Q4 2023 Colgate Palmolive Co Earnings Call

Good morning, welcome to today's Colgate Palmolive fourth quarter and full year 2023 earnings conference call.

This call is being recorded and is being simulcast live at Www Dot Colgate Palmolive dotcom.

Now for opening remarks, I'd like to turn this call over to Chief Investor Relations Officer, and Executive Vice President M&A John Boucher.

John A. Faucher: Thanks Patty.

John A. Faucher: Good morning, and welcome to our fourth quarter and full year 2023 earnings release Conference call. This is John O'shea.

John A. Faucher: Today's conference call will include forward looking statements actual results could differ materially from these statements. Please refer to the Q4 and full year 2023 earnings press release and related prepared materials and our most recent filings with the SEC, including our 2022 annual report on Form 10-K and.

John A. Faucher: Subsequent SEC filings all available on Colgate's website for a discussion of the factors that could cause actual results to differ materially from these statements.

John A. Faucher: This conference call will also include a discussion of non-GAAP financial measures, including those identified in tables for 678 and nine of the earnings press release, a full reconciliation to the corresponding GAAP financial measures is included in the Q4 2023 earnings press release and is available on Colgate's website.

John A. Faucher: Joining me on the call. This morning are Noel Wallace, Chairman, President and Chief Executive Officer, and stands at Tulip Chief Financial Officer.

Noel R. Wallace: <unk> will provide you with some thoughts on our Q4 and full year results and our 2024 outlook. We will then open it up for Q&A.

Noel R. Wallace: Thanks, Sean and good morning, everyone and thanks for joining us to discuss our strong finish to a very good year in 2023, and our positive outlook for 2024.

Noel R. Wallace: Over the past two years, we've been particularly focused on sustaining our strong organic sales growth, while rebuilding our margins and improving our cash flow performance, we deliver on all three of those goals. This year, while still investing behind advertising to strengthen our brands and building and scaling capabilities to deliver future growth.

Noel R. Wallace: 2023 marked our fifth consecutive year of organic sales growth either in line or ahead of our 3% to 5% long term target range.

Sean Smith: We delivered balanced organic sales growth growth in all six divisions, all four of our categories and with improved balance between pricing and volume as we exited the year.

Volume rounded to flat in the fourth quarter and was up for the quarter, excluding the impact of lower private label volumes at Hills.

Sean Smith: Our market share momentum is improving behind strong innovation higher levels of brand investment with a focus on improving the effectiveness of each dollar spent.

We are also seeing the benefits of our digital transformation as well as our efforts with data and analytics continue to proceed.

Sean Smith: Our commitment to revenue growth management, and the strength of our funding the growth average combined with our global productivity initiatives drove gross margin expansion double digit base business operating profit growth and high single digit base business EPS growth. We delivered these results, while increasing the investment in marketing and strategic capabilities.

Sean Smith: And absorbing the headwinds from higher interest expense pension and tax.

Sean Smith: We drove greater than 60% of free cash flow growth, allowing us to invest behind our brands increased capacity and buy back stock. We also increased our dividend for the 60 <unk> consecutive year.

Sean Smith: I am deeply proud of the results Colgate people have delivered in a challenging operating environment.

Sean Smith: 'twenty 'twenty four will offer many of the same challenges as 2023 geopolitical unrest foreign exchange headwinds and a challenged consumer.

Continued softening in China, and a large number of political elections around the world.

Operator: Good morning. Welcome to today's Colgate-Palmolive fourth quarter and full year 2023 earnings conference call. This call is being recorded and is being final cast live at www.colgatepalmolive.com. Now, for opening remarks, I'd like to turn this call over to Chief Investor Relations Officer and Executive Vice President, M&A, John Faucher. Thanks, Betsy. Good morning, and welcome to our fourth quarter and full year 2023 earnings release conference. This is John Faucher.

Sean Smith: We enter 2024 with strong momentum and the plans in place to deliver in this environment as well as greater flexibility in both our income statement and our balance sheet.

Sean Smith: As we've mentioned over the past few quarters, we're focused on returning to consistent.

Sean Smith: Compounding EPS growth and our 'twenty 'twenty four guidance reflects this ambition, we will continue to invest to drive high quality balanced organic sales growth and with both volume and pricing growing we plan to deliver on productivity to fund this incremental investment while growing earnings per share this should enable us to deliver.

Today's conference call will include forward-looking statements. Actual results could differ materially from these; please refer to the Q4 and full year 2023 earnings press release, and related prepared materials, and our most recent filings with the SEC, including our 2022 annual report on Form 10-K, and subsequent SEC filings, all available on Colgate's website, for a discussion of the factors that could cause actual results to differ materially from these statements. This conference call will also include a discussion of non-GAAP financial measures, including those identified in Tables 4, 6, 7, 8, and 9 of the Earnings Press Release.

Sean Smith: Our strong cash flow growth to invest back in the business and return cash to shareholders.

Sean Smith: I look forward to discussing our 2024 plants in further detail at Cagny next month. So you can share the confidence the Colgate Palmolive team has in our continued growth and with that I'll take your questions.

Okay.

Sean Smith: We will now begin the question and answer session.

Sean Smith: I'll ask a question you May press Star then one Andrew touched on it too.

Andrew: To withdraw your question. Please press Star then two please.

Andrew: Please limit yourself to one question. If you have further questions you may reenter the question queue.

A full reconciliation to the corresponding GAAP financial measures is included in the Q4 2023 earnings press release and is available on Colgate's website. Joining me on the call this morning are Noel Wallace, Chairman, President, and Chief Executive Officer, and Stan Satula, Chief Financial Officer. Noel will provide you with some thoughts on our Q4 and full year results and our 2024 outlook. We will then open it up for Q&A.

Andrew: Once again, if he would like to ask a question. Please press Star then one.

Andrew: The first question today comes from Dara.

Dara: <unk> with Morgan Stanley. Please go ahead.

Dara: Hey, guys. So just wanted to focus on market share results in Q4, and as you look ahead.

Noel R. Wallace: Thanks, Sean. And good morning, everyone. And thanks for joining us to discuss our strong finish to a very good year in 2023 and our positive outlook for 2024. Over the past two years, we've been particularly focused on sustaining our strong organic sales growth while rebuilding our margins and improving our cash flow performance. We delivered on all three of those goals this year while still investing in advertising to strengthen our brands and building and scaling capabilities to deliver future growth. 2023 marked our fifth consecutive year of organic sales growth either in line or ahead of our three to five percent long-term target range. We delivered balanced organic sales growth, growth in all six divisions and all four of our categories, and with an improved balance between pricing and volume as we exited the year, volume rounded to flat in the fourth quarter and was up for the quarter excluding the impact of lower private label volumes it held.

Dara: Oral care share was was obviously strong again and you delivered healthy expansion for the full year can you just talk about your forward positioning on the share front in oral care you know you've got a tougher comparison here.

Dara: So how do you think about.

Sean Smith: The sustainability of those share gains as you look out to 2024, and then a similar question on pet obviously, some industry pressure points can you sort of juxtapose your market share relative to those industry pressure points and if the unlocked capacity.

Greg: <unk> is a significant driver of market share opportunity longer term in that business. Thanks, Greg.

Greg: Great. Good morning, Dara. Thank you. So let me start a little bit broader on the on the categories, particularly oral care where.

Dara: We're really encouraged to see the inflection of positive volume growth in the categories around the world.

Dara: And in many of the regions, where we would see negative volume growth. We started to see an inflection of that towards the end of the fourth quarter in the category. So that gives us great confidence that the category and the pricing that we put in place is continuing to turn and importantly, we're going to see that growth continue in 2024.

Noel R. Wallace: Our market share momentum is improving behind strong innovation, higher levels of brand investment with a focus on improving the effectiveness of each dollar spent. We are also seeing the benefits of our digital transformation as our efforts with data analytics continue. Our commitment to revenue growth management and the strength of our funding-to-growth efforts, combined with our global productivity initiative, drove gross margin expansion, double-digit-based business operating profit growth, and high single-digit-based business EPS growth. We delivered these results while increasing the investment in marketing and strategic capabilities and absorbing the headwinds from higher interest expense, pension, and tax. We drove greater than 60% free cash flow growth, allowing us to invest behind our brands, increase capacity, and buy back stock. We also increased our dividend for the 61st consecutive year.

Dara: As you bring that back to our business, a really strong quarter for oral care as you mentioned, both from a organic and sales standpoint, but likewise is that transferred into better market share growth. If I take oral care in general we were up double digits in the quarter that translated into strong market share growth, particularly in regions like <unk>.

Dara: Latin America, Europe Africa, Eurasia, and you saw some improved scanner data in the U S. As well I think this is a reflection of the core business strategy that we have in place the increased advertising that we're putting behind the business as well as a strong innovation pipeline that continued in the back half of 2023 and will continue in 2024.

Sean Smith: As well so market shares around the world strong and we would anticipate that that we'll see continued growth as we move through the balance of 'twenty, four and I would caveat with some of that obviously the markets will be challenged given some of the upfront issues I mentioned.

Noel R. Wallace: I am deeply proud of the results Colgate people have delivered in a challenging operating environment. 2024 will offer many of the same challenges as 2023, including geopolitical unrest, foreign exchange headwinds, a challenged consumer, continued softness in China, and a large number of political elections around the world. We enter 2024 with strong momentum and the plans in place to deliver in this environment, as well as greater flexibility in both our income statement and our balance sheet. As we've mentioned over the past few quarters, we're focused on returning to consistent, compounded EPS growth, and our 2024 guidance reflects this ambition. We will continue to invest to drive high-quality, balanced organic sales growth with both volume and pricing growing. We plan to deliver on productivity to fund this incremental investment while growing earnings per share.

