touch point, a brand builder and a value engine, a massive commercial machine which we haven't utilized to its full potential. Previously, cabinets fleet declined, and productivity dropped and a powerful competitive asset was underutilized. Now we are investing to reverse the lost sales from cabinet fleet decline and reduction in productivity, to ensure away-from-home returns to its full potential as a powerful competitive asset. As part of our new focused strategy, we have prioritized our away-from-home business as one of our key pillars to drive growth. What does this mean? It means we are now making the necessary investments to modernize and digitize our fleet, to boost productivity, to increase profit per square meter and to lower our emissions. In 2024 and '25, we are already seeing encouraging results, and it's just the beginning. Optimizing away-from-home sales starts with 1 big question, what are the right locations for the ice cream cabinets? And answer starts with data. We use geolocation and telecom data to pinpoint high-traffic areas then layering demographic and behavioral signals to understand who is walking by and what they are likely to buy. This helps us match the right location with the right portfolio. Whether it is a night club, a beach kiosk, a beauty store or a metro station, we tailor the mix, the right product at the right price for the right occasion. Next comes to execution. We install the cabinet, brand the space and stock it to sell. From that point, it's about smart replenishment. The system restock levels, analyses consumption and proposes the next order in seconds. In fact, once we place our cabinets, it becomes a locked in replenishment machine with low effort and high returns. That's how we make it easy to sell every day, in every store. And finally, the maintenance. With a digitized fleet, we manage maintenance proactively, fixing issues before they appear, extending lifetime and maximizing uptime. And this is not just smarter. It's also much cleaner. Our new cabinets have smarter components, high efficiency compressors, better insulation and lower energy consumption. Since 2008, we have improved cabinet energy efficiency by 35%. This is how we grow the fleet sustainably. And this system works. Turkey is one of the proof points that are away-from-home system is successful. We have rebuilt the full model, data-led cabinet placement, tailored portfolios, predictive replenishment and productive maintenance. Today, Turkey is our second largest global business with nearly 70% of total sales-from-away from home, delivering consistent volume and value growth. What's next? First, we are now scaling a smarter, faster, more relevant away-from-home business. We are investing to expand our fleet every single year and more importantly, expanding into new occasions from gyms and rooftops to clubs and offices. We are creating new consumption moments wherever demand is evolving. Ice cream vending is the next frontier, driving availability in new locations through unmanned machines. We also work on route-to-market options in developing markets like Mexico, Indonesia and Philippines. We are scaling an ambient last mile distribution model to go deep into untapped territories. And finally, we aim to have all our cabinets digitally enabled by 2030, operated with a harmonized system that is globally consistent yet locally responsive. This built-in best practice capabilities from across the world. This is our away-from-home story: high frequency, high margin, high precision retail, a system that sells every day in every stock and powers our next wave of value creation. This is The Magnum Ice Cream Company, making life taste better away-from-home.

Rebuilding our sales capability is actually a real game changer. It really did not work to have sales integrated with all these different categories. And this stuff is really cool. You need to love execution. I love execution, but granular data-driven execution. The return on that is enormous. Now let me get to the growth algorithm. The market grows 3% to 4% a year. We were historically growing below the market. And we are committing ourselves to you and your investors to grow ahead of the market. This is a big step up for a company that over a very long period was underperforming. We said we, as a team, will make sure that we drive competitive growth. Underpinned by volume growth, you can't price yourself to glory in consumer goods. I'm really proud that we got the volume engine going again. And with the [ sale ]systems, that is also really possible. Growth will come from stepped-up innovations and occasion-based model, digital demand creation, availability expansion across the world and further premiumization. It's a long-term trend, and we can ignite it even further. So we commit ourselves to 3% to 5% growth over the medium term. Yes, productivity. This business was really underperforming when it comes to productivity and profit. We have a really detailed granular program that we built up with the best of the consultants in the different cost bases to take EUR 500 million cost out of this business. It's in the supply chain. It's about the end-to-end network. It's the way we run our factories. It's overhead reductions. And I told you we're going to add 1,000 extra sales reps. Actually, we did it already. And still, our overhead will come down versus the former situation and a lot of work on tech. We had a tech stack logically, which was part of the bigger Unilever tech stack, with a very broad functionality. Now we're building a fit-for-purpose tech stack, and it will create savings. This is not a pipe dream. Already in 2024, we delivered EUR 70 million, and we continue to deliver this year. It's actually accelerating. Big, big, very granular program. But let me now hand over to Sandeep, who again, in a video will explain our supply chain. Sandeep, over to you. [Presentation]

Welcome to supply chain, the engine room of our business, where speed, precision and scale come together to unlock profitable growth and cash. Hi, I'm Sandeep Desai, Chief Supply Chain Officer of The Magnum Ice Cream Company. I've spent nearly 25 years at Unilever across various geographies, Africa, Asia and Europe and have led large-scale transformations across the supply chain. Today, I'm here to tell you about the global ice cream supply chain. And I'm excited to show you how we're scaling smarter, faster and stronger than ever. With 30 owned factories, nearly 330 production lines, close to 200 warehouses, 2,100 distributors and 3 million cabinets, we operate one of the most complex cold chains in the world. That's scale, but it's also our strength. But it hasn't always been this way. Let me take you back to where we start. Historically, our network was built to optimize manufacturing costs. Where, as an example, we moved production to Eastern Europe from Western Europe, creating large-scale factories. However, this led to an inefficient end-to-end network. And hence, we lost out on total end-to-end cost. CapEx set well below 3% of turnover. And this stagnated our digital advancement, our automation agenda and led to some underperformance. Service level dipped as low as 80% in the peak of the summer season, and waste levels were also quite high. But all of that has changed. Starting in 2024, we began to unlock productivity to fuel growth. And the results are already shown, with an 80 bps gross margin improvement in 2024. How are we doing it? Well, let me talk to you about the 5 pillars that are transforming everything we do. First pillar is portfolio optimization. [Presentation]

This is an unbelievable upside in this business. When Ian and Hein asked me to have a look at the role, I did an over-the-some analysis on the supply chain, supported by one of the leading supply chain consultants. And we found a lot of money, enough to bridge the profit gap versus my nearest -- my competitor in the snacking industry. And the more we work on it, the more money we find. And we need this money because we need more profitability, but we also need more funds to reinvest. So what do we do? We have to step up CapEx. Our return on invested capital, as you know, is very high, 23%, but we had underinvested in the supply chain. It was not digitized enough. The network was not optimal. We have the right factory sort of at the right location, but not always aligns. so a lot of money to help expand growth but also to get more profit out but also investments in sales and distribution because we have underinvested in those cabinets. Tech is really important. We're in a very fortunate situation that we design a new company, new processes, and we can apply latest tech, built the agents and the AIs in our organization structure, whether that's in marketing and sales and as you also seen in the supply chain. We're very proud of our history in Unilever and a very broad ESG agenda that we used to have. We focused it for this new company very much on energy consumption in cabinets and our chain on the raw materials, especially cocoa and dairy. It also has a social impact. Employee safety and health, obviously, very important and getting our governance framework really tight. When you set up a new company, you really need to make sure that governance is done in a very disciplined way in all parts of the business. I think this translates is not only good for the planet, but it translates in real business value, resilience, cost savings, retailer alignment. I believe we have a very good agenda. But I'm shifting gears, and I'm going to hand over to Ronald because ultimately, business is as good as its people and we did a lot of work on people, organization and culture. Ronald.

Yes. So Peter mentioned already that we have built a fit-for-purpose operating model, a fit-for-purpose people system and a fit-for-purpose culture. So let me unpack that a little bit for you what does that really mean? Starting with the most senior team. We feel this is a very strong team. And it has a great blend of business leaders, general managers and Peter and our 4 regional presidents, who have run business end-to-end, at country level, at regional level. They know their trade and they're deeply experienced in the Ice Cream category as well. On the other hand, we have strong functional leaders. You saw Sandeep 20 years experience in supply chain, has done many transformations. You saw Julien, 30 years of experience in marketing. And then we have augmented that with 2 external hires in myself and Abhijit, 2 people who have served on executive committees, who know how to operate with Boards and who understands corporate governance. So we feel that this is a super strong team moving into the next stage of the journey. Now if you look at the organization, the operating model we've built, it is really fit-for-purpose. So we have 24 P&L units. That's where the business is run. So sometimes, these are single countries like Mexico, sometimes there are multiple countries like Central and Eastern Europe. We run these businesses, these P&L units end-to-end. They are responsible for P&L delivery, for cash delivery. They own the consumer, they own the customer, they own their employees, and they basically run the company. On top of that, we have 4 lean regions and the regions basically support these 24 P&L units, and they have sometimes supply chain or sales capabilities, which they can augment and support the P&L units. And then we have one corporate center responsible for strategy and governance, a lean corporate center as well. So lean overhead but very much focused on the 24 P&L units. In addition, we have upgraded 95% of our top 100 people. And the beautiful thing is we were allowed by Unilever to pick the best of the best. And in addition, we were recruiting externally the best of the best as well. So we feel really good about our top 100 executives in the company, best of the best internal from Unilever combined with best of the best in the external market. We're also building new capabilities. We have chosen 4 important new capabilities, which really will be strategic differentiated for us. Net revenue management, super important for us. Peter spoke about it already. And we're upscaling the top 5,000 in our company on really understanding deeply what type of net revenue management capabilities do we need to have. Sandeep spoke already about S&OP. We've codified what are the best practices in S&OP, and we're really investing in system capabilities to move from manual S&OP planning to automated S&OP planning, taking a lot of subjectivity out of the planning process. In addition, a deep investment in digital marketing and digital commerce where we're looking not only about capabilities, but also what's the operating model, what's the talent base and what are the capabilities we need to have to be successful in these 2 areas. And then finally, we want to be a frontline company. The people who make, move and sell our products are the heroes in our companies. They make this company come alive on a day-to-day basis. They need to have the right capabilities. They also need to feel appreciated and recognized in our company. You see a nice example here of our frontline recognition program we've started to recognize that frontline people. We had, I think, it's 60 of our frontline people, we flew them into Amsterdam, and we celebrated their successes within our company. Now then incentives, fit-for-purpose as well. So we have 3 layers of incentive. So we have the first layer for 8,000 people, that's the short-term bonus. The cash bonus. There are 4 components here, organic sales growth, adjusted EBITDA margin improvement, free cash flow and market share gains. The most important thing of this is that we set the target once a year and they can see on a monthly basis where am I performing versus my targets. So what are the levers I can pull to get a higher bonus payout and how do I have real control of my business? That's the key to success of a good bonus plan in my opinion. Then for the medium-term plan, which applies roughly to the top 300 employees in our company. We will have 2 parameters, organic sales growth again. So we doubled down on making sure that organic sales growth is super important. And then EPS growth as the second one. And then finally, we're looking at a one-off program, we call the executive ownership plan, which will be about share appreciation. But for the top of the company, the top 60 to participate, they have to put their own money up. They have to invest into buying Ice Cream shares, and then they can participate in this program. Hence, the top 60 will be deeply committed in share appreciation and success of this company. Finally, we said we were going to build a fit-for-purpose culture. So we looked actually at our founding fathers. We have multiple founding fathers, but, let's say, Wall's, Breyers, Ben & Jerry's, how did these people actually run the business? What was important for them? How did they behave on a day-to-day basis? And out of that, we codified 6 behavioral attributes, we believe are fundamental to success for the Ice Cream business in terms of the culture. The most important one, they were obsessed with growing the company, growing was their reason that they grow the company and you will be successful. And they did that through continuous innovation, not only in their products, but also in the go-to-market systems, in their factories, in their warehouses, they're obsessed with rethinking their business model. They were also experts in the Ice Cream category. They were single category play businesses. So they were focused on being an expert in ice cream exactly what we want to do ourselves. They ran the business end to end, they were winning together, but they also enjoyed what they were doing. They had fun. They operated a simple company, quick, quick on your feet, simple with speeds. And finally, they challenge continuously their own ways of working, their operating model, but they did it in a way that they cared as well. They care about their people. We believe these are the cultural construct, the behavioral constructs, which will lead to success. I'm going to show you a quick video, which we made for -- when we carved out the company legally on the 1st of July. It talks a little bit about the culture, but it's a little bit broader as well, but I thought it was a nice video to share. [Presentation]

I hope you enjoy that. It's nice. So Peter and Ronald are happy and the senior team are happy. But what do the rest of the company say? And we did a couple of surveys amongst our employee base, and you can see it here. And one question was, would you recommend the classical NPS, would you recommend the ice cream company to a friend? And you can see here that you look at the top of the house, the top 30, 100% would recommend our company to a friend. The rest of the survey people more than 80%, 82% recommend the company to a friend, which I think it's a strong endorsement of where we are. And you see the progress as well as the 3 surveys. And then finally, we asked what is your view on the business outlook of the Magnum Ice Cream company? So 92% of our employees are positive about the business outlook. So I think these are 2 nice proof points that we are on the right way and that we have our employee base with us as well. With that, I'm going to hand back to Michèle, who's going to lead the Q&A session for us.

Yes. Thank you, Ronald for that. And nice to have you back on stage, Peter. So let's start the Q&A. [Operator Instructions].

