Half Year 2026 Haleon PLC Earnings Call - Q&A

July 30, 2026

Speaker #1: Yeah, everyone, welcome to Haley & Tom's call for our half-year results. I'm Joe 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.

Speaker #1: 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 #1: 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 that differ materially from those expressed in or implied by such forward-looking statements.

Speaker #1: 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 #1: And with that, I'll hand back to the operator, and we can open for Q&A.

Speaker #2: Thank you. Again, if we would like to ask a question before I start, followed by one on your telephone keypad. To remove your question, press Start, followed by 2.

Speaker #2: Again, to ask a question, press Start 1. As a reminder, if we are using a speakerphone, please remember to pick up your handset before asking a question.

Speaker #2: We'll pause here briefly as questions are registered. Our first question is from Cedric Bunnar with Citi. Let me ask your question.

Speaker #3: Yes, good morning, everyone. Hi, Joe. Hi, Brian, and hi, Dawn. Just a couple of questions, please. One on top line, and one on margin.

Speaker #3: The one on top line will be about North America. Could you just shed some light on the progress you've made there, especially maybe quantify the shelf reset benefits?

Speaker #3: And also, how we should think about the organic growth sequence for the rest of the year with the various building blocks. And then on margin, I mean, I guess another profit beat.

Speaker #3: But how would you assess whether the business actually remains invested enough, and what are the KPIs you would have internally to make sure no category and no market starts over-earning?

Speaker #3: Thank you.

Speaker #4: Great. Thanks, Cedric. Listen, I'll take the first question, and I'll probably kick off the second and then pass to Dawn. So first of all, I felt good about the progress in North America.

Speaker #4: Maybe I just start with a bigger step back, Cedric. So as you all saw, 3.1% organic sales growth in the quarter. So that's a sequential improvement from Q1, which was 2.2%.

Speaker #4: And we definitely saw a better balance of price and volume mix with volume mix at 1.4%. So a few other maybe highlights: emerging markets.

Speaker #4: Obviously, another sequential improvement at 6.3%. And we do look to see that strengthen in the back half, one of the drags to the emerging markets was Middle East, where we have a disproportionately kind of large market share versus the balance of our business there.

Speaker #4: And we just seen significant market declines in places like Dubai and Pakistan. Now, we believe that will get better in the back half based on our plans, not counting on the market to do anything different or the war to end.

Speaker #4: So I would say those are two key building blocks. And then Europe. Europe has been more challenging. What I'd say is we ended the quarter where we expected, in line, but probably a bit stronger in North America, a bit weaker in Europe.

Speaker #4: So we've definitely seen a Europe market which is declining, and we were relatively flat up, I think, 0.4% or so. So in the corner.

Speaker #4: So now getting to North America, 3.1% growth with 2% volume. I'd maybe put it in three buckets of what we're seeing. One is the stronger execution, and we've talked about that.

Speaker #4: That's the shelf recess, the self-placements across key categories, and key customers. The second I'd say innovation is delivering. We've launched the third pillar of our clinical range and clinical repair in the US, and that's doing extremely well.

Speaker #4: But it's beyond that. We've launched things like Centrum Age Defy, Excedrin Rapid Relief, and innovation is performing well. Maybe the third pillar is around e-commerce.

Speaker #4: So we're seeing good momentum in e-commerce, strong double-digit growth, and twice the market rate. So for me, listen, good progress in the US. I feel good about that.

Speaker #4: Still more work to do. Very encouraged by the progress. And certainly, we're going to have a stronger second half than first half, and we're confident in that.

Speaker #4: And that's obviously embedded in our guidance of holding our guidance of 3 to 5%. Now, maybe moving to your margin question. I'm going to pass it to Dawn to maybe talk a bit of the margin and the building.

Speaker #4: Maybe I'd start with a bit of your question on investment, just my perspective. So I think we are investing in the business. I mean, A&P in the first half grew 3.2%, broadly in line with sales, slightly ahead, but broadly in line with sales.

Speaker #4: And our A&P is roughly just below about 21% as an A&P percentage of A&P. So I think it's strong investment in growth. And there's specific areas where we've increased investment, and we're constantly doing resource allocation to ensure that we're investing behind the key growth areas, that we believe we have one rig room, and key innovations.

Speaker #4: So I feel like we're invested well in the business. Now, that said, our priority is growth. We don't want to invest in the business just for the sake of investing.

Speaker #4: We want to invest where we see growth opportunities. Listen, in the second half, we expect to step up in investment and growth, and that will show up in A&P.

Speaker #4: It'll also show up in different areas like we're investing in China and our non-Doyen because we have a good business on Doyen. Our portfolio is a bit less exposed to that channel, but we're growing 100%, and we see more opportunities there.

Speaker #4: So we're going to invest more there, and we're going to invest some more in activations in the US where we see opportunity. We're going to drive things.

Speaker #4: So let me leave it there. The only other thing I'd say before I pass it to Dawn is what the growth margin and productivity has enabled us to do is have the P&L flexibility to invest where we need to, but also drive strong EPS growth.

Speaker #4: If it makes sense. But to be clear, we're not holding back on investing in the business. We feel like we're investing where we need to be, and we see opportunities.

Speaker #4: We'll invest more. Dawn, maybe a bit of an on-the-margin.

Speaker #2: Yeah. Good morning. Good morning, everyone. So look, I think what's important to say on the margin is we have delivered the margin through efficiency.

Speaker #2: We are driving long-term sustainable improvements in our supply chain. So to Brian's point, the margin is not come from cutting investment. It's not come from taking too much price.

Speaker #2: When you look at our pricing, our pricing is in line with inflation. And this is a really important point that it is coming from efficiency.

Speaker #2: So the 120 basis points improvement in margin in operating margin, constant currency, is coming from growth margin, up 140 basis points. And we also have a 40 basis points benefit coming through FX, which, if you think about, it's quite nice to have a tailwind from FX for a change.

Speaker #2: And to Brian's point, that is pulling through and driving strong EPS in the business. And it is giving us flexibility and agility. And why that's important is when you look at the second half, we will start to see costs come through from the Middle East impact as we roll our fixed price contracts and our hedging positions.

Speaker #2: And it means that given that we've got the strength in the supply chain productivity program, it means we won't have to take exceptional pricing to cover it.

