Unilever PLC (ULVR) Earnings Call Transcript & Summary

Good morning, everybody. Welcome to day 2. I'm Tom Sykes, Head of Consumer Research at -- European Consumer Research at Deutsche Bank. It's my great pleasure to welcome to the stage, Graeme Pitkethly, the Group CFO of Unilever; and Hanneke Faber, the President of Unilever Nutrition. Hanneke and Graeme, welcome to the stage, and we'll have a presentation and maybe a brief Q&A at the end.

Good morning, everybody. It's really great to be back at DB Paris again, to get back to face-to-face meetings with so many of you, and nice to see everybody in a nice full room. Today, as Tom said, I'm joined by Hanneke Faber, who's President of our Nutrition Business Group. Here is our plan for today's presentation. I'm going to kick off with a short overview of Unilever before taking you through just how we're navigating the business of 2022, focused on 5 clear strategic choices and a rigorous attention to operating fundamentals that together create a stronger and faster-growing Unilever. I'm then going to hand you over to Hanneke who's going to talk about our Nutrition Business Group. This is now a more structurally attractive business. It's got lots of great growth opportunities ahead of it, and it's all underpinned by our new organization and the really important changes that we are making to the operating model of Unilever starting from the 1st of July. But first, I want to just quickly draw your attention to the usual disclaimer regarding forward-looking statements and non-GAAP measures. And with that, let's get started. Now not everybody closely follows Unilever. So let me share just some key data with you. Turnover was EUR 52 billion last year. And here you see it split for the first time across our new business groups. These are 5 more focused and empowered global businesses. 4 have got a turnover of over EUR 10 billion, and Ice Cream sits at just under EUR 7 billion. Our new operating model is a significant change from today's matrix structure and it makes each business group fully responsible for the strategy, the growth and profit delivery of their business, whilst benefiting from both a leaner corporate center and the scale and technology of Unilever in the form of Unilever business operations. Now we're a company of 150,000 people, many of them working in our supply chain which has just been recognized by Gartner for the third year running as one of only 5 global supply chains in the top masters category. Our core asset is our footprint in the developing markets. These are the engines of global growth in the years ahead and 58% of our turnover comes from developing markets. They include 4 of our 5 largest businesses, that's India, Brazil, China and Indonesia. And whilst developing markets were hit hardest by the pandemic, we have the unique scale, talent and market leadership to benefit from recovery there. Our strategy also calls out 3 very large markets where our priority is to build even more scale for Unilever. That's in the U.S.A., in China and in India. Now our global footprint is very far reaching with 3.4 billion consumers using our brands every day and 190 countries selling our products. We're probably the world's most global company in terms of that footprint. That global presence very much gets reflected in both our talent and our talent acquisition with 92% of our leaders local to their market and it makes Unilever the #1 CPG employer of choice for graduates and career starters in over 50 countries. 13 of our brands have good sales [indiscernible] the chart. 13 of our brands have got sales of over EUR 1 billion annually with the largest, Dove and Knorr, and at over EUR 5 billion and EUR 4 billion, respectively. And in total, these EUR 13 billion brands deliver more than half of our total turnover. And sticking to the number 13 -- there are 13 Unilever brands that sit in the top 50 consumer brands globally according to Kantar, who rank based on market penetration and the number of consumer interactions around the world. And we can keep those brands there because for the past 4 years, we have been recognized as the world's most effective marketer. Our brand is in a good health. Over 80% of our turnover is increasing or holding the key brand power metric, and we have invested to build leading in-house digital marketing and data capability through 45 digital commerce hubs around the world. That's important because almost half of our advertising is now in digital channels. Our goal is to deliver superior financial performance through an integrated, sustainable business strategy because that has ever increasing relevance to both our consumers and our preferences. And we are a global leader in sustainable business, topping both the Dow Jones Sustainability Index and the GlobeScan/SustainAbility Leaders Survey. This strategy is a simple, hard-edged business decision made because millennial and Gen Z consumers who represent the largest part of our consumer base now expect that the businesses and brands that they use go about their business this way. Now our growth strategy has 5 clear strategic priorities delivering the higher performance levels, which we've seen over 2021 and 2022. Let me use the lens of Q1 performance to illustrate these. Priority #1 is our brands. Our 13 EUR 1 billion-plus brands delivered growth of 8.8% in the quarter, underpinned by bigger, better, more focused innovation and much improved product performance all validated by stepped-up continuous testing. Our second priority is to move our portfolio towards higher-growth spaces. Acquisitions made since 2017 grew at just under 15%, delivering 80 basis points of growth accretion. In Prestige Beauty, growth of 14% was driven by skin care with a step-up in hair and cosmetics. Functional Nutrition Q1 growth was 18%, reflecting strong contributions from the hydration brand Liquid I.V. and the vitamin brand, OLLY. And the divestments that we've made since 2017 are spreads and of tea representing almost 1/4 of our Food & Refreshment business, create a step change in the growth profile of that business, which Hanneke will talk to in a second. 