It's David Hayes at Jefferies. My one question will be, you mentioned the licenses at your competitors, and you mentioned that, that got an inverted sort of set up, and you mentioned they stress every now and then about those licenses going. As Magnum Ice Cream, do you go for those licenses now? Does it changed the dynamic and you're going to put them on even more stress because you're going to try and steal some of their business.

That's a sneaky question. No, basically, licenses have a role in the portfolio, and we have licenses in different parts of the world. And obviously, where we see which licenses we would like to have and are involved in bidding processes around these licenses.

Celine Pannuti, JPMorgan. I wanted to understand when you looked at framing the strategy and framing that in targets, so 3 to 5 and 40 to 60 basis point margin expansion, I mean those are -- you have to hit 2 goal posts and effectively quite elevated margin expansion. So can you talk about why you chose that framework versus, say, EBIT growth framework? And yes, when you say on average, what does that mean?

Good question. There was an enormous amount of money that we found in productivity, and it was just not decent, not to get it out. And we put the organization internally on very serious targets to get the waste out of the system, and it is often like running the factories better, running procurement better, running a very tight execution on the end-to-end value chain, growth and market share we have not invested especially in sales and distribution, having a dedicated team and starting to put cabinets in, enabled by solid digital support frameworks it just comes out. And therefore, we feel comfortable with both a growth target and a productivity target I personally believe that in consumer goods, it's staff who is driving volume through the system, growing but it would be insane in our case, not to talk about productivity because there's just so much to be had, and that's why we called it out. And for a more detailed question, I have a very intelligent CFO, who will answer more detailed framework questions after his presentation.

It's Guillaume Delmas from UBS. A couple of questions. An hour ago, Ben & Jerry's issued a statement saying they would like to be released from the Magnum Ice Cream Company. So clearly, it doesn't come as a surprise to you, but would you consider this releasing Ben & Jerry's? And to what extent is constant headlines, agitation are impacting your teams and the way they're managing the Ben & Jerry's brand?

Okay, let me answer the question. A, Ben & Jerry's is doing phenomenally well. We bought the business 25 years ago. We grew business by a factor of 6. From a business that was hardly profitable, is now a very profitable business. We invested EUR 500 million in the social mission. The sweet part mission construct that we have to grow this business has proven to be phenomenally successful. Jerry and Ben from the beginning were activists. They're 75 years old, they're super passionate. You don't always want to agree with them, but you always want to have them. They're really good people. But the business is not for sale. It's fully integrated in Unilever -- in the Magnum Ice Cream Company. It's a proud part of our portfolio, and we know how to operate it. Its factories, its sales, its marketing and we do so with big success.

It's James Edwardes Jones from RBC. Peter, you talked about having a dedicated sales force. And what does that mean? I can't imagine that you have the same people selling deodorant as ice cream previously. So is it more about having a good sales force and...

No, no. We had a truly integrated sales force. Out-of-home ice cream was separate, but it got defunded, in many countries in Italy and France, we didn't even have an out-of-home ice cream sales force anymore. But for the rest, a senior account manager would come with the whole portfolio. Luckily, Unilever is now changing. Unilever is changing as well. And part of the good work that Fernando is doing, also ready with the Compass structure is getting more dedicated, but that is not where we come from. So you can imagine because the dynamics, I'm a Home Care guy for a long period, the dynamics in Home Care, where you have a very stable purchase, consumption pattern, you have promotion, but so very different than a seasonal business. And we now have dedicated people who understand these dynamics and can work these dynamics with our customers in effective customer plans and help them execute. So it's an absolute game-changer.

Sarah Simon from Morgan Stanley. Just a question on kind of SKU concentration. So you go to the store and there's more and more funky flavors and whatever. But can you talk about how much of your business comes from kind of core Magnum classic, almonds, white as opposed to Persian flower or an -- I'm just interested in how concentrated the revenue base is now...

Actually, most of us have our classics in many categories, but definitely also in ice cream. And for a brand like Magnum, it will not surprise you, but the white, the almond and the classic is the core of the portfolio. We activate it through new flavors but you could not build a business only on new flavors. You just would not have the rotation. In Cornetto, in some countries, it's the chocolate; in other countries, it's the strawberry. But these core products are super important, and it is an illusion to think that you can build an ice cream business on fringe flavors. People will try you, but will they repeat? Because we tend to come back to the classics because those reason that we deeply, deeply like. You cannot do without the added flower or whatever, but you need to have your core portfolio. And we are very pleased that in most core product segments we own the core flavors. I'm not so worried about Magnum me-too, who come up with all kinds of fancy stuff because the core of the category is the core.

I see a lot of questions coming through the webcast, but maybe we take one more from the stage, from the room. This side of the room.

Callum Elliott, Bernstein. Very interested in the market modeling, Peter. The evolution thereof, especially, so I wonder if you can talk a little bit about how long that market model has been in place? And obviously, from what we could see on the slide, it looked very complicated, but maybe you could also add some thoughts on...

The occasion model you mean or...

Exactly. Maybe you can add some thoughts on you had sort of growth of occasions driving some of the sales growth acceleration. So where do you see the biggest opportunities for new occasions?

I think occasion modeling is actually not new to the snacking industry. Coke, Pepsi, Frito-Lay most people have an occasion-based model. We didn't have it. And when I started, I started building that and doing the research market by market because you need to be more specific. We need to -- as a market leader, you need to be a market maker. You cannot just be sort of repeating what you do or just copy competition. And this is our model. So macro spaces, from the comfort to the control to the release, translating them in occasions, making it very specific how do we land something in a specific market and then building a marketing mix to basically unlock it. That's our model. I think it is very powerful. It's also working, and I think it will fuel a very different type of innovation over the coming years.

[indiscernible]. Just a question on innovation. How much would you say is innovation, which you've genuinely created alone internally at the moment? And how would you see that evolving in the future? And how much will you be depending on your supply partners, for example, to push in innovation for you?

It's a very important question. We have a whole network of academics, suppliers, flavor houses who help us with our innovation program. I think the biggest shift that we are trying to make is move from more flavor innovation, a new Magnum variant or a new Carte D'Or variant or a new Ben & Jerry's format to finding new occasions, unlocking them with new formats and driving that very hard. And I think classically, it was -- our portfolio was investment-wise, 90% renovation, 10% doing really, really new stuff, and we try to balance that to more 50-50. And it is important because that is overall but it's also culturally very interesting. We need a little bit more risk taking, a little bit more pioneering, a little bit more trying new stuff to make this really a phenomenal growth machine. And I think part of the work that we do is the organization is really in that space.

Olivier Nicolai from Goldman Sachs. Just one quick question for you, Ronald. On the incentives going back to the short-term incentive of the 8,000 employees, you mentioned organic sales growth. Is there a component for volume growth within that? And then is incentives different between the regions, some regions more focused on, let's say, free cash flow generation or others more on the volume growth, for instance?

Yes. So each organic sales growth volume obviously plays a part in it, but it is organic sales growth. So not directly, but obviously, you need to drive volume to get to the organic sales growth. We deliberately keep the same metrics throughout the company to be consistent because the regions are basically the sum of the part of the individual P&L units and the top of the house is basically the sum of the 4 regions again. And we believe that if you flow through the same incentive plan, you are the most powerful. If you have a company which has different incentive metrics, I think it becomes more confusing. So we're very consistent.

Yes. And of course, different regions and different countries have different targets. So that is how you do it. But the basic drivers are the same. And especially for new company like this, cash, cash, cash, cash. When you're a division, this is not your general focus for us, of course, this is really, really important and share, I like competitiveness.

Okay. Maybe one more from the room, Warren.

It's Warren Ackerman at Barclays. Just on the freezer numbers, the 3 million number that you have, can you maybe outline where those freezers are? Because I guess they're not exactly correlated to the country. Some countries are more profitable. And where is that number come from? I guess it's been going down? And where do you want it to go to?

A really interesting question. Obviously, the freezer strategy is very much also dependent on your retail universe. In Western Europe, America, there's a lot of grocery with their own freezers. In India, there's less grocery, and there are a lot of smaller stores, [ kirana ] stores that require a freezer. So they tend to be skewed to markets where big retail is less developed, out-of-home here tends to be more leisure type of out-of-home and in the United States, I think, in general, it's relatively underdeveloped, I don't know whether you picked it up, but have a look at the vending machine that is standing outside. We found it very difficult to make vending machines work in the past because they were expensive. And you always have issues with temperatures, stockouts. But now these machines are basically affordable. They're totally digitally connected. You know what's in. There are sensors in there. You know when there is an energy problem. The machine outside, Toloy, did I get it wrong, $3,500 pay back 1.6 years. So especially in places where you don't have a lot of labor, I think there's a lot of space for ice cream vending machine. Think about London, how difficult it is to get a Wall's ice cream. There's so few outlets. It's an embarrassment. But we basically don't have the type of outlets to place an open freezer with a person next to it, who sells it out. Yes, there are a couple of tobacco stores, but there are not many. But imagine at every metro station, you would have a beautiful vending machine. There are drinks vending machine. Actually interesting on these outlets. I believe that in soft drinks sort of 40 million sales units around the world. In ice cream, it's just a very percent -- low percentage of that. So vending machines are, of course, very big in that rate, not yet for us. I think it's another really big opportunity, especially for developed markets. Although, Wai-Fung will say, actually, vending machines are big for me as well. And Toloy says, I want some as well in India and Turkey.

Karel Zoete, Kepler Cheuvreux. Can you expand on the task ahead for the supply chain team? Have we heard in the video more local U.S. large factories. But it seems that probably not halfway where you want to be.

No, we made unbelievable progress because that's where a lot of the savings already come from. What have we done? We put a new team in place, very strong regional leaders, very strong, often new factory leaders, a new procurement team. We have locked a new strategy 1.5 years ago. We have a detailed plan. I think do we have 1,000 subprojects and KPIs, names against, and we are unlocking it. At a very high level, so what do we do? Actually, we need to get more local for local instead of Caivano in Naples shipping to Sweden, basically, Flen needs to do Sweden and Caivano needs to do Europe. So they need to get broader in the portfolio. Second thing is we need to digitize the factories. We have state-of-the-art factories and we have factories which are basically a little bit as the Chinese would call the mamahuhu and we need to upgrade them and then work on operational qualities like bringing waste levels down, operational efficiencies up, quality standards up. It's an agenda, which is a multiyear agenda. But the beauty is it will multiyear give us a lot of money flowing back in the P&L. But we are well underway. We're well underway. This is not new stuff. We started it last year and we are full.

So let's take a question from the webcast because we have many people listening. The first one up is, your leadership team is overwhelming male, what's your strategy to ensure gender diversity becomes more competitive advantage for you?

Yes, listen, I think it's a completely fair point. Just so we have work to do. If you look at the organization when we build it, if you look a little bit the classical definition of white collar, which is roughly our 7,000 employees, we ended up with roughly 45% being female. So I would say we're not in a bad place. But as you go up in the rank, you see that it tapers off and we have 3 females in the Executive Committee. I think we also have work to do in 2 areas, I would say, general managers for our businesses for the P&L units as well as supply chain. So work ahead, I think we're not completely where we want to be, and we'll use the opportunities ahead of us to get to a place where we want to be, which is more like a 50-50 split of our leadership group.

We basically recruited top 100 new or at least sort of 95 of them. We had balanced slate but with a really sort of very specific job to be done in all these roles. And we said, okay, for this stage, prioritize experience and track record in this specific role. And it doesn't mean we don't have fantastic female general managers. We also have them, but the choice for talent was experience and track record.

But work to be done. So let's be clear that it's an area where we need to do more work.

So there is another question from the webcast on private labels. It says, can you talk a little bit about private labels as competitors the products often look scarily similar at huge discounts versus your prices. How do you manage this, Peter?

Yes. So first, one step back on private label market share in Ice Cream. It hasn't moved over a 10-year period. Actually, more recently, especially in Europe, we've won share back from private label. Private labels have a role in the assortment. They offer value. Sometimes we don't have these value offerings private label has, but private label can also not run with our brands because we need to drive the category, innovation-wise, price-wise, so we're in it together with the retailers. There is nothing that we can't handle in the private label space. So it's fine. It is how these categories are built and how they run.

Any questions from the room. Yes, in the back there. Jeff?

Yes. I think you mentioned -- sorry, Jeff Stent, BNP Paribas Exane. I think you mentioned over 100 brands, which just intuitively feels quite a big number, and discuss.

Yes. So we have big global brands that we run in multi countries, but we also have the Flutschfinger in Germany or the Golden Gaytime in Australia or the Raket in Holland or the Klondike bar in the U.S. and they are sizable entities with a huge loyal following. Just with a little bit of maintenance, making sure quality standards or packaging and products stay up to date, they keep on going and going. Like the Popsicle in the U.S., it's a phenomenal brand. A couple of years ago, the business decided to deprioritize Popsicle because it was less profitable than some of the other businesses. obviously taking them out led to underutilization. But apart from that when we brought Popsicle back, they became the biggest new product in the American market. So it has to do with these memory structures. People love the products they grew up with. I have one investor in this company who is really likes the Fudgsicle very much and always wants to discuss the Fudgsicle, American Fudgsicle with me and will explain me again and again that the quality is not what it was 70 years ago. And this is this beautiful relationship that people have with some of our portfolio. And it is truly very, very powerful. And often below the skin, we do a lot of harmonization. Technology-wise, we do a lot of harmonization, but the certain expression is an expression just for that 1 country, and that's fine. We can deal with it also on a complexity point of view.

