Full Year 2025 Haleon PLC Earnings Call

February 25, 2026

Speaker #1: Good morning. Thank you for attending today's Haleon fiscal year 2025 results question and answer. My name is Sarah, and I'll be your moderator today.

Operator: Good morning. Thank you for attending today's Haleon Fiscal Year 2025 Results Question and Answer. My name is Sarah, and I'll be your moderator today. All lines will be muted during the call, with an opportunity for questions and answers. To ask a question, please press star, then the number one on your telephone keypad. We ask that you please limit yourself to one question. I'd like to pass the conference over to our host, Jo Russell. Please go ahead.

Speaker #1: Our lines will be muted during the call, with an opportunity for questions and answers. To ask a question, please press star, then the number 1 on your telephone keypad.

Speaker #1: We ask that you please limit yourself to one question. I'd like to pass the conference over to our host, Jo Russell. Please go ahead.

Speaker #2: Good morning, everyone, and welcome to Haleon's full year 2025 results Q&A conference call. I'm Jo Russell, Head of Investor Relations, and I'm joined this morning by Brian McNamara, our Chief Executive Officer, and Dawn Allen, our Chief Financial Officer.

Jo Russell: Good morning, everyone. Welcome to Haleon's full year 2025 Results Q&A Conference Call. I'm Jo Russell, Head of Investor Relations, and I'm joined this morning by Brian McNamara, our Chief Executive Officer, and Dawn Allen, our Chief Financial Officer. Just to remind listeners on the call, that in the discussions today, the company may make certain forward-looking statements, including those that refer to our estimates, plans, and expectations. Please refer to this morning's announcement and the company's UK and SEC filings for more details, including factors that could lead to actual results to differ materially from those expressed or implied by such forward-looking statements. We have posted today's presentation on the website this morning, along with a video running through the results in detail. Hopefully you've all had the chance to see that ahead of this call.

Speaker #2: Just to remind listeners on the call that in the discussions today, the company may make certain forward-looking statements, including those that refer to our estimates, plans, and expectations.

Speaker #2: Please refer to this morning's announcements and the company's UK and SEC filings for more details, including factors that could lead to actual results to differ materially from those expressed in or implied by such forward-looking statements.

Speaker #2: We have posted today's presentation on the website this morning, along with a video running through the results in detail, so hopefully you've all had the chance to see that ahead of this call.

Speaker #2: And with that, let's open the call for Q&A, and I'll hand back to the operator.

Jo Russell: With that, let's open the call for Q&A, and I'll hand back to the operator.

Operator: Thank you. Again, if you would like to ask the question, please press star followed by 1 on your telephone keypad. To remove your question, press star followed by 2. As a reminder, if you are using speakerphone, please remember to pick up your handset before asking a question. We ask that you please limit yourself to 1 question. Our first question is from Guillaume Delmas with UBS. You may ask your question.

Speaker #1: Thank you. Again, if you would like to ask a question, please press star, followed by 1 on your telephone keypad. And to remove your question, press star, followed by 2.

Speaker #1: As a reminder, if you are using speakerphone, please remember to pick up your handset before asking a question. We ask that you please limit yourself to one question.

Speaker #1: Our first question is from Guillaume Dalmas, with UBS. You may ask your question.

Speaker #3: Thank you very much, and good morning, Brian, Dunn, and Jo. So, one question. My one question is on your organic sales growth guidance of 3% to 5% for 2026.

Guillaume Delmas: Thank you very much. Good morning, Brian, Dawn, and Jo. One question. My one question is on your organic sales growth guidance of 3% to 5% for 2026. I mean, it does seem to signal some sequential acceleration related to the 3% you posted last year. Wondering, what will be the main drivers behind this sequential improvement? I mean, is it predicated on category growth accelerating and/or your level of outperformance gaining further momentum? Related to this, Brian, you reiterated your medium-term ambition of 4% to 6%. I guess, what underpins your confidence in the 4% to 6%, when you may be delivering organic sales growth below the bottom end of that range for now 2 consecutive years? Thank you very much.

Speaker #3: I mean, it does seem to signal some sequential acceleration, relative to the 3% you posted last year. So, wondering, what will be the main drivers behind this sequential improvement?

Speaker #3: I mean, is it predicated on category growth accelerating, and/or your level of outperformance gaining further momentum? And then related to this, Brian, you reiterated your medium-term ambition of 4% to 6%.

Speaker #3: I guess, what underpins your confidence in the 4% to 6% when you may be delivering an organic sales growth below the bottom end of that range for now two consecutive years?

Speaker #3: Thank you very much.

Brian McNamara: Thanks, Guillaume. Appreciate the question. Maybe let me take the 3 to 5 guidance, and I'll go to medium-term view. If you take a step back and let's look at 2025, we grew 3%. That clearly was below what we were expecting, you know, when we were at Q3, based on the cold and flu season. The US was down about 0.5%. APAC, EMEA, LatAm grew mid-single digits. We did experience a market slowdown. A vast majority of that was obviously what we've talked about in the US market, and then the cold and flu category, which I mentioned. Remember, 70% of our cold and flu business is also outside the US. In that context, we did deliver competitive performance.

Speaker #4: Thanks, Guillaume. Appreciate the question. So, maybe let me take the 3% to 5% guidance, and I'll go to the medium-term view. So, if you take a step back, and let's look at 2025.

Speaker #4: We grew 3%. That clearly was below what we were expecting when we were at Q3, based on the cold and flu season. But the US was down about half a percent.

Speaker #4: APAC and EMEA last hand grew mid-single digits. Now, we did experience a market slowdown, a vast majority of that was obviously what we've talked about in the US market, and then the cold and flu category, which I mentioned.

Speaker #4: Now, remember, 70% of our cold and flu business is also outside the US. So in that context, we did deliver competitive performance. We outgrew the market overall in 60% of the business gain to maintain share.

Brian McNamara: We outgrew the market overall. 60% of the business gained and maintained share. Looking at 2026, we're not planning on material improvement in the market. Consumers are likely to stay cautious. We're absolutely focused on driving category growth. I'm confident we will continue and improve on our competitiveness, that's through investment in AMP, a strong innovation plan, sharper commercial execution behind our new operating model. Listen, the US will return to growth in 2026, that's based on the progress we've had to date. We ended the year where we expected to, with inventories at the right place. That's part of that is we did have softer cold and flu, but we had stronger oral health business, which helped, you know, offset that.

Speaker #4: Looking at 2026, we're now planning on material improvement in the market. Consumers are likely to stay cautious. We're absolutely focused on driving category growth.

Speaker #4: I'm confident we will continue and improve on our competitiveness, and that's through investment in AMP, a strong innovation plan, sharper commercial execution behind our new operating model, and—listen—the US will return to growth.

Speaker #4: And in 2026—and that's based on the progress we've had to date. We ended the year where we expected to, with inventories at the right place.

Speaker #4: And part of that is we did have softer cold and flu, but we had a stronger oral health business, which helped offset that. And we also have plans in place that we know are going to help us improve through the year.

Brian McNamara: We also have plans in place that we know are gonna help us improve through the year. For instance, in Q2, we have a lot of key customers doing shelving resets. We're gaining distribution, we're gaining shelf placement. On the profit side, the productivity program continues to deliver. You saw the 220 basis points of gross margin improvement. We feel great about that. That, combined with the efficiencies coming from the operating model, will allow us to deliver high single-digit operating growth at constant currency and still invest in growth, still invest in A&P, R&D, and some key capabilities that we're continuing to build on. Now we step back and think the medium-term guidance.

Speaker #4: So, for instance, in Q2, we have a lot of key customers doing shelving resets. We're gaining distribution. We're gaining shelf placement. On the profit side, the productivity program continues to deliver.

Speaker #4: You saw the 220 basis points of gross margin improvement. We feel great about that. That, combined with the efficiencies coming from the operating model, will allow us to deliver high single-digit operating growth at constant currency and still invest in growth—still invest in AMP, R&D, and some key capabilities that we're continuing to build on.