Speaker #2: We will be able to absorb that cost, which means from a margin perspective, we also expect in half two that we will deliver high single-digit operating margin growth as we have operating profit growth, as we have in half one.

Speaker #2: So let me take your second part of the question, which was about A&P and the KPIs and how we think about A&P. So people buy our brands because they are superior, meaningful, differentiated, and salient, which means that people are aware of them.

Speaker #2: And therefore, continued strong investment in A&P at 20.9%, as it is today, is really important for our brands. And the way that we think about that is probably three main areas in how we think about it.

Speaker #2: So the first question is, are we buying efficiently? And if you look at the first half, we have mitigated the majority of our inflation in terms of how we are buying that media.

Speaker #2: The second piece is, are we spending effectively? We have quite a sophisticated market mix modeling tool where we look at the incremental retail sales growth and ROI around that spend.

Speaker #2: And both of those are up in the first half. And the third question is, are we driving growth through reach and relevance? And when we think about this, we're trying to match our spend with where consumers are consuming that media or where they are getting where they're getting their media from.

Speaker #2: 60% of our spend is allocated to digital, and we continue to increase that spend behind social and expert, which are both up in the first half.

Dawn Allen: Cover it. We will be able to absorb that cost, which means from a margin perspective, we also expect in H2 that we will deliver high single-digit operating profit growth as we have in H1. Let me take your second part of the question, which was about A&P and the KPIs and how we think about A&P. People buy our brands because they are superior, meaningful, differentiated, and salient, which means that people are aware of them and therefore, continued strong investment in A&P at 20.9% as it is today is really important for our brands. The way that we think about that is probably three main areas in how we think about it. The first question is, are we buying efficiently?

Speaker #1: Corporate, we will be able to absorb that cost, which means from a margin perspective, we also expect in H2 that we will deliver high single-digit operating margin growth as we have operating profit growth, as we had in H1.

Speaker #2: So when we think about A&P, we keep it quite dynamic. So in areas where we're performing really well, like oral health, China, India, we increase our investment.

Speaker #1: So let me take your second part of the question, which was about A&P and the KPIs and how we think about A&P. So, people buy our brands because they are superior, meaningful, differentiated, and salient, which means that people are aware of them.

Speaker #2: And in areas where it needs less investment, so for example, when Costco and flu season, was weak in Q1, obviously, that's an area where we would shift investment to other areas.

Speaker #2: So all the time, it's very dynamic. So that we're ensuring that we're making our money work harder. And we continue to look for opportunities to invest.

Speaker #1: And therefore, continued strong investment in A&P at 20.9%, as it is today, is really important for our brands. And the way that we think about that is probably three main areas in how we think about it.

Speaker #1: Good. Thanks, Dawn. Next question.

Speaker #3: Thank you.

Speaker #4: Thank you. Our next question is from Guillaume Delma with UBS. You may ask your question.

Speaker #1: So the first question is, are we buying efficiently? And if you look at the first half, we have mitigated the majority of our inflation in terms of how we are buying that media.

Dawn Allen: If you look at the H1, we have mitigated the majority of our inflation in terms of how we are buying that media. The second piece is, are we spending effectively? We have quite a sophisticated market mix modeling tool where we look at the incremental retail sales growth and ROI around that spend, and both of those are up in the H1. The third question is, are we driving growth through reach and relevance? When we think about this, we're trying to match our spend with where consumers are consuming that media or where they're getting their media from. 60% of our spend is allocated to digital, and we continue to increase that spend behind social and search, which are both up in the H1. When we think about A&P, we keep it quite dynamic.

Speaker #5: Thank you very much. Good morning, Brian, Dawn, and Joe. A couple of questions for me. The first one on risk piratery health. We had another weak quarter in Q2.

Speaker #1: The second piece is, are we spending effectively? We have quite a sophisticated market mix modeling tool, where we look at the incremental retail sales growth and ROI around that spend.

Speaker #5: I think it shaved off 150 basis points of your organic sales growth. So my question is, of the three buckets of cost and cold, allergy, smokers' health, which are the ones where you would expect an improvement materializing relatively quickly?

Speaker #1: And both of those are up in the first half. And the third question is: are we driving growth through reach and relevance? And when we think about this, we're trying to match our spend with where consumers are consuming that media, or where they are getting their media from.

Speaker #5: And is your confidence in OSG, organic sales accelerating in the back half largely underpinned by an expected sequential pickup in RESPI? Or do you think the acceleration should be more broad-based than that in the back half?

Speaker #1: Sixty percent of our spend is allocated to digital, and we continue to increase that spend behind social and expert, which are both up in the first half.

Speaker #5: And then second question, just China high single-digit growth in the second quarter. Despite low incidence of cough and cold and some negative pricing, so maybe can you touch on what is driving what seems to be I guess double-digit volume growth in China?

Speaker #1: So when we think about A&P, we keep it quite dynamic. So in areas where we're performing really well, like oral health, China, India, we increase our investment.

Dawn Allen: In areas where we're performing really well, like oral health, China, India, we increase our investment. In areas where it needs less investment, for example, when cough, cold, and flu season was weak in Q1, obviously that's an area where we would shift investment to other areas so that all the time, it's very dynamic so that we're ensuring that we're making our money work harder and we continue to look for opportunities to invest.

Speaker #5: And how should we think about this pricing pressures? Is it more of a one-off? Is it the cost of competing in that hospital channel?

Speaker #1: And in areas where it needs less investment, so for example, when cough, cold, and flu season, was weak in Q1, obviously that's an area where we would shift investment to other areas.

Speaker #5: And does this have any negative implications for your margins in the region? Thank you very much.

Speaker #1: So all the time, it's very dynamic. So that we're ensuring that we're making our money work harder. And we continue to look for opportunities to invest.

Speaker #1: Great. Thanks, Guillaume. Listen, I'll take the first question. I'll respirator and I'll pass the China question to Dawn. So listen, on respiratory health, you're right, three buckets in respiratory health, cough and cold, allergy, and the smallest piece being smokers' health.

Brian McNamara: Good. Thanks, Dawn. Next question.

Speaker #2: Good. Thanks, Dawn. Next question.

Speaker #1: So first of all, on cold and flu, cold and flu is about half the size of in Q2 than it is in Q1. It's off-season, so it tends not to be as volatile.

Speaker #3: Thank you.

Guillaume Delmas: Thank you.

[Analyst]: Thank you.