Sean Smith: But pleasing to see the strong volume growth in some of our bigger regions. If you take Latin America, particularly aged three strong quarters of strong volume growth very much driven by oral care, but quite frankly that was a cross section of all of our categories and youll see that volume improving across all of our divisions. So again I think we're well positioned on that.

Sean Smith: Let me talk a little bit about pet because I think there's some important context to our strategy and why what we're doing is different for the market and what we're doing is working for the marketplace as well we've talked about Colgate being the most penetrated brand in the World. We've also know the hills has low penetration. So we will continue to execute.

Sean Smith: Series, a differentiated strategies on hills in order to continue to accelerate our growth on that business. So if I take the three aspects that we think about for Hill's reach awareness and conversion reach obviously is a reflection of the strong advertising that we're putting in place to get the message out with low single digit penetration on.

Noel R. Wallace: This should enable us to deliver strong cash flow growth to invest back in the business and return cash to shareholders. I look forward to discussing our 2024 plans in further detail at Cagney next month so you can share the confidence the Colgate-Pomaleff team has in our continued growth. And with that, I'll take your questions. We will now begin the question and answer session. To ask a question, you may press star and one on your touch-tone phone. To withdraw your Praskar, Vint. Please limit yourself to one question.

Sean Smith: Hill's we want to ensure the awareness of our superior science is well understood. Hence the strategy to drive more TV spending more digital spending through consistently through the quarters. We're spending a lot of time on the effectiveness of that reach to ensure that we're getting the awareness of it we're using obviously a strong professional endorsement that we have behind that.

Sean Smith: <unk> continued to accelerate our science and our clinical communication with that key opinion leaders is critical to the success of the brand and importantly, as we think about conversion a lot of non users in the category as I mentioned I think on the third quarter call, 5% of consumers are using a therapeutic nutrition, but theoretically 80 person.

Operator: If you have further questions, please feel free to reach out to us at the email address. You may re-enter the question queue. Once again, if you would like to ask a question, please press star then 1. The first question today comes from Dara Mohsenian with Morgan. Please go ahead.

Sean Smith: <unk> should be using the therapeutic nutrition, so a lot of opportunity to continue to drive share the dynamics in the category, hence you're seeing a little bit of trade down from wedding to enter into dry I mentioned that on the third quarter call treats have suffered now we're not immune to the category softness, but if you take a step back and look at our principal retail <unk>.

Hey guys, just wanted to focus on market share results in Q4. And as you look ahead, oral care share was obviously strong again, and you delivered healthy expansion for the full year. Can you just talk about your forward position on the share front in oral care? We've got a tougher comparison here.

Sean Smith: <unk> pet specialty neighborhood pet, we're growing share nicely across all of those environments, which means we're helping our retail partners grow category dollars penetration was up roughly 10% in the U S. Our biggest and largest market. So we're very pleased with the progress we have there yes, the categories a little softer, but we have the right.

Noel R. Wallace: So how do you think about the sustainability of those share gains as you look out to 2024? And then, on PET, obviously, some industry pressure points, can you sort of juxtapose your market share relative to those industry pressure points? And if the unlocked capacity is a significant driver of market share opportunity longer? Great. Good morning, Dara.

Sean Smith: Strategies and differentiated strategies in place to continue to accelerate growth.

Sean Smith: Okay.

Sean Smith: The next question comes from Bryan Spillane with Bank of America.

Noel R. Wallace: Thank you. So let me start a little bit wider on the categories, particularly oral care. We're really encouraged to see an inflection of positive volume growth in categories around the world. And in many of the regions where we had seen negative volume growth, we started to see an inflection of that towards the end of the fourth quarter. So that gives us great confidence that the category and the pricing that we put in place is continuing to turn. And importantly, we're going to see that growth continue in 2024. As you bring that back to our business, a really strong quarter for oral care, as you mentioned, both from an organic and sales standpoint, but likewise, that transferred into better market share growth. If I take oral care in general, we were up double digits in the quarter.

Sean Smith: Go ahead.

Bryan Spillane: Alright, thanks, operator, good morning, everyone.

Bryan Spillane: Maybe this question both for Knoll, and Stan just related to Argentina.

Knoll: I think there was maybe a write down that ran through the other expense line. So if you could give us a little bit more color on that and how much of that may recur and maybe no just kind of stepping back.

Knoll: I think this week, we've heard from several other companies, who maybe even rethinking how they approach Argentina given the devaluation.

No: It's been a while right since we've had this kind of currency crisis in Latin America. So I don't know just your perspective, both short term, how we should be thinking about it from accounting perspective, Stan and then no I'll just just how youre thinking about Argentina, maybe longer term.

Noel R. Wallace: That translated into strong market share growth, particularly in regions like Latin America, Europe, Africa, and Eurasia. And you saw some improved scanner data in the U.S. as well. I think this is a reflection of the core business strategy that we have in place, the increased advertising that we're putting behind the business, as well as a strong innovation pipeline that continued in the back half of 2023 and will continue in 2024 as well. Market shares around the world are strong, and we would anticipate that those will see continued growth as we move through the balance of 2024. And I would caveat with some of that.

Brian: Great Brian Good morning, and thank you let me, let me talk again, a little bit of history in Argentina, and I apologize to go down.

Brian Good: An extended answer, but I think it's important.

Brian Good: For the audience to understand how we operate in these hyper inflationary environment, we've been in Argentina close to 100 years.

Brian Good: We have an extraordinarily capable management team that understands hyperinflationary accounting understands how to manage the income statement and the balance sheet understands how to prevent further devaluations on the value balance sheet as we move forward and Thats a reflection of just years and years of experience in dealing with this level of volatility we can go back to.

Noel R. Wallace: Obviously, the markets will be challenged given some of the upfront issues I mentioned, but it is pleasing to see the strong volume growth in some of our bigger regions. If you take Latin America, for example, three strong quarters of strong volume growth, very much driven by oral care, but quite frankly, that was a cross section of all of our categories. And you see that volume improving across all of our divisions. So again, I think we're well positioned on that. Let me talk a little bit about PET because I think there's some important context to our strategy and why what we're doing is different for the market, and what we're doing is working for the marketplace as well. You know, we talked about Colgate being the most penetrated brand in the world.

<unk> 2001, 2002, which I think was the last major devaluation in the country in 2014 had one as well. So we're very accustomed to ensuring we're doing everything to manage the potential volatility in a market like Argentina and that experience has certainly played out we've always always continued to invest for the long.

Brian Good: Term in Argentina, we are manufacturing on the ground, we have good relationships in terms of our ability to access dollars, but importantly, given some of the limitations that we've seen over the years on the ability to access dollars. We now have flexibility in the business to import product into the country as well. So we're very attuned to the volatility I would say on the flip side.

Noel R. Wallace: We also know that Hills has low penetration, so we will continue to execute a series of differentiated strategies on Hills in order to continue to accelerate our growth in that business. So if I take the three aspects that we think about for Hills, reach, awareness, and conversion, reach obviously is a reflection of the strong advertising that we're putting in place to get the message out. With low single-digit penetration on Hills, we want to ensure that our superior science is well understood, hence the strategy to drive more TV spending and more digital spending consistently over the quarters. We're spending a lot of time on the effectiveness of that reach to ensure that we're getting the most out of it. We're obviously using the strong professional endorsement that we have behind vets and continuing to accelerate our science, and our clinical communication with that key opinion leader is critical to the success of the brand.

Brian Good: Good news that price controls seem to have been.

Brian Good: <unk> settled a bit and we're not going to see as much of those moving forward. So we continue to operating environment, where we can bring value to the consumer and take pricing in order to offset some of the significant transaction now we're not immune to the devaluation, we will see that ultimately unfold as we go through the next couple of quarters more on the margin line and the profit line, but ultimately we.

Brian Good: Make sure we get pricing in the market analysis. It takes some time to flow through into the P&L, but overall experienced team, which I want to thank for their incredible diligence in how they do they deal with the economic environment, there and feel pretty good that we've got real control of what's going on in Argentina, notwithstanding there will be continued volatility so with that.

Let me give Stan.

A chance to talk a little bit about how we're managing more closely the income statement. Thanks, Neil and Brian Let me, let me start and pick up where <unk> left off on the team. So as an example.

Noel R. Wallace: And importantly, as we think about conversion, a lot of non-users in the category, as I mentioned on the third quarter call, 5% of consumers are using therapeutic nutrition, but theoretically, 80% should be using therapeutic nutrition. So, a lot of opportunity to continue to drive share. The dynamics in the category, hence you're seeing a little bit of trade down from wet into dry. I mentioned on the third quarter call that treats have suffered. Now we're not immune to the category softness, but if you take a step back and look at our principal retail environments, pet specialty, neighborhood pet, we're growing share nicely across all of those environments, which means we're helping our retail partners grow category dollars.

We have a gentleman that I work with Jose Fernando and he is my CFO for Latin America, but he was also the CFO or the finance director in Argentina. In 2002. So we have a depth of experience and I think that manifests itself with a very proactive approach to mark.

Stan Smith: Get conditions, so he and I talk on a very regular basis about changing market conditions, and then more importantly, the proactive nature of what we do about that so they've operated a hyperinflationary environment for a very long time, they take the actions necessary.

Noel R. Wallace: Conversion was up roughly 10% in the U.S., our biggest and largest market, so we're very pleased with the progress we made there. Yes, the category is a little softer, but we have the right strategies and differentiated strategies in place to continue to accelerate growth. The next question comes from Brian Spillane with Bank of America. Go ahead. Thanks, operator. Good morning, everyone.