Speaker #4: So now if you step back and think the medium-term guidance, I mean, you said it. The guidance doesn't necessarily mean we're going to be outside the range.

Brian McNamara: I mean, you said it, the guidance doesn't necessarily mean we're gonna be outside the range, obviously, part of the guidance is outside our medium-term range. I think it's an acknowledgment of the uncertain market we're dealing with. Based on what we know today, we'd expect to be in the middle of that range, based on what we know today. You also asked about the phasing. What we do know today is that Q1 cold and flu season is gonna be below a year ago. We're now almost 2 months into the quarter, the results, we saw a spike towards the end of the year, we saw it come down after that.

Speaker #4: But obviously, part of the guidance is outside our medium-term range. I think it's an acknowledgment of the uncertain market we're dealing with. Based on what we know today, we'd expect to be in the middle of that range, based on what we know today.

Speaker #4: You also asked about the phasing. What we do know today is that Q1 cold and flu season is going to be below a year ago.

Speaker #4: We're now almost two months into the quarter. And the results we saw spike towards the end of the year, and then we saw it then we saw it come down after that.

Speaker #4: So we're going to be below a year ago, and that's not only in the US. It's outside the US. My confidence. Listen, these are still attractive categories.

Brian McNamara: We're going to be below a year ago, and that's not only in the US, it's outside the US. My confidence. Listen, these are still attractive categories. I still believe there's huge potential. Everything we've talked about in the past, closing the instant treatment gap, success of our premiumization continuing, the low-income consumer opportunity, which we're still only at the beginning at. As we progress through 2026, I expect to see stronger performance in North America, as I said, and continued strength in emerging markets. We feel good about China. I expect an acceleration in India. Actually, India, for us, is performing extremely well.

Speaker #4: I still believe there's huge potential. Everything we've talked about in the past, closing the incident treatment gap, success of our premiumization continuing, the low-income consumer opportunity, which we're still only at the beginning at, and as we progress through 2026, I expect to see stronger performance in North America as I said.

Speaker #4: And continued strength in emerging markets. We feel good about China, and I expect an acceleration in India. Actually, India for us is performing extremely well.

Speaker #4: And then, as we continue to drive that productivity agenda, again, we will be able to continue to invest in the business, which, again, underpins my confidence in getting back to that 4% to 6% growth.

Brian McNamara: As we continue to drive that productivity agenda, it, again, we will be able to continue to invest in the business, which again, underpins my confidence in getting back to that 4% to 6% growth.

Speaker #1: Thank you. Our next question is from Warren Ackerman from Barclays. Please go ahead.

Operator: Thank you. Our next question is from Warren Ackerman from Barclays. Please go ahead.

Speaker #3: Yeah, good morning, Brian. This is Warren Ackerman here at Barclays. Outside of the numbers, Brian, could you talk about the new reorganization? You've got a new Chief Growth Officer, Chief Transformation Officer, new reporting structure.

Warren Ackerman: Good morning, Brian. It's Warren Ackerman here at Barclays. Outside of the numbers, Brian, could you talk about the new reorganization? You've got a new Chief Growth Officer, Chief Transformation Officer, new reporting structure, new hires in the US other than Natalie, I've seen. Can you maybe sort of walk us through how that's gonna be a growth unlock, and how you'll drive more volume growth in the US, more innovation? Anything you can say on sort of shelf resets and how the things are shaping up in the US in what is clearly a tougher operating environment? Thank you.

Speaker #3: New hires in the US other than Natalie, I've seen. Can you maybe sort of walk us through how that's going to be a growth unlock and how you'll drive more volume growth in the US, more innovation?

Speaker #3: Anything you can say on sort of shelf resets and how the things are shaping up in the US and what is clearly a tougher operating environment?

Speaker #3: Thank you.

Brian McNamara: Thanks, Warren, I think you captured it. This is first and foremost about unlocking growth and agility. I think about the journey we've been on as a company. We're now three and a half years in as a company. The strategy we laid out is very clear, and there is still an opportunity for us to streamline and simplify the way we work and drive a strategy to execution. As you said, we created this Chief Growth Officer role that combines our category structure, our marketing effectiveness and capabilities, our business insights and analytics, strategy, and a new commercial excellence function. Six operating units replacing our 3 regions. As you're aware, Latin America, India, and Middle East, Africa, will now have a seat around the leadership team table. I think a couple things.

Speaker #4: Thanks, Warren. And I think you captured it. This is first and foremost about unlocking growth and agility. And I think about the journey we've been on at a company.

Speaker #4: We're now three and a half years in as a company. The strategy we laid out is very clear. And there was still an opportunity for us to streamline and simplify the way we work and drive a strategy to execution.

Speaker #4: So, as you said, we created this Chief Growth Officer role that combines our category structure, our market and effectiveness and capabilities, and our business insights and analytics.

Speaker #4: Strategy and a new Commercial Excellence function. And then six operating units replacing our three regions. As you're aware, Latin America, India, and Middle East Africa will now have a seat around the leadership team table.

Speaker #4: So I think a couple of things. It's one, on the commercial execution function that we've created centrally. We're driving AI-driven tools behind net revenue management and SBEC's action.

Brian McNamara: It's one, on the commercial execution function that we've created, centrally, you know, we're driving AI-driven tools behind Net Revenue Management, Next Best Action. We're gonna be able to drive this quicker and faster through the organization. This structure of CGO to six operating units is gonna allow us to really much quicker drive our category strategies through to execution, better leverage scale, better be able to move resources around, react to what I would say, as you said, a very uncertain environment. As a result of it, we're taking a layer out of the organization.

Speaker #4: We're going to be able to drive this quicker and faster through the organization. This structure of CGO, the six operating units, is going to allow us to really, really much quicker drive our category strategies through to execution, better leverage scale, better be able to move resources around, react to what I would say, as you said, a very uncertain environment.

Speaker #4: And then, as a result of it, we're taking a layer out of the organization. So we're talking about a flatter, leaner organization. And that leads to the $175 to $200 million in gross savings we talked about, which gives us incredible flexibility, frankly, to invest in those growth opportunities, and to invest in innovation and drive the capabilities.

Brian McNamara: We're talking about a fat, flatter, leaner organization, and that leads to the GBP 175 to 200 million in gross savings we talked about, which gives us incredible flexibility, frankly, to invest in those growth opportunities and to invest in innovation and drive the capabilities. Your question on the US, specifically on the US. Yeah, well, first of all, overall in the team, we did, as part of those changes, bring new members of the team. We got a fantastic leader in India, a fantastic leader in Latin America, that came from outside the company, who know these markets extremely well. Our Middle East, Africa leader is now sitting on the leadership team, and she's an incredible talent.

Speaker #4: Now, your question on the US—specifically on the US—yeah, well, first of all, overall on the team, we did, as part of those changes, bring new members of the team.

Speaker #4: We got a fantastic leader in India, a fantastic leader in Latin America that came from outside the company who know these markets extremely well.

Speaker #4: Our Middle East Africa leader is now sitting on the leadership team, and she's an incredible talent. In the US, as part of all this, Natalie made a number of changes in her category heads or category general managers.

Brian McNamara: In the US, as part of all this, Natalie made a number of changes in our category heads, or category general managers. We have one of our top talents now on the OTC business. We brought external talent in oral health and in the, in the wellness category, which is a combination of VMS and digestive health. I mentioned it a bit earlier, Warren, but we know that in Q2, we will see across a number of key customers some wins on distribution and shelving across oral health, VMS, and pain relief, and that's locked. That's gonna happen in Q2, and we feel good about that commercial execution, and we also feel good about the innovation.

Speaker #4: So we have one of our top talents now on the OTC business. We brought external talent in in Aura Health and in the wellness category, which is a combination of ZMS and digestive health.

Speaker #4: I mentioned it a bit earlier, Warren, but we know that in Q2 we will see, across a number of key customers, some wins on distribution and shelving.

Speaker #4: Across oral health, VMS, and pain relief—and that's locked. That's going to happen in Q2, and we feel good about that commercial execution. And we also feel good about the innovation.