Speaker #4: Thank you. Our next question is from Guillaume Delma with UBS. You may ask your question.

Operator: Thank you. Our next question is from Guillaume Delmas with UBS. You may ask your question.

Speaker #5: Thank you very much. Good morning, Brian, Dawn, and Joe. A couple of questions for me. The first one on respiratory health. We had another weak quarter in Q2.

Speaker #1: You are right that contact, which is a very big cold and flu brand in China, just saw very little, if any, pickup in the quarter.

Guillaume Delmas: Thank you very much. Good morning, Brian, Dawn, and Jo. Couple of questions for me. The first one on respiratory health. We had another weak quarter in Q2. I think it shaved off 150 basis points of your organic sales growth. My question is, of the three buckets of cough and cold, allergy, smokers' health, which are the ones where you would expect an improvement materializing relatively quickly? Is your confidence in OSG organic sales growth accelerating in H2 largely underpinned by expected sequential pickup in respi? Do you think the acceleration should be more broad-based than that in H2? Second question, just China high single-digit growth in Q2, despite low incidents of cough and cold and some negative pricing.

Speaker #1: We believe that's just an extension of what was a very difficult cold and flu season. And I'll get back to cold and flu in the back half in a second.

Speaker #5: I think it shaved off 150 basis points of your organic sales growth. So my question is, of the three buckets of cough and cold, allergy, smokers' health, which are the ones where you would expect an improvement materializing relatively quickly?

Speaker #1: Then you have allergy, which did well in Q1. It was down a little bit in Q2, just a phasing of the season piece. And you just expect that that's normal.

Speaker #1: You tend to see some seasonal swings in allergy, but it's never to the degree of cold and flu and the impact. And then third is smokers' health.

Speaker #5: And is your confidence in OSG, organic sales growth accelerating in the back half largely underpinned by an expected sequential pickup in respi, or do you think the acceleration should be more broad-based than that in the back half?

Speaker #1: Listen, smokers' health still declined in the quarter, but it's declined at a lower rate than it did in Q1. So we're starting to see a stabilization of that business as we go forward.

Speaker #1: And we have plans in place where we're like most things, like in the US in general, we're seeing better execution and we're seeing improvement as they go.

Speaker #5: And then, second question—just China, high single-digit growth in the second quarter despite low incidence of cough and cold and some negative pricing. So maybe, can you touch on what is driving what seems to be double-digit volume growth in China?

Speaker #1: Now, on cold and flu, as we look at the back half in cold and flu, we know that we've had two years of decline in cold and flu.

Guillaume Delmas: Maybe can you touch on what is driving what seems to be, I guess, double-digit volume growth in China, and how should we think about this pricing pressures? Is it more of a one-off? Is it the cost of competing in that hospital channel? Does this have any negative implications for your margins in the region? Thank you very much.

Speaker #1: And I think I've said in the past that associated with the category for over 20 years, it's not necessarily common that that happens, but it's not unheard of.

Speaker #5: And how should we think about this pricing pressures? Is it more of a one-off? Is it the cost of competing in that hospital channel?

Speaker #1: We've obviously done all the work to understand, is that a cyclical or a structural thing? We believe it's cyclical. What we're assuming in the back half is we'll see we see growth off of this two years of decline.

Speaker #5: And does this have any negative implications for your margins in the region? Thank you very much.

Speaker #2: Great. Thanks, Guillaume. Listen, I'll take the first question. I'm respiratory, and I'll pass the China question to Dawn. So listen, on respiratory health, you're right, three buckets in respiratory health: cough and cold, allergy, and the smallest piece being smokers' health.

Brian McNamara: Great. Thanks, Guillaume. Listen, I'll take the first question on respiratory, and I'll pass the China question to Dawn. Listen, on respiratory health, you're right, three buckets in respiratory health, cough and cold, allergy, and the smallest piece being smokers' health. First of all, on cold and flu. Cold and flu is about half the size in Q2 than it is in Q1. It's off-season, so it tends not to be as volatile. You are right that Contac, which is a very big cold and flu brand in China, just saw very little, if any, pickup in the quarter. We believe that's just an extension of what was a very difficult cold and flu season. I'll get back to cold and flu in the back half in a second. You have allergy, which did well in Q1.

Speaker #1: Still don't expect it to be at the level it was from two years ago. And obviously, in cold and flu, that's more Q4 weighted because that's when the cold and flu season is.

Speaker #1: So that's a bit of the frame around respiratory and what we're seeing. Dawn, you want to talk a bit about China?

Speaker #2: So first of all, on cold and flu, cold and flu is about half the size in Q2 than it is in Q1. It's off-season, so it tends not to be as volatile.

Speaker #2: Yeah. So let me take the question. Let me take the question in three parts. So let me talk about Asia Pac, then I'll talk about China, and then I'll come on to your specific question around hospital channel and price.

Speaker #2: You are right that Contact, which is a very big cold and flu brand in China, just saw very little, if any, pickup in the quarter.

Speaker #2: So when we look at Asia Pac, when you look at the growth profile of Asia Pac over the last few years, more than 80% of that growth is coming from volume.

Speaker #2: We believe that's just an extension of what was a very difficult cold and flu season. And I'll get back to cold and flu in the back half in a second.

Speaker #2: And that's a really good growth profile for that region. I think obviously, and you see that also coming through in the year to date and actually even stronger, even stronger growth in Q2.

Speaker #2: Then you have allergy, which did well in Q1. It was down a little bit in Q2, just a phasing of the season piece. And you just expect that that's normal.

Brian McNamara: It was down a little bit in Q2, just a phasing of the season piece and you just expect that. That's normal. You tend to see some seasonal swings in allergy, but it's never to the degree of cold and flu and the impact. Third is smokers' health. Listen, smokers' health still declined in the quarter, but it's declined at a lower rate than it did in Q1. We're starting to see a stabilization of that business as we go forward. We have plans in place where we're, like most things, like in the US in general, we're seeing better execution and we're seeing improvement as they go. Now on cold and flu, as we look at the back half in cold and flu, we know that we've had two years of decline in cold and flu.

Speaker #2: You tend to see some seasonal swings in allergy, but it's never to the degree of cold and flu and the impact. And then, third, is smokers' health.

Speaker #2: China is a really important driver of that. So China was a high single-digit in Q2. Main drivers, so we increased investment in Doyen. Doyen grew more than 100% in the quarter.