Stan Smith: We look at the long term so while we operate hyperinflationary environment, we account for it appropriately you do see the impact of the devaluation and other income other expense. It was not the majority of that line item. So there are other items in there, but we dealt with that we delivered our overall numbers we have.

Brian Good: Improved our productivity delivered margin expansion profit expansion and cash flow. So I think the team has done a very nice job.

Noel R. Wallace: Maybe this question, both for Noel and Stan, just related to Argentina. You know, I think there was, you know, maybe a write-down that ran through the other expense line. So if you could give us a little bit more color on that, and how much of that may recur, and maybe Noel, just kind of stepping back. You know, I think this week, we've heard from several other companies who may be even rethinking how they approach Argentina, given the devaluation. You know, it's been a while since we've had this kind of currency crisis in Latin America. So, I don't know, just your perspective, both short term and how we should be thinking about it from an accounting perspective, Stan, and then, Noel, just how you're thinking about Argentina, maybe longer term. Okay, great, Brian, good morning, and thank you. Let me talk again about a little bit of history in Argentina, and I apologize to go down with an extended answer, but I think it's important for the audience to understand how we operate in these hyperinflationary environments. We've been in Argentina for close to 100 years.

Jose Fernando: Looking at our proactively and dealing with the decisively. So you mentioned on a go forward basis, obviously when you <unk> your balance sheet gets smaller we'll continue to take those actions going forward, we have a growing business there.

Jose Fernando: So going forward I would not anticipate a major impact to our results from Argentina.

Jose Fernando: Yeah.

Yes.

Jose Fernando: Okay.

Jose Fernando: The next question comes from Andrea.

Jose Fernando: J P. Morgan. Please go ahead.

Speaker Change: And good morning, everyone.

Speaker Change: I was wondering if you can talk a little bit more about marketing investments and you elaborated just just recently that you mentioned increased advertising and are you also seeing a normalizing promotional environments in the past you had said that he is dialed down and you mean fasting advertising promotional.

Noel R. Wallace: We have an extraordinarily capable management team that understands hyperinflationary accounting, understands how to manage the income statement and the balance sheet, understands how to prevent further devaluations on the balance sheet as we move forward, and that's a reflection of just years and years of experience dealing with this level of volatility. We can go back to 2001 and 2002, which I think was the last major devaluation in the country. 2014 had one as well.

Speaker Change: <unk> capabilities in the U S.

Speaker Change: Can you comment on how you stand right now and how the category promotional levels are.

Speaker Change: And separately, if you can talk a bit about the supply chain.

Brian Good: Does that have you implemented with the new leadership and also how youre positioning in light of the disruptions in the middle East and the learnings from the pandemic. Thank you.

Noel R. Wallace: So we're very accustomed to ensuring we're doing everything to manage the potential volatility in a market like Argentina, and that experience has certainly played out. We have always, always continued to invest for the long term in Argentina. We have manufacturing on the ground. We have good relationships in terms of our ability to access dollars, but importantly, given some of the limitations that we've seen over the years on the ability to access dollars, we now have flexibility in the business to import product into the country as well. So we're very attuned to the volatility.

Brian Good: Great. Thanks, and good morning, Andre So let me, let me take the advertising and promotional piece and I'll come back and add a little bit of context on some of the great work that Luciano has done is he has come into the new role. The strategy has been quite consistent for the last three years to four years about our ability to build brands through great communicate.

Andre So: <unk> and great innovation, and you've seen that obviously flow through the P&L and despite the fact that we have obviously grown an accelerated advertising meaningfully over the last couple of years, we've continued to deliver against our guidance and exceed our operating profit objectives, which is terrific with that just gives you a sense for the health of the P&L today.

Noel R. Wallace: I would say, on the flip side, good news, that price controls seem to have been settled a bit and we're not going to see as much of those moving forward. So we continue to operate in an environment where we can bring value to the consumer and take pricing in order to offset some of the significant transaction costs. But we're not immune to the devaluation.

Andre So: And our ability to continue to fund investment going forward and that will clearly be our strategy now likewise it gives us flexibility to be very focused on the efficiency of that spend and I can assure you. There is not a discussion that goes by where we don't talk about reach and frequency and the ROI associated with our spend both at the digital level in the linear TV level.

We're very very very focused on the ability to drive more efficiency through the P&L as we accelerate our advertising and as we said in the prepared comments, we anticipate to continue to accelerate the advertising into 2020 for promotional environment as very constructive right now I would say its about 75% to 80% of the pre COVID-19 levels.

Noel R. Wallace: We'll see that ultimately unfold as we go through the next couple of quarters, more on the margin line than the profit line, but ultimately, we will make sure we get pricing in the market, and that will take some time to flow through into the P&L. But overall, an experienced team that I want to thank for their incredible diligence in how they deal with the economic environment there, and feel pretty good that we've got real control of what's going on in Argentina, notwithstanding that there will be continued volatility. So with that, let me give Stan a chance to talk a little bit about how we're managing the income statement more closely. Thanks, Noel. And, Brian, let me start and pick up where Noel left off on the team. So as an example, we have a gentleman that I work with, Jose Fernando, and he is my CFO for Latin America, but he was also the finance director or the CFO in Argentina in 2002.

Andre So: So it's come down it's more moderated we as I've mentioned in second and third quarter calls that we will be very selective on increasing the cadence of our promotions and some of the geographies, where we may have taken a little bit too much pricing as we let some of those some of those markets that will be prudent and thoughtful.

Andre So: <unk> focused in certain select markets, but overall the promotional environment changed very constructive and our objective is to drive category and healthy volume growth through obviously, the accelerated accelerated advertising line on the supply chain Luciano has come in and really thinking about hit the continued transformation of that bringing a lot of good ideas.

So we have a depth of experience, and I think that manifests itself in a very proactive approach to market conditions. So he and I talk on a very regular basis about changing market conditions, and then, more importantly, the proactive nature of what we do about that. So they've operated in a hyperinflationary environment for a very long time. They take the actions necessary

Luciano: On automation and data analytics and driving network optimization, a lot of our focus over the last couple of years, particularly at Hill's was increasing capacity and you saw that through our capital expenditure line that will moderate as we move forward with more spending being allocated towards efficiency and savings and optimizing the network.

Luciano: On automation and data analytics and driving network optimization, a lot of our focus over the last couple of years, particularly at Hill's was increasing capacity and you saw that through our capital expenditure line that will moderate as we move forward with more spending being allocated towards efficiency and savings and optimizing the network.

Luciano: Work and very much digitizing, the supply chain and getting very aggressive on using data analytics to optimize our efficiency.

We look at the long term. So while we operate in a hyperinflationary environment, we account for it appropriately, you do see the impact of the devaluation and other income, and other expenses. But it was not the majority of that line item.

Andrea: Our cash flow level. So overall pleased with where where he is taking the group and that team has done just an extraordinary job getting us ready for further optimization moving forward and Andrea I'll just pick up on your last comment around the issues out in the Red Sea in the shipping. So we've been also proactive on that looking at alternate alternate methods.

So there are other items in there, but we dealt with that. We delivered our overall numbers. We improved our productivity. We delivered margin expansion, profit expansion, and cash flow. So I think the team did a very nice job, looking at it proactively and dealing with it decisively. As you mentioned on a go-forward basis, obviously, when you devalue, your balance sheet gets smaller.

Andrea F. Teixeira: We're available planning for the lead time disruption and the rest of the supply chain has remained stable. So we don't see issues there, but we have anticipated longer lead times and planned appropriately for 2024.

The next question comes from Filippo for Lauren.

Andrea F. Teixeira: Please go ahead.

Andrea F. Teixeira: Hey, good morning, everyone.

Andrea F. Teixeira: So now going back to Hale clearly a high single digit topline growth, excluding the private label discontinuation very strong results in the Florida.

We'll continue to take those actions going forward. We have a growing business there. So, going forward, I would not anticipate a major impact on our results from Argentina. The next question comes from Andrea Teixeira of J.P. Morgan. Please go ahead.

Lauren: As you think about 'twenty for like can you give us a sense of how you see the volume for that business evolving.

Andrea F. Teixeira: Thank you, Freda, and good morning, everyone. I was wondering if you could talk, Noel, a little bit more about marketing investments. You elaborated just recently that you mentioned increased advertising, and are you also seeing a normalizing promotional environment? In the past, you said that you dialed down and you're reinvesting in promotional capabilities in the U.S. Can you comment on how you stand right now and how the category promotional levels are? And separately, if you can talk a bit about the supply chain changes that you implemented with the new leadership and also how you're positioning in light of the disruptions in the Middle East and the lessons from the pandemic. Thank you.

Lauren: And also the pricing environment.

Lauren: In pet food and then at the margin line.

Lauren: You saw a pretty significant cost headwinds in 2023 are you see any moderation on the.

Lauren: Cultural protean side for the Hill's business. Thank you.

Lauren: Yes, good morning, Felipe. Thank you, we see more balanced volume and price as we move into 2024, obviously, we've had roughly six quarters of aggressive pricing seven quarters, where we've had to take pricing to offset a lot of the inflation that we've seen in agricultural products.

To get to your second part of your question, we do see AG prices beginning to moderate which is good.

Brian Good: Which over time as we see the pricing settle out in the markets. We anticipate that volume will come back but remember this is the one category we compete in where we've seen prolonged inflation as we move through the back half of 2023, but we anticipate that will definitely moderate as we move into 2024 and pricing Likewise will moderate in Wuxi written.