2022 also started well for our 3 priority markets, as I said, the U.S., India and China. And taken together, those markets actually represent over 1/3 of Unilever. Alongside the good growth noted on this chart, we have strong business winning reads in these 3 priority markets. Our fourth priority is leading in the channels of the future. E-commerce grew by 27% in Q1. And in just 5 years, e-commerce in Unilever has grown from 2% of turnover to 14% by investing significant resources and channel expertise in relevant innovation and in our technology capabilities. And finally, at the start of this year, we announced a new operating model, which is a very important change in how we run Unilever, and it underpins higher performance. We've made excellent progress with what is a fast implementation and the new organization will be in place on our target date of July 1. Now I mentioned that we continue to shift our portfolio towards higher growth through a combination of divestments and capital deployment. A couple of weeks ago, we announced the acquisition of a majority stake in this brand, Nutrafol, which is a leading provider of hair wellness products, and we did have a position before in that business through Unilever Ventures. Nutrafol is the #1 dermatologist-recommended hair wellness brand in the U.S., and it's a truly excellent addition to our Beauty & Wellbeing business group. I'd like to turn now to our 2022 priorities. I can summarize these as follows: first, sustaining the step-up in growth and competitiveness in Unilever; second, navigating through unprecedented cost inflation; and third, landing the new organization and operating model successfully. So let me turn to each of these in turn. Putting our performance in the context of recent years, our goal is sustained competitive growth in a multiyear framework of 3% to 5%. And of course, our ambition is to be towards the top end of that range. We stepped up growth in 2021 at 4.5%, Q1 growth of 7.3% built on that momentum helped by strong pricing in a high input cost environment and supported by broad-based competitiveness. And restoring our competitiveness has been a key focus of the last 3 years. It had dropped to a level that was unacceptable. And through our 5-point strategy, we have corrected this with 53% of our business gaining share in 2020 and 2021 and 58% in Q1. And while we kept underlying operating margin around flat in 2021, growth is our goal, and we will invest to maintain competitive levels of marketing, R&D and CapEx despite this period of extreme cost inflation. In summary then, we're continuing to see improved growth momentum, and we're committed to building on that to sustain stepped up competitive growth which we know is the biggest unlock for value creation. Let me turn briefly to the cost environment, how inflation is impacting our business and how we're navigating that. As we all know, the macro picture is dominated by extreme cost inflation, which is best illustrated by our key commodity markets. On the left-hand side of this chart are the 5-year spot price trends for 3 commodities palm, soy and crude, which are very important materials for Unilever. The index shown is relative to the 2020 average price rebased to 100, and it shows increases ranging from 2.3x to 2.7x. All of this is reflected in our net material inflation, which is the P&L impact of inflation after hedging, procurement actions, product reformulations and currency movements. With our Q1 results, we shared that we are seeing inflation of around EUR 4.8 billion for 2022 on a cost base of some EUR 20 billion. Against this backdrop, we delivered strong price growth of 8.8% in -- sorry, 8.3% in Q1. And only a small impact on volume. The pricing momentum that we established during 2021 has continued. And whilst there is pressure on consumers at many levels, increasing prices in response to such extreme cost inflation is the right thing to do because it enables us to keep investing in the quality and performance of our brands. In executing this pricing strategy, we must be responsible and not do so in a way that compromises long-term business health. And our teams are managing cost, price, demand elasticity and competitive dynamics, market by market, channel by channel, brand by brand, and they're doing this well so far. Our third 2022 priority is to deliver the new organization on the first of July. It is so important that I want to repeat it here. This is a very substantial change in the operating model of Unilever, and it will underpin improved performance delivery. We're fully focused on delivering this change without compromising the improving momentum that we've built. It is a simpler operating model with 5 business groups, a lean corporate center and a low-cost, high-scale technology-driven backbone in the form of Unilever business operations. The new organization makes Unilever simpler, faster and more agile. We'll be more focused on our categories. We'll be able to execute strategy more powerfully and more consistently. It will be a Unilever that's easier for great managers to operate in with higher impairment and with that, a higher level of accountability. We will, of course, provide you with a lot more granularity and data in the months ahead. Q2 will be the last quarter in which we will formally report our results based on the old organization structure, which was 3 divisions and 15 market organizations. And then in September, over the course of September, we'll provide restated historical data for each business group. Our Q3 trading statement in October will reflect the new organization, and we will have a capital markets event in the week commencing the 5th of December, which will include deeper dive sessions with each of the 5 business group presidents and a review of Unilever business operations. We're planning to host that event in Brazil so that we can show you firsthand just how the new organization is working in one of our key developing markets and I very much hope you can attend that event. And with that, let me hand you over to my colleague, Hanneke, who as Tom said, is our Business Group President for Nutrition. Hanneke, over to you.