Speaker #2: Listen, smokers' health still declined in the quarter, but it's declined at a lower rate than it did in Q1. So we're starting to see a stabilization of that business as we go forward.

Speaker #2: And we have plans in place where, like most things in the US in general, we're seeing better execution and we're seeing improvement as they go.

Speaker #2: And key brands that underpin that were in Centrum, Caltrace, a really strong in terms of driving growth in Doyen. And we have actually doubled the amount of content creation in that channel.

Speaker #2: Now, on cold and flu, as we look at the back half in cold and flu, we know that we've had two years of decline in cold and flu.

Speaker #2: So that's a really strong driver of performance. The other strong driver of performance was actually on Voltaren. Where we increased our presence, Voltaren 2%.

Speaker #2: And I think I've said in the past that associated with the category for over 20 years it's not necessarily common that that happens, but it's not unheard of.

Brian McNamara: I think I've said in the past, been associated with the category for over 20 years, it's not necessarily common that that happens, but it's not unheard of. We've obviously done all the work to understand, is that a cyclical or a structural thing? We believe it's cyclical. What we're assuming in the back half is we see growth off of this two years of decline. Still don't expect it to be at the level it was from two years ago. Obviously in cold and flu, that's more Q4 weighted, because that's when the cold and flu season is. That's a bit of the frame around respiratory and what we're seeing. Dawn, you want to talk a bit about China?

Speaker #2: Innovation continues to do really well. And we have actually put that now through the hospital channel. Hospital channel is a channel that we have always been in in China.

Speaker #2: We've obviously done all the work to understand, is that a cyclical or a structural thing? We believe it's cyclical. What we're assuming in the back half is we'll see growth off of this two years of decline.

Speaker #2: That's not new. What's new is now Voltaren is in that channel, which is a real positive. If I put all of that together and then talk about pricing, so you're right, pricing was negative in Asia Pac in Q2.

Speaker #2: Still, don't expect it to be at the level it was two years ago. And, obviously, in cold and flu, that's more Q4-weighted because that's when the cold and flu season is.

Speaker #2: So, that's a bit of the frame around respiratory and what we're seeing. Dawn, do you want to talk a bit about China?

Speaker #2: I'm not worried about that. It was driven by going into hospital channel where we have a volume-based procurement pricing model as well as investment in Doyen.

Speaker #1: Yeah, so let me take the question. Let me take the question in three parts. So, let me talk about Asia Pac; then I'll talk about China; and then I'll come on to your specific question around the hospital channel and price.

Dawn Allen: Yeah. Let me take the question three parts. Let me talk about Asia Pacific, I'll talk about China, I'll come onto your specific question around hospital channel and price. When we look at Asia Pacific, when you look at the growth profile of Asia Pacific, over the last few years, more than 80% of that growth is coming from volume. That's a really good growth profile for that region. I think obviously, you see that also coming through in the year to date and actually even stronger growth in Q2. China is a really important driver of that. China was up high single digit in Q2. Main drivers, we increased investment in Douyin. Douyin grew more than 100% in the quarter. Key brands that underpin that were in Centrum, Caltrate, really strong in terms of driving growth in Douyin.

Speaker #1: So when we look at Asia Pac, when you look at the growth profile of Asia Pac over the last few years, more than 80% of that growth is coming from volume.

Speaker #2: But when you look at the gross profit growth in Asia Pac, that's strong. And when you look at the margin improvement in Asia Pac, a constant currency, that's also strong.

Speaker #1: And that's a really good growth profile for that region. I think obviously and you see that also coming through in the year to date.

Speaker #2: So for me, this is it's a real positive. It shows that the investment that we're putting in to drive growth in China and in Asia Pac is actually coming through.

Speaker #1: And actually, even stronger— even stronger growth in Q2. China is a really important driver of that, so China was a high single-digit in Q2.

Speaker #2: And as I said, we're still seeing margin improvement overall in that region.

Speaker #1: Main drivers: we increased investment in Doyen. Doyen grew more than 100% in the quarter, and key brands that underpin that were Centrum and Caltrace, which were really strong in terms of driving growth in Doyen.

Speaker #5: Thank you very much.

Speaker #1: Okay. Thanks, Dawn. Let's go to the next question.

Speaker #4: Thank you. Our next question is from Nicholas Duran with Bank of America. You may ask your question.

Speaker #5: Hi, Brian. Hi, Dawn. Hi, Joe. Just two questions for me, please. The first one is on your VMS business. Do you think there's any consumer need that your current portfolio is not really able to address?

Speaker #1: And we have actually doubled the amount of content creation in that channel. So that's a really strong driver of performance. The other strong driver of performance was actually on Voltaren.

Dawn Allen: We have actually doubled the amount of content creation in that channel. That's a really strong driver of performance. The other strong driver of performance was actually on Voltaren, where we increased our presence, Voltaren Two Defense. Innovation continues to do really well, and we have actually put that now through the hospital channel. Hospital channel is a channel that we have always been in China. That's not new. What's new is now Voltaren is in that channel, which is a real positive. If I put all of that together and then talk about pricing. You're right, pricing was negative in Asia Pacific in Q2. I'm not worried about that. It was driven by going into hospital channel where we have a volume-based procurement pricing model, as well as investment in Douyin. When you look at the gross profit growth in Asia Pacific, that's strong.

Speaker #5: And do you think that you need to do M&A to do that? It's a bit of a thorny question. And the second one, it's going back to the pain relief, big acceleration Q2 versus Q1.

Speaker #1: Where we increased our presence, Voltaren 2%. Innovation continues to do really well. And we have actually put that now through the hospital channel. Hospital channel is a channel that we have always been in in China.

Speaker #5: Maybe if you could just explain to us the key drivers behind the acceleration. And whether you think mid-single-digit is the growth for that business going forward.

Speaker #1: That's not new. What's new is now Voltaren is in that channel, which is a real positive. If I put all of that together and then talk about pricing, so you're right, pricing was negative in Asia Pac in Q2.

Speaker #5: Thank you.

Speaker #1: Great. Thanks, Nicholas. First, on the VMS business, listen, I think first of all, we like our portfolio. And we have seen, by the way, if we look at Centrum in the US specifically, we've seen improvement in the first half of the year.

Speaker #1: I'm not worried about that. It was driven by going into hospital channel where we have a volume-based procurement pricing model as well as investment in Doyen.