Noel R. Wallace: Great, thanks, and good morning, Andrea. So, let me take the advertising and promotional piece, and I'll come back and add a little bit of context to some of the great work that Luciano has done as he's come into the new role. The strategy has been quite consistent for the last three to four years of our ability to build brands through great communication and great innovation, and you've seen that obviously flow through the P&L. And despite the fact that we have obviously grown and accelerated advertising meaningfully over the last couple of years, we've continued to deliver against our guidance and exceed our operating profit objectives, which is terrific. Well, that just gives you a sense for the health of the P&L today and our ability to continue to fund investment going forward, and that will clearly be our strategy. Likewise, it gives us flexibility to be very focused on the efficiency of that spend, and I can assure you there's not a discussion that goes by where we don't talk about reach and frequency and the ROI associated with our spend, both at the digital level and the linear TV level.

Felipe: Turn to really continuing to drive that successful household penetration number that I shared with you earlier, which is obviously our ability to continue to support strong advertising. So overall, we'll see that more balanced growth as we move through.

Felipe: As we move through 2024 and on the margin line as I mentioned again more moderating cost we're still lapping some of the strong.

Brian Good: Inflationary environments that we had in the first half of last year, so that pricing that we've taken in the back half of this year and early in the quarter will stay but we'll see the volume start to come back as we move through the back half of the year more more meaningfully.

Brian Good: The next question comes from Callum Elliot Thanks, Paul.

Callum Elliot: Please go ahead.

Callum Elliot: Hi, Good morning, Thanks for the question really good to see the big uptick in brand spending this year on the successes having on competitive performance and growth. My question is can you talk about some of the other investment buckets outside of advertising and brand spend.

Noel R. Wallace: So we're very, very, very focused on the ability to drive more efficiency through the P&L as we accelerate our advertising. And as we said in the prepared comments, we anticipate to continue to accelerate the advertising into 2024. The promotional environment is very constructive right now. I would say it's about 75 to 80% of the pre-COVID levels.

Callum Elliot: I'm thinking R&D capex some of the more infrastructure capability investments.

Callum Elliot: P&L.

Callum Elliot: Where are you guys today knows us as where you think you need to be and what's the relative importance of these non brand spend buckets and yoga. Thank you.

Noel R. Wallace: So it's come down. It's more moderated. We, as I've mentioned in the second and third quarter calls, will be very selective in increasing the cadence of our promotions in some of the geographies where we may have taken a little bit too much pricing as we let some of those in some of those markets. That will be prudent and thoughtful and focused in certain select markets. But overall, the promotional environment seems very constructive, and our objective is to drive category and healthy volume growth through, obviously, the accelerated advertising line. On the supply chain, Luciano's come in and is really thinking about the continued transformation of that, bringing a lot of good ideas on automation and data analytics and driving network optimization. A lot of our focus over the last couple of years, particularly at Hills, has been increasing capacity, and you saw that through our capital expenditures line.

Speaker Change: Thank you and good morning, good question, because we've talked a lot about.

Speaker Change: Positioning ourselves to win in the short term, but more importantly.

Sean Smith: <unk> consistently in the long term and that has been a lot around obviously, the advertising investment, but as you well point out investing in other areas specifically capabilities, our digital transformation would be at the forefront of that training and developing talent, bringing in talent, ensuring that we're optimizing our agency.

Sean Smith: And the talent that they have on that side. So that's an important part of ultimately building the capabilities to continue to drive the effectiveness of our spend and ultimately setting ourselves up for better data architecture, and the infrastructure required to do that and do it consistently over the long term. So a lot of investment going in that space as well on the <unk>.

Sean Smith: Capital side, we've had obviously a lot of spending on the capital side in terms of increased capacity as I mentioned earlier, we're going to see that chart to shift to a lot more optimization and savings projects moving through our manufacturing facilities as I mentioned earlier setting up infrastructure for our data architecture, and our data and our data transformation.

Noel R. Wallace: That will moderate as we move forward with more spending being allocated towards efficiency and savings and optimizing the network and very much digitizing the supply chain and getting very aggressive on using data analytics to optimize our efficiency and our caseload levels. So overall, pleased with where he's taking the group, and that team has done just an extraordinary job getting us ready for further optimization moving forward. And Andre, I'll just pick up on your last comment about the issues out in the Red Sea and the shipping.

Kevin: So overall these are all investments for the long term that we think will continue to play out and allow us to drive that consistent earnings growth that we talked about earlier, saying anything to add to that Kevin.

Kevin: Kevin the only thing I'd say is when you look at the face of the income statement or balance sheet. The absolute numbers. It doesn't reflect the one of our key jobs here is to allocate resources and we've re allocate to those high growth areas of the areas, where the most potential and while that may not show on the absolute line underneath the covers.

So we've also been proactive on that, looking at alternate methods where available, planning for the lead time disruption, and the rest of the supply chain has remained stable. So we don't see issues there, but we have anticipated longer lead times and planned accordingly for 2024. The next question comes from Filippo Salorni with Citi. Please go ahead.

Kevin Grundy: That reallocation of resource, whether it's dollars or human capacity as what support us in analytics and digital and data and thus for Hana and to enhance all of those capabilities. So lots of work under under the covers to drive resource to those key areas.

Hey, good morning, everyone. So Noel, going back to Hales, clearly high single-digit top line growth, excluding the private label discontinuation, very strong results in the quarter. As you think about 24, can you give us a sense of how you see the volume of that business evolving? And also the pricing environment in pet food, and then at the margin line, you saw pretty significant cost headwinds in 2023. Do you see any moderation on the agricultural and protein side of the Hales business? Thank you. Yeah, good morning, Filippo.

And I'd mentioned.

Kevin: Very indirectly tied to your question is the strong cash flow the cash flow is giving us the ability to have a lot more flexibility in how we invest across the business and that is pleasingly up significantly as you saw in the quarter and the year.

Kevin: The next question comes from Steve Powers with Deutsche Bank. Please go ahead.

Kevin: Hey, Thanks, and good morning, I wanted to ask about gross margin. It was obviously very strong in the quarter.

Noel R. Wallace: Thank you. We expect more balanced volume and price as we move into 2024. Obviously, we've had, you know, roughly six quarters of aggressive pricing, seven quarters, where we've had to take pricing to offset a lot of the inflation that we've seen in agricultural products. Now, to get to your second part of your question, we do see ag prices beginning to moderate, which is good, and over time, as we see the pricing settle out in the markets, we anticipate that volume will come back. But remember, this is the one category we compete in where we've seen prolonged inflation as we move through the back half of 2023. But we anticipate that will definitely moderate as we move into 2024. And pricing, likewise, will moderate, and we'll see a return to really continuing to drive that successful household penetration number that I shared with you earlier, which is obviously our ability to continue to support strong advertising.

Steve Powers: And you expect progress in 'twenty four maybe.

Steve Powers: Respective on the work you've done to get here the drivers this quarter, but then also as we look at 'twenty four.

Steve Powers: I'm, assuming from a year over year perspective that expansion is heavily weighted to the first first part of the year.

Steve Powers: But sequentially, how should we think about gross margin.

Steve Powers: The fourth quarter.

Steve Powers: A high watermark or is there a sequential progress can be made thank you.

Yes, let me, let me top line and I'll, let Dan answer a couple of questions obviously.

Steve Powers: Pricing I think cost.

Steve Powers: Foreign exchange is obviously the big drivers in the cost line for US we've done a terrific job in delivering strong funding the growth I think a lot of opportunities as we had the supply chain selling down our ability to start ramping up a lot of the projects that were in many respects on the backburner during COVID-19 that has allowed us to drive strong funding the growth we anticipate.

Steve Powers: Right that that will continue as we move forward into 2020 for the pricing that has been a big part of the gross margin expansion that we've been very aggressive with over the last six quarters, yes pricing will be more balanced as we move forward. So you anticipate that will be a lesser impact as we move through the gross profit and raw materials will.

Noel R. Wallace: So, overall, we'll see that more balanced growth as we move through 2024. And on the margin line, as I mentioned, again, a more moderating cost, we're still lapping some of the strong inflationary environments that we had in the first half of last year. So that pricing that we've taken in the back half of this year and early in the quarter will stay, but we'll see the volume start to come back as we move through the back half of the year more meaningfully. The next question comes from Callum Elliott with Fern. Please go ahead. Hi, good morning.

Dan: <unk> to I think be inflationary, but far more benign than we've seen in the plasma and theres clearly a moderation there. So ultimately hopefully an opportunity for us with that let me turn it over to stand and give you a little bit more our cost structure to that.

Stan Smith: First we're very pleased with the progress on gross profit through 2023, we had sequential improvement across the categories driven by a broad base of innovation productivity that help offset that commodity situation that we all had to deal with now as you think about going forward coming off of.

Operator: Thanks for the question. Really good to see the big uptick in brand spending this year and the success it's having on the competitive. My question is, can you talk about some of the other investment buckets outside of advertising and brand spend? R&D, CapEx, some of the more infrastructure-capability investments that sit in the P&L. Where are you guys today, Noel, versus where you think you need to be, and what's the relative importance of these non-brand spend buckets? Yeah, Calum, thank you, and good morning.

Stan Smith: Q4, there are a number of items that always impact the timing Q4 to Q1 and this year is a couple of new ones with a little bit of Argentina timing of some of the events worldwide like Chinese new year, the timing of when that occurs and where some of this price rolls through roll through from 2023 and incremental new.

Stan Smith: Price as we go through the year, we expect that that will expand but not at the same kind of levels. Obviously as 2023, so working through that the teams are focused on productivity.