Fulvio Cazzol from Berenberg. I've got a bigger picture, sort of industry question. I mean we've seen -- it might still be a very small market, but we've seen more social media activity around appliances. There was David Beckham promoting the Ninja CREAMi product. I was just wondering, is there an opportunity for the industry a bit like what Nestlé did with Nespresso to bring out a sort of at-home appliance for ice cream? And would that be an opportunity that you would have thought about? Is it an opportunity? Is that a potential threat to you guys? Just some...

It is a very good question, and I spent an enormous amount of time in my career looking at new patterns, ideas, et cetera. How many cups of coffee do you make every day, for a 3 family does -- you probably at home make sort of like 10 coffees. How many ice creams which you make every day, 12, 8, 6? The problem is the frequency is not there. And I have so many entrepreneurs who come with capital ideas to us. And then at home, you say, okay, I have this big thing on my kitchen top, how often do I use it? My wife complains about all the stuff I buy and stands there. And then you say, okay, but I bring it to HoReCa. But then these things are not fast enough because when people come in, 10 people come in and want an ice cream, and you need the Carpigiani freezer who can just go very quickly, lots of volume. So it hasn't landed yet. It always looks cool, but I don't see it work yet. Would be great, though, but...

One last question from the room.

Victoria Petrova from Bank of America. I hope I have a high-level question. Could you help us understand if Ice Cream is a great category where Magnum just needs to be better than it was when it was a part of Unilever? Or is it -- is Magnum a great company, which can push a social category forward? And can you put it kind of quantified within the context of 3% to 4% category growth and your guidance of 3% to 5%?

Very good question, challenging question. I believe Ice Cream is a good category. They are not that many consumer categories that grow actually 3% to 4% a year, half of it volume. And it is also not with sort of weird drivers, but sort of drivers that you can understand, disposable income, okay, shares distribution, so premiumization, so we understand why this would grow. We understand why India will grow relatively fast. Indians have sweet tooth. Ice cream is hardly available, nobody has really, really started developing it, so we understand why this category runs at a good pace. I think -- it's an interesting question. How good is this company? I think we can be very proud that over the last 100 years, Unilever has built up this system, these brands, this portfolio, these capabilities but the business was underperforming. And I think maybe it's me, but when a business for 10 years, growth below the market. It's not even a business problem. It's a culture product -- culture problem, how does this get accepted in the system because a normal state of businesses that you want to win. So we created a strategy around wanting to win, and we actually got people in who are nicely competitive who enjoy sending me notes when they have a market share gain at a customer or in a country. And so this winning is a culture thing, I think, making good progress. But this company is 1.5 years in, I think most of the heavy lifting, what's the strategy? Who's the team? How will this work is now happening, but we can build on execution day in, day out because there is never perfect execution. When I walk the street and I see a cabinet, which is dirty with the wrong products in it. I make a photo ID or tag it, want to talk to the sales rep. A permanent improvement culture where you come to a factory, you see stuff running off the lines. I look at Sandeep and say, what the hell is happening here, this we could do better. Consumer goods are about execution. It's about driving volume through the system through deep, deep, deep execution, and you need to love execution in consumer goods. And this is not like -- execution is not a tweak, execution is a culture. And with Ronald and I, together with the team, try to do is build a real execution culture. I'm sorry, a little bit long answer to your question, but that's -- I feel very passionate about that.

I think that's a really nice end to the first Q&A, Peter. So thank you. We'll take a break for 30 minutes, and those of you in the room I invite you outside in the plenary court to enjoy some of our products.

You have to at least eat 2 ice cream before you're allowed back in. It's actually, now you have to do...

For those on the webcast, we'll be back in 30 minutes. [Break]

Welcome, everyone, back in the room and on the webcast. I hope you've enjoyed the ice creams. So it's time to dive into the regions. We will have, as earlier said, Gerardo talking about Americas, followed by Mustafa on the European market and last but not least, Wai-Fung on Asia. So with that, I would like to give the floor to Gerardo.

Thank you, Michèle. Good afternoon, everyone. My name is Gerardo Rozanski, and I'm the President of the Americas region at the Magnum Ice Cream Company. Let me start by telling you a little bit first about my background and my experience in the ice cream company. I started with Unilever more than 30 years ago. I've done a number of marketing and general management roles across several countries in the world. But specifically, in Ice Cream and the Americas, I was once Vice President of Marketing for the North American region, I was later General Manager for the Mexico operations of Unilever, that, of course, included our wonderful Holanda Ice Cream division. And later, I was General Manager for the operations of Unilever in Brazil, that also had another wonderful Ice Cream business, the Kibon Ice Cream division. As you can see, I worked in most of the big markets in ice cream, and I also -- I lead in those markets, I'm no stranger to the region and to the category. And this is why when Peter called me a couple of weeks after he was appointed, and offered me the job, it took me basically 4, maybe 5 seconds to accept it. This is because I know the region, I know the category, I understand the opportunity. And I also know that with a few interventions, we can really step up the performance of this business. So let me show you in the next 15 minutes, what are we doing to step up this performance and how it is going? Firstly, this is a big business, and we are #1. We have cemented this #1 position on a very strong portfolio and some key leading positions across different segments. And we have a very simple plan to step up performance. First, we will step up innovation Secondly, we will reset our cost base. And finally, we will expand availability. I would later show you through examples in my presentation and through some financials how we are doing on these initiatives. But let's first start with an overview of the region. This is a 1 billion people region that buy collectively EUR 25 billion of ice cream. This market is expected to grow between 2% and 3% in the next few years. As I mentioned before, we are #1. We sell around EUR 3 billion of revenue and we are fully 1/3 of a Magnum Ice Cream Company. We're not present in every market, but we have organic presence in the largest markets that represent 90% of the total Americas factory -- Americas market, sorry. In each of these markets, we have our own manufacturing capacity, we source locally more than 90% of our products. And in the largest markets, we have our own R&D centers that allow us to stay closer to consumers and to react quickly to the needs of the demand. But of course, when you think about the Americas and you have countries like Ecuador or Brazil or the U.S., you can imagine that under the hood, these markets are quite different. And indeed, in the north, the consumption is much higher and therefore, the markets are much higher. In the South, the markets are smaller. There are also differences between channels and occasions. In the north, we sell most of our ice cream through the in-home channel, whereas in the south, we sell most of our ice cream in the away-from-home channel. And once we have overall strong shares across the board, we tend to have higher shares in the South and lower shares in the North. Now before the announcement of demerger in the years preceding the performance of this business was quite challenged. We only grew at mid-single digits. We saw volume declines. We also saw significant market share declines and in spite of seeing a lot of progress in premiumization that was insufficient to drive profitability forward. And as Peter mentioned, we are trying to turn this around, and we're building this turnaround plan on 3 key pillars. The first one is to accelerate growth. We will do it in Americas through our innovation step up, we will drive demand creation and we will also work on channel expansion and product availability. We will also generate funds by working very hard on productivity where there are a number of initiatives, but I will cover in this presentation, 2 that are quite significant for the Americas. The first one is an end-to-end reset of our U.S. supply chain. And the second one is that we are reimagining our sales and distribution system in the away-from-home channel in Latin America. Finally, we will reinvest part of the benefits of this growth plan and the productivity plan into an expansion of capacity, which will do mostly through the bottleneck in our existing lines. We will also spend or invest in an expansion of our cabinet fleet for the away-from-home channel. And then finally, of course, we will also invest in our brands. Now we have a very strong starting point across the region, very solid positions, very solid portfolio. I could have a slide like this for each market in the region. But of course, I chose the U.S. because it's the largest market. As you can see, we hold a number of significant #1 positions across different aspects of our business. If you think about channels, we are #1 in grocery, which is the largest channel in the U.S. If you think about segments or product -- type of products, we're #1 in super premium, we're #1 in wellness that is becoming increasingly relevant. And even if you go to the most basic elements of ice cream, flavors, we're #1 in vanilla, #1 in chocolate. These are obviously the most important flavors in the market. And we have a wonderful portfolio that underpins this whole thing. We have a portfolio that covers different price points, different formats, different benefits. Some of these brands have more than 100 years old, and they are still relevant. And we keep on adding to this portfolio as it is needed in order to refresh it and make it more relevant. For example, with the acquisition 2 years ago of Yasso, which is a product based on Greek yogurt, low calories, high levels of protein and an incredible taste. Now innovation is critical to our success, and we are stepping up the number of innovations and also are trying to make them more on trend. This is an example from our innovation performance in 2024 in the U.S. We sold or our innovation generated more retail sales than that of our competitors. And as a matter of fact, if you think about the top 10 innovations in the market, both in packaged ice cream and in frozen novelties, fully more than 50% of those came from the Magnum Ice Cream Company. And we are going to go deeper going forward by focusing on those segments where we think there is a lot of opportunity and where we also have strong leadership. One of those segments is wellness. We see that the wellness occasions will continue to grow. I spoke about our wonderful brand, Yasso. We're already leading this segment very soon, we're going to be expanding this brand from sticks into the world of pints that will expand its consumption base. But also as wellness occasions will grow, indulgence will continue to grow as well. Indulgence is what this category is based about. Indulgence is the most significant driver of consumption of ice cream and super premium indulgence is a space where we have been investing for, for a long time and where we also have strong leadership. We will take our largest brand, Ben and Jerry's that only exists on pints finally into sticks, you will be able to find your favorite Ben & Jerry's concoction, but now in a stick, you'll be able to control those portions, but still have those wonderful Ben & Jerry's chunks. And then finally, there are a lot of wonderful products out there that do not exist in the ice cream category, products or properties, but do not exist in the ice cream category, but that can exist in the Ice Cream category, and that we will continue to bring in through licensing agreements. There's a lot of that, a lot of people want to work with us. We focus on the best opportunities next year, for example, we'll take the #1 candy bar in the U.S. Reese's, and we will create our ice cream version of it. And then we'll take the #1 stream show in the U.S., and this is not just for kids, the #1 stream show in general, those who have small kids know who Bluey is, and we'll create a Bluey face pop and we are sure that this will be a major success with the young ones. On top of stepping up our innovation, we will also step up our investment in media, and we'll also do it better. We are investing more in general. Last year, we increased our media investment by 12% but we dedicated the majority to digital media, social media for the most part, which we increased by 33%, and this combination of more investment and a better media mix is driving -- is converting into sales better. Last year, we saw our media attributed sales grow by 25%. We will also continue to invest in the development of digital commerce platforms. We are investing heavily this year, and we already have a very good position. We are now the #1 branded manufacturer in 5 out of the top 6 digital commerce platforms in the U.S. And then finally, as Peter mentioned, this is a business about occasions. We drive each of our brands. We try to identify what are the best occasions for these brands. We activate against those occasions. And here is an example of Breyers. Breyers is about sharing. When is sharing more relevant? Around the holidays. Those holidays also happen to be the moment -- the peak weekly sales in volume for the category in the U.S. market. And in those peak sales weeks, we also peak on our share. So that's a combination and the power of getting the right brand with the right occasion. Expanding availability is also critical to the success going forward. And of course, we aim to win in every channel, and we do very well in the majority of channels, but there are 3 in particular that I'm racing here where we're taking special action. And the reason is in the case of digital commerce, already a massive channel at $1.4 billion, but this channel is growing at 10x the speed of the overall ice cream market. It is critical, obviously, to succeed in this channel. We already have a leading share. We're already over-indexed, and we continue to expand this share. In the last 18 months, we grew our share by 40 bps. Then there are other channels where our performance maybe is not that good and, therefore, they represent an incremental opportunity. One of those channels is the value channel that becomes increasingly important in moments of economic stress. We have a decent share at 18% of a significantly large channel, but it's a tale of 2 cities. We have a very high share in some smaller players, but in the largest player, Dollar General, which makes fully $500 million of the sales of the $700 million of the channel, we only have a 4% market share. We sat down with this customer, we presented the plan, we agreed on the terms, and they rewarded us with quadrupling our total distribution points. We are seeing right now, obviously, an increase in sales and increasing market shares, and we expect to do more going forward. And finally, the Club channel, for those of you that don't know, this is the likes of Costco, Sam's, BJ's; again, another massive channel that grows very fast in the U.S., a $1 billion channel where we only have a 4% market share. But this channel has its peculiarities. They don't buy product ranges. They buy specific items. They also trade these items at a much lower price per gram than you would find on the regular grocers. And therefore, it's important to craft the right items to offer to this channel. We put together a team last year to reengage with this channel. We are this year, as we speak, pitching ideas to this channel, and we expect to start seeing benefits, increased turnover and increased market share coming in next year. And then finally, I spoke about how we drive innovation, how we step it up, how we drive availability expansion, how we invest more in media and how we do it better, but also we spend a large part of our time working on increasing our productivity. We've been working since the beginning of last year, supported by external consultants on a massive project to reset our U.S. supply chain. And this project combined will deliver around EUR 200 million in savings. It's already well underway, well into execution. We saw benefit savings coming in last year. There are savings coming in this year, and there is more that will come in, in the subsequent years. We covered everything from how we buy, how we transport, how we make. We're making some investments into our lines to debottleneck them to -- through technology, accelerate the speed of our lines, reduce the time that the lines are stopped. And therefore, we are not only reducing our overall cost, but also increasing our available capacity at a fraction of the cost that it would take to buy or to make a new factory. There's another area where we can -- we have to work on productivity, and that is the away-from-home channel in Latin America, which, as I mentioned at the beginning of the presentation, is the largest retail channel for us. And in many of these markets in Latin America, we don't necessarily operate with distributors. A big part of our sales, we operate ourselves with our own distributor. So we go from procurement, manufacturing, warehousing to even selling and dropping the product in the cabinet directly. And therefore, as you can imagine, this is a big source of a competitive advantage. But on the other hand, it's also -- it takes a big part of our operating cost in these companies. And therefore, it's imperative that we drive efficiency here. We have a number of interventions that we're making, one that was covered in Toloy's video. We're adding cameras to these freezers, so that we can know real time what's going on, how the demand is moving. We're transforming that data together with other pieces of data like weather forecast or time of the year, weekends and so on to produce an automatic ordering through an algorithm. And then we are shifting that order directly to these store managers through WhatsApp business, which, by the way, we're very active. Already in Mexico, we make 50% of our sales on this channel. And then finally, it wouldn't do us much good if we knew exactly what's going on in the cabinet, if we know how to make a perfect order and if we can shift that order to the store manager, if it then takes a week for the ice cream truck to arrive with the order. So we're working on one last leg of this whole system, which is flexibility in the delivery. We're setting up small micro distribution centers. We are piloting this in Mexico, where we have 10 of these from where we receive these orders and we can dispatch directly through a motorcycle to the cabinet. So 2 hours total from the moment when we get the order to the moment when the ice cream shows up in the cabinet. This combined system will allow us to reduce out of stocks, respond to demand more quickly and, eventually, also to reduce the number of visits of our salesmen as we can get everything done in WhatsApp business, reduce the whole cost and, therefore, allow us to expand our availability through more cabinets. Now how is this going? Really very good. We're growing in sales. Importantly, we are now growing in volume after many years of volume declines. And as I showed you at the beginning, our market share declined by 180 bps in the previous 5 years is now showing consistent movements forward. And then finally, profitability is having a significant boost, more than 100 bps of increased profitability last year and another 100 bps in the first half of this year. So in summary, we have a great region, a great large business with very solid positions. We're taking action on very specific points, stepping up innovation, resetting our cost base, increasing availability. And this strategy is bringing results. Of course, there is a lot more to go for. But I hope now that I have shared this with you, you understand more why I'm so excited and why it took me so little time to respond to Peter when he offered this job. Thank you very much. I'm passing over to my colleague, Mustafa, who will be talking about Europe.