Speaker #1: So mid-single-digit growth. And actually, if I look at latest consumption data, so now we're into July, you're starting to see double-digit consumption behind the activations.

Speaker #1: And the shelving resets and everything we're doing on that business. So we do like the portfolio we have. Listen, there are higher growth spaces within VMS we don't participate in.

Speaker #1: But when you look at the gross profit growth in Asia Pac, that's strong. And when you look at the margin improvement in Asia Pac, a constant currency, that's also strong.

Dawn Allen: When you look at the margin improvement in Asia Pacific at constant currency, that's also strong. For me, it's a real positive. It shows that the investment that we're putting in to drive growth in China and in Asia Pacific is actually coming through. As I said, we're still seeing margin improvement overall in that region.

Speaker #1: And we're looking at that also organically. How can we introduce new products, under Centrum? How can we drive that? One example I would give you is our GLP-1 variant on Centrum, which we launched in the US as part of our broader GLP-1 effort to support consumers on that journey.

Speaker #1: So for me, this is a real positive. It shows that the investment that we're putting in to drive growth in China and in Asia-Pac is actually coming through.

Speaker #1: And as I said, we're still seeing margin improvement overall in that region.

Speaker #1: And activate in retail. So I've always said, every portfolio can benefit potentially from a bit of bolt-on M&A, a bit of divestment as we go.

Speaker #5: Thank you very much.

Guillaume Delmas: Thank you very much.

Speaker #2: Okay, thanks, Dawn. Let's go to the next question.

Brian McNamara: Okay, thanks, Dawn. Let's go to the next question.

Speaker #1: But I feel good about the portfolio we have. And I'm confident that while the VMS has been a bit of an up-and-down business for us over the last few years, to acknowledge that we have plans in place where we feel like we're going to get that to a place where it can deliver the growth that we would like.

Speaker #4: Thank you. Our next question is from Nicholas Duran with Bank of America. You may ask your question.

Operator: Thank you. Our next question is from Nicolas Caron with Bank of America. You may ask your question.

Nicolas Caron: Hi, Brian. Hi, Dawn. Hi, Jo. Just two questions from me, please. The first one is on your VMS business. Do you think there's any consumer need that your current portfolio is not really able to address? Do you think that you need to do M&A to do that? It's a bit of a Sony question. The second one is going back to the pain relief peak acceleration Q2 versus Q1. Maybe if you could just explain to us the key drivers behind the acceleration and whether you think mid-single digit is the growth for that business going forward. Thank you.

Speaker #1: On pain relief, it was a stronger quarter in pain relief. And I think that links to a few things. First, I'd say we saw strength.

Speaker #5: And do you think that you need to do M&A to do that? It's a bit of a thorny question. And the second one, it's going back to the pain relief, big acceleration Q2 versus Q1.

Speaker #1: Voltaren. And that linked to. China. By the way, of a Voltaren 12-hour variant that's doing very well. Also, in the US, we're seeing some strength in Voltaren behind some of those changes we've talked about across shelving because we also saw benefits from shelving across Voltaren.

Speaker #5: Maybe if you could just explain to us the key drivers behind the acceleration, and whether you think mid-single-digit is the growth for that business going forward.

Speaker #5: Thank you.

Speaker #2: Great. Thanks, Nicholas. First, on the VMS business—listen, I think, first of all, we like our portfolio. And we have seen—by the way, if we look at Centrum in the U.S. specifically—we've seen improvement in the first half of the year.

Brian McNamara: Great. Thanks, Nicolas. First on the VMS business. Listen, I think, first of all, we like our portfolio and we have seen, by the way, if we look at Centrum in the US specifically, we've seen improvement in the H1 of the year, so mid-single digit growth. Actually, if I look at latest consumption data, so now we're into July, you're starting to see double-digit consumption behind the activations and the shelving resets and everything we're doing on that business. We do like the portfolio we have. Listen, there are higher growth spaces within VMS we don't participate in, we're looking at that also organically. How can we introduce new products under Centrum? How can we drive that?

Speaker #1: Panadol has grown healthy growth. And ahead of our global number. And that's behind good activations, but also the rollout of Panadol dual action, which is the combination of acetaminophen.

Speaker #2: So mid-single-digit growth. And actually, if I look at latest consumption data, so now we're into July, you're starting to see double-digit consumption behind the activations.

Speaker #1: We market that under Advil dual action in the US, but outside the US, we market that and we've launched that under Panadol. All I'd say.

Speaker #2: And the shelving resets and everything we're doing on that business. So we do like the portfolio we have. Listen, there are higher-growth spaces within VMS we don't participate in.

Speaker #1: Patient and slight growth of share in Advil. So we're starting to see some we're starting to see share growth in Advil, which we'd expect, although the category is still a bit muted.

Speaker #1: But we're ahead of the category. So overall, I feel there's some fundamental things that are happening in pain relief that helped drive those numbers.

Speaker #2: And we're looking at that also organically—how can we introduce new products under Centrum? How can we drive that? One example I would give you is our GLP-1 variant on Centrum, which we launched in the US as part of our broader GLP-1 effort to support consumers on that journey.

Brian McNamara: One example I would give you is our GLP-1 variant on Centrum, which we launched in the US as part of our broader GLP-1 effort to support consumers on that journey and activate in retail. I've always said every portfolio can benefit potentially from a bit of both on M&A, a bit of divestment as we go, but I feel good about the portfolio we have. I'm confident that while the VMS has been a bit of an up-and-down business for us over the last few years to acknowledge that we have plans in place where we feel like we're going to get that to a place where it can deliver the growth that we would like. On pain relief, it was a stronger quarter in pain relief. I think that links to a few things.

Speaker #5: Thank you.

Speaker #1: Okay. Thank you. Next question.

Speaker #4: Thank you. Our next question is from Warren Ackerman with Barclays. Please go ahead.

Speaker #2: And activate in retail. So I've always said, every portfolio can benefit potentially from a bit of bolt-on M&A, a bit of divestment as we go.

Speaker #5: Yeah. Good morning, Brian, Dawn, Joe, Warren here at Barclays. Apologies if this question has been asked before because it just jumped on late. Multiple results today.

Speaker #2: But I feel good about the portfolio we have. And I'm confident that while the VMS has been a bit of an up and down business for us over the last few years to acknowledge that we have plans in place where we feel like we're going to get that to a place where it can deliver the growth that we would like.