Stan Smith: Balance of the of the topline will change from pricing being the predominant driver to pricing and volume and that productivity will help us drive the margin improvement as we go through the year.

Noel R. Wallace: A good question because we've talked a lot about positioning ourselves to win in the short term but, more importantly, succeed consistently in the long term, and that has been a lot around, obviously, the advertising investment, but, as you well point out, investing in other areas, specifically capabilities. Our digital transformation would be at the forefront of that, training and developing talent, bringing in talent, ensuring that we're optimizing our agency and the talent that they have on that side. So that's an important part of ultimately building the capabilities to continue to drive the effectiveness of our spend and ultimately setting ourselves up for better data architecture and the infrastructure required to do that and do it consistently over the long term.

Stan Smith: Yes, I would just simply underscore that there will be a sequential impact at the margin line on Argentina.

Stan Smith: We will take pricing in the quarter, but that will take a while to flow through to recover the transaction impact of the of the Duval.

Stan Smith: Okay.

Stan Smith: The next question comes from Peter Grom with UBS. Please go ahead.

Stan Smith: Thanks, operator, and good morning, everyone. So I wanted to ask specifically about Latin America volume performance.

Peter K. Grom: This quarter three straight quarters of growth and I recognize that the comps are somewhat easy, but the growth is still really impressive can you maybe just unpack how much of that is a function of category growth versus share performance and really how does that inform your view on volume growth looking out to 'twenty four in Latin America, specifically thanks.

Noel R. Wallace: So a lot of investment is going in that space as well. On the capital side, we've obviously had a lot of spending on the capital side in terms of increased capacity, as I mentioned earlier. We're going to see that start to shift to a lot more optimization and savings projects moving through our manufacturing facilities, as I mentioned earlier, setting up infrastructure for our data architecture and our data and our data transformation. So overall, these are all investments for the long term that we think will continue to pay out and allow us to drive that consistent earnings growth that we talked about earlier. Stan, anything to add to that?

Sean Smith: We talked about it I think on the second and third call third quarter call that the strength of our Latin America business and ultimately our ability to lead in pricing and then the consistent history. We have seen volume returned to the categories and so if I talk at the category level first which great as we've seen all three of the categories.

Sean Smith: In which we compete.

Sean Smith: Inflect positively from a category standpoint, and you've obviously seen us growing quite considerably on the on the volume side. The last three quarters, which is generating good volume share growth for our business. So we're very pleased with the overall performance there and based on where we see the categories inflicting right now.

Cal, the only thing I'd say is when you look at the face of the income statement or balance sheet, the absolute numbers, it doesn't reflect that one of our key jobs here is to allocate resources. And we reallocate to those high growth areas or the areas with the most potential. While that may not show on the absolute line underneath the covers, that reallocation of resources, whether it's dollars or human capacity, is what supports us in analytics and digital and data, and that's for HANA and to enhance all those capabilities.

Sean Smith: We're pretty confident that we're going to continue to see balanced growth as we move forward, we will have to take some.

Sean Smith: Some currency.

Sean Smith: <unk> for sure through the year.

Sean Smith: But as we've.

Sean Smith: Indicated before we would expect the volume to come back in these in these markets and Thats exactly what were seeing if you drill down to some of our biggest markets, particularly Brazil, and Latin and Mexico really strong quarter for both those markets with double digit volume growth.

Jose Fernando: For Brazil.

Speaker Change: And for <unk>.

Speaker Change: Strong double digit growth for Mexico, as well, so again clear indication that the strategy of putting and strong innovation across all price points getting the advertising, which we accelerated in the fourth quarter. Likewise in Latin America is helping to recover the categories and drive good volume market share in that business.

Steve Powers: So lots of work under the covers to drive resources to those key areas. And, you know, I mentioned that very indirectly tied to your question is the strong cash flow, right? The cash flow is giving us the ability to have a lot more flexibility in how we invest across the business, and that is pleasingly up significantly, as you saw in the quarter and the year. The next question comes from Steve Powers with Deutsche Bank. Please go ahead.

Speaker Change: Yeah.

Speaker Change: The next question comes from Nik Modi with RBC capital markets. Please go ahead.

Noel R. Wallace: Hey, thanks. And good morning. I want to ask about gross margin, it was obviously very strong in the quarter, and you expect progress in 24, maybe some perspective on the work you've done to get here the drivers this quarter. But then also, as we look at 24, I'm assuming from a year over year perspective that a, heavily weighted to the first part of the year, but sequentially, how should we think about gross margin? Is the fourth quarter a high watermark, or is there sequential progress? Thank you. Yeah, let me top line in, and I'll let Stan answer a couple questions.

Nik Modi: Yes. Thank you and good morning, everyone. Just wanted to follow up maybe on the raw material packaging inflation, just some more perspective.

Nik Modi: Specialty products, but just wanted to get some context around that what exactly some of those elements are.

Sure Let me, let me throw that understand and give you a little bit more context, Sir sure. Unlike the prior two years, we don't expect a material impact here. So we see modest inflation in 2024 and there are some areas like every year that go up and down but there are some new ones. This year things like fish oil has has increased.

Nik Modi: Significantly, but overall, we expect modest inflation and so while commodities overall are off of their highs. They are still elevated versus pre COVID-19 levels and we expect that as we go through this there might be a little bit of benefit.

Noel R. Wallace: Obviously, think that, you know, pricing, think cost, think foreign exchange are obviously the big drivers in the cost line for us. We've done a terrific job of delivering strong funding for growth. I think a lot of opportunities as we have the supply chain settled down and our ability to start ramping up a lot of the projects that were, in many respects, on the back burner during COVID. That has allowed us to drive strong funding for growth. We anticipate that that will continue as we move forward into 2024. Pricing has been a big part of the gross margin expansion that we've been very aggressive with over the last six quarters. Yes, pricing will be more balanced as we move forward, so you would anticipate that it will have a lesser impact as we move through gross profit. And raw materials will continue to be inflationary, but far more benign than we've seen in the past, and there's clearly a moderation there. So, ultimately, hopefully, an opportunity for us. With that, let me turn it over to Stan and give you a little bit more context on that.

Kevin Grundy: Moving in our favor, but not dramatically and the only thing I would say after that as raw materials are one component. So we deal with conversion costs, we deal with transport and logistics costs, and we drive productivity across all of these areas through our funding the growth program and that's why we're confident in margin expansion for <unk>.

Kevin Grundy: 24.

Kevin Grundy: Great and if I can just follow up on <unk> question I think he was asking on proteins.

Kevin Grundy: Relates to hill so.

Kevin Grundy: You cited egg cost, but maybe just comment on <unk>.

Kevin Grundy: Yes.

Kevin Grundy: Pleasingly at least at the current point in time, we're not seeing them on it.

Speaker Change: Impact to hills in total on an increased basis year on year. So when you look at total around hills as AG has kind of stabilized here a bit as well as proteins. We don't see a big headwind heading into 2024 based upon total for commodities for Hilde and Thats important because as we drive productivity with <unk>.

So, first, we're very pleased with the progress on gross profit through 2023. We had sequential improvement across the categories, driven by a broad base of innovation and productivity that helped offset that commodity situation that we all had to deal with. Now, as you think about going forward, coming off of Q4, there are a number of items that always impact the timing, Q4 to Q1. And this year, there's a couple of new ones with a little bit of Argentina, the timing of some events worldwide, like Chinese New Year, the timing of when that occurs, and where some of this price rolls through, roll through from 2023, an incremental new price.

Speaker Change: Modest levels of flow through on price and the innovation that will allow us to continue to expand margin on the hills portfolio.

The next question comes from Chris Carey with Wells Fargo. Please go ahead.

Chris Carey: Hey, good morning, So I wanted to ask about productivity maybe.

Chris Carey: Go down to the regional level.

Chris Carey: I think this was the best productivity and our model anyway going back.

Chris Carey: 20 years, and so is there anything add.

Chris Carey: Normal about this quarter any pull forward of productivity.

Chris Carey: Or are we talking about maybe just productivity muscle continues to build here.

Chris Carey: This is something that we can think about being at a slightly higher run rate go forward and then just connected to that this was.

So, as we go through the year, we expect that that will expand, but not at the same kind of levels, obviously, as 2023. So, working through that, the teams are focused on productivity; the balance of the top line will change from pricing being the predominant driver to pricing and volume, and that productivity will help us drive margin improvement as we go through the year. Yeah, I would just simply underscore that there will be a sequential impact at the margin line on Argentina as we take pricing in the quarter, but that will take a while to flow through to recover the transaction impact of the deval. The next question comes from Peter Grom with UBS. Please go ahead.

Chris Carey: The best North American margin, we've seen in some time was there any outsized productivity benefited in the quarter or are you just starting to see some easing costs and better efficiency.

Chris Carey: Relative to the stabilization, we're seeing in the business.

Speaker Change: Thanks, Chris and good morning, Yeah, a little bit of all of that quite frankly, obviously with the incredible inflation that we've seen.

Chris Carey: Over the last year and a half across the bulk of our commodity basket.

Chris: We've had to obviously accelerate the funding the growth and the higher cost obviously have allowed us to generate higher funding the growth as I mentioned earlier.

Chris: A lot more efficiency in the plants and our ability to utilize our manufacturing facilities to drive more of the funding. The growth projects is likewise allowed us to step up a little bit of that funding to growth in 2023 that we historically had not had the time to do so a bit of it will be we'll be symptomatic of the year and the <unk>.

Peter K. Grom: Thanks, operator. And good morning, everyone. So I wanted to ask, up 80% this quarter, three straight quarters of growth. And I recognize that the comps are somewhat easy, but the growth is still really impressive. Can you maybe just unpack how much of that is a function of category growth versus share performance? And really, how does that inform your view on volume growth looking out to 24 in Latin America? Thanks.