Thank you. Thank you, Gerardo. Good afternoon, everyone. My name is Mustafa Seckin. I will take to Europe, Australia and New Zealand. Like Gerardo, I am also more than 30 years working in Unilever. Actually, I celebrated my 35 a couple of months ago. I worked 15 years in ice cream. I know some of you have been very recently in Turkey and had a chance to see our operations there in ice cream. I was very proudly leading 9 years that business in Turkey in Ice Cream, before I have been promoted as Executive Vice President for Turkey for multiple categories of Unilever. I have been working at different categories, of course, for 3 decades and different geographies. I'm very happy to be in that team as of January '24. So before I start, the key messages that I want to leave you is, first of all, Europe business is large, attractive and resilient. The second thing is that between 2019 and '23, business had some serious challenges. It was quite tough. The third thing is that after that, beginning of January '24, we had a new team in place. We made a lot of changes in the leadership team and also we set a new strategy, which we are confident that we will bring the business back to growth, a growth which is profitable and also competitive. We are very conscious about our profitability position and totally not satisfied, and we see massive opportunity. That's why a very granular productivity plan is in place and already started. Last but not least, the progress in the last 1.5 years shows very good signals, which I will share for you. Yes, of course, a lot to be done in the plan period. Let me start with the region first. It's a EUR 3.1 billion region, which makes 40% of the total business. We are almost everywhere in Europe. We are operating with 9 clusters that you can see. And some of you may be -- may ask why ANZ, Australia and New Zealand. We believe that the consumer similarities are very large. Customer similarities are very large, and this is the best way to manage this very high capita consumption ANZ together with Europe. Time difference is large. This is maybe the disadvantage, which is quite manageable. Coming to market position, we are clear #1 and relative market share, we have the double size of our nearest competitor. And last but not the least, 50% of this turnover comes through Magnum and Ben & Jerry's, which says a lot about the brand strength in the region. The market. The market is about EUR 25 billion and definitely a large market. Per capita consumption in Europe is 4x higher than average of the world, about 8 liters. Within that one, we have very high capita, especially in the North and also between it varies 5 to 25. So basically, average is 8. The second fact is that according to Euromonitor, the expected growth rate is between 2% and 4% and with volume, positive volume. And it is slightly ahead of the snacking category forecast that Euromonitor indicates. The last part is also very important. I think in the last 4 years, 4, 5 years, the business or the market has been tested quite interestingly by COVID, which was an up elevator in terms of volume. We have seen an inflationary period in Europe, which put some pressure on the consumer. Still volume was flat or positive. And also, of course, the catalyst factor of the [indiscernible] even at that time, volume was positive. So we believe that it's a resilient market as well. The last 4 years, I said, it was tough and challenging. I think the charts speak itself. I will not go one by one, but it was years of persistent volume loss, coupled with market share loss and, obviously, profitability also eroded. So definitely, it was a period which all key indicators were going to start. One of the root cause analysis, of course, we have done a lot of analysis of this period. There are multi reasons as can be expected. But overarching team is lack of focus because of, Peter mentioned, the 5 category leading that one, and Ice Cream definitely has some strategic priorities different than sometimes rest of them. So that was an overarching reason that we can identify across the business. But we have very clear strengths as well that we have to recognize and understand very well. First of all, we have admirable brands with very high equity of growth. Secondly, we have 12 factories, which is very well placed across Europe. And we have 1 million cabinets, which makes our reach really uncomparable. We have triple leadership across channels. Last but not the least, we have a team, which has been completely renewed 7 out of the 9 general managers they started as of '25, some of them earlier, so in the last 18 months. Secondly, track record, obviously, ice cream knowledge, end-to-end capabilities are the things that we renewed in the new management. Our strategy is threefold, similar to Americas: growth, productivity and reinvestment. Under growth, there are 3 vectors: strategic portfolio and innovation; demand creation, but definitely digital-led demand creation; and also physical availability, which is very important for any ice cream business. I will unpack these. The second pillar is productivity, mostly supply chain driven, but not only overhead is also under radar. Last but not the least, volume is a leverage for profitability, which is linked to growth path. And some of the productivity to be back invested to brands, portfolio, cabinets for growth and supply chain. So let me unpack the first driver, which is strategic portfolio and innovation. What do we mean that one? Three things actually. There was a very good question about the core in the Q&A. Core is important and has to be renovated because when the parity comes, we have to go to superiority. It's a bit rat-race. And every year, we will renovate and we are renovating our core at scale. 25% of the portfolio in '26 will be renovated. It's a bit boring versus innovation, renovation, but it is very important, and it is in place. The second part to me is the part that we will hunt the most volume and the share as well. Let me explain. So when we need to ice cream category by need states, by format and by price points, we have identified our opportunities. What are they? For example, in the need states, we are pretty strong in the indulgence. But when it comes to snacking kind of sandwich kind of, for example, ice creams or refreshers, this is not the case. Our competition is far stronger there. So we strategically innovate in these areas, definitely to hunt volume and the share as well while keeping our very strong position in indulgence. On the format, same logic. We are very strong in some formats like sticks and pints, but in some of them, we identified our opportunities, and we are again investing and innovating there. This part is also very important in Europe because the inflation and the consumer pressure is obviously there. And then again, in the premiumization, we have been very successful with Magnum, Ben & Jerry's, less so on the bottom end where we gave a lot of space volume to competition. And definitely, we are trying to make our innovation program addressing these areas as well. We can't leave in ice cream, especially in this 31% leadership place an empty place that we definitely don't touch. So this is the logic of the second part. The third part is market-making innovation, one level up. This is not only share gain, but category growing also. Bon Bon, for example, this is something very new, a new experience, a new occasion and now it's launched across Europe. And we are expanding that one to Solero, which is a different experience, not chocolaty, but more fruiter experience. Volcano, which started in Asia last year has been launched in Turkey. Next year, that will be on the shelf in Europe. Totally new experience with the texture, everything. Last but not the least, another big experience change is in Magnum. Very courageously, we are expanding to a corn experience. The cracky chocolate of the Magnum combined with the crunchy corn is totally an unbeatable experience. So on the demand creation, the difference is on 4 areas. We have been very stubbornly investing in 2 brands, Magnum and Ben & Jerry's. We will invest more brands. We will also change our footprint, and we will be more social. This is no-brainer. Things are changing, and we will double down our digital investment in the plan period. We believe in partnership, especially when and where it is relevant, and it brings us earned media for sure. And last but not least, it's not about what, but when also is important, and we will make -- we are making our media plans very agile and especially skewed to 100 days of the summer where the consumption happens. On the distribution is news for away from home and also at home. So at home, the strategic agenda definitely is a very disciplined RGM, revenue growth management, of course, and how to bring our captainship on the customer is very important to the shelves. We do a lot of shopper understanding, which has been started last year. On the execution excellence, our biggest enemy is nothing than out of stock. So in that sense, on-shelf availability is super important. We are working on that one. And the service levels, of course, linked to that one is the KPIs that we are very rigorous. Last but not the least, not only the portfolio expansion towards the lower end the pyramid, we know that the fastest-growing channels are discounters where we are very underrepresented. So we changed our focus and strategy there, and we are growing in '25, 3x faster than average of our growth in discounters and value chain, which is the fastest growing and definitely more consumers are expected to shop there. On the out-of-home, route to markets are very important. Managing 1 million cabinets every day effectively is a different skill set and capability. And we have identified in a few countries, some tied and definitely a fixed requirement countries, Italy, France and also Netherlands are the areas that we are refixing and looking every part of the route to markets. Cabinet Operational expenses is key. When you have EUR 1 billion, it can make really a big nightmare. So that's why bringing innovation, how to make it very proactively. You can see one example outside is something that we are working on that one. Also smart cabinets, which has been talked today a lot, the live example, again, outside for those who didn't see it is the future of the out-of-home business for us that we are investing. Today, in Denmark and Hungary, which are 2 maybe relatively small countries, but we have very good working replenishment system with in-built camera. It's working extremely well, which we will expand. And the priority channels, especially after the COVID, no doubt, travel channels and HoReCa, hotel, restaurant and catering are the 2 areas that we chose as priority to hunt and find growth, more growth. On the profitability, which is a very important part for Europe, we have a lot of homework to be done there. The productivity plan is in place. It's very large and granular, but I can summarize in 3 headings maybe. End-to-end network optimization, which has been again mentioned today in the presentation, how to lower the kilometer travel is very important. We see a 20% opportunity reduction there. The second part is definitely step change in manufacturing productivity, and we believe that there is an opportunity to decrease our cost per liter by 10%. And on the procurement side, we identified EUR 60 million opportunity simply by harmonization, not only formulation, but also the raw materials. And also, we have a very focused compared to the past, a procurement team who only think every day about our own ecosystem and raw material, et cetera. So it's quite different. A lot of focus and specialization has been put there. Results, always important. So basically, in '24, we have seen some acceleration in our growth, which makes us quite happy. But also, it was very important that it came with the volume, and we stabilized the share in '24. After many years of the volume decline in Europe and Australia and New Zealand, first time, we have seen small, but important growth in volume, about 1.7% is a bit relative, is it small or not, but definitely a good one. Half 1 '25, even better. We have 6%, 6.1% growth in half 1, half volume, 3%. And also, we have seen our competitive has increased to almost 90 bps, which is an indication of our strategy and it gives us confidence that definitely the strategy is getting good results, but we are very conscious that we have a big homework and a lot to be done. So let me summarize the key messages that I put -- I tried to put in the beginning of that. First of all, Europe is a large, attractive and resilient market. Secondly, yes, we had a challenging and tough times for 4 years at least, but definitely a new strategy, which we believe is working, giving good results and a new team is in place, and we are very committed to bring back this business to accelerate growth, which is profitable and also competitive. We have a granular productivity program in place, which already started to definitely give us some results. And last but not least, the 18 months performance proves that the strategy is working well. Again, a lot of things to be done in the plan period. Thank you very much. And for Asia and METSA, Wai-Fung will join the stage. Thank you, Wai-Fung.