Thanks, Graeme, and good morning, everyone. It's great to be with you here today. I'd like to talk to you -- introduce you to Nutrition since its brand new and talk a little bit about our vision and our strategy going forward. Introduction. This is a EUR 13 billion business. You've seen it. We're accelerating growth after many years of kind of 1% to 2% growth. From the second half of 2020, we started growing faster. Last year, a bit over 6%. We started this year off very well as well. That's driven by some COVID headwinds and tailwinds, clearly more in-home eating, but we also have a very large food service business, which, of course, had a lot of headwinds from COVID. It's mostly driven by being more competitive, and you see the shares there. We just got more competitive, which has driven the growth. This business is very profitable, comfortably accretive to Unilever. And we're proud that it's also a responsible business. Last September, the World Benchmarking Alliance [indiscernible] Unilever, Foods and Refreshments at that time. as the #1 company out of 350 food and agricultural companies when it comes to responsible business. We have a concentrated brand lineup. So in Nutrition, 60% of our sales are from 2 mega brands, Knorr and Hellmann's. And in fact, 80% of our sales are from just 10 brands globally. So this is a concentrated lineup. And I'll tell you a little bit about 4 of our brands: Knorr, first and foremost, $4.4 billion, available in pretty much every market that Unilever operates in. Large, steady growing, very profitable plays in interesting growing segments. So bouillon and seasonings, cooking ingredients, they're the biggest part of that business. You see some examples there, our new zero salt which is doing very well, the iconic Aromat products. And actually, our #1 skew around the world is the Chinese chicken powder on Knorr. We also sell mealmakers, soups and other meal ingredients. Very large in emerging markets, almost 1/3 of the Knorr business is in food service. It is a product that hundreds of thousands of chefs around the world depend on and the global campaign is Eat for Good, which is all about taste, ease and healthier eating. Hellmann's is almost a EUR 2 billion brand. It's in about 70 countries. Again, large and profitable, has been growing very, very fast -- the last 2 years, double-digit growth. Stronghold, of course, in mayonnaise, the world's best mayonnaise if I might say so myself, with real mayonnaise, vegan mayonnaise, light mayonnaise, flavored mayonnaises. And of course, it is skewed towards developed markets because it goes with sandwiches and burgers. That's what we eat here in the West. But as that cuisine moves east and south as well, big opportunity for Hellmann's to further grow, and we've seen some really good success in white space expansion of Hellmann's. About 20% of that business sits in food service and the campaign of Hellmann's is called Make Taste, Not Waste. Since that has attracted some attention among some of you earlier this year in terms of campaigns that are purposeful, I did want to show you 1 ad of Hellmann's. This was one of the highest scoring ads in the Super Bowl this year, and this campaign is what's been driving the growth. [Presentation]

That's Hellmann's. Horlicks and Boost acquired in 2020, a real functional nutrition powerhouse, about EUR 600 million worth of sales, very, very profitable. Two strong brands, actually, Horlicks and Boost focused on India and a lot of future upside in that business as well. And finally, the Vegetarian Butcher, which we acquired in 2019 as part of our overall plant-based strategy. Our plant-based strategy isn't just plant-based meat. It's very much also plant-based ice cream, plant-based mayonnaise, plant-based products under Knorr. But clearly, this is an important segment. This brand has been super-fast growing, grew 70% each of the last 2 years. We have been expanding it sequentially into white spaces, both geographically and new products. You see some of our products there. The Unbelievaballs, the What The Cluck, very irreverent brand. We're really building a brand in this segment, which is very, very important. And food service has been important to build this brand. So we are the whopper of Burger King in EMEA, in China and in Latin America. We have good collaborations with Starbucks and with The Pizza Guys as well. And I think what's really, really interesting is -- just 2 weeks ago, Burger King Belgium came out and said now 1/3 of their whoppers are actually The Vegetarian Butcher. So this continues to be a segment that's growing fast and that we see a lot of future for. So quick film. [Presentation]