Speaker #4: The one thing I will say—it's broadly across the business, specifically in the US, oral health is doing incredibly well. And it really did better in Q4 than we expected, which, again, helped us offset and land the US where we wanted to, despite the tough cold and flu season.

Brian McNamara: The one thing I will say, it's broadly across the business, specifically in the US, oral health is doing incredibly well, and it really, you know, did better in Q4 than we expected, which again, helped us land the US where we wanted to, despite the tough cold and flu season.

Speaker #1: Thank you. Our next question is from David Hayes with Jefferies. Please go ahead.

Operator: Thank you. Our next question is from David Hayes with Jefferies. Please go ahead.

Speaker #3: Thank you. Good morning, all. So just on emerging markets again, I mean, there was a sequential slowdown in the fourth quarter. So just trying to dig a little bit deeper into whether the emerging is performing as you would expect it to be like it to be at the moment.

David Hayes: Thank you. Good morning, all. Just on emerging markets, again, there was a sequential slowdown in the Q4. Just trying to dig a little bit deeper into whether the emerging is performing as you would expect it to be, like it to be at the moment, and then which areas specifically maybe are not doing as well? I guess in that context, oral care continues to be amazing and impressive, obviously, and still in this difficult consumer environment. Is there something different about oral care and the dynamics there versus some of the other categories, X respiratory, because of the cold and flu? It feels like, you know, oral care can ride the consumer dynamic, whereas the other brands can't.

Speaker #3: And then, which areas specifically maybe are not doing as well? And I guess, in that context, oral care continues to be amazing and impressive.

Speaker #3: Obviously, still in this difficult consumer environment, so is there something different about oral care and the dynamics there versus some of the other categories—excluding respiratory because of the cold and flu?

Speaker #3: But it feels like oral care can ride the consumer dynamic, whereas the other brands can't. Is there something you'd point to that says this is what's going to change as the consumer maybe picks up in the other areas?

David Hayes: Is there something you'd point to that says that, you know, this is what's gonna change as the consumer maybe picks up in the other areas? Thank you.

Speaker #3: Thank you.

Speaker #4: Yeah, thanks, David. So, listen, I will take the oral care question, linking to other categories, and I'll pass it to Dawn to talk about what we're seeing more broadly in emerging markets.

Brian McNamara: Yeah. Thanks, David. Listen, I will take the oral care question linking to other categories, and I'll pass it to Dawn to talk about what we're seeing more broadly in emerging markets. First of all, we do feel really good, as you pointed about, around oral care. As we've been talking about now for a while, the clinical range in Sensodyne has really resonated well with consumers. It's beyond Clinical White, it's Clinical Repair, it's Clinical Enamel Strength. Beyond that, you know, we're seeing great progress in places like India, with low-income consumer on oral health. parodontax is an amazing brand in gum health. We don't talk about it as much as Sensodyne. It's obviously not as big, but it's growing in the, you know, strong double digit in the mid-teens.

Speaker #4: So, first of all, we do feel really good, as you pointed out, around oral care. And as we've been talking about now for a while, the clinical range in Sensodyne has really resonated well with consumers.

Speaker #4: And it's beyond clinical wide. It's clinical repair. It's clinical enamel strength. Beyond that, we're seeing great progress in places like India with low-income consumer on oral health.

Speaker #4: And Parodontax is an amazing brand in gum health. We don't talk about it as much as Sensodyne. It's obviously not as big, but it's growing in the strong double digits, in the mid-teens.

Speaker #4: We launched in China this past year. It's still quite early in our ramp-up for distribution, but we couldn't be happier with the progress that we're seeing there.

Brian McNamara: We launched in China this past year. It's still quite early in our ramp-up for distribution, but we couldn't be happier with the progress that we're seeing there. We feel great about oral health, and the oral health model is very, very clear. It's linked to the dental recommendation, it's linked to the innovation, and obviously, we compete on the therapeutic side of the business. In the other categories, when we talk about the impact of cold and flu, to be clear, we talk about our cold and flu portfolio specifically, which are brands like Theraflu and Robitussin and Otrivin, which sit in that category. There is also impacts across other areas like pain relief and some VMS and things like that.

Speaker #4: So we feel great about oral health. And the oral health model is very, very clear. It's linked to the dental recommendation. It's linked to the innovation.

Speaker #4: And obviously, we compete on the therapeutic side of the business. Listen, in the other categories—quite—listen, when we talk about the impact of cold and flu, to be clear, we talk about our cold and flu portfolio specifically, which are brands like Theraflu, Robitussin, and Otrovan, which sit in that category.

Speaker #4: There is also impact across other areas, like pain relief and some VMS and things like that. It tends not to be as much, but there does tend to be a little bit of that impact that happens too.

Brian McNamara: Tend not to be as much. There does tend to be a little bit of that impact that happens, too. Fundamentally, I believe these are real strong categories that, you know, that as we move forward, we can move ahead. I think we're just radically differentiated versus the competition in oral health in a way that's very, very unique. We're talking about now, you know, over 10 years of kind of high single digit to double-digit growth in Sensodyne. We continue to see that continue to hum. We're seeing good competitiveness in the other categories, but we're continuing to focus on innovation, things like our 12-hour patch launch on Voltaren in a number of European countries. Otrivin Nasal Mist continues to do well. We're growing aggressive share there.

Speaker #4: Fundamentally, I believe these are real strong categories that as we move forward, we can move ahead. I think we're just radically differentiated versus the competition in oral health in a way that's very, very unique.

Speaker #4: We're talking about now over 10 years of kind of high single-digit to double-digit growth in Sensodyne. And we continue to see that continuing to hum.

Speaker #4: And we're seeing good competitiveness in the other categories, but we're continuing to focus on innovation—things like our 12-hour patch launch on Voltaren in a number of European countries. Otro Nasal Mist continues to do well.

Speaker #4: We're growing aggressive share there. Our Optisorb technology on Panadol, we're rolling out to another of them to market. So we feel like we have a good innovation plan that should underpin certainly our medium-term guidance.

Brian McNamara: Our Optizorb technology on Panadol, we're rolling out to another of under markets. We feel like we have a good innovation plan that should underpin, you know, our, certainly our medium-term guidance. Dawn?

Speaker #4: Dawn?

Speaker #5: Yeah. Morning, David. Hi, everyone. So let me talk a bit about emerging markets. And because we feel really excited about our emerging markets business, if I look at Asia-Pac, first of all, I mean, we continue to deliver strong performance in Asia-Pac.

Dawn Allen: Yes. Morning, morning, David. Hi, everyone. let me talk a bit about emerging markets, and because we feel really excited about our emerging markets business. If I look at Asia Pacific, first of all, I mean, we continue to deliver strong performance in Asia Pacific. We expected an acceleration in half two versus half one, that has come through. When I look at the growth drivers in Asia Pacific, 80% of our growth is coming from volume mix, that is a factor of both driving penetration and expanding reach, expanding reach across lower-income consumer groups. If I look within Asia Pacific, let me talk about India. I mean, an incredible performance in India. Double-digit growth in the year and acceleration in Q4 on the back of the macro changes around GST, also on the fact of our activations.

Speaker #5: We expected an acceleration in half two versus half one, and that has come through. And when I look at the growth drivers in Asia-Pac, 80% of our growth is coming from volume mix.

Speaker #5: And that is a factor of us driving penetration and expanding reach across lower-income consumer groups. If I look within Asia-Pac, let me talk about India.

Speaker #5: I mean, an incredible performance in India—double-digit growth in the year and acceleration in Q4 on the back of the macro changes around GST.

Speaker #5: But also on the fact of our activations, if I look at our 20-rupee pack, and Sensodyne is performing credibly well. We continue to expand our reach across rural areas, across villages, based on our investment in terms of bringing ourselves forth in-house.