Thank you, Mustafa. Good afternoon, everyone, and good afternoon to all those who are online. My name is Wai-Fung Loh. I'm the President of Asia and also the General Manager of China at the Magnum Ice Cream Company. I'm a little younger than my 2 other counterparts. I'm only like about 28 years with Unilever, and I've done mostly sales and also with the categories over the last 28 years. And I'm a Singaporean, so forgive my sometimes Singlish, yes. But hopefully, you understand me. And I moved actually from Singapore to China when I was 28, and that has been some time back, obviously. And I'm now living in Shanghai and looking after the Asia region. And together with Toloy, who's my other partner in crime, we are responsible for the Asia, Middle East and Africa. So before I actually go into some of the details and explaining some parts of the region to you guys, you may be asking, right? So yes, okay, what's going to be new. I've heard your 2 other colleagues, okay? This is going to be a little bit quite different, okay? First of all, yes, first and foremost, and this is the one thing that I want you guys to remember, EMEA is the fastest growing and the most profitable region in the group. That's number one, okay? And we have actually showed quite strong historical performance, which I'll show you in a minute. Our strategy is really focused on volume-led market share growth, and we're going to do this through a couple of pillars, which I'll talk through. So we're driving innovations through formats and on trends. We are pricing the right portfolio at the key snacking price points. We are growing occasions and driving digital-led social-first demand creation. We are also increasing availability across channels and driving digitization. And we have already in market dedicated teams end-to-end that we are -- especially we have upgraded talents actually in sales and supply chain. And that's where we are actually going to grow our ice cream expertise moving forward to be able to lead the agenda in the region. So I'll show you a little bit about who we are. So first of all, we are about EUR 2 billion in revenue. Some of our largest countries are actually Turkey, China, Philippines and Indonesia. We are on the average about 11% in market share, but it actually ranges quite a lot across our region. So we have Turkey at more than 80%, Southeast Asia between 30% and 60%, China at about 11%. And of course, there are white space markets like Japan, where we are not yet present. We have 17 factories in the region. Over 85% of our products are actually manufactured and sourced locally. We have R&D centers across Shanghai, Bangkok, Bangalore, Istanbul, just to name a few. And that's really important for us, right, because that's where we actually get our local insights to be able to drive our localized strategies. Our current footprint stands at 1.3 million cabinets. And earlier, there was a question on where these cabinets are. So we have about half of where we are globally, and we are investing for more. And obviously, when you see this beautiful map, we are #1 across most of our key markets with the exception of China and India at #2. And yes, I hear you. Yes, don't rush. We are about consistent and competitive growth, so we will get there. And for sure, it's going to be worth the wait, Peter. So our region actually is large, attractive and growing, right? And why is that? So we have a large and young population. Large, we have 80% of the global population. Young, the average age actually is about 32. And why -- what does it mean, right? It means really we have a large group of consumers who are actually in their prime, either working, spending, family forming and literally growing up on digital. And this really opens up a lot of opportunities that we have in growing occasions and also building our brands as they mature over the longer consumer life cycle. The second point about us is we have a low per capita ice cream consumption. We are averaging at about 1.4, and you have seen Europe and U.S. a lot higher than that. And therefore, there's actually a huge headroom for growth. Last but not least, we are operating in high-growth markets. So the forecast is about between 4% to 6%. And it actually represents a EUR 25 billion market size. Our historical performance actually has been strong. We are growing low double digit actually on revenue, half of that coming from volume. It's quite consistent with the strategy that you have seen. We are progressing a little on market share, and we actually have a strong margin position. So then you may ask, okay, then what then do you do next, right, to be able to sustain this? So our strategic pillars for value creation are very much in line to the global strategy. We put it into 3 buckets. We have 3 pillars: growth, productivity and reinvestment. On growth, I will go into a little bit of details and show you some examples of what exactly we are doing in some of the markets, just to give you a flavor. On productivity, yes, 2 parts to it. One part is really optimizing our supply chain end-to-end and to be able to improve our capacity utilization and at the same time, better service and a lower cost. I think that's one area. We also want to lead through digitization, automation and technologies. And Sandeep in his video showed you a little bit and he called out Taicang, to be honest. Taicang is actually located in China, obviously. It's an hour out of Shanghai. It is the first lighthouse factory that we have in the ice cream industry. So we're extremely proud of it. But I think what's more, right, we have seen in practice, when we drive automation and digitization, it not only drive cost down, but actually also improves and gives us -- improves our standard on quality and also on product superiority. We actually make the crunchiest cone in Taicang. On reinvestments, we are investing into cabinets. We are investing into digitizing the front line. We are debottling capacity and invest into safety and quality. And also, we are building leading-edge capabilities. And that's important because we want to be able to attract the top talents from the industry to join us. So moving forward, on innovations, we talked about global innovations. On top of the global innovation agenda, what we're driving in the region are also driving format disruptions and on-trend innovations. So one of the products you will recognize the Magnum Dubai chocolate. This is invented by my friend over there, Toloy. It was launched in April. We have since sold 11 million pieces. I don't think we have the product here today, but hopefully, you try it when you go to Turkey. And it's still growing. In Thailand, we actually launched the ice balls. I saw some outside. Hopefully, you guys have tried some of it, yes. But you really have to try in a DIY way, right, because our consumers and KOLs are actually snapping it up. They are coating it with chocolate. They're adding it to their carbonated drinks, and they're creating new occasions for themselves. Since the launch in March, we have actually picked up about 6% of market share in modern trade in Thailand, and that's a big win for us. And last but not least, it's also about how do we localize concepts, right? This is the first ever 7-layer stick, and we launched under Cornetto in China. And the beauty of it, right, when we actually innovate in formats is that it brings new consumers to the brand. So 48% actually of consumers who have actually tried the product are actually new to the brand. Moving forward, the second pillar is very much about pricing competitively in the snacking market. Peter talked about it. In Indonesia, this is an example of Indonesia. And I really believe I underrepresent the amount of snacks there are in Indonesia that most of you guys know, right? It's a lot more than this. But if you look at the chart, historically, we usually perform at the upper end of our price spectrum. And what we have done over the last 18 months is to really launch innovations at the core snacking price points. And why is that important, right? Because then it builds up a basket of cabinet magnets that actually draws consumers to the cabinets and drive our throughput. And the third pillar -- third item on the growth agenda is really where we do the magic and really turn memories -- turn ice cream moments into lasting memories. So we try to grow occasions through digital-led demand creation to increase consumption. And here are some examples. In Indonesia, we have maxed the Paddle Pop Lion who goes into schools. You enjoy ice cream with him. The kids are happy. They go back to tell their stories. So that's very, very nice. Another occasion, which is celebrated across many parts of Asia is the Ramadan or the Eid al-Fitr celebration. The kids love it because they don't go to school, obviously. But we developed campaigns to actually celebrate families breaking fast together at the end of the day. And this sort of becomes like a tradition and it becomes an after meal routine that is actually passed down for generations. So it's actually very beautiful. Philippines, you have seen the example on birthdays, and this requires multi-years actually of activating the occasions such that it becomes ingrained right? And in China, we activated the Magnum brand against a city walk event that took a lot of consumers and KOLs into the city. So I'll share a video now. [Presentation]

I hope you enjoyed that video. A little bit different -- sorry. And the next item actually on the growth agenda moving on is really increasing availability through our localized cabinet expansion programs, right? Internally, we have a measure called population per outlet. It sort of measures how many cabinets do you need in a country, in a city or even at a neighborhood to be able to gauge whether we have got the right levels of saturation and that number is 500. Obviously, when you see from the chart, Turkey and Thailand are meeting and actually over-delivering a bit of this. There are more opportunities actually in Philippines, China, Indonesia and obviously, India. And how do we actually implement this, right? We implement in a very localized way. From protecting cabinet leadership in Turkey and Thailand to actually selecting provinces to go into in China to actually expanding aggressively in Philippines and in Indonesia to gain market share. So that's really about how do we land the strategies. And you may ask, right, how do we then run this efficiently? And how do I connect the dots over the route to market with our distributors and with our outlets. Toloy and -- I'm standing short a little bit of this, but I will actually show you an example of how this is actually landing in our markets. Maybe I can have the video. [Presentation]

And our strategy is really delivering results, right? So you have seen we had strong historical performance. In 2024, we grew 4.7%, a little negative actually on volume with the disruption in China. In half 1, we are continuing our strong momentum. We're delivering again double digit in half 1 on sales growth and 7% at volume. So to wrap it up, yes, I hope you guys remember, we are the fastest growing and profit ahead of the group. Historically, our performance is strong. Our strategy is very much focused on volume because there's a large headroom for us to grow, right, around innovations, around pricing, around occasions and also around driving availability. And really, we will continue to invest in people with end-to-end actually experience in ice cream, and that's why we will build a consistent and competitive growth. Thank you. And now I invite Michèle.

Thank you, Wai-Fung. So we'll convene for a short break due to the time, we'll be back in 20 minutes. There is still some other ice cream to taste outside. And after you come back, Abhijit will come on stage, discuss the financials and present the medium-term outlook, after which we will take questions on that. See you in 20 minutes. Thank you. [Break]