So a couple of last tidbits on the business. Nutrition is a global business. We already said that with really good exposure to faster-growing markets and faster-growing channels. So 55% of nutrition is in developing markets with India at the top, that's also our single biggest market for nutrition, 45% in developed with the U.S. at the top, and that's our second biggest market in Nutrition. In terms of channels, 1/3 of our business is outside of traditional retail in channels that are growing faster. So about 20% in food service, mostly in restaurants, which have a bright future post COVID. And almost 10% already in e-commerce, both of those still lots of upside to be had. Now as we look forward, what's the market going to do? We think this is a market that is quite attractive. So there's some strong trends underpinning future growth. First of all, Cooking Renaissance. In COVID, we all learned to -- we learned how to cook at home. And with so many people working hybrid these days, part office, part home, there's many more lunches still being cooked. That's a market opportunity for us. People are looking for recipe inspiration and we're seeing that tailwind. Food Now is a second trend. Last year, we grew e-commerce by more than 50% in Nutrition. And in fact, the instant delivery of food that gets to you, the Uber Eats, the Gopuffs, we had growth of 5x. So again, a really strong trend for us. Value. Big topic today, because clearly, there's a cohort of consumers that's extremely cash strapped and will be so in the months ahead globally. And we serve those consumers well with things like the INR 5 Horlicks sachet or the $1.25 [indiscernible] in the U.S. Real basic products for people that they need now. There's also a cohort that's really flushed with cash, and we serve those consumers well as well. I was in myStore, myBoutique, I should say, here in Paris last night. It was doing very, very brisk business with my products that go for up to EUR 100. So we span the gamut across both premium and the bottom end of the pyramid, which will be super important in the months ahead. Of course, the big mega trend is healthier living. I have yet to meet a consumer who says, "I don't want to live and eat healthier and conscious choices are part of that, increasing number of people around the world who want to eat more flexitarian diets. Maybe not be vegetarian, but just swap meat for plant-based products once in a while. People want to waste less food. They want to use less plastic. And increasingly, we're seeing a desire for sustainably sourced products as well. So all those are trends that are important. And finally, a key trend that we're seeing, which is a [ fun ] 1 diaspora is not a new trend, but 1 in 25 people around the world does not live in the country that they come from. There's probably a bunch of them in this room as well. With our strong local brands, we have real opportunity to capitalize on that trend. And one example is the Fun 1 is Brew Coffee, which you may have never heard of, but it's the biggest coffee brand in India, to Unilever. It's now also a very big coffee brand on the campus of Google in Mountain View in California. Why? Of course, lots of Indian engineers there. So diaspora's an opportunity for us with local brands that we're going after. All of those trends are happening in a food system that needs to change. 1 billion people hungry increasingly so unfortunately, 2 billion people overweight or obese. Food system responsible for 30% of greenhouse gas emissions and causing deforestation and biodiversity loss as we grow food. And as we do that, we also waste 1/3 of all the food that is produced. Those are horrific stats and as a big foods nutrition company, we have a big responsibility to help mitigate those. So our ambition is to be a world-class force for good in food. World-class starts with the business. We aim to deliver top third growth and top 3 financial performance in our sector. And Force for Good means doing that, doing well by doing good. And I think in nutrition, the interest of the consumer, the planet and the shareholder are extremely well aligned, and we'll talk about the choices that go with that. Three strategic priorities: an ever healthier portfolio, a boldly healthier core and leveraging the new Unilever organization. Let me touch on all 3 of those. Portfolio can be quite brief and Graeme mentioned it as well. 80% of our sales in Nutrition are now in growing segments, segments that are growing at or above the Nutrition market growth. That is up from less than 50% in 2018. And of course, it's driven by the big divestitures that we did, the selling of spread, the selling of tea and the selling of a whole host of smaller food brands, including in the last year. Sale of Barilla, sale of Baltimore, we continue to shed smaller foods brands in lower-growth segments. And of course, the acquisition of Horlicks and the acquisition of the Vegetarian Butcher. So a rising tideless boats, we have a much better portfolio now than we had 4 years ago. I'm excited about that. And we'll continue to make that healthier. If there's opportunities, we'll shed smaller brands, we don't have very many left in lower growth segments. And if there's good opportunities, we will be looking to acquiring Functional Nutrition and in Scratch Cooking aids, which are really robustly growing segments. Spend a little bit more time on boldly healthier core, the products and the brands we have now. As I said, consumers want to eat healthier. In fact, 73% intend to eat healthier, and they expect companies to act, whether it's on their health or on the planet's health. And the first thing we've done to leverage that is a new product design framework. This is from 2019. Before 2019, here's how we measured product superiority. Of course, superior products in the bedrock of everything we do. We used to measure that by basically blind taste testing. We take our product, we take the key competitive product. We do blind taste testing and said, you win or you lose. How do you drive taste, sugar and salt. That is not what consumers want today. So our new framework that we implemented in 2019 actually says you still have to win that taste test. That is critical. But you have to do that in a way that's also healthier for people, healthier for the planet, and that comes to sustainable packaging and sourcing and has a clean label. Only when you tick those boxes do we consider a product superior. That's been a sea change in how we develop products, and I'm delighted to say that we went from 75% holistically superior to now 88%. And clearly, the target is 100%. And here's a few examples of that. I mentioned the Knorr lower salt and the Knorr's zero salt bouillons which is actually quite a feat to develop the zero salt. They're doing very well. They're also margin accretive. So these things are kind of win-win-wins. Lipton Ice Tea, Zero sugar, very significant part of our portfolio now, delivering super strong growth and also helps us be less exposed to sugar taxes, which are trends around the world. Plant based, of course, really important. I'll show you a little film in just a second. And then fortification is another area where we can really develop products that are better for people, especially. This is an example from Royco. Royco is Knorr in Indonesia, just sold under a different name. Indonesia, more than 200 million people, 1/3 of children in Indonesia are stunted for their growth. They don't reach their full height. That's because of iron and iodine deficiencies. Royco is present in 80% of Indonesian households where it's used on at least a weekly basis. Last year, we reformulated adding iron and iodine, record shares, record growth and we're making a real difference for public health in Indonesia. That's the kind of holistic superior products that we're delivering for consumers around the world. I want to show you one example of plant-based, which is Knorr Rinde Mas. Again, very consumer-based. We launched this in Latin America last fall. Lots of cash dropped consumers in Latin America. They love to eat meat but they're trying to stretch their budget. Rinde Mas means better yield. It's a plant-based mix that you mix into your burgers or your meat balls and you actually get more bang for the buck. I'll show you the film here. [Presentation]