Dawn Allen: You know, if I look at our 20-rupee pack, Sensodyne is performing incredibly well. We continue to expand our reach across rural areas, across villages, based on our investment in terms of bringing our sales force in-house. Actually, you know, I was out in India the first week of this year, and it was great to be on the ground with the team, visiting stores and really seeing our brands come to life. That was India. If I look at China, we're also really excited about China. Mid-single digit growth in the year. Just some pockets to talk about: If I look at our e-commerce business, it's around 40% of our business in China. Douyin, you know, we're growing more than 100%. Our online to offline business is also growing double digits. Actually, we feel really good about China.

Speaker #5: And actually, I was out in India the first week of this year, and it was great to be on the ground with the team visiting stores and really seeing our brands come to life.

Speaker #5: So, that was India. If I look at China, we're also really excited about China—mid-single-digit growth in the year. And just some pockets to talk about.

Speaker #5: If I look at our e-com business, it’s around 40% of our business in China. And Douyin—we’re growing more than 100%. And our online-to-offline business is also growing double digits.

Speaker #5: So actually, we feel really good about China. If I move on then to Amir Latam, Amir Latam actually, we've seen a good performance particularly across Latam and Amir.

Dawn Allen: If I move on to EMEA LATAM. EMEA LATAM, actually, we've seen a good performance, particularly across LATAM and EMEA, Middle East and Africa, as well as Central Europe. It is fair to say that whilst we've seen a good performance, particularly in LATAM and specifically Brazil, we are seeing a much more challenging macro backdrop, you know, both in terms of the consumer behavior, but also in terms of retailer behavior as well. We did see a slowdown in LATAM, particularly in Q4. If I thought about kind of Middle East, Africa continues to perform well. Central Europe, you know, also has seen a good performance, but again, based on the cough, cold, and flu season in Q4, we saw a slowdown, you know, in Central Europe because of that.

Speaker #5: Middle East and Africa, as well as Central Europe. But it is fair to say that, whilst we've seen a good performance particularly in Latam, and specifically Brazil, we are seeing a much more challenging macro backdrop.

Speaker #5: It's both in terms of the consumer behavior, but also in terms of retailer behavior as well. So, we did see a slowdown in LatAm, particularly in Q4.

Speaker #5: And if I thought about kind of Middle East, Africa continues to perform well. Central Europe also has seen a good performance. But again, based on the soft cough, cold, and flu season in Q4, we saw a slowdown in Central Europe because of that.

Speaker #5: But overall, as I said, we're really excited about emerging markets. It's a huge growth opportunity for us. When I look at our AMP investment, half of our increase in AMP investment in the year actually went to emerging markets.

Dawn Allen: Overall, as I said, we're really excited about emerging markets. It's a huge growth opportunity for us. When I look at our A&P investment, half of our increase in A&P investment in the year actually went to emerging markets, you can see that coming through in the performance.

Speaker #5: And you can see that coming through in the performance.

Speaker #1: Thank you. Our next question is from Celine Panettier with JPMorgan. Please go ahead.

Operator: Thank you. Our next question is from Celine Pannuti with J.P. Morgan. Please go ahead.

Speaker #6: Thank you, good morning. My question comes back on the overall guidance and how you manage top-line performance versus margin improvement. Clearly, strong delivery in margin, and your cost savings initiative augurs well for the years to come.

Celine Pannuti: Thank you. Good morning. My question comes back on the overall guidance and how you manage top-line performance versus margin improvement. Clearly, strong delivery in margin and your cost savings initiative augur well for the years to come. At the same time, your top line has disappointed. If I look at the past three years, volume has been 1%, which is quite low compared to the overall European staples. You know, best in class are trying to achieve at least 2 and above. You know, in order to grow 4 to 6, what kind of volume level do you think you need to have?

Speaker #6: At the same time, your top line is disappointing. And if I look at the past three years, volume has been 1%, which is quite low compared to the overall European staples. Best-in-class are trying to achieve at least 2% and above.

Speaker #6: So, in order to grow 4 to 6, what kind of volume level do you think you need to have? And how do you see the discrepancy between margin progression and volume performance?

Celine Pannuti: You know, like, the discrepancy between margin progression and volume performance, does it mean that you may need to reinvest more, or maybe look at your price positioning, in order to grow volume faster? Thank you.

Speaker #6: Does it mean that you may need to reinvest more or maybe look at your price positioning in order to grow volume faster? Thank you.

Brian McNamara: Thanks, thanks for the question, Celine. Let me kick that off, and I'll pass it to Dawn to give a bit more perspective. I think if you take a step back, I do think we're investing in the right places on the business. If you look at our A&P investment in the last year, we were over 7% ahead of a year ago, and R&D was over 7% of ahead of a year ago. That is the absolute benefit of the gross margin improvement and the improvements we've seen in our supply chain and structure, giving us 220 basis points of operating gross margin improvement, which is allowing us to invest in the business. We continue to focus on where is the best of that investment.

Speaker #4: No, thanks. Thanks for the question, Celine. So let me kick that off, and then I'll pass it to Dawn to give a bit more perspective.

Speaker #4: I think if you take a step back, I do think we're investing in the right places on the business. If you look at our AMP investment in the last year, we were 7 over 7% ahead of a year ago.

Speaker #4: And R&D was over 7% ahead of a year ago. That is the absolute benefit of the gross margin improvement and the improvements we've seen in our supply chain and structure, giving us 220 basis points of gross margin improvement, which has allowed us to invest in the business.

Speaker #4: We continue to focus on where is the best of that investment, by the way. A lot of that incremental investment this year went against oral health, and you see the results that have come out.

Brian McNamara: By the way, a lot of that incremental investment this year went against oral health, you see the results that have come out. We understand that, you know, in a lower cold and flu season, also, while we can gain share, we're going to have a very difficult time, you know, driving volume overall. Maybe, Dawn, you can talk a little bit about how we see the algorithm going forward and where we see the role of volume growth, which we're very focused on volume growth. Dawn.

Speaker #4: And we understand that on a lower cold and flu season, also while we can gain share, we're going to have a very difficult time driving volume overall.

Speaker #4: But maybe Dawn, you can talk a little bit about how we see the algorithm going forward and where we see the role of volume growth, which we're very focused on volume growth.

Speaker #4: So Dawn.

Dawn Allen: Yeah. Thanks for the question, Celine. You're right, and Brian mentioned it. We are very focused on driving volume growth. You know, in 2026 and moving forward, we've always said that the right price volume mix split for this business is around 60, 40, 60. I already talked about Asia Pacific, and you know, in terms of 80% of our growth is coming from volume on Asia Pacific, and we feel really good about that. When I look at EMEA, LATAM, if I take out the two shoulders of the year, so if I take out Q1 and Q4 for 2025, where we had a soft cough, cold, and flu season, actually, in Q2 and Q3, we did see a more balanced price volume mix profile, and that obviously should give us confidence moving forward that we can deliver that.

Speaker #3: Yeah. Yeah. Thanks for the question, Celine. And you're right. And Brian mentioned it. We are very focused on driving volume growth. In 2026 and moving forward, we've always said that the right price volume mix split for this business is around 60/40, 40/60.

Speaker #3: I already talked about Asia PAC in terms of 80% of our growth is coming from volume on Asia PAC. And we feel really good about that.

Speaker #3: When I look at Amir Latam, if I take out the two shoulders of the year, so if I take out Q1 and Q4 for 2025, where we had a soft cough, cold, and flu season, actually in Q2 and Q3, we did see a more balanced price volume mix profile.

Speaker #3: And that obviously should give us confidence moving forward that we can deliver that. And then if I look at North America look, it's been a really challenging market in North America.

Dawn Allen: If I look at North America, look, it's been a really challenging market in North America in 2025. As Brian's talked about, we have put in place the key actions to drive volume growth in 2026. Whether it's about, you know, us no longer doing destocking, whether it's about reducing the drag from Smokers' Health, the distribution builds that we expect to get from shelf resets, as well as the strong activations. These are all important drivers in terms of driving the volume growth. Whilst for 26, I'm not going to guide to specific volumes, I would expect us to be improving the split of price volume mix in 26.