Good afternoon, everybody, and welcome back after yet another ice cream session. I hope you've had your feel. If you've not, we have another session even after this. So hold your horses. And to those on the webcast, I can only apologize saying, hey, you missed a real great ice cream treat. My name is Abhijit Bhattacharya. I'm the CFO of the Magnum Ice Cream Company. A little bit about myself. I was the CFO of Royal Philips for the last 10 years. I had the good fortune of being part of the team that transformed Philips from an industrial conglomerate to a health care-focused company. Did a lot of M&A at that time. We acquired 30 companies, but we also divested 7, 8 big entities. I had the good fortune of leading a lot of them when I counted, this is my sixth large carve-out. I was part of the carve-out of NXP, which is a semiconductor company, but also the television business of Philips, the IPO of lighting, which was Signify, the domestic appliances business. So actually, when Peter called me and said, do you want to be part of forming the largest ice cream company in the world, it was very difficult to say no. But I had to cross his magic threshold because he said, if you don't have 10 years of consumer experience, you don't make the team. I worked for 12 years in the consumer business. So I said, okay, that works. So Peter said, come on board, and here I am. What I'm going to attempt to do in the next 40 minutes is to tell you a little bit, you heard the plan, you heard the actions we are taking. What does it mean in terms of numbers? Because ultimately, I guess, most of us have to see that it all squares. After that, we suspect that there may be a couple of questions, so we have time for Q&A. And then after that, again, the next round of ice cream. So what holds you back between the ice cream is just my presentation for the next few minutes. What do I want to tell you? You saw in the regional presentations that a lot of the numbers are delivering, right? You saw that, yes, we had troubled times in the U.S. We had a difficult period in Europe, but performance increased. I will show you how that works for the full company. I want to share with you key parts of the self-help plan that we have to drive margin expansion. I think that's critical to understand that a lot of it just depends on us, and we have a fantastic execution team, which is working on it. I will give you color on the capital allocation policy and how that supports our growth strategy. And last but not the least, I will give you some detail and color in terms of the targets that we have set for ourselves, both internally and, of course, committed externally, but very importantly, there's complete clarity in the organization as to what we want to drive in the coming years. If I move to our performance till 2024, you see that from a volume point of view, we have been losing over a 10-year period, we have been losing volume. It's the first time it came back last year. You see the same in terms of market share, losing steadily not by big chunks, but now we have turned the corner. Most importantly, you see that as you lose top line and volume, you lose margins. That's the problem with our business, but that's also the opportunity because if we drive volume growth, we will get margin expansion. And last but not the least, after a flat EBITDA for a number of years, you see a step-up of EUR 100 million last year. So that shows that the plan is already working. I want to show you a bit of a balanced scorecard, not just on these parameters, but across the board in terms of growth. And you see that we grew 2.8%. And now I'm going to introduce a little bit of complexity in all of this. The numbers we present to you is the carve-out numbers that we have based on how we separate on day 1, which is in the middle of November. We don't have India in these numbers because that comes later. So for those of you who saw the 3.7% growth in the reported number of Unilever, you know where the difference comes from. Most importantly, we got back to volume growth. And I will compare ourselves later with a peer group, and you see that we are really at the top of the table in terms of getting back volume growth. Market share, and I will show you a few slides on market share as well, but important, gross profit, adjusted EBITDA, both up and the margin up by 100 basis points last year. We've been talking about our productivity program. I will give you some details, but you see that this is not something that is a PowerPoint that still has to be implemented. This is up and running and EUR 70 million already in the P&L last year, another EUR 80 million in the first half of this year. So EUR 150 million done, but still a long way to go. As part of the productivity that we are doing, we also get benefits in our working capital. And you see our inventory days reducing last year, continuing to reduce this year. I'll show you that, and the promised step-up in CapEx that we've already started putting in because that is what is causing our growth engine to start moving. What you see here, and this is an important chart, you see that the improvement that is happening in the company is happening across the world. This is not driven in one pocket in Asia or a pocket in Europe or in -- it's happening across the world. You see the step-up in profitability is strong in North America -- sorry, the Americas and in EMEA. Europe had a big productivity program, but challenged with the cocoa price increase, but still managed to step up. So across the board, we are getting back to good growth. But looking at ourselves just and comparing ourselves to ourselves doesn't really matter unless you're winning in the marketplace. And this is the chart. If you look at the dark line, appropriately, I think, colored in the color of chocolate, you see that we have been consistently delivering on the market share improvement. We started the trend in Q1. We were still down, but improving. And over the last 4 quarters, we have been continuously gaining. And important point that Peter made, people often ask about private label. If you look at a 10-year period, their shares in the market have been flat. So they have a place to play, but it's not that they are coming after the bigger players or that you are able to challenge, let's say, the bigger established players. Now this was 2024 and a bit of 2025. How have we done in the first half of 2025. First quarter, 4% growth, half of it in volume. So we -- I picked up a few questions on volume, et cetera. This is a key indicator for us. Q2, 7% growth, 5% from volume. It's a big number and a big growth and also competitively a big advantage that we've started to now really clock in. And I'll now show you exactly the same dashboard for the first half of the year. You see the 5.8% growth. You see the volume growth in the first half of 3.5%, which is more than half the organic sales growth. And you see us continuing to gain market share. You may question me, "Hey, your profit is down in terms of gross profit by EUR 4 million. And the EBITDA margin is down 30 basis points this year versus last year." Very, very important to know. We had a headwind of 340 basis points in the first half of the year, unprecedented, 340. 290 from commodity prices and 50 basis points from FX. So if you see that we have actually been able to neutralize 310 basis points in half a year, and that would not have happened if we didn't have our pricing machinery working and our productivity engine delivering. On top of that, you see that the inventory reductions continue and the step-up in CapEx, we did EUR 43 million last year. We did half of that already in the first half of this year. So we are putting our money where our mouth is, and that's reflecting back in the performance of the company. This is the dashboard. Let us now compare ourselves to the peer group. And if you look at this chart, this is -- this has organic sales growth over a 2.5-year period. You see 2023, you see 2024 and you see the first half of 2025. You see in 2023, we were at the bottom of the pack. In 2024, we moved up to second. And in 2025, we are at the top of the pack for the first half. But most importantly, for 2024 and the first half of 2025, we have the highest volume growth in the peer group. What does this mean for profit? Because if we drive top line, we have the productivity program under control, what does it mean for profit? Same format. 2023, we were bringing up the tail. We lost actually 70 basis points when others were making money. Last year, we were almost at the top of the pack, 5 bps behind. And this year, everybody of our peer group is feeling the pressure of commodity prices. We have been able to mitigate by far the largest amount as anybody else in the peer group. Let me now move on to the next part, which is our overall strategy. Peter spent some time this morning giving us, let's say, the overview of what we are doing. I will go a little bit into detail on a few elements. The first pillar is growth, and I just want to emphasize that, that's a key pillar of our overall strategy. Why do I say that? Because we have built that into our incentive programs. As you saw from Ronald's presentation this morning, the short-term incentive has growth, the long-term incentive has growth. Both are critical. If you, for example, have one tough year, you still have to make in that period, your growth target so that you are able to catch the LTI. The second important part, and you will see that when I present the capital allocation policy, we have factored in the investments that we need to drive growth. It is in the financial plan that we will present. You saw this slide from Peter this morning, and I just want to provide a little bit of clarity on what we are doing for growth. So if you look at the past couple of years, we were around the 3%, just shy, and we are now planning to move to the 3% to 5% range. The important point to say here is that this is an annual average improvement in a market that grows 3% to 4%. So the market grows 3% to 4%, we expect on an average over the medium term to deliver 3% to 5%. That could be in a year, which we are at the higher end of the guidance, could be a year where we are at the lower end. But on average, this is how we expect this to pan out. The 3 biggest levers, I know we've said this earlier in the morning, somebody once told me that the power of advertising is in repetition, so let me try again. Innovation and occasions are our biggest driver of growth. You see that. Availability expansion, you heard about our cabinets, the money we want to put to further grow our distribution. And last but not the least, we have some fantastic brands. They are in particular geographies. We have the ability to grow them in other geographies. You saw many times the reference to Yasso this morning. We have done the first customer tests in Europe. They've come out extremely well. It's a business that grows, I think, 22%, 23% CAGR over the last 5 years in the U.S. If we are able to replicate that success in the rest of the world, really gives us a boost to drive growth. On sales, I'm going to cover one more on growth and sales, one more slide, which may take you by surprise. The slide may look a bit complicated, but let me walk you through it. On the left-hand side, what I've attempted to do is to look at how seasonal we are because the often discussion around ice cream is, yes, you're a volatile business and oh, is the sun shining today? Are you in a good mood. Actually, if you look at it, overall globally, we've looked at it here for 15 years, but if you look at the last 20 years, for the period September to May -- sorry, September -- May to September every year, we do between 53% and 55% of our sales. You see the dark line that it's flat as a pancake. You could have great years in Europe, they're compensated somewhere else. But this is a seasonal business, but it's not volatile. What we cannot predict accurately yet is what happens between the months. Is there going to be rain in June? Is it going to be July? Is it going to be August, and that gets capital markets a bit kind of nervous. But if you look at the period, it's actually very, very stable. Now let me draw your attention to the right of the slide. And there, you see us compared to other beverage companies. And why do I take beverage companies? Because there, you see the volatility closest linked to weather. And for each company that we have taken, there are 2 lines. So for the time being, let's focus on the line on the left. It shows you from the period 2019 to 2024 in Q2 alone, the kind of peak and trough sales that has happened in that time. And you see for the beverage companies, it's a factor 2 or 3x higher in terms of volatility when you compare it to the Magnum Ice Cream Company. If you look at the bars, which are just to the right of it, it's in the shaded area. That's the part where we've taken out the COVID period because people think, yes, there's COVID that may have spoiled the number or have created a favorable impression. We've done both. We said with COVID, without COVID, you see that the volatility is less. And we are working on a few things to further ensure that over a period of time that the seasonality is more spread out through the event -- through the year. We are working on the geographic mix because the -- let's say, the seasonality is highest in Western Europe, less so in the rest of the world. The channel mix, you heard the rapid growth in dCom. That happens -- I mean, that's indulgence buy that happens irrespective of how cold or hot it is, but also the portfolio mix. As we drive more in the premium zone, more indulgent, you see that, that is less and less seasonal. I'll come to the next part, which is productivity and give you some color as to what we are doing. So we have a EUR 500 million productivity plan. You see the plan, the EUR 70 million we delivered last year. You see cumulatively how we build that up in the next few years. This productivity plan is the gross saving plan till 2028, and there are 3 big buckets. The first one is on the supply chain transformation. The second one is on overheads and the third is on tech-enabled productivity, and I'll give you some color on each one of these 3 blocks. Within supply chain, we have, again, 3 big blocks. One is optimizing our end-to-end network cost. I'll give you a few examples. The second is driving manufacturing productivity and the third is product procurement efficiency. What does end-to-end network optimization mean? We have actually a fantastic footprint of factories around the world. We have -- you may hear 2 numbers, 30, 36, that's because of the perimeter. Let's say, going forward, we have 36 factories around the world. We don't need to build new ones. But the factories were actually optimized for lowest cost of production. When you optimize the plant for lowest cost of production, you make as few SKUs as possible so that you have less changeovers and then you distribute. For a business like ice cream, the cold chain that you transport products on has a significant cost element to it. So the right way to do this is actually to look at the end-to-end cost. And when you look at the end-to-end cost, you realize that the factories we have should actually be producing many more SKUs, but serving a smaller radius of product -- radius of customers so that your ice cream is not traveling a lot. In the U.S., our ice cream travels on an average 770 kilometers. If we bring that down by 20%, we get 100 basis points on margin alone. So that is the big changing productivity that we are driving there. And the other important one is debottlenecking of the factory. So for example, we have a factory where if your packing line is manual, you can produce ice cream at a level of 100%, pack at a level of 80%, you cannot produce the 100% because otherwise, you can't pack it. These are small investments which we need to make, and that gives us, for a fraction of the cost, 20% capacity. And this is happening as we speak. So in terms of network, for example, in Europe, we are reducing our distribution centers from 29 to 10. So we are cutting it by 2/3. So that is, again, you produce in factories a wider range of products. They travel less. You have lower inventory because you have lower stocking points. And then we have smaller distribution centers for last-mile distribution, which helps you really to bring the cost down. So that's a big thing. To give you another example, we were in our factory in Covington in Tennessee, and there are issues around labor, and therefore, we were again constrained in terms of our packing capacity. We have now automated that line, and it gives us 8% additional capacity in the whole plant. We have another one in our -- maybe I give you the Ben & Jerry's example. We used to produce all our Ben & Jerry's for the U.S. out of Vermont. We have moved 25% of that production to Sikeston. Sikeston, by the way, is the largest ice cream factory in the world for anybody, not just us. And once we've moved it there, we are able to distribute now from Missouri and therefore, again, bring cost down. So it's quite a big program that we are running. In terms of manufacturing productivity, the big war there is the war on waste. We had a rejection or a waste percentage of 6% a couple of years ago. That means you take 6%, you make the ice cream and because it's either not packed or not produced properly, you have to throw it away. We have, in the last couple of years, brought that down by 25%. And by 2028, we will bring that to just below 3%. You saw earlier today, TaiCang at 2%. If we get all our factories to around 3%, that's just 100 bps in gross margin just on waste alone. I think the most exciting part is on procurement because being part of Unilever and looking at the Pareto of big purchases you do, you don't get the same importance that you get when you just look at the ice cream category. So we have really -- in 4 categories, we have very, very strong category teams who are specialists in cocoa, in dairy, in sugar and in energy. And they make their curves, et cetera, in terms of what they expect. On a weekly basis, Sandeep, me and Peter, we sit together with the teams and decide what we are going to cover for, what we expect market developments to happen together with the team, and it gets the highest level of attention in the company. And with that, you are able to do quite a few things that we couldn't do earlier. The other point is that we have much more flexibility also on hedging. So we are now able to look into next year and not just in terms of futures, but also in terms of collars, we see where cocoa prices are going. And we are now actually pretty well covered into next year, which is something that earlier we were restricted in terms of time frame that we could go. So that's another big thing. And last but not the least is indirect procurement. We think that, that's a big opportunity. We are looking at outsourcing the big package to a service provider who does it for many companies, and therefore, you get much better rates, but also discipline in the way we spend our money. These are the 3 big initiatives we have there. The second big pillar I told you was on overheads. And you see that in overheads, we've built a company that has 92% of people who make, move and sell ice cream. Therefore, the part that actually works in the headquarters, which is primarily focused on strategy, capital allocation, talent allocation, dealing with capital markets, et cetera, is very, very narrow. And we've put all the functions into the businesses, into the regions so that they have end-to-end accountability for the P&L and the infrastructure that goes along with it. The last bit is on the tech-enabled productivity, and I think that's a big question that often comes up because it's a big transition that is happening. We started early, and I think that's what gives us the advantage. We started planning for this in the fourth quarter of last year. So we are almost complete with the design phase. We have actually already started implementing. So our treasury management system, our money flows through the company operates on our new treasury management system. Our consolidation for July and August runs on our own systems. And then the ERP, et cetera, are in the process of being built. So the design, like I said, is mostly done. We will now build and then deploy over a 2-year period. This actually supports us in the global business solutions that we are building as well. This will help us also to move out of the temporary service agreements or the TSAs that we have with Unilever. And we are looking at a broader scope. So include not just the usual finance and HR back office stuff, but also in areas of digital services, marketing and many more. And we are building a couple of hubs around the world. We've just signed with the government of Maharashtra, an MOU to set up a big global business services setup in Pune in India. We will set up one in Central Eastern Europe and one in Mexico. I think the biggest advantage that you get here is apart from the big ERP implementation, if you have a lot of your back-office processes running in one location, the use of hyperautomation, agenting, et cetera, really gives you efficiency at scale. It's something that I've done before. We have recruited Florence Mui, who has done this for 3 large multinationals. So we are really up and running and ready to implement. Last but not the least is the reinvestment that we are going to make. Two big areas. One is on CapEx. You see here that about 40% will go towards growth. There is the cabinet expansion we talked about, the innovation, but also the capacity expansion, not in terms of new factories, but the debottlenecking that we have to do. The other 40% is on productivity. The savings of EUR 500 million are not going to come for free. So that -- I explained that in detail. And then, of course, you will have a remaining 20%, which goes into quality, compliance and ESG-related expenses. The other area that we are looking at is our spend on advertising and promotion. And what I'd like to leave with you is 3 things that we are focused on: digitizing, social impact and better activation. So we -- instead of having -- spending a big chunk of the money on producing assets, we need really to have a lot of it in activation. And that line, as we go more and more towards social, is getting blurred with the influencers and others that get used to this. The first priority in this is not to jump from 12.4% to 13%. The first priority is actually to spend the 12.4% better. And if we need to up that amount, our financial plan and balance sheet give us that flexibility. The other area, of course, is working capital. I've spoken about it a couple of times. The inventory reductions that we are doing, our receivables are actually in a very good place. We hardly have any overdues. So we collect on time. We have good payment terms, which we adhere to. And we work on negative working capital. So as we grow sales, that negative working capital will grow, and that gives us a little benefit into our free cash flow. So what does this mean for the free cash flow? The biggest contributor is the improvement in profitability. And this is the bridge that we have kind of built to give you a good idea of what are the main drivers. The main driver for closing the profitability gap medium to longer term is the driving of volumes. Yes, there is a certain amount of price inflation, most of it which gets covered by pricing. You heard Gerardo saying that he wants to get into areas like the dollar clubs and the value channels. For that, we have to run the productivity program so that our cost of the product becomes low enough so that we make good margins. So part of it is reinvested. Over a longer period of time, we believe we have the strength in our brands to offset inflation with pricing. So basically, what you get is then the volume mix and overall productivity, which is going to drive the increase in margins. In this plan, we have for material-related inflation about 2.7% and for nonmaterial related about 3% would be about 2% if you exclude Turkey, Turkey, given the hyperinflationary nature and the fact that it's our second largest business has a big impact on the overall mix. So this happens to the EBITDA. I want to also mention here just for clarity that this is the average annual increase that we are going to drive over the period. Again, you could have years which is a little bit less, year which is a little bit more, but this is the average that we are driving. And as we come to the years, we will give more clarity. What does this do for cash flow? I think quite a significant step-up. If you look at the average cash flow between '22 and '24, we were around the EUR 6 billion. You see that we will plan to go in '28, '29 between EUR 0.8 billion to EUR 1 billion. That's roughly a 50% step-up. Most of it coming from the improvement in earnings and a very good free cash flow conversion. So cash flow conversion to our net income will be high. What does this do? This higher return, et cetera, actually put us in a starting position of a very good return on invested capital. We are at 23%. A lot of people were surprised by this number. I got a lot of questions, is goodwill included, not included, whatever. Everything is included. The goodwill that we have for brands like Yasso, et cetera, are all included. This is the ROIC. It will have a temporary effect of going down a bit because we will have to acquire the business in India that will add a little bit of goodwill. A couple of other countries, we will also make investments, but we will still be in and around the 20%, which is a fantastic return for our business and among our peer group. I also want to leave you with a few important points about our business as we exit from Unilever. Our hard currency, soft currency profile is significantly different from Unilever. We have 70% of our business operating in hard currencies. So what Peter showed you earlier as well. Turkey, yes, is hit by inflation, but we have demonstrated the ability in a hyperinflationary situation to price accordingly. So when the local market prices go up, we are able to price and Turkey is about 8% of the remaining 30%. The second important fact is that more than 90% of our businesses are local for local. So therefore, the discussion on tariff is, let's say, not as relevant for us as a lot of other industries. You look in the U.S., we are above 92% local for local. And then the last one is a lot of interest in how big is cocoa exposure, how big is dairy exposure. You have it all here. 22% of our overall material and packaging cost is cocoa. If you look at that as a percentage of sales, it's about maybe 8%, give or take. So then you have a good idea of what it is and how we manage it and what could be the impact. But be aware also that this is an industry impact. It's not just a Magnum Ice Cream Company impact. A couple of more things which people are often asking me is about a separation cost. We will spend about EUR 800 million on separation. Most -- more than half of it is on technology. So Mark, who is here, who's our Chief Information Technology Officer, has a lot of money to spend, but he has also a big delivery to give us. We work very closely with him and the team. Important also is that 80% of the separation costs would be incurred by next year, which is -- which also means that our separation will happen at a very rapid pace. We are looking to exit all TSAs by 2027. And we will have restructuring costs in the bandwidth of 75 bps to 80 bps. Let me also update you on where we stand regarding separation. It's a very complex process around the world, multiple legal entities, factories, et cetera. We are a separate stand-alone legal company operating already from 1st of July. So this is something important to note that it's not something to happen, but we are operating, of course, fully owned by Unilever. Another important part is that we have agreed on a net debt-to-EBITDA leverage ratio, and that is at 2.4, which puts us nicely in the investment-grade rating. We have obtained the credit rating from Moody's. Maybe between the time that I walked on stage and I will walk off, we may get it also from S&P. The lawyers are I wouldn't say arguing, but discussing the last words of the press release, but there, we should be in a good place. I think you've all seen the announcement that Unilever will retain a 20% stake. I think that clearly signals the confidence that Unilever has and the support that they will give us to ensure that this transition is done in the best possible manner. And most importantly, not only have we signed the TSA agreements, we are actually now already in the month of September, beginning to exit some of the TSA. So the exit plan is pretty rapid, and I will show that to you on the next page. Bulk of the TSA is on IT cost, 60%. And why have we done this? Because we have chosen the most derisked approach to separation. If we had rushed this, there could have been instability in the business. We continue on Unilever systems. We have worked out a way where the data, et cetera, is fully separated within our control. And over time, we will start the rollouts of our own ERP system. There's 15% in terms of finance and supply chain back office that will transition to us as we ramp up our global business solutions. There's a little bit in real estate, which we share and then 20% in other smaller things like fleet management, et cetera, which we are exiting as we work the new contracts. So this -- you see, again, by end of next year, we would have exited 70% of the TSAs. And that's pretty rapid because for a company which has its day 1 in November this year, within a year, we would have exited 70% of our TSAs. Let me then take you on to the capital allocation policy. I want to repeat our strategy is based on driving organic growth. And therefore, we have ensured that the financial plan has the right amount of investments we need. We will have a very competitive dividend policy compared to our peer group. We have a payout ratio of 40% to 60%. The first dividends we will pay out for next year in 2027. I heard a few questions by the -- do we have to wait 2 years for dividend? Absolutely not. Since we are part of Unilever for almost all of this year, the dividend for this year for the ice cream business and all of Unilever will be paid by Unilever. And then from next year, as we run the full year, we will start paying dividends. So there is no dividend holiday in the plan. We do retain the ability of doing bolt-on M&A where we need to. So that's also important. If there are opportunities that come in particular areas that we want to invest, we have the flexibility to do that. And we think that by doing this, we give a good balance between attractive shareholder returns, but also maintaining a solid grade investment rating. And that brings me to the overall financial framework, which is the growth of the top line of 3% to 5% on an average, the margin expansion, 40 to 60 basis points, strong improvement in free cash flow, a very, very competitive return on invested capital, a strong balance sheet with investment-grade leverage and an effective tax rate of 25% to 27% -- that gives us -- that's also roughly in the range of companies that are doing the kind of business mix that we have. So what I want to leave you with is that the strategy that you heard all through the day is actually delivering results consistently over now 18-month period. We have a self-help plan that we are working on and also significantly advanced on. The capital allocation policy and the questions that people had now, you see that in terms of a balance sheet, we exit with a very respectable balance sheet in a very cash-generating business and the targets that we have set for ourselves. So before I move to Q&A, maybe to sum up the day because we've been here for a while and you've heard multiple stories. We play in an attractive market. The market grows 3% to 4% good and attractive returns and the snacking category is very attractive. We have a lot of strengths from the get-go, 160 years of experience and expertise in the company, which is really an invaluable asset, strong brands, world-class capabilities, big part of local manufacturing and a hard currency, soft currency mix that puts us in a very good space. We've also said that the separation is good for both companies. I hope by now, we have made clear why it's an advantage for ice cream. We have the flexibility of tailoring our supply chain and operating model to the cold chain required for ice cream. And we are focusing our investment algorithm on what is needed for ice cream. And what does that give us? It gives us good growth and profit expansion through self-help measures and then gets us to the targets that we have set for ourselves. Before we go to Q&A, I have 2 points to make. You've seen on your table that there are some questionnaires. Please take a couple of minutes to fill them in because it gives us very valuable feedback in terms of what we can do to make this more rewarding for you and help us improve. There is, of course, a great incentive at the end of it because if you hand it in outside at our registration desk, there's a fantastic goody bag that you get as well. And that goody bag doesn't have ice cream, but you can have ice cream on the way to the goody bag. The second most important thing is you saw on Ronald's slide that 92% of our employees believe in the future of our company that has really improved. I really hope that this group is even better than the 92%. So with that, let me invite Peter on stage. Thank you.