Chris: Opportunity, but I think the discipline that we've ingrained in the culture that we have a great colgate around funding the growth.

Chris: In parallel likewise with the global productivity initiative that we put in place has allowed us to generate obviously strong contraction in our cost overall.

Chris: I wouldn't say use it as a benchmark for going forward there will be a lot of moving parts to that but we feel like structurally we're in a better place on funding the growth structurally we've managed to execute the GPI in line and slightly towards the high end of the guidance range that we provided earlier on on that on that initiatives. So we.

Noel R. Wallace: You know, we talked about it, I think, on the second and third quarter call, the strength of our Latin America business and ultimately our ability to lead in pricing and then the consistent history we have of seeing volume return to the categories. And so if I talk at the category level first, what's great is we've seen all three of the categories in which we compete inflect positively from a category standpoint. And you've obviously seen us growing quite considerably on the volume side in the last three quarters, which is generating good volume share growth for our business. So we're very pleased with the overall performance there. And based on where we see the categories inflecting right now, we're pretty confident that we're going to continue to see balanced growth as we move forward. We'll have to take some currency pricing for sure through the year.

Chris: Feel like we're in a good place pricing will moderate so it's important that we continue to generate the strong funding the growth and.

Chris: Through the P&L in order to generate the margin growth.

Stan Smith: Stan talked about.

Stan Smith: The next question comes from Olivia Tong with Raymond James. Please go ahead.

Stan Smith: Great. Thank you good morning, I just wanted to add.

Stan Smith: Actually a little bit about the top line, obviously coming off a very impressive 7% topline growth in Q4.

Stan Smith: For the fiscal year.

Stan Smith: That's sort of three to five can you just provide some perspective.

Stan Smith: First half versus second half, perhaps the cadence of volume growth.

Stan Smith: The pricing contribution.

Noel R. Wallace: But as we've indicated before, we would expect the volume to come back in these markets, and that's exactly what we're seeing. If you drill down to some of our biggest markets, particularly Brazil and Latin America and Mexico, really strong quarters for both those markets with double-digit volume growth for Brazil and strong double-digit growth for Mexico as well. So again, a clear indication that the strategy of putting in strong innovation across all price points, getting the advertising, which we accelerated in the fourth quarter, likewise in Latin America, is helping to recover the categories and drive good volume market share in that business. The next question comes from Nik Modi with RBC Capital Markets. Go ahead. Yeah, thank you. Good morning, everyone.

Stan Smith: To lap and then similarly on <unk>.

Speaker Change: You know, obviously, a very strong 23.

Speaker Change: In Q4, I'm talking about the mid to high single digits, you know that of course that range implies.

Speaker Change: Central for growth decelerated in 2024, so let's just talk about.

Speaker Change: Yeah.

Speaker Change: What has to happen to get to the high and then what do you incorporate.

Speaker Change: Hello, and then perhaps some incremental conservatism built into the guidance. Thank you.

Speaker Change: Thanks, Larry and good morning.

Speaker Change: As I said in my upfront comments, we believe we are well positioned to deliver consistent compounded earnings growth moving forward and that's certainly reflected in our guidance in the range that we provided we have.

Speaker Change: Good strong momentum coming out of 'twenty, three and heading into 'twenty, four and I think most importantly, the flexibility in the P&L and the balance sheet has allowed us to set ourselves up for continued success.

As we look at the cadence of that we will see the balance overall change as we lap the higher pricing that we've had through the bulk of 2023 that will rebalance itself down to be sure and we will see the volume come back in the categories as I talked about earlier and ultimately our focus on driving household penetration with the increased advertising and the <unk>.

Nik Modi: Just wanted to follow up maybe on the raw materials, packaging, inflation, just some more perspective. You cited specialty products, but just wanted to get, you know, some context around that and what exactly some of those elements are. Sure. Let me throw that one to Stan.

Speaker Change: Share positions that we have so we think we're in a good position comps will get tougher as you say, but we feel that we will see the volume growth come back and will offer balanced growth throughout the balance of the year now recognize that we still have some inflationary markets, Argentina, we've talked about obviously, Nigeria, and Turkey that will drive some <unk>.

Can I give you a little bit more context there? Sure. Unlike the prior two years, we don't expect a material impact here. So we see modest inflation in 2024. And there are some areas, like every year, that go up and down. But there are some new ones this year.

<unk>, we've got some flow through most of the pricing you will see in 2024 will be pricing flow through we are going to take a little bit of a new pricing in certain select markets, but overall, we're going to see a much better balanced as I mentioned upfront how that ultimately unfolds, we shall see but we're definitely planning for more balanced growth as we move through the back half.

Things like fish oil have increased significantly. But overall, we expect modest inflation. And so while commodities overall are off of their highs, they're still elevated versus pre-COVID levels. And we expect that as we go through this, there might be a little bit of benefit moving in our favor, but not dramatically. And the only thing I'd say after that is raw materials are one component.

This year.

Speaker Change: The next question comes from Kunal <unk>.

Speaker Change: Yes.

Go ahead.

Speaker Change: Hey, everybody.

Speaker Change: Good morning could you maybe give us.

Speaker Change: Kind of state of play in China, starting maybe with the market and then getting into your business typically.

Sean Smith: Sure. Thank you and good morning, China, you've heard it I think consistently throughout the earnings season. So far that there is a real slowdown in China, and we're not immune to that slowdown I will say with respect to some of the numbers out that we feel we performed very very well across greater China are.

So we deal with conversion costs. We deal with transport and logistics costs. And we drive productivity across all these areas through our funding of the growth program. And that's why we're confident in margin expansion for 2024. Great. And Stan, if I could just follow up on Filippo's question. I think he was asking about proteins as it relates to hills.

Sean Smith: Our business roughly down low to mid single digits and that was very much commensurate with the category declines that we saw in those markets are clearly on the on the skin health side, we've seen a more acute declined in the categories and therefore, a bigger decline in our business as well long term the market fundamentals remain in <unk>.

So you cited agricultural costs, but maybe you could just comment on protein and what you're seeing. Yeah. Pleasingly, at least at the current point in time, we're not seeing an impact on hills in total on an increased basis year on year. So we look in total around hills as ag is kind of stabilized here a bit, as well as proteins. We don't see a big headwind heading into 2024 based on total commodities for hills. And that's important because as we drive productivity with modest levels of flow throughout price and innovation, that will allow us to continue to expand margin on the hills portfolio. The next question comes from Chris Carey with Wells Fargo. Please go ahead.

Kevin Grundy: <unk> and I think it will take some time as we move through 2024 for those markets to come back obviously, a lot of stimulus money as you've read going back into the market, but we shall see the impact that has on consumers and consumption.

But we think we're well positioned the business continues to build share on the Colgate side, we talked about the Holly in Haynesville. We think we're now shipping more closely to consumption as we move through the price increase in some of the inventory allocations that we've seen across the trade and we've got a strong innovation pipeline for next year, but we will be.

Chris Carey: Hey, good morning. So I wanted to ask about productivity, then maybe go down to the regional level. I think this was the best productivity in our model, anyway, going back roughly 20 years. And so is there anything abnormal about this quarter, any pull forward of productivity? Or are we talking about maybe just the productivity muscle continuing to build here? And that this is something that we can think about being at a slightly higher run rate going forward? And then, you know, just connected to that, this was, you know, the best North America margin we've seen in some time. Was there any outside productivity benefit in the quarter, or are you just starting to see some easing costs and better efficiency relative to their stabilization? Yeah, thanks, Chris, and good morning. Yeah, a little bit of all of that, you know, quite frankly.

Kevin Grundy: We will be thoughtful and prudent on our investment structure in China until we see the categories come back to the levels that invite us to invest more but we feel long term a good market and the dynamics are there, but we want to be thoughtful in the short term.

Kevin Grundy: The next question comes from Lauren Lieberman with Barclays. Please go ahead.

Kevin Grundy: Great. Thanks, good morning.

Lauren R. Lieberman: On North America, It was great to see volumes inflect to positive this quarter.

Lauren R. Lieberman: And you called out growth in oral care, but also in bar soap liquid hand soap and cleaners.

Lauren R. Lieberman: So theres a lot of things that can contribute to that better performance you mentioned more balanced promotion, but was wondering if you could spend a little bit of time talking about innovation across the business and any plan for 'twenty four.

And maybe also if you could talk a little bit about any plans you may have around hand dish and plans to kind of stabilize and regain share in that business. Thanks, yeah.

Lauren R. Lieberman: Yes, Hi, Lorrie and good morning. Thanks.

Lauren R. Lieberman: Can't really talk specifically to the innovation that we have in 2024.

Noel R. Wallace: Obviously, with the incredible inflation that we've seen over the last year and a half across the bulk of our commodity basket, we've had to obviously accelerate the funding to growth, and the higher costs obviously have allowed us to generate higher funding to growth. As I mentioned earlier, a lot more efficiency in the plants and our ability to utilize our manufacturing facilities to drive more of the funding to growth projects has likewise allowed us to step up a little bit of that funding to growth in 2023 that we historically had not had the time to do. So, a bit of it will be symptomatic of the year and the opportunity, but I think the discipline that we've ingrained and the culture that we have ingrained at Colgate around funding for growth in parallel likewise with the global productivity initiative that we put in place has allowed us to generate, you know, obviously, a strong contraction in our costs overall. You know, I wouldn't say to use it as a benchmark for going forward.