Speaker #3: In 2025, but as Brian's talked about, we have put in place the key actions to drive volume growth in 2026, whether it's about us no longer doing the stocking, whether it's about reducing the drag from smokers' health, the distribution builds that we expect to get from shelf resets, as well as the strong activations.

Speaker #3: These are all important drivers in terms of driving the volume growth. So whilst for '26, I'm not going to guide to specific volumes, I would expect us to be improving the split.

Speaker #3: Of price volume mix in '26.

Speaker #1: Thank you. Our next question is from Olivia Nicolai with Goldman Sachs. Please go ahead.

Operator: Thank you. Our next question is from Olivier Nicolai with Goldman Sachs. Please go ahead.

Olivier Nicolai: Hi, good morning. I've got one question first. Could you go back to the change you have implemented in the US over the last 12 months, specifically also the incentive structure you put in place for the new management there? Just following up on the press release on page 5, regarding the Overall Equipment Effectiveness, it has improved by 7 point in 2025. It's a bit lower than what you expected at H1. Should we assume a stronger improvement in 2026 compared to 2025 on these metrics? Thank you.

Speaker #5: Hi, good morning. I got one question first. Could you go back to the change you have implemented in the US over the last 12 months and specifically also the incentive structure you put in place for the new management there?

Speaker #5: And just following up on the press release on page 5 regarding the overall equipment effectiveness, it has improved by 7 points in 2025. It's a bit lower than what you expected at H1.

Speaker #5: Should we assume a stronger improvement in '26 compared to '25 on these metrics? Thank you.

Speaker #4: Yeah. So thanks for the question. Let me talk a bit about the US. As you know, we announced a new leader in the US in May.

Brian McNamara: Yeah. Thanks for the question. Let me talk a bit about the US. As you know, we announced a new leader in the US in May. As we looked at our operating model structure broadly, we worked very closely as an executive team to define that. I talked a little bit earlier when Warren asked the question about that. We work that very closely with the US. One of the things we've done is we've created these C category general manager roles, which obviously report directly up to our president of the US and also are connected to our global category heads, which is going to help us really drive some of this strategy to execution even faster. We're making a number of changes around Net Revenue Management and the tools that we're providing.

Speaker #4: As we looked at our operating model structure broadly, we worked very closely as an executive team to define that. I talked a little bit earlier, when Warren asked the question about that.

Speaker #4: And we worked that very closely with the US. So, one of the things we've done is we've created these three category general manager roles, which obviously report directly up to our President of the US and also are connected to our global category heads, which is going to help us really drive some of this strategy to execution even faster.

Speaker #4: We're making a number of changes around net revenue management and the tools that we're providing. We've made a number of changes in our Salesforce, and in our sales leadership and structure.

Brian McNamara: We've made a number of changes in our sales force and our sales leadership and structure. All that was really pretty much done on 8 January, when we announced the broader stuff. In the US, you obviously, you move much faster on those kind of changes. I feel really good about those changes and how they're gonna drive growth. As I said, we've seen progress to date. There's no question about it. We ended up, again, where we expected to. Inventories are kind of where we expected to. Oral health has been extremely strong. Advil grew share in Q4, so that was a really important element. You know, we see these opportunities on the distribution and stuff that I talked about in Q2.

Speaker #4: And all that was really pretty much done on January 8th when we announced the broader stuff in the US. You obviously move much faster on those kind of changes.

Speaker #4: So I feel really good about those changes and how they're going to drive growth. And as I said, we've seen progress to date. There's no question about it.

Speaker #4: We ended up, again, where we expected to. Inventories are kind of where we expected to. Oral Health has been extremely strong. Advil grew share in Q4.

Speaker #4: So, that was a really important element. We're seeing—and we see—these opportunities on the distribution and stuff that I talked about in Q2. So, I feel like we're in a very good place to really drive those changes in the US.

Brian McNamara: I feel like we're in a very good place to really drive those changes in the US.

Speaker #3: Yeah, and I think, look, in terms of the productivity program, Brian talked about it. We're really pleased with our supply chain productivity program—it was even better than we expected.

Dawn Allen: Yeah, I think, look, in terms of the productivity program, Brian talked about it. We're really pleased with our supply chain productivity program. It was even better than we expected. I mean, 220 basis points improvement in growth margin, you know, is incredible in the year, and it is a collective effort across the whole organization. That's important because it helps to drive flexibility and agility in the P&L to be able to invest for growth. If you remember, we talked about three drivers of how were we going to deliver that growth margin improvement and productivity benefit? The first one we talked about was immediate accelerators. This was reducing complexity in our supply chain, whether it's around number of languages on pack, harmonizing packaging, formulations. Let me give you an example.

Speaker #3: I mean, a 220 basis point improvement in gross margin is incredible in the year, and it is a collective effort across the whole organization. And that's important because it helps to drive flexibility and agility in the P&L to be able to invest for growth.

Speaker #3: And if you remember, we talked about three drivers of how are we going to deliver that gross margin improvement and productivity benefit. The first one we talked about was immediate accelerators.

Speaker #3: So this was reducing complexity in our supply chain, whether it's around number of languages on PAC, harmonizing packaging, formulations, and let me give you an example.

Speaker #3: So in Europe, in 2025, on our Aquafresh brand, we had 44 single-language PACs. And then we've now reduced to 18 multi-language PACs in the year.

Dawn Allen: In Europe, in 2025, on our Aquafresh brand, we had 44 single language packs, and we've now reduced to 18 multi-language packs in the year. That is a, you know, huge optimization piece in terms of supply chain. The second area that you referenced in your, in your question was around operational efficiency, and this is all about debottlenecking our plants, process improvement, equipment optimization. Let me give you an example of that. In our La Vita factory, in Europe, we reduced formulations by 30%. If you think about the impact of that reduces change over time, but it also increases the capacity, the available capacity on that line, which is really important. I think, as I said, it's an incredible effort that is helping us to continue to invest in the business to drive growth.

Speaker #3: And that is a huge optimization piece in terms of supply chain. The second area that you referenced in your question was around operational efficiency.

Speaker #3: And this is all about debottlenecking our plants, process improvements, equipment optimization. And let me give you an example of that. In our LaViche factory, in Europe, we reduced formulations by 30%.

Speaker #3: So if you think about the impact of that, that reduces change over time, but it also increases the capacity, the available capacity on that line, which is really important.

Speaker #3: So, I think, as I said, it's an incredible effort. That is helping us to continue to invest in the business to drive growth, moving forward.

Dawn Allen: Moving forward, you know, I wouldn't expect to see... It would be great if we had that level of improvement each year. You know, moving forward, 50 to 80 basis points, you know, is what we've built into our guidance. That will be a strong performance on supply chain productivity.

Speaker #3: I wouldn't expect to see it. It would be great if we had that level of improvement each year, but moving forward, 50 to 80 basis points is what we've built into our guidance.

Speaker #3: That will be a strong performance on supply chain, productivity.

Speaker #1: Thank you. Our next question is from Jeremy Fialko with HSBC. Please go ahead.

Operator: Thank you. Our next question is from Jeremy Fialko with HSBC. Please go ahead.

Speaker #6: Hi. Hi, morning. Thanks for taking the question. So the one for me is more on the US market more generally. So the first element is just the farmer channel within the US.

Jeremy Fialko: Hi. Hi, morning. Thanks, taking the question. The one for me is more on the US market more generally. The first element is just the pharma channel within the US. Do you see that continuing to be under pressure in 2026? Do you think with some of the ownership changes there's the possibility that the channel could become a little bit better in some of the, say, the broader drops there, which have, I guess, led to pressure on inventories and overall sell-through could abate?

Speaker #6: Do you see that continuing to be under pressure in 2026, or do you think with some of the ownership changes there, there's the possibility that the channel could become a little bit better and some of the broader drops there, which have, I guess, led to pressure on inventories and overall sell-through could abate?

Speaker #6: And then maybe if you look at the US more broadly, is it just a case of waiting for the consumer to get a bit better before the market growth can improve, or are there some other elements that you think are kind of specific to the market getting a bit better?