All these boldly healthier core examples are underpinned and enabled by world-class R&D expertise. We opened a brand new EUR 85 million innovation center on the campus of Wageningen University in the Netherlands at the end of 2019. They call that the Silicon Valley of Food. It's been serving us very well to have about 500 scientists on campus there with students, with professors with a very rich start-up ecosystem around us that is driving a lot of this innovation and strengthening further our already really good capabilities in areas like processing, like micro structures and of course, culinary expertise by the hundreds of chefs we employ around the world. Now all that is nice, but when it doesn't come to life for the consumer, it's worth absolutely nothing. So big focus on execution as well. We've got to look great in-store and in promotion every single day, big focus for us and doing well and online. Increasingly, content that converts is critical for our business. And I want to show you one fun example from a not-so-fun time, the last couple of months, obviously, been very difficult in Shanghai and in many Chinese cities with the lockdown, very difficult for consumers. Now our team did a great job. Our plants -- government approval to reopen our foods plants pretty quickly into the lockdown. Of course, in a closed loop or people have been sleeping at the plant on stretchers because they were not allowed to leave. We figured out some ways to do logistics. And then we said, well, we've got to let consumers know that we are still around and can deliver food for you. Of course, consumers at home, all they can do at home was take COVID tests and eat their government rations -- vegetables that they got. So we worked with some -- acquire actually of influencers to do this campaign. [Presentation]