Next Capital Markets Day, we're going to turn it around. Then I will be the calm guy and Abhijit will be the excited guy. And so we can flop this. We're actually -- I must say I feel very privileged. We're actually a really nice team. You always -- when you start a new job, will you have work with a great group of people. We were in the lucky circumstance that we could form a team. It's hard work, but we have a lot of fun as well. Questions and answers?

Yes. Let's go to Q&A.

Warren has his hand up.

It's indeed the same. Put your hand up on the webcast, you can type it in the chat and we'll get it into the room. Thank you, Warren.

Warren Ackerman from Barclays. And 2 from Abhijit. You've guided on EBITDA margin, not EBIT margin. Obviously, you can't put EBITDA in the bank. So just imagining that's due to Turkey, it's due to higher depreciation on CapEx. Can you give us some help on how Turkey can swing the numbers for you? And on the go forward on depreciation and amortization, it looks like 5% is a starting point. What your expectation is for D&A going forward as CapEx goes up? Are you confident basically that you can grow EBIT in hard currency? And why not guide on EBITDA? And then the second one, on Ronald's presentation, EPS growth is part of the LTIP criteria. Are you able to tell us what the criteria for EPS is on the LTIP in terms of getting the full payout? And would that be a good guide to what you think EPS growth could be for the Magnum Group?

I think that was 3 questions, Warren.

Yes. Let me -- a couple. So I think you answered the first question, right? The reason why we put EBITDA instead of EBIT is that the depreciation element because of inflation accounting in Turkey has an impact either up or down, depends on which way the currency goes. What happens is typically you have to recalculate your investment -- your capital assets in Turkey from the time of inception and redepreciate it. So the reason why we gave EBITDA is that you see operational improvement, and it gives clarity to our organization on the elements that they can handle. So I think that is one. On the EPS, I think the answer is relatively simple because we still have not gone through our RemCo. Our Board, as you know, is in the form -- still in the stage of being formed. We will make a proposal to our Remuneration Committee. And then as soon as that is finalized, we will have that made public as well. It's just a bit too early now.

Good over there. Anyone have a mic?

Jeremy Fialko, HSBC. Coming back to some of the regional presentations, I know that Peter will be able to give some perspective on this. You talked about getting growth from some of the value retailers doing a little bit more at sort of lower prices. Can you talk about why you think that is a sort of good quality business for you to be kind of going after and how you can avoid getting sort of, let's say, sucked into things becoming very, very, let's say, price dependent 1 or 2 years down the line, whether you think that the moat in those categories at that kind of lower price tiers is good enough. So why you think this is sort of good business to be going after?

It's a really, really interesting question. A couple of years ago, the strategy is we are beauty foods, and we focus only on the premium parts of our portfolio, brands, channels, customers. And it did not work. Everything we gained on mix, we lost in utilization. And when you then don't have a magical god ferry that can wish all these factories away, actually, your profit doesn't improve. Actually, we moved out of dollar and club, amazing channels. In Liquid IV, the business in Costco was above and beyond. We moved out to improve our margin. We are very happy to move in. We need to fight ourselves back in because once you move out, they don't just open the door, you need to come with really good plans. We talked about that during the presentation. But it is really good for the economics of this business to drive volumes through the pipes in the factory, in the distribution, not only ours, but also our distributors have capacity, more volumes through margins up. So we are very bullish about that, whether that is Aldi Lidl in Europe or whether it's drug or whether it's club or whether it's dollar stores, really important and a shame that we pulled out by choice.

More questions from the room, maybe over there.

Yes. Just on the India, when you take on India, is that going to be treated as just M&A? Or is there some other way that's going to be engineered?

No, it's -- so in India, it's a joint venture or kind of -- there is a public shareholding and Unilever, I think, owns 62.9%. So India is going through a separate demerger process following regulatory approvals. The good news is that most approvals are now in place, including the shareholder approval. I think we got a vote of 99.7%. We just have to follow the process. And then at a certain time when permissions are through and the necessary time lines have been achieved, in Q1 next year, we will have to acquire the 62.9% from Unilever. We'll have to make a matching tender offer at the same price to other shareholders and see what if they offer and then decide. And we have to go -- we could go to a maximum of 75%. So even if more do tender their shares, you would temporarily go up and then have to go back to the 75%. That's how it works.

In the front here. Fulvio.

Thank you for taking another question from me. One of the charts that I thought was interesting, it's not there now, but it was on the private label versus your market share in the last few years. And you also showed one of your main competitors. And what intrigued me was that your share was quite negatively correlated with the performance of private label. It seems that you're more susceptible to private label pressures than your main competitor. Did I read that chart correctly? And if that's the case, why do you think that would be? Because normally, when you look at consumer brands, the premium brands tend to be more protected from private label, but obviously, that chart has proved that theory.

And they are. In '23 -- actually, I talked about building a pricing capability. In '22, this business did not price enough. In '23, we had to compensate not pricing enough in '22, and we sort of doubled up on pricing. And as you can see, you probably have read in the reports, we actually lost more volume than we gained on pricing. And who took that volume? It was especially a European problem. It went straight into private label. And once we started to correct that, and we could correct because there is an insane amount of productivity savings, so partly pricing, productivity saving, it straight came back. It was shot in our own foot, just like pulling out of the Dollar General and Club. Why would you do that?

Yes we have a question there in the back.

Jeff.

Yes, or Jeff.

So 2 questions, if I may. The first one is, are you able to provide any sort of guidance as to the likely ballpark cost of the Indian acquisition next year, just so that can get factored into people's forecasts? And secondly, just coming back to the point on EBIT margins. I appreciate that Turkey will add volatility and it's impossible to predict. But on average, what would you expect over time would be a reasonable expectation for EBIT margin expansion for the business?

I think it will be largely in line with the EBITDA that we have given. The Turkey thing, and you don't know what is the degree of inflation and for how long, but the impact of that is 10 or 20 bps plus or minus. So it's not that it goes completely the other way. That's number one. On the India pricing, unfortunately, due to regulatory reasons, there is a set pattern, and we can only disclose it at a particular time when we have to disclose it also to shareholders in India. So unfortunately, I'm a bit tied up there from a legal perspective. But we have that completely funded. So if you look at our overall funding plan and you've seen the report of Moody's already out, it's all in the numbers there. So there is no uncertainty around the India acquisition.