Lorrie Smith: But I can say, obviously that we've got a strong pipeline and a much more balanced pipeline across.

Lorrie Smith: Across all of our businesses.

Lorrie Smith: The acceleration in advertising is thoughtful and strategic as well that we will support more of our businesses in North America I think that's a reflection of the really strong operating profit growth that we've re injected back into the business. So we feel like we're in a much better place to support some of the categories that had been.

Lorrie Smith: That had been declining in advertising over the year. So we feel we're in a good place to reflect continued growth on the volume side, obviously, the pricing will moderate quite considerably in the U S. As we move through 2024, and we've got a strong innovation pipeline across the categories in order to ensure that we continue to drive market share.

Lorrie Smith: The other aspect of it as I've talked about a more balanced cadence of promotions and we will make sure we execute those very very thoughtfully, we have no intentions.

Noel R. Wallace: There will be a lot of moving parts to that, but we feel like structurally we're in a better place on funding for growth. Structurally, we've managed to execute the GPI in line and slightly toward the high end of the guidance rates that we provided earlier on that initiative. So, we feel like we're in a good place. Pricing will moderate, so it's important that we continue to generate the strong funding for growth and through the P&L in order to generate the margin growth that Stan talked about. The next question comes from Olivia Tong with Raymond. Please go ahead.

Sean Smith: Going back to the historical numbers, there, but we feel we've got some opportunities in select accounts in select parts of the country in order to accelerated where we've seen competition be quite aggressive so good position really happy with the health of the P&L really happy with the advertising that we put back in the P&L, which will bode well for the long term health of that business.

Sean Smith: <unk>.

Sean Smith: The next question comes from Mark Astrachan Stifel. Please go ahead.

Olivia Tong: Great, thank you. Good morning. I'm going to ask you a little bit about the top line. A very impressive 7% top line growth in Q4, the guide for the fiscal year, you know, that's sort of three to five. Can you just provide some perspective thinking about the first half of the second half? begins to laugh, and then similarly on EPS.

Sean Smith: Yeah, Thanks, and good morning, everybody.

Mark Stiefel Astrachan: Two questions from me one on North America, So global market share better North American market share for.

Mark Stiefel Astrachan: For Tk's little bit weaker advertising spend obviously increased <unk> and for the year.

Mark Stiefel Astrachan: How much is.

Mark Stiefel Astrachan: <unk> level and is there a quarterly.

Sean Smith: In the U S between advertising and volume performance is there more to it.

Noel R. Wallace: 3, Thank you for watching. I'm talking about the mid to high end, you know, that of course, that range in price, potential for growth deceleration in 2024. So just talk about what has to happen to get to the high end and what you incorporate Aloha and perhaps some. Thank you. Thanks, Olivier, and good morning.

R E: R E.

R E: Whatever.

R E: Just curious there and then on the.

R E: The Hill's business.

R E: The weakness in pet specialty channel.

In all about whether your.

Noel R. Wallace: You know, as I said in my upfront comments, we believe we are well-positioned to deliver consistent compounded earnings growth moving forward, and that's certainly reflected in our guidance and the range that we've provided. We have good, strong momentum coming out of 23 and heading into 24, and I think, most importantly, the flexibility in the P&L and the balance sheet has allowed us to set ourselves up for continued success. As we look at the cadence of that, you know, we will see the balance overall change as we lap the higher pricing that we've had through the bulk of 2023. That will rebalance itself down, to be sure, and we'll see the volume come back in the categories, as I talked about earlier, and ultimately, our focus on driving household penetration with the increased advertising and the market share positions that we have. So we think we're in a good position. Comps will get tougher, as you say, but we feel that we'll see volume growth come back, and we'll offer balanced growth throughout the balance of the year. Now, we recognize that we still have some inflationary markets. Argentina we talked about.

R E: Next in terms of where the product is sold.

R E: But at this point of view.

R E: Think about expanding that into other retailer areas. Thank you.

Andre So: Yes, good morning, Mark Thanks, So North America first.

Andre So: Clearly, we're trying to get much more balanced investment across North America, we needed to get the P&L, particularly the middle P&L in the right shape and that was a strategic choice that we made a strategic choice enabled by I think the broadness of health of our business around the world that has allowed us to obviously accelerate the investment in nor.

Mark: With America as we took more pricing in the market. So we have a strong innovation pipeline. We anticipate that will continue to increase our investment levels. This is not for the short term. This is for the long term health of that business, which we believe to be a very very vital market for our success and in the future and we've seen the benefits coming through across our.

Mark: Overall consumption.

Mark: A little softness in the Nielsen tracked channels I will say that our non tracked channels are growing at three to four a multiple of the track channels. So we feel the overall investment in its entirety is proving to grow the consumption and the sales that we need in that marketplace. So.

Noel R. Wallace: Obviously, Nigeria and Turkey that will drive some pricing. We've got some flow through. Most of the pricing we'll see in 2024 will be pricing flow through. We are going to introduce a little bit of new pricing in certain select markets, but overall, we're going to see a much better balance, as I mentioned up front. How that ultimately unfolds, we shall see, but we're definitely planning for more balanced growth as we move through the back half of this year. The next question comes from Kaumil Gajrawala with Jesse. Please go ahead.

Mark: Long story short, we think we're in a good position for that.

On your Hill's comment our focus is in the channels, where we compete and we believe we're a differentiated unique product that drives to premium nutrition side science. Clearly is the segment that continues to grow, particularly amongst pet specialty we have no no plans to expand distribution into food drug mass we believe.

Everybody, um, good morning. Could you maybe just give us a kind of state of play in China, starting maybe with the market and then getting into it? Sure, thank you, and good morning. You know, China, you've heard it consistently throughout the earnings season so far that there is, you know, a real slowdown in China, and we're not immune to that slowdown. But I will say with respect to some of the numbers out there, we feel we've performed very, very well across greater China. Our business is roughly down low to mid-single digits, and that was very much commensurate with the category declines that we saw in those markets. Clearly, on the skin health side, we've seen a more acute decline in the categories and, therefore, a bigger decline in our business as well.

Mark: That would deteriorate the brand and we have very unique distribution policies that require us to be in the channels that we're in and we continue to as I've mentioned earlier to feel we have significant upside in those channels and the brand penetration that I mentioned earlier continues to grow so in a good place no intentions on expanding distribution that being said.

Mark: As you know the bulk of our business is done in the U S. We will be very selective about market expansion on the Hill's business, making sure we get the business model right, making sure. The vet becomes a core part of that expansion strategy because that will drive long term sustainable profitability for the business and so we will continue to look for opportunities as we increase the <unk>.

Noel R. Wallace: Long-term, the market fundamentals remain intact, and I think it will take some time as we move through 2024 for those markets to come back. Obviously, a lot of stimulus money, as you've read, is going back into the market, but we will see the impact that has on consumers and consumption, but we think we're well-positioned. The business continues to build share on the Colgate side. We talked about Holly and Hazel.

Mark: Of that business and the expansion needed in markets around the world.

Mark: The next question comes from Robert <unk> with Evercore ISI. Please go ahead.

Mark: Great. Thank you very much no I was wondering if you can talk about India for a little bit.

Noel R. Wallace: We think we're now shipping more closely to consumption as we move through the price increase and some of the inventory allocations that we've seen across the trade, and we've got a strong innovation pipeline for next year, but we will be thoughtful and prudent on our investment structure in China until we see the categories come back to levels that invite us to invest more. We feel, long-term, that this is a good market and the dynamics are there, but we want The next question comes from Lauren Lieberman with Barclays; please go ahead. Great, thanks, and good morning.

Robert Ottenstein: Lot of the companies that we talk to are very excited about the market and see it increasingly vibrant so perhaps maybe review your position there market share trends, if you're seeing more opportunities and what your plans are and then just a kind of a housecleaning item for Stan.

Robert Ottenstein: It looked like there was a seven cent impact on the other income item.

Robert Ottenstein: On other income, but there were some offsets there and some asset sales and a value added tax refund. If you could kind of just let us better understand exactly what's going on there. Thank you.

Lauren R. Lieberman: On North America, it was great to see volumes inflected positively this quarter, and you called out growth not just in oral care but also in bar soaps, liquid hand soap, and cleaners. So I know there's a lot of things that can contribute to that better performance. You mentioned more balanced promotions, but I was wondering if you'd spend a little bit of time talking about innovation across the business and any plans for 24, and maybe also if you could talk a little bit about any plans you may have around hand dish and plans to kind of stabilize and regain share. Thanks. Yeah, hi, Laurie.

Yes, Thanks, Rob and good morning, So India you saw the results. This week very strong results across the board nine.

R E: 9% organic continued strong pricing and sequentially better volume in that market I would likewise say, we remain very excited and bullish on the market in India.

R E: We will see the continued return to the rule segment and the vitality of the rural segment, which will bode well for volume as we move as we look forward.

Andre So: They're aspect, which I won't get into a lot of specific details. We have some really strong innovation plan for India, particularly around our core businesses and we're excited to see that obviously be delivered in the market and executed. The team is doing an exceptional job finding added distribution points to make sure that we continue to capitalize on our investment strategy. So <unk>.

Noel R. Wallace: Good morning. Thanks. You know, I can't really talk specifically about the innovation that we have in 2024. But I can say, obviously, that we've got a strong pipeline and a much more balanced pipeline across all of our businesses. The acceleration in advertising is thoughtful and strategic as well, supporting more of our businesses in North America. I think that's a reflection of the really strong operating profit growth that we've re-injected back into the business. So we feel like we're in a much better place to support some of the categories that have been declining in advertising over the years. And we feel we're in a good place to reflect continued growth on the volume side. Obviously, prices will moderate quite considerably in the US as we move through 2024.