Speaker #5: So I just wanted to just dive a little bit deeper on a couple of places. Latin America, Brian, looks like it's accelerated from low singles to high singles.

Speaker #5: Can you talk a little bit about the new team that you've got in LatAm and kind of what you're doing differently in terms of price pack architecture and understanding kind of local consumers better?

Speaker #2: On pain relief, it was a stronger quarter in pain relief. And I think that links to a few things. First, I'd say we saw strength in Voltaren.

Speaker #5: And do you think this kind of step up in Latin America is sustainable? Is it a one-timer or do you see kind of real legs for the improvement in that region?

Brian McNamara: First, I'd say we saw strength in Voltaren, and that linked to a launch in China, by the way, of a Voltaren 12-hour variant that's doing very well. Also, in the US, we're seeing some strength in Voltaren behind some of those changes we've talked about across shelving, because we also saw benefits from shelving across Voltaren. Panadol has grown healthy growth and ahead of our global number. That's behind good activations, but also, the rollout of Panadol Dual Action, which is the combination of acetaminophen and ibuprofen. We market that under Advil Dual Action in the US. Outside the US, we market that and we've launched that under Panadol. Overall, I'd say a stabilization and slight growth of share in Advil.

Speaker #2: And that's linked to a launch in China, by the way, of a Voltaren 12-hour variant that's doing very well. Also, in the US, we're seeing some strength in Voltaren behind some of those changes we've talked about across shelving.

Speaker #5: And then the other region I just wanted to touch on was, again, Europe. Sorry. This has been asked already, but it just seemed a little bit softer.

Speaker #2: Because we also saw benefits from shelving across Voltaren. Panadol has shown healthy growth and is ahead of our global number. And that's behind good activations but also the rollout of Panadol Dual Action, which is the combination of acetaminophen and ibuprofen.

Speaker #5: In the quarter sequentially, in Q2 versus Q1, I'm just wondering whether you can sort of outline is there anything weird happening in the pharma channel?

Speaker #5: Is it Germany? What are you seeing in terms of kind of consumer dynamics in that region that would be super helpful? Thank you.

Speaker #2: We market that under Advil Dual Action in the US, but outside the US, we market and have launched that under Panadol. Overall, I'd say there's been a stabilization and slight growth of share in Advil.

Speaker #1: Yeah. Thanks, Warren. And I don't think either of those questions were asked. So I will take them both. Listen, on Latin America, you're right.

Speaker #1: What we saw was kind of flattish in Q1. And we're seeing high single-digit growth in Q2. I would say, is that sustainable in the back half?

Speaker #2: So we're starting to see some we're starting to see share growth in Advil, which we'd expect. Although the category is still a bit muted, but we're ahead of the category.

Brian McNamara: We're starting to see share growth in Advil, which we'd expect, although the category is still a bit muted. We're ahead of the category. Overall, I feel there's some fundamental things that are happening in pain relief that helped drive those numbers.

Speaker #1: I'd expect to see similar results to that high single digits, albeit maybe a bit of phasing Q3, Q4, just because of some base effects and stuff.

Speaker #2: So overall, I feel there's some fundamental things that are happening in pain relief that helped drive those numbers.

Speaker #1: So to take a step back, on January 8th, when we announced the new operating model, we also announced a new leader in Latin America: Andres, who has spent many years at a company in a Colombian-based company called Quala in Latin America.

Speaker #5: Thank you.

Nicolas Caron: Thank you.

Speaker #2: Okay. Thank you. Next question.

Brian McNamara: Okay. Thank you. Next question.

Speaker #4: Thank you. Our next question is from Warren Ackerman with Barclays. Please go ahead.

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

Speaker #1: And then spent some time at Unilever once that company was acquired. Clearly, deep, deep, deep understanding of the Latin American markets and the consumer.

Speaker #5: Yeah. Good morning, Brian, Dawn, Joe. Sorry—Warren here at Barclays. Apologies if this question has been asked before because I just jumped on late.

Warren Ackerman: Yeah, good morning Brian, Dawn, Jo. It's Warren here at Barclays. Apologies if this question's been asked before because just jumped on late, multiple results today. I just want to dive a little bit deeper on a couple of places. Latin America, Brian, looks like it's accelerated from low singles to high singles. Can you talk a little bit about the new team that you've got in Latin America and kind of what you're doing differently in terms of price pack architecture and understanding local consumers better? Do you think this kind of step up in Latin America is sustainable? Is it a one-timer or do you see real legs for the improvement in that region? The other region I just wanted to touch on was, again, Europe.

Speaker #5: Multiple results today, so I just want to dive a little bit deeper on a couple of places. Latin America, Brian, looks like it's accelerated from low singles to high singles.

Speaker #1: And I think he is come in and has done a very robust assessment of what is happening. And has taken actions. One of the actions we've talked Warren that I believe I've mentioned in the past is very quickly identify.

Speaker #1: An opportunity in Brazil and a few other markets on our price gaps on Sensodyne. Very quickly did a pilot test and saw that would drive double-digit volume growth.

Speaker #5: And do you think this kind of step up in Latin America is sustainable? Is it a one-timer, or do you see real legs for the improvement in that region?

Speaker #1: We've executed against that. So we've taken pricing down. And again, it wasn't broad-based pricing on Sensodyne. It was a particular skew on Sensodyne in the price gap first.

Speaker #5: And then the other region I just wanted to touch on was, again, Europe. Sorry, this has been asked already, but it did seem a little bit softer.

Speaker #1: One of our competitors that got a little out of whack. But we've made that change and we moved. And I'd say just purely on execution across the region, understanding moves we need to make, and looking as we go forward, a better capitalizing on the low-income consumer where obviously we have a tremendous case study in India on the low-income consumer that's driven now over 20% growth on Sensodyne and also huge opportunities we're seeing in Centrum and areas.

Warren Ackerman: Sorry if this has been asked already, but it did seem a little bit softer in the quarter sequentially in Q2 versus Q1. Just wondering whether you can sort of outline, is there anything weird happening in the pharma channel? Is it Germany? What are you seeing in terms of consumer dynamics in that region? That would be super helpful. Thank you.

Speaker #5: In the quarter sequentially, in Q2 versus Q1, just wondering whether you can sort of outline— is there anything weird happening in the pharma channel?