Jeremy Fialko: Maybe if you look at the US more broadly, is it just a case of waiting for the consumer to get a bit better before the market growth can improve, or are there some other elements, you know, that you think are kind of specific to the market getting a bit better, let's say, putting aside any cold and flu impacts? Thanks.

Speaker #6: Let's say putting aside any cold and flu impacts. Thanks.

Brian McNamara: Thanks, Jeremy. Thanks for the question. Let me take that. I think as you talk, pharmacy channel, really, what we've talked about is the two big retailers in the US, which is Walgreens and CVS. What I can say is, you know, we see the channel shift that we've seen for many years, which is, you know, drug channel and obviously, e-commerce. E-com growing quite aggressively, and if that's Walmart.com or if that's Amazon.com, you know, that will continue. The dynamic we saw in 2025 was lower inventory levels in those retailers as they were dealing with their own challenges. We believe we're where we need to be, and now we're just managing normal channel shifts as we can. Oh, by the way, that channel shift is not a bad thing for us.

Speaker #4: Thanks, Jeremy. Thanks for the question. Let me take that. I think as you talk, pharmacy channel really what we've talked about is the two big retailers in the US, which is Walgreens and CVS.

Speaker #4: What I can say is, we see the channel shift that we've seen for many years, which is the drug channel and, obviously, e-comm—DCOM—growing quite aggressively, and that's Walmart.com or that's Amazon.com.

Speaker #4: That will continue. The dynamic we saw in 2025 was lower inventory levels in those retailers as they were dealing with their own challenges. We believe we're where we need to be, and now we're just managing normal channel shifts as we can.

Speaker #4: And oh, by the way, that channel shift is not a bad thing for us. If we look at our Amazon shares, 18 brands on Amazon account for 90% of our business on Amazon and 16 of those 18 brands have higher share online than offline.

Brian McNamara: If we look at our Amazon shares, 18 brands on Amazon account for 90% of our business on Amazon, and 16 of those 18 brands have higher share online than offline. As that channel shift moves, it's something we can take advantage of. We have good capabilities there, so we feel good about that channel shift. Yet to be seen what happens under new ownership at Walgreens, if that's a positive or not a positive. Again, I don't feel like this is a situation that gets worse. We baked it in. We proactively managed our inventory levels to try to be in a place where we felt good about, so we can stop talking about it as we move forward.

Speaker #4: So as that channel shift moves, it's something we can take advantage of. We have good capabilities there. So we feel good about that channel shift.

Speaker #4: Yet to be seen what happens under new ownership at Walgreens, if that's a positive or not a positive. But again, I don't feel like this is a situation that's get worse.

Speaker #4: We've baked it in. We proactively managed our inventory levels to try to be at a place where we felt good about so we can stop talking about it as we move forward.

Brian McNamara: In the overall market, you said the ex-seasonality, so I will take that out because there's certainly a seasonality impact that we're kind of seeing. What we see in the dynamic is we see club channel doing a bit better, dollar channel doing a bit better as consumers are looking for more value. Some consumers looking for lower price points, some consumers looking for different consumer, but want value, higher price point, and lower price per use. We're very focused on those 2 channels and increasing our offerings to make sure that we're meeting the affordability issues of consumers in the US. We believe we can also play a role, and we do play a role, certainly in oral health, in driving that category growth. We're not sitting back and waiting for the categories to change.

Speaker #4: In the overall market, you said ex-seasonality. So I will take that out because there's certainly a seasonality impact that we're kind of seeing. Listen, what we see in the dynamic is we see club channel doing a bit better, dollar channel doing a bit better as consumers are looking for more value.

Speaker #4: Some consumers looking for lower price points. Some consumers looking for different consumer, but want value, higher price point, lower price per use. We're very focused on those two channels.

Speaker #4: And increasing our offering to make sure that we're meeting the affordability issues of consumers in the US. And we believe we can also play a role, and we do play a role, certainly in oral health, in driving that category growth.

Speaker #4: So we're not sitting back and waiting for the categories to change. We're just acknowledging that we there's some things we can't control. We're focused on competitiveness, growing market share.

Brian McNamara: We're just acknowledging that there are some things we can't control. We're focused on competitiveness, growing market share. We feel confident in that, and we're focused on driving that category growth where we can.

Speaker #4: We feel confident in that, and we're focused on driving that category growth where we can.

Speaker #1: Thank you. Our next question is comes from Sarah Simon with Morgan Stanley. Please go ahead.

Operator: Thank you. Our next question comes from Sarah Simon with Morgan Stanley. Please go ahead.

Sarah Simon: Yes, morning. Just one question from me. How important is it in terms of securing shelf space and sort of with your retailer negotiations, to have that cold and flu business? I think, you know, in your bid to become a sort of steady compounder with predictable top line, this is obviously the kind of bit that's causing the biggest issue. I'm just wondering how much you need to own that business. Thanks.

Speaker #7: Yes, morning. Just one question from me. How important is it in terms of securing shelf space and sort of with your retailer negotiations to have that cold and flu business?

Speaker #7: Because I think in your bid to become a sort of steady compounder with predictable top line, this is obviously the kind of bit that's causing the biggest issues.

Speaker #7: So, I'm just wondering how much you need to own that business. Thanks.

Speaker #4: Okay. Well, Sarah, thanks for the question. Let me take that. Listen, I think cold and flu plays an incredibly enormous role in consumer health and for consumers.

Brian McNamara: Well, Sarah, thanks for the question. Let me take that. Listen, I think cold and flu plays an incredibly enormous role in consumer health and for consumers. You know, if you look over the history, I've been involved in consumer health now for over 20 years. I've seen quite a few cold and flu seasons. You know, this year we're seeing kind of two seasons in a row that are down because if you remember last year we were down. We know that Q1 is also going to be down. It doesn't happen that often, but it has happened in the past. We've experienced that in the past. I believe if you look over time, you're gonna see growth in this category going forward.

Speaker #4: And if you look over the history, I've been involved in consumer health now for over 20 years, so I've seen quite a few cold and flu seasons.

Speaker #4: This year, we're seeing kind of two seasons in a row that are down because you remember last year we were down. We know that Q1 is also going to be down.

Speaker #4: It doesn't happen that often, but it has happened in the past. We've experienced that in the past. I believe if you look over time, you're going to see growth in this category going forward.

Speaker #4: It's a bit exasperated this year because we are dealing with multiple headwinds in the US environment, which this is compounded on. But I think it's a very important category.

Brian McNamara: It's a bit exasperated, this year because we are dealing with multiple headwinds in a US environment, which this is compounded on. I think it's a very important category. We feel good about our positions in the category and our portfolio. I think it plays a very important role for our customers, too. As you were saying, it, this is, you know, category management around pain and cold and flu. Frankly, cold and flu and pain have some common brands, Panadol Cold & Flu, Advil Cold and Flu. We think it's an important part of the portfolio, as we move forward.

Speaker #4: We feel good about our positions in the category and our portfolio. I think it's going to play it plays a very important role for our customers too.

Speaker #4: As you were saying, this is category management around pain and cold and flu. And frankly, cold and flu and pain has some common brands: Panadol, cold and flu, Advil, cold and flu.

Speaker #4: So we think it's an important part of the portfolio as we move forward.

Speaker #1: Thank you. Our next question is come from Corral Zoo with Kepler. Please go ahead.

Operator: Thank you. Our next question is come from Karel Zoete with Kepler. Please go ahead.

Speaker #8: Yes, good morning, all. Thanks for taking the questions. I'd like to poke a bit deeper into two categories. The first one is the digestive health business.

Karel Zoete: Yes, good morning, all. Thanks for taking the questions. I, yeah, I'd like to go a bit deeper into two categories. The first one is the digestive health business. Historically, a good business for you, not so seasonal, but we've seen a slowdown in 2025. What should we anticipate for 2026? Why should things get better? Coming back to pain. I know there's a bit of cold and flu impact in there, but if you zoom out, 2024, 2025 have not been great years for pain, despite of some of your strongest franchises, such as Panadol in Asia, are there. What is needed for the pain franchise to start performing more in line with the anticipated growth rates? Thank you.