Rob: <unk> on India, good results and sequentially, right, where we'd like to see their business today and setting us up for ultimately another strong year in 2024.

Yeah, Rob let me pick up on your second question are in other income other expense as we talked earlier.

Rob: <unk> is made up of a number of items both from this year and last year and Argentina devaluation.

Rob: <unk>, an impact but not the majority of it. We also had some startup costs in there. Some one time items from this year and last year, what I would say is that's not a new run rate that's not going to continue into next year at that level.

Noel R. Wallace: And we've got a strong innovation pipeline across the categories in order to ensure that we continue to drive market share. The other aspect of it is, as I've talked about, a more balanced cadence of promotions. And we will make sure we execute those very, very thoughtfully. We have no intentions of going back to the historical numbers there.

Rob: And you should think about these as kind of one time events in nature. So these change as you go through the year.

Rob: Yeah.

Speaker Change: The next question comes from Edward Lewis with Redburn. Please.

Noel R. Wallace: But we feel we've got some opportunities and select accounts and select parts of the country in order to accelerate where we've seen competition be quite aggressive. So good position, really happy with the health of the P&L, really happy with the advertising that we put back into the P&L, which will bode well for the long-term health of that business. The next question comes from Mark Astrachan. Please go ahead.

Speaker Change: Please go ahead.

Speaker Change: Yes, thanks very much.

Speaker Change: Wanted to talk on Europe, another quarter of strong pricing.

Speaker Change: Schools looking back I think it's not harmful from 2023 on falling off in 2022.

Speaker Change: So just be really interested to hear how you're thinking about pricing because consistently I guess its opponents pricing hasnt been a big part of the story in Europe.

Speaker Change: Kind of a new kind of.

Mark Stiefel Astrachan: Thanks, and good morning, everybody. I have two questions for you. One on North America.

Callum Elliot: Two we should expect to continue doing sort of more pricing in general coming out of Europe.

Mark Stiefel Astrachan: So global markets are better, North America markets, toothpaste, a little bit weaker. Advertising spend obviously increased in 4Q and for the year. How much is the right level, and is there a quarterly?

Callum Elliot: Yes, Thanks, Ed good question.

Ed: I think we've learned a tremendous amount on pricing in Europe, and really work closely with our retail partners to find ways to drive value and ultimately there are categories clearly a significant inflation over the last six or seven quarters, which certainly helped to take more pricing in the marketplace, but I think our teams have exited.

Mark Stiefel Astrachan: in the U.S. between advertising and volume performance, is there more to it than that R&D? you know, whatever, you know, it's curious there. The Hiltons.

Mark Stiefel Astrachan: Given the weakness of a specialty channel, has it made you think at all about whether or not? Thank you. Yeah, good morning, Mark. Thanks. So North America first, you know, clearly, we're trying to get much more balanced investment across North America; we needed to get the P&L, particularly the middle P&L, in the right shape. And that was a strategic choice that we made, a strategic choice enabled by, I think, the broadness of our business around the world, that has allowed us to obviously accelerate the investment in North America as we take more pricing in the market. So we have a strong innovation pipeline, and we anticipate that we'll continue to increase our investment levels. This is not for the short term; this is for the long-term health of that business, which we believe to be a very, very vital market for our success in the future. And we've seen the benefits coming through across our overall consumption. I see a little softness in the Nielsen track channels, but I'll say that our non-track channels are growing at three to four times the rate of the track channels.

Ed: 'twenty three with more confidence now there's no question as inflation declines in 2024, we'll get a much more balanced view of pricing and volume moving back into the P&L, but I would say some good stories that have allowed us to really accelerate our innovation and drive real value in the categories by Relaunching our brands you heard.

Ed: John Luke talk about that at the Deutsche Bank Conference and I think that continues to be a consistent theme. So a lot of learning there not saying, it's going to be a challenge as we move forward to get more pricing in Europe, but we believe we've got the tools and the vehicles to continue to find ways to accelerate category growth and therefore, our margin growth in the business.

Ed: This concludes the Q&A portion of our call I.

Ed: I would now like to return the call to no wallet, Colgate Chairman, President and CEO for any closing remarks.

Noel R. Wallace: Well thanks, everyone for joining the call. This morning, we hope you agree that the strategy and plans we have in place to deliver consistent compounded profitable growth to drive value for all of our stakeholders is there and let me, particularly thank all the Colgate employees around the world for their incredible hard work and dedication to deliver these strong results in <unk>.

Noel R. Wallace: So we feel the overall investment, in its entirety, is proving to grow the consumption and the sales that we need in that marketplace. So, long story short, we think we're in a good position for that. Regarding your Hill's comment, our focus is on the channels where we compete. And we believe we're a differentiated, unique product that drives the premium nutrition side. Science clearly is the segment that continues to grow, particularly amongst pet specialty stores. We have no plans to expand distribution in the food drug mass.

Noel R. Wallace: <unk> thousand 23, and thank them in advance for the results. They are going to continue to deliver in 2024. Thanks, everyone. We'll see you down in Florida.

Noel R. Wallace: Yeah.

Andre So: The conference has now concluded. Thank you for attending today's call you may now disconnect.

Noel R. Wallace: We believe that would deteriorate the brand, and we have very unique distribution policies that require us to be in the channels that we're in. And we continue, as I've mentioned earlier, to feel we have significant upside in those channels, and the brand penetration that I mentioned earlier continues to grow. So we are in a good place; we have no intentions of expanding distribution. That being said, as you know, the bulk of our business is done in the U.S. We will be very selective about market expansion for the Hill's business, making sure we get the business model right, making sure the vet becomes a core part of that expansion strategy because that would drive long-term sustainable profitability for the business.

Okay.

Noel R. Wallace: And so we'll continue to look for opportunities as we increase the health of that business and the expansion needed in markets around the world. The next question comes from Robert Ottenstein with Evercore ISI. Please go ahead.

Robert Ottenstein: Great, thank you very much. Noel, I was wondering if you could talk about India for a little bit. A lot of the companies that we talked to are very excited about the market and see it becoming increasingly vibrant. So perhaps maybe review your position there, market share trends, if you're seeing more opportunities and what your plans are. And then just a kind of housekeeping item for Stan.

Noel R. Wallace: It looked like there was a $0.07 impact on the other income item, on other income, but there were some offsets there and some asset sales and a value-added tax refund. If you could kind of just let us, you know, better understand exactly what's going on there, thanks. Yeah, thanks, Robin. Good morning.

Noel R. Wallace: So, India, you saw the results this week, very strong results across the board, 9% organic, continued strong pricing, and sequentially better volume in that market. I would likewise say we remain very excited and bullish on the Indian market. We'll see the continued return to the rural segment, and the vitality of the rural segment, which will bode well for volume as we look forward. The other aspect, which I won't get into a lot of specific details, we have some really strong innovation plans for India, particularly around our core businesses. And we're excited to see that, obviously, be delivered in the market and executed. The team's doing an exceptional job finding added distribution points to make sure that we continue to capitalize on our investment strategy.

Noel R. Wallace: So, bullish on India, good results, and sequentially right where we'd like to see their business today and setting us up for, ultimately, another strong year in 2024. Hey, Rob, let me pick up on your second questionnaire and other income, and other expenses. We talked earlier, you know, that is made up of a number of items, both from this year and last year. And Argentina's devaluation is certainly an impact, but not the majority of it. We also have some startup costs in there, some one-time items from this year and last year. But what I would say is that's not a new run rate. That's not going to continue into next year at that level.

And you should think about these as kind of one-time events in nature. So these change as you go through the year. The next question comes from Edward Lewis with Redburn. Thank you for having us. Yes, thanks very much. I just wanted to talk about Europe.

Edward Lewis: Another quarter of strong pricing this quarter, and looking back, I think it's nine and a half or 2023 on four and a half in 2022. It will be really interesting to hear how you're thinking about pricing over here because, consistently, I guess in the past, pricing hasn't been a big part of the part of the story. Is this a new kind of attitude we should expect you can continue doing, more pricing in general coming out of Europe? Yeah, thanks, Ed. Good question.

Noel R. Wallace: We think we've learned a tremendous amount about pricing in Europe and really worked closely with our retail partners to find ways to drive value and ultimately their categories. Clearly, there was significant inflation over the last six or seven quarters, which certainly helped take more pricing in the marketplace. But I think our teams have exited 23 with more confidence now.

Noel R. Wallace: There's no question that as inflation declines in 2024, we'll get a much more balanced view of pricing and volume moving back into the P&L. But I think there are some good stories that have allowed us to really accelerate our innovation and drive real value in the categories by relaunching our brands. You heard Jean-Luc talk about that at the Deutsche Bank conference, and I think that continues to be a consistent theme. So a lot of learning there, not saying it's going to be a challenge as we move forward to get more pricing in Europe, but we believe we've got the tools and the vehicles to continue to find ways to accelerate category growth and, therefore, margin growth in the business.

Noel R. Wallace: This concludes the Q&A portion of our call. I would now like to return the call to Noel Wallace, Colgate's Chairman, President, and CEO, for any closing remarks. Well, thanks everyone for joining the call this morning. We hope you agree that the strategies and plans we have in place to deliver consistent, compounded, profitable growth to drive value for all of our stakeholders are there. And let me particularly thank all the Colgate employees around the world for their incredible hard work and dedication to deliver these strong results in 2023 and thank them in advance for the results they're going to continue to deliver in 2024. Thank you, everyone. We'll see you down in Florida. The conference is now concluded. Thank you for attending today's call. You may now disconnect.