Speaker #5: Is it Germany? What are you seeing in terms of kind of consumer dynamics in that region that would be super helpful? Thank you.

Speaker #2: Yeah. Thanks, Warren. And I don't think either of those questions were asked. So I'll take them both. Listen, on Latin America, you're right. What we saw was kind of flattish in Q1.

Brian McNamara: Yeah. Thanks, Warren, and I don't think either of those questions were asked, so I'll take them both. Listen, on Latin America, you're right. What we saw was kind of flattish in Q1, and we're seeing high single-digit growth in Q2. I would say, is that sustainable in the back half? I'd expect to see similar results to that high single digits, albeit maybe a bit of phasing Q3, Q4, just because of some base effects and stuff. To take a step back, on 8 January, when we announced the new operating model, we also announced a new leader in Latin America, Andres, who has spent many years at a Colombian-based company called Quala in Latin America, and then spent some time at Unilever once that company was acquired. Clearly, deep understanding of the Latin American markets, and the consumer.

Speaker #1: So I think he's making good progress. Again, on all this stuff, encouraged with the progress. You never want to declare victory. We're not complacent.

Speaker #2: And we're seeing high single-digit growth in Q2. I would say, is that sustainable in the back half? I'd expect to see similar results to that high single digits, albeit maybe a bit of phase in Q3, Q4, just because of some base effects and stuff.

Speaker #1: But I feel like the back half, what we're seeing in Q2 is sustainable in the back half. On Europe, there's no question what I said earlier, Warren.

Speaker #1: You may not have been on. Is that if I look at if I look at where we ended up in the quarter, it was broadly it was in line with our expectations of what we thought we would deliver in the quarter.

Speaker #2: So to take a step back, on January 8th, when we announced the new operating model, we also announced a new leader in Latin America: Andres, who has spent many years at a company in a Colombian-based company called Quala in Latin America.

Speaker #1: It was a bit better in the US. But it was a bit tougher in Europe. So there's no question that we're seeing a tougher market in Europe.

Speaker #2: And then spent some time at Unilever once that company was acquired. Clearly, deep, deep, deep understanding of the Latin American markets. And the consumer.

Speaker #1: And we're seeing kind of low single-digit declines in the categories. Now, that said, as you saw, we delivered roughly flat results, up 0.4% or so.

Speaker #1: We are growing market share in Europe. Sensodyne continues to perform well. And broadly, we're performing. I feel like, listen, as we look at the balance of the year, we're not counting on anything changing in the Europe.

Speaker #2: And I think he has come in and has done a very robust assessment of what is happening, and has taken actions. One of the actions we've talked about, Warren, that I believe I've mentioned in the past, is that he very quickly identified a bit of an opportunity in Brazil and a few other markets on our price gaps on Sensodyne.

Brian McNamara: I think he has come in and done a very robust assessment of what is happening and has taken actions. One of the actions we've talked, Warren, that I believe I've mentioned in the past, is very quickly identified a bit of an opportunity in Brazil and a few other markets on our price gaps on Sensodyne. Very quickly did a pilot test and saw that would drive double-digit volume growth. We've executed against that. We've taken pricing down, and again, it wasn't broad-based pricing on Sensodyne. It was a particular SKU on Sensodyne and the price gap versus one of our competitors that got a little out of whack. We've made that change and we've moved.

Speaker #1: Dynamic. Obviously, we're just very focused on driving our execution, driving our innovation, delivering the growth that we think we can get in that market.

Speaker #2: Very quickly did a pilot test and saw that would drive double-digit volume growth. We've executed against that. So we've taken pricing down. And again, it wasn't broad-based pricing on Sensodyne.

Speaker #1: But we certainly have seen a tougher backdrop in Europe. Then we had seen in as the year has gone on.

Speaker #2: It was a particular skew on Sensodyne in the price gap first. One of our competitors that got a little out of whack. But we've made that change and we moved.

Speaker #5: Thank you, Brian. Thank you.

Speaker #1: Okay. Next question.

Speaker #4: Thank you. Thank you. Our next question is from Misha Amanadzi, with BNP Paribas. You may ask your question.

Speaker #2: And I'd say just purely on execution across the region, understanding moves we need to make and looking as we go forward, and better capitalizing on the low-income consumer—where obviously we have a tremendous case study in India on the low-income consumer that's driven now over 20% growth on Sensodyne—and also huge opportunities we're seeing in Centrum and other areas.

Brian McNamara: I'd say just purely on execution across the region, understanding moves we need to make, and looking as we go forward of better capitalizing on the low-income consumer, where obviously we have a tremendous case study in India on the low-income consumer that's driven now over 20% growth on Sensodyne and also huge opportunities we're seeing in Centrum area. I think he's making good progress, again, on all this stuff. Encouraged with the progress. You never want to declare victory. We're not complacent, but I feel like the back half, what we're seeing in Q2 is sustainable in the back half. On Europe, there's no question what I said earlier, Warren, you may not have been on, is that if I look at where we ended up in the quarter, it was in line with our expectations of what we thought we would deliver in the quarter.

Speaker #5: Thanks. Morning, all. So one question on call and flu, please. Can you please remind us what's the timeline for the selling for the season?

Speaker #5: And also, one of your competitors speaks a lot about the major innovation in cold and flu coming. Do you see this as a bit of a challenge for you?

Speaker #5: The second question would be on price volume split for H2. You did say that you're not intending to take any material pricing, but should we think about H2 being a bit balanced between price and volume?

Speaker #2: So I think he's making good progress. Again, on all this stuff, encouraged with the progress. You never want to declare victory. We're not complacent.

Speaker #2: But I feel like the back half, what we're seeing in Q2 is sustainable in the back half. On Europe, there's no question what I said earlier, Warren.

Speaker #5: And the last question would be on one-offs. Were there any notable one-offs benefiting your Q2 delivery? Thank you.

Speaker #2: You may not have been on. Is that if I look at where we ended up in the quarter, it was broadly it was in line with our expectations of what we thought we would deliver in the quarter.

Speaker #1: Good. What I'll do is let me take the cold and flu question and then I'll pass it on to the second part of that question.

Speaker #2: It was a bit better in the US, but it was a bit tougher in Europe. So there's no question that we're seeing a tougher market in Europe.