Speaker #8: And historically, a good business for you not so seasonal, but we've seen a slowdown in 2025. What should we anticipate for 2026? Why should things get better?

Speaker #8: And then coming back to pain, I know there's a bit of cold and flu impact in there, but if you zoom out, 2024, 2025 have not been great years for pain despite some of your strongest franchises such as Panadol in Asia are there.

Speaker #8: So what is needed for the pain franchise to start performing more in line with the anticipated growth rates? Thank you.

Speaker #4: Okay. Thanks very much, Corral. Appreciate the questions. So let me start with digestive health. If you think about our digestive health business, just to get us grounded, it is over 80% of that business is focused in three countries: US, India, and Brazil.

Brian McNamara: Okay, thanks very much, Karel. Appreciate the questions. Let me start with digestive health. If you think about our digestive health business, just so to get us grounded, it is over 80% of that business is focused in 3 countries: US, India, and Brazil. In India and Brazil, it's Eno, which is a fantastic brand and does very well in both cases, and is part of our, you know, our strategy and our growth strategy, certainly in both those countries and certainly in India. Now you get to the US, where we have TUMS, we have Nexium, brands like Gas-X and Ex-Lax, Benefiber, which is a fantastic brand. We have seen a drag on Nexium in the US.

Speaker #4: In India and Brazil, it's ENO, which is a fantastic brand and does very well in both cases and is part of our strategy, and our growth strategy, certainly in both those countries.

Speaker #4: And certainly in India. So now you get to the US where we have Tums, we have Nexium, brands like Gas-X and X-Lax, Benefiber, which is a fantastic brand.

Speaker #4: We have seen a drag on Nexium in the US. There's no question that is one brand and one category. And we're not alone in this.

Brian McNamara: There's no question that is one brand and one category, and we're not alone in this, that has been impacted by a private label. If I zoom out, and look at the US overall, we've gained share versus private label, Nexium has been a bit of a challenge there. One of the opportunities we see in digestive health, we feel really good about, we're now working, is supporting consumers on GLP-1s, because there's multiple side effects on GLP-1s that brands like TUMS and brands like Benefiber address. There's also side effects like dry mouth, which we have a mouthwash brand we don't talk about much in the US, Biotene, which is actually quite effective in dry mouth.

Speaker #4: That has been impacted by private label. If I zoom out and look at the US overall, we've gained share versus private label. But Nexium has been a bit of a have been a bit of a challenge there.

Speaker #4: One of the opportunities we see in digestive health, and we feel really good about, and we're now working, is supporting consumers on GLP-1s. Because there's multiple side effects on GLP-1s that brands like Tums and brands like Benefiber address.

Speaker #4: There's also side effects like dry mouth, which we have a mouthwash brand we don't talk about much in the US, Biotene, which is actually quite effective in dry mouth.

Speaker #4: And there's nutritional supplementation. And we've actually created a Centrum variant, that's specifically focused to GLP-1 consumers. So we see an opportunity across our categories to drive that.

Brian McNamara: There's nutritional supplementation, and we've actually created a Centrum variant that's specifically focused to deal with people and consumers. We see an opportunity across our categories to drive that. TUMS is a tremendously performing brand, and so is Benefiber. We have dealt with a little bit of the drag from the Nexium side of the business. Listen, on pain relief, it's a great portfolio. I mean, Voltaren's number one topical analgesic in the world. By the way, we talk a lot about the topical. We also have a very strong patch business. I mentioned earlier, we're launching 24-hour patch in a number of markets around the world, and we're seeing quite a successful pickup of that. Panadol has done quite well in Asia.

Speaker #4: Tums is a tremendously performing brand. And so is Benefiber. We have dealt with a little bit of the drag from the Nexium side of the business.

Speaker #4: Listen, on pain relief, it's a great portfolio. I mean, Voltaren is number one—topical analgesic in the world. By the way, we talk a lot about the topical.

Speaker #4: We also have a very strong patch business. I mentioned earlier, we're launching a 24-hour patch in a number of markets around the world, and we're seeing quite a successful pickup of that.

Speaker #4: Panadol has done quite well in Asia. We don't have quite the same strength of a systemic pain relief business through Europe. And we're addressing that.

Brian McNamara: We don't have quite the same strength of a systemic pain relief business through Europe, and we're addressing that. We're launching there. The big thing is on Advil. Like I said, we're growing Advil share in Q4. We're really confident that now with the new structure, with the new focus, our ability to invest and everything else, that we'll get Advil back to a more consistent performer. That's gonna be important for us. That's one of the things we need to make sure that we drive and deliver on the business. Overall, listen, we've always said the OTC categories in general would be, you know, 2% to 3% growth categories, and we can outgrow that. They've seen a little bit of headwinds here and in the US, as all categories have been a bit muted.

Speaker #4: We're launching there. And the big thing is on Advil. Like I said, we're growing Advil share in Q4. We're really confident that now, with the new structure, with the new focus, our ability to invest in everything else, that we'll get Advil back to a more consistent performer.

Speaker #4: That's going to be important for us. So that's one of the things we need to make sure that we drive and deliver on the business.

Speaker #4: But overall, listen, we've always said the OTC categories in general would be 2 to 3 percent growth categories. And we could outgrow that. They've seen a little bit of headwinds here and in the US as all categories have been a bit muted again, not super declines, but a bit muted.

Brian McNamara: Again, not super declines, but a bit muted. We're addressing that, but we feel very good about that, franchise and the global nature of that franchise.

Speaker #4: So we're addressing that. But we feel very good about that franchise and the global nature of that franchise.

Speaker #1: Thank you. Our next question is from Edward Lewis with Rothschild & Co Redburn. Please go ahead.

Operator: Thank you. Our next question is from Edward Lewis with Rothschild & Co Redburn. Please go ahead.

Edward Lewis: Thanks very much. Morning, everyone. Brian, just returning to the medium-term guidance, should we think that getting back to that range is all about the US, or do you think you can deliver against that with a structurally slower US market, but greater contribution from the rest of the world, given the confidence you're obviously expressing about India and China?

Speaker #9: Thanks very much. Morning, everyone. Brian, just returning to the medium-term guidance, should we think that getting back to that range is all about the US, or do you think you can deliver against that with a structurally slower US market but greater contribution from the rest of the world, given the confidence you're obviously expressing about India and China?

Speaker #4: Yeah. So listen, as I think about the medium-term guidance, I do expect that the US will perform better. There are two things. We've outperformed the market, to be clear.

Brian McNamara: Yeah, listen, as I think about the medium-term guidance, I do expect that the US will perform better. There's 2 things: We've outperformed the market, to be clear, in 2025. Do I feel like the performance is, we're hitting it on all cylinders? We have not. We can do better. Just outperforming the market isn't enough, and I am confident we can do better. We do expect an improvement in that US environment. I believe over the next couple of years, we'll get that US environment, if not too close to the bottom end of our algorithm growth.

Speaker #4: In 2025. But do I feel like the performance is we're hitting it on all cylinders. We have not. We can do better. Just to outperforming the market isn't enough.

Speaker #4: And I am confident we can do better. So we do expect an improvement in that US environment. And I believe, over the next couple of years, we'll get that US environment, if not too close to the bottom end of our algorithm growth.

Brian McNamara: Outside of that, oh, we also expect that again, over time, emerging markets will continue to be a strong contributor, and the low-income consumer strategy we have, which is taking hold in certain places, and we're learning a lot, to be very clear. And that takes a bit of time, you know, to kind of build up to be significant, and we see those opportunities. You know, overall, I do feel the medium term of 4 to 6, that nothing has fundamentally changed versus what we have said and what we've said in the past about our strategy and our opportunities. What you're hearing from us this year is 3% to 5% because the market is still quite uncertain, and we want to make sure we're providing the proper context for everyone on where we see things are at.