Good. Then the gentleman in the back, please.

Edward Lewis from Rothschild & Co Redburn. I guess just a couple of comments around the Unilever side of things in terms of your Unilever relationship. How much did the changes that were put in place, I guess, in 2022 at Unilever, where Ice Cream was sort of put out as a separate business group? How much has that sort of helped and the advantage that gave? And then what would you -- what are you going to miss from not being part of Unilever?

Good question. I think Unilever has evolved tremendously over the years. Alan started with change. And now obviously, Fernando is really trying to get Unilever to the next level. I think there's more category focus started, but Ice Cream was just at the very, very beginning. And because Ice Cream is so different from the rest, the benefit of separation is really much larger than the specialization in the other categories, but also in the other categories, dedicated supply chains, dedicated sales force. It's a very different Unilever than the Unilever 2 years ago. But I shouldn't comment on Unilever. For us, the separation, as I showed, is an unbelievable game changer because we're in a specific industry. We have a job to be done. We need to step up profitability seriously. We need to step up growth, and we could create the talent, the structures, the strategies with a single-minded focus on delivering on these jobs.

And fully supported by the Unilever Board as well.

Yes. Actually, we're not in -- it's different than margarine or tea where it's sold and basically the buyer sort of need to sort it out. We have been working with Unilever, and I must say, very collaboratively on the separation for the last 18 months, and they're still our friends, friends at a distance, but they're still our friends.

David?

So I'm going to do 2 as well. A few years ago, Halo in the U.S. caused a few problems. And the market structure you talk about, it feels like there's good strong local regional players that can come in and do stuff. So question one, is that a fair comment that, that is a risk more here than anywhere else? Secondly -- it will 3 questions actually. Secondly, does the way you operate now mean that is less of a risk than it would have been under Unilever? And I guess -- and the third piece was you mentioned Japan as a market you hadn't entered. I mean have you looked at that kind of entry and then the question being, is it tough to get into new markets? Or is that something that you'll now be doing more of because you are agile, focused and you'll do it when Unilever didn't do it?

Okay. A couple of questions. Insurgence, there will always, luckily in this world, be people with amazing ideas who have business success. In ice cream, given the investments you need to make in both the supply chain as well as sales and distribution, scaling up is very difficult. In the end, Halo Top did not make it. To be honest, the products were not good enough. And so what happened? They got bought by Welsh. So that's the pattern. It is an industry structure that favors consolidation. And there are 2 large global players. On your second question on Japan and Korea, I did a lot of work in Japan and Korea. The trade structure is dominated by the convenience stores. And when you look at the profit pools of the industry, a too large part of industry profit goes to basically the channel. That's why I find it less successful. I tried actually together with Ben, we were in Japan, opening Ben & Jerry stores. We didn't really make it. But now I have a very, very good Singaporean Asian lead who has all kinds of creative ideas. But we still have [ Shu ] and I hope she finds something really creative and good and profitable and whatever. But when you look at our growth opportunities, we have massive growth opportunities in our existing businesses, whether that's the U.S. or whether that is India. I personally put -- we put a lot of our time and effort in building up a really good business in India. I ran one of the best consumer goods businesses in India, which is the home care business in India. And now we inherited a struggling business. We put our best -- one of our best operators, Toloy on it to build it. The 2 of us are involved. For me, that is lower-hanging fruit than going to Korea.

Maybe that's a nice bridge to one of the questions that we got on the webcast. It's about China. And it says, could you elaborate on the transformation of China? Is the business well positioned for the future?

We have an amazing business in China. I worked in China for 6 years, some of the most fun and interesting working period in my life. Actually, we have -- in normal -- in most businesses, we have a tiered portfolio and quite a broad portfolio. There was already a very strong local ice cream industry with Yili and Mengniu, and these are outstanding companies. These are really, really good companies who basically had a mass and mid-tier portfolio, and we decided to be more premium. Magnum, Cornetto are unbelievable power brands. And in our go-to-market, more regionally focused, more convenience store, more e-commerce. One of the reasons Wai-Fung got this job because she actually did the makeover of Unilever China sales from offline to online. This is the focus of the business. We had -- in '23 and '24, the business was wobbling a bit. We basically put a new boss in, changed the team, changed the strategy, changed the portfolio, changed the distributor margin structure. And I'm very happy that we are humming again. We should hum a bit faster, Wai-Fung, but we are humming again. And it's actually a nicely profitable business in the first half growing double digit. It's great to be in China because China is by far the most competitive ice cream market in the world. It's the most competitive market in many areas. And we, over a 20-year period, have proven that we can compete in China. And the products, you tasted the 7-layer stick is an improvement on a Yili product. We are now rolling it out to the rest of the world, and it's flying off the shelf. So I think increasingly, China will also become a source of innovation. I go there once or twice a year. Next year, I promise Wai-Fung, I will live there for the whole month of May. You're amazed by the innovation power of China. And it's the way they digitize sales, the way they digitize their factories, the robotics, but also marketing execution. China is an amazing market for ice cream -- not only for cars, also for ice cream.

So some more hands here in the front.

My name is [ Niko. ] I just was wondering if you could help me with the free cash flow for FY '26 and '27. I guess I should take the base of the average free cash flow. And then those cash costs, I imagine they're 100% cash or the costs are cash.

Largely, yes.

And so with the Hindustan acquisition, these one-off costs, the dividends, does that mean that your balance sheet actually levers up? And also, can you disclose the lease component? Is there a heavy component of leases here?

Yes, there is. And I can -- sorry, I can disclose it, but it has to happen with the prospectus. That's just legally. So that will come to you before the date of the listing. Your first question was, sorry, on?

Free cash flow.

Yes. No, no, no, that's not the plan. So if you look at the free cash flow, the India acquisition is not part of free cash flow, right? That's just part of the financing. So that doesn't come in. But we do have the one-off costs, which, therefore, you started with the average of the past and you take down the one-off cost to set it up, you take the additional CapEx and then you're pretty much there. So it will be a bit of a dip in the first couple of years given the separation cost that we have to incur, and then we will go up.

Good. More questions over there.

Tom Sykes from Deutsche. Just on your out-of-home business, I think you said you've got about 4 million square meters. It's whatever, 40% of your business. So it's like EUR 850 or something per square meter, which doesn't sound very much. What's the sort of spread of that, please? And where can you actually push that to? Because why should I as a retailer allocate space to you if you're going to generate that per square meter when I could maybe generate more by allocating to different categories, please? And maybe related to that and Warren's question was just do you expect the out-of-home business to grow more quickly than the rest of the group because it's obviously depreciation to sales along with your CapEx is at a higher rate than the group as a whole at the moment?

Yes. So I think we believe when we have the right portfolio for the right outlets with the right assets, that this is a value creation opportunity for retailers. Interestingly, ice cream, you don't sell every time you sell ice cream. You sell the ice cream business system. And at the end of the year, they look and say, okay, how much ice cream did we sell? How much margin did we make? How much money did I spend on electricity? That's basically it. And for most retailers, this is a very -- still a very good game. It's actually more than just placing cabinets. Actually, just placing cabinets. I was in China a long time ago, and there was a period that we placed zillions of cabinets. And in the end, they were full with chickens. So you don't want to do that. You want -- you need a system. And I hope that, that you saw what we are now trying to do in the digitalization of the whole cabinet system, which allows us to look very granular outlet by outlet where is it working, where is it not working. I believe it's still a big opportunity to extend distribution, especially in places like India. I think we will end up with a very serious amount of extra cabinets in India, many D&E countries. I think the opportunities for the U.S. and Europe is different selling systems. I really like this fending idea because it's just very difficult to find outlets where there is a man who is actually willing to do the transactional stuff. They have disappeared, but there's still a lot of space for actually making ice cream available. The return on cabinets is basically 2 to 3 years, basically on the location. So we are not constraining anything, but we want people to put a proper system in place. It's not like this is sort of cabinets for free bonanza. You have a system, you can show us the opportunity. You have a framework around it, capital, no constraint.

And there's a lot of technology that goes in terms of the choice of where we want to put cabinets. Through mobile phone data and all of the rest, we can really see the hotspots of where there is a population that wants ice cream, but we don't have cabinets. And based on that, we do replacement plans.

It is -- we had a real competitive challenge in China for a couple of years because Unilever as a business believed that actually these cabinets was too much capital, too complex. There was Yili, Mengniu came into Indonesia, and they went to many outlets where we said, too marginal, too marginal, we don't want it. And all of a sudden, they had 40% market share in out-of-home, and now we need to compete them out again. When we would have been a little bit more logic in our capital allocation choices, we would have basically closed all the gaps ourselves. And you have the space. It's actually quite amazing. When you go to all these places, and it's just you have your 2-meter, 1-meter shelf space, it's yours. When your throughput is not good, something else might end up, but never a lot, and you control it. how many businesses have it? Yes, Coke and Pepsi, they have their chillers. But it's an enormous asset. When you look at Mondelez in India, they start putting chillers in their stores because it's a very good way to secure shelf space.

Any more questions from the room? Last questions also looking at the time.

The ice cream lover has a question.

Indeed. Well, sorry, it's going to be not a very romantic question, but it's about costs. So you had a lot of -- I mean, the savings this year is quite elevated, and then you have unprecedented costs in terms of raw mat and FX. So is that continuing in the second half of the year? And does that mean we have a bit of a benefit of your savings that kick in next year? So basically trying to understand the curve in terms of margin expansion? And can we as well understand how big are the TSA?

How big in the sense of absolute amount?

Yes.

Yes, that's again something that is a piece of information that is between us and Unilever. We unfortunately cannot put that in the public space. But we will -- like I said, most important for the TSAs is to move out as quickly as possible. And there, we have a very aggressive plan to move out. Regarding the cost savings, the biggest piece of the cost savings are this year and next year. You would have seen that in the chart that we have given. This year, we were unfortunately impacted big time by the raw material price.

Especially in the first half.

So the second half, we kind of lapped that, but the first half was incredibly big. And the fact that it didn't set us back more than 40 basis points just tells you that the rest of the operational plan is working extremely well. And we -- from the prices that we see now, we don't expect that level of hit next year also from the information that we have in terms of weather, crop preparation, et cetera. We don't believe that we will have a hit of that size next year.

One last from Vika. Do we have a mic?

I will be very, very short. You said that you don't see a reason why you could not reach profitability level of one of the core competitors. If I'm not mistaken, it was 14.7% last year. Structurally, it's slightly different businesses. They have exposure to private label, slightly different geographical exposure and a different share of licensing. Is there anything which is structurally different apart from execution, et cetera, which we should keep in mind when we think about it directionally?

Maybe we give you 2 different angles to it. One is simply the footprint, right? You saw our footprint. We are -- in the U.S., we are the #1. And in terms of profitability, you can see publicly available information, we are ahead. So that's a tick. If you look at Europe, we have doubled the market share, but they have then a private label. So you see that overall, in terms of sales, similar levels, but profitability for them is significantly elevated, and that's the gap we have to close. I think the one thing I'd like you to take away is the rest of the world or AMEA as we call it. We have -- and Wai-Fung mentioned it a few times, it's the fastest-growing and most profitable business and our biggest competitor does not have that footprint. So fundamentally, from a footprint perspective, if we close the gap in Europe, there is no reason over the longer term why we should not be a structurally more profitable business.

Actually, we should be more profitable.

If there are no more questions from the room, I think we should give the floor to Peter for a wrap-up because ice creams and drinks are waiting for us.

18 months ago, Ian and Hein asked me, Peter, would you be interested to do so? And I said, I'm not really sure. It's not a really good business. I like my home care stuff. It's in momentum. But I took a month to look at the opportunity. I had some help of some friendly consultants who gave me a freebie. And it's actually much better than I thought 18 months ago. You don't often get a business with really good assets in a really good market that somehow is not gelling. And it was not gelling because the integration, operational integration with Unilever didn't really work, not in sales, not in the supply chain. And there was so much money on the table in the first analysis, in our analysis that we do at this moment in time. And my dream was twofold. A, somebody needs to take this money off the table. It better be me. I put on my activist head and said, what would an activist do to unlock value in this business, and we created a plan and we shared the plan with you. Not all our ambition, but the plan. The second thing I said to myself, I'm in this business now for a really long time in consumer goods. What is the sort of business where a 24-year-old Peter or Abhijit would love to work. Great people, entrepreneurial, growth-obsessed, creative, tech forward and a business with really decent values because we come from a business with really decent values. We're putting this together. I feel very privileged to work with an amazing group of people. And actually, everything we said that will come out is coming out. I'm going to put a large part of the Kulve and family wealth. It's not that much, but it's decent money. I'm going to put in this business because I don't see a better opportunity to make my own -- put my own money in because I really trust that we and the team can get it out. I hope that we also created the picture for an interesting investment opportunity for you guys. We really did our best to show as much as possible. And over the coming period, we will have more time to engage and you'll get all our time for whatever questions that you have. I first would like to thank my team. We're 18 months in. We have a lot of fun, but it's also really hard work. Thank you for putting this all together, Michèle, in the first place. And then I have to thank you because you are here with this huge group. It's a huge commitment. Some people have flown in from far. And only for ice cream, you don't have to do that. So thank you for being with us. Thank you for listening to us. Thank you for all the constructive questions and wish you a safe journey back, and stay in touch. Thank you.