And digital advertising is now about 50% of what we do. So this is very different from even just a few years ago. The other part of execution in this business is winning every season, absolutely critical in foods. There are times of year where people eat more, whether it's Ramadan, very important for our business. Barbecue season, right now, if you walk around into Paris stores, so you'll see some of that. And of course, new seasons that we created, Super Bowl was huge for us this year and helped us get off to a great start in the U.S. We want to lead the industry when it comes to being boldly healthier. We do that through our future food commitments. Those are public, external. We've committed to EUR 1 billion in plant-based meat and dairy replacement sales to halving food wastes to doubling the number of products with positive nutrition and to continue to lower salt, sugar and calories. We also will lead in regenerative agriculture. We've committed that. Just on the Knorr brands, we'll invest EUR 20 million in regenerative ag and 50 projects around the world across the business. That will be more than 100 projects, absolutely critical for the future of the food system to grow our vegetables, our fruits, our oils in ways that are much more sustainable than they've ever been. And finally, Positive Nutrition. You may have seen in the press that in March, we committed to set new benchmarks for healthy nutrition reporting, and we'll be the first foods company to do that and report on 6 government endorsed nutrition profiling schemes. And I suspect some others will follow that. So finally, and I'll wrap it up there. The third area of our strategy is leveraging the new Unilever organization, which Graeme explained. I really believe that the new organization will make a simpler, faster, more agile. We'll have the P&L ownership end-to-end. We will also have direct ownership of the supply chain, which wasn't true in the current matrix. That will help us move faster and do some more simplification. We have updated our supply chain over the past few years, but there's more to do. It will help us deliver more category focus and domain expertise, talk to you about the Hive, our center in the Netherlands will help us with customers some really great progress with some big customers around the world. And of course, in foodservice and e-com, it will help us continue to build more domain expertise in those spaces. And finally, we'll just be more empowered and accountable. We like to talk about ourselves as we are all chefs, that's chefs in the culinary sense, but more so chefs in the sense of the French chief. The buck stops with us, we're accountable and we're going to make this business shine. So with that, I'll summarize. Very attractive, I think, nutrition business, a transformed portfolio, which sets us up well for growth. A real focus on boldly healthier products for now and the future. And we think the new organization will be a real help to us. Thank you.

Great. Thanks very much, Hanneke. We've got a couple of minutes left only for questions. So if you would like to ask a question, do please raise your hand and there'll be microphones if you'd like to. Perhaps yes.

Thanks for the presentation. We've had a lot of comments over the -- yesterday at the conference and suspect ongoing around this discussion around inflation and price points. I'd just be interested to hear a few more thoughts around that the incremental buyer of certain products and where you think the pricing can potentially increase to? And if you're seeing any signs of any change in the customer ability to absorb those prices?

It's a very complicated, but very relevant question, I have to say. The question about pricing and what can be absorbed is a function basically of 4 things: the strength of your brand, the competitive dynamic, the intensity of competition. Very importantly, the relative price of your product, not the absolute price of your product, but the relative price of your product. And your sort of power on the ground in your consumer relationships. They are the 4 dynamics that we're balancing out. And around the world, we talk a lot within the business. So about a triangle that we're managing right now, which is between price and cost at one corner, volume and margin in another corner and competitiveness of our business. And It's a very different landscape around the world. I'll just give you a couple of examples. In South Asia, we've raised prices by double digits. -- and volumes have been broadly flat. So quite a low level of elasticity so far in that part of the world. In Latin America, which obviously is used to higher levels of inflation generally, we raised prices in the first quarter at 16%, but volumes were down by 6%. Now we're not particularly concerned about that. But even for Latin America standards, the level of price increases we've taken in Brazil, in Mexico, in Argentina and Chile, et cetera, have all been well into double digits. And then a very important market for us in North America, we've raised prices and volumes have held up so far. Very different around the world, quite different in Southeast Asia, where competition trends to manage, at least in our business, absolute profit levels and competition has not been following so strongly as we have been doing on pricing. And similarly, in Europe, where the competitive dynamic is very different. So I wish I could give you a simpler, more consolidated picture, but it really is very fragmented around the world, but it's very relevant and probably our biggest priority at the moment.

I think we got about a minute left. Maybe just one question, perhaps be remiss of me not to ask with regard to recent board changes and -- and why were those board changes made? What should we read into the implications of those? And what impact do we see that happening on the group?

Well, Tom, I mean obviously, it was big news, widely covered. I'm sure it's on most people's minds. We have a new board member in the form of Nelson Peltz. First of all, he has a great deal of experience and track record, particularly in the consumer space at P&G, at [ Hines ], at Mondelez, et cetera. Board did a lot of diligence. The board had enormous amount of interaction and thinking about Mr. Peltz' candidacy to join the Unilever board. And it really is as simple as that, we felt he would be a strong addition to Unilever's board. He joins the board member in a few weeks' time, and we're looking forward to seeing what he can bring to the business to unlock value in the company. That's what we're focused on, and we feel he is a strong addition to the board.

Okay. Great. Well, I'm sure there'll be lots of debate on things going forward. But thank you very much, Hanneke, and thank you very much, Graeme, for joining us.

Thanks, Tom. Thanks, everybody.

Thanks very much.