Speaker #4: Outside of that, oh, we also expect that, again, over time, emerging markets will continue to be a strong contributor. And the low-income consumer strategy we have, which is taking hold in certain places, and we're learning a lot, to be very clear, and that takes a bit of time.

Speaker #4: To kind of build up to be significant. And we see those opportunities. So overall, I do feel the medium term of four to six, that nothing has fundamentally changed versus what we have said and what we've said in the past about our strategy and our opportunities.

Speaker #4: What you're hearing from us this year is 3 to 5 percent because the market is still quite uncertain. And we want to make sure we're providing the profit context for everyone on where we see things are at.

Speaker #4: And again, where we sit now, knowing Q1 is going to be softer due to cold and flu, middle of the range is kind of where we're at on that.

Brian McNamara: Again, where we sit now, knowing Q1 is gonna be softer due to cold and flu, middle of the range is kind of where we're at on that, and we'll update as the year goes on.

Speaker #4: And we'll update as the year goes on, I believe.

Operator: Thank you.

Brian McNamara: I believe-

Speaker #1: I have a question. Our next question is from Tom Sykes with Deutsche Bank. Please go ahead.

Operator: Our next question is from Tom Sykes with Deutsche Bank. Please go ahead.

Speaker #10: Thank you, morning, everybody. One quick follow-up from one on AMP, please. Are you able to quantify the shelf space stocking benefit that you'll get in either Q1 or Q2 in North America, please?

Tom Sykes: Thank you. Morning, everybody. One quick follow-up and one on AMP, please. Are you able to quantify the shelf space stocking benefit that you'll get in either Q1 or Q2 in North America, please? Just on the AMP spend, I mean, there can't be many consumer companies that have increased AMP by almost 8% to 20% of sales and still running at negative volumes. Where is the AMP ineffective, and where is it effective? Does it make much of a difference in your non-oral care businesses at the moment? Can you talk about whether you're allocating more or that AMP increase to oral care or to non-oral care, please?

Speaker #10: And then just on the AMP spend, I mean, there can't be many consumer companies that have increased AMP by almost 8 percent to 20 percent of sales and are still running at negative volumes.

Speaker #10: So where is the AMP ineffective? And where is it effective? And does it make much of a difference in your non-aural care businesses at the moment?

Speaker #10: And can you talk about whether you're allocating more or that AMP increase to oral care or to non-aural care, please?

Speaker #4: Thanks, Tom. Thanks for the question. Let me take the US stocking. I'll pass it to Dawn on the AMP question. Listen, we're not going to guide to specific improvements on the shelving increases.

Brian McNamara: Thanks, Tom. Thanks for the question. Let me take the US stocking. I'll pass it to Dawn on the AMP question. Listen, we're not gonna guide the specific improvements on the, you know, on the shelving increases. Let's just say it's part of the thing that gives us the confidence as we progress through the year, that we'll see stronger results because it's real. Consumers will see more of our brands. We'll have a bigger shelf space, and in a number of cases, we'll be at a better visibility point in some key resellers. Dawn, you wanna talk about AMP?

Speaker #4: But let's just say it's part of the thing that gives us the confidence as we progress through the year that we'll see stronger results.

Speaker #4: Because it's real. Consumers will see more of our brands. We'll have a bigger shelf space. And in a number of cases, we'll be at a better visibility point in some key resellers.

Speaker #4: Dawn, you want to talk about AMP?

Speaker #11: Yeah. So thanks for the question. And I think it also builds on one of the comments that Celine talked about in terms of the in terms of the margin profile as well.

Dawn Allen: Yes. Look, thanks for the question, and I think it also builds on one of the comments that Celine talked about in terms of the margin profile as well. Let me say a few words about that. I think, look, it's often easy for companies to cut AMP when the market's more challenging. We have not done that, and we haven't done that because we're really focused on ensuring the long-term sustainable growth for this business. You're right, we've increased AMP 7.5%. We've increased R&D 7.7% in the year, and we invest in our brands at a healthy and the right level to drive that sustainable growth. If I kind of give a bit more color behind that. Where has that increased in AMP? Where has it gone?

Speaker #11: So let me say a few words about that. I think, look, it's often easy for companies to put AMP when the market's more challenging.

Speaker #11: We have not done that. And we haven't done that because we're really focused on ensuring the long-term sustainable growth for this business. So with your right, we've increased AMP 7.5 percent.

Speaker #11: We've increased R&D 7.7 percent in the year. And we invest in our brands at a healthy and the right level to drive that sustainable growth.

Speaker #11: So if I kind of give a bit more colour behind that, so what at warehouse that increase in AMP? Where has it gone? We've already talked about it.

Dawn Allen: We've already talked about it. Half of that increase went to oral health. You know, you've seen the growth momentum in, on that this year in terms of high single digit and acceleration in Q4, and the ROI on that, on oral health, is incredibly strong. The other half, I referenced it earlier, went to emerging markets, so India, you know, DCOM in China, and that's really important. The third area actually is around expert. Expert is a critical part of our business model in terms of, you know, the work that we're doing around the Haleon HealthPartner, where registrations have increased 27% in the year, and on our field force engagement, you know, which has also increased 16% in the year. That's where the spend has gone.

Speaker #11: Half of that increase went to oral health. You've seen the growth momentum on that this year in terms of high single digits and acceleration in Q4, and the ROI on that in oral health is incredibly strong.

Speaker #11: The other half, I referenced it earlier, went to emerging markets. So India, DCOM in China, and that's really important. And the third area actually is around expert.

Speaker #11: So expert is a critical part of our business model. In terms of the work that we do in and around the Haleon Health portal, where registrations have increased 27 percent in the year.

Speaker #11: And on our field force engagement, which also increased 16 percent in the year. So that's where the spend has gone. The other thing that we are critically focused on, as well as ensuring it's the right level, is also around the return, the efficiency, and the effectiveness.

Dawn Allen: The other thing that we are critically focused on, as well as ensuring it's the right level, is also around the return, the efficiency, and the effectiveness. In the year, we've improved our working, non-working split, so 12% growth in working media. We've also increased our overall ROI, mid-single digit, and we've increased the coverage, the global coverage, to around three-quarters of our business. The other thing that we're focused on is also the mix. Sixty percent of our working media is allocated to digital, and that's an important balance for us as we think about, you know, the shift in the broader economy. I would say overall, look, it's an important focus area for us. We, you know, we invest at healthy level, 20.5%. I feel really good about that.

Speaker #11: So in the year, we've improved our working/non-working split. So, 12% growth in working media. We've also increased our overall ROI, mid-single digit. And we've increased the coverage, the global coverage, to around three-quarters of our business.

Speaker #11: The other thing that we're focused on is also the mix. So 60 percent of our working media is allocated to digital, and that's an important balance for us as we think about the shift in the broader economy.

Speaker #11: So I would say overall, look, it's an important focus area for us. We invest at healthy level, 20.5 percent. I feel really good about that.

Speaker #11: And we also continue to focus on improving the efficiency and effectiveness of our spend, as well as ensuring that we are shifting and having the right mix around digital versus legacy.

Dawn Allen: We also continue to focus on improving the efficiency and effectiveness of our spend, as well as ensuring that we are shifting and having the right mix around digital versus legacy.

Speaker #10: Okay. Super. Thanks, Dawn. Listen, I think we are going to close the call now. So thanks, everyone. Appreciate you joining us today. Look forward to catching up with all of you in upcoming meetings and roadshows.

Brian McNamara: Okay, super. Thanks, Dawn. Listen, I think we are going to close the call now. Thanks, everyone. Appreciate you joining us today. Look forward to catching up with all of you in upcoming meetings and roadshows. Please feel free to reach out to the IR team if you have any further questions. Really appreciate your continued interest and support in Haleon. Thanks, everybody.

Speaker #10: And please feel free to reach out to the R team if you have any further questions. Really appreciate your continued interest and support in Haleon.

Speaker #10: Thanks, everybody.

Operator: Thank you. That concludes Haleon fiscal year 2025 results Q&A. Thank you for your participation. You may now disconnect your line.

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