Brian McNamara: It was a bit better in the US, but it was a bit tougher in Europe. There's no question that we're seeing a tougher market in Europe, and we're seeing kind of low single-digit declines in the categories. Now, that said, as you saw, we delivered roughly flat results, up 0.4% or so. We are growing market share in Europe. Sensodyne continues to perform well and broadly, we're performing. I feel like, listen, as we look at the balance of the year, we're not counting on anything changing in the Europe dynamic. Obviously, we're just very focused on driving our execution, driving our innovation, delivering the growth that we think we can get in that market. We certainly have seen a tougher backdrop in Europe than we had seen as the year has gone on.

Speaker #1: And then the one-off question. So listen, on cold and flu, the selling, the selling happens as we speak. So July and August, typically, is when selling happens in cold and flu.

Speaker #2: And we're seeing kind of low single-digit declines in the categories. Now, that said, as you saw, we delivered roughly flat results, up 0.4% or so.

Speaker #1: As expected, typically in cold and flu, the big potential for the any seasonality effect happens later in the year in Q4. As far as competitive activity, listen, nothing we were unaware of.

Speaker #2: We are growing market share in Europe. Sensodyne continues to perform well. And broadly, we're performing. I feel like, listen, as we look at the balance of the year, we're not counting on anything changing in Europe.

Speaker #1: And we feel like we have good plans in the US. And combined with all the executional improvements that we are seeing and then the plans we have behind our cold and flu portfolio, again, never complacent, never take anything for granted.

Speaker #2: Dynamic. Obviously, we're just very focused on driving our execution, driving our innovation, delivering get in that market. But we certainly have seen a tougher backdrop in Europe.

Speaker #2: Then we had seen in as the year has gone on.

Speaker #1: So we're aware of launches of multiple competitors. And we feel good about our cold and flu plans in the back half. Dawn?

Warren Ackerman: Super, Brian. Thank you.

Speaker #5: Super, Brian. Thank you.

Speaker #2: Okay. Next question.

Brian McNamara: Okay, next question.

Speaker #4: Thank you. Thank you. Our next question is from Misha Amanadzi, with BNP Paribas. You may ask your question.

Operator: Thank you. Our next question is from Misha Aminadze with BNP Paribas. You may ask your question.

Speaker #2: Yeah. So if we think about the price volume mix, I mean, we have been working hard to improve that balance, the price volume mix.

Speaker #5: Thanks. Morning, all. So one question on call and flu, please. Can you please remind us what's the timeline for the selling for the season?

Misha Aminadze: Thanks. Morning, all. One question on cold and flu, please. Can you please remind us what the timeline for the sell-in for the season? Also one of your competitors speaks a lot about the major innovation in cold and flu coming. Do you see this as a bit of a challenge for you? The second question would be on price volume split for H2. You did say that you're not intending to take any material pricing, but should we think about H2 being a bit balanced between price and volume? The last question would be on one-offs. Were there any notable one-offs benefiting your Q2 delivery? Thank you.

Mikheil Omanadze: Thanks. Morning, all. One question on cold and flu, please. Can you please remind us what the timeline for the sell-in for the season? Also one of your competitors speaks a lot about the major innovation in cold and flu coming. Do you see this as a bit of a challenge for you? The second question would be on price volume split for H2. You did say that you're not intending to take any material pricing, but should we think about H2 being a bit balanced between price and volume? The last question would be on one-offs. Were there any notable one-offs benefiting your Q2 delivery? Thank you.

Speaker #2: And you've seen in the quarter the step-up in volume performance. We volume mix at 1.4%. Where is that coming from? We have obviously talked about Asia-Pac and significant volume growth in Asia-Pac in the quarter.

Speaker #5: And also one of your competitors, speaks a lot about the major innovation in cold and flu coming. Do you see this as a bit of a challenge for you?

Speaker #5: The second question would be on price/volume split for H2. You did say that you're not intending to take any material pricing, but should we think about H2 being a bit balanced between price and volume?

Speaker #2: We also saw a big step-up in North America to 2% into the volume mix on the back of all of the execution activities innovation that Brian has talked about.

Speaker #5: And the last question would be on one-offs. Were there any notable one-offs benefiting your Q2 delivery? Thank you.

Speaker #2: Those two step-ups in the quarter were offset by, Emil, where volume mix was down on the back of a very tough macro picture in Europe and obviously toughness in the Middle East, given what's happening there.

Speaker #2: Good. What I'll do is, let me take the cold and flu question, and then I'll pass it on to the second part of that question.

Brian McNamara: Good. What I'll do is, let me take the cold and flu question, and then I'll pass Dawn to the second part of that question and then the one-off question. Listen, on cold and flu, the sell-in happens as we speak. July and August typically is when sell-in happens in cold and flu. As expected, typically in cold and flu, the big potential for any seasonality effect happens later in the year in Q4. As far as competitive activity, listen, nothing we were unaware of. We feel like we have good plans in the US and combined with all the executional improvements that we are seeing and then the plans we have behind our cold and flu portfolio. Again, never complacent, never take anything for granted.

Speaker #2: And then the one-off question. So listen, on cold and flu, the selling, the selling happens as we speak. So July and August, typically, is when selling happens in cold and flu.

Speaker #2: If we look to the second half, I mean, we continue to focus on that balanced price volume mix. We would expect to see a step-up in volume mix half two versus half one.

Speaker #2: As expected, typically in cold and flu, the big potential for the any seasonality effect happens later in the year in Q4. As far as competitive activity, listen, nothing we were unaware of.

Speaker #2: Particularly given that we have cough, cold, and flu, in Q4. And as I said, from a pricing perspective, I would expect pricing to be broadly similar.

Speaker #2: And we feel like we have good plans. In the US and combined with all the executional improvements that we are seeing and then the plans we have behind our cold and flu portfolio, again, never complacent, never take anything for granted.

Speaker #2: Second half versus first half. And then to come to the third part of your question, I mean, I guess there have been activities whether it's Amazon Prime Day, whether it's World Cup, where we've had activities in terms of US soccer.

Speaker #2: So, we're aware of launches from multiple competitors, and we feel good about our cold and flu plans in the back half. Dawn?

Brian McNamara: We are aware of launches of multiple competitors, and we feel good about our cold and flu plans in H2. Dawn.

Speaker #2: What I would say is, obviously, they've both been successful for us. If I think about kind of phasing Q2, Q3, or selling, sell out, there's nothing significant to call out in that respect.

Speaker #3: Yeah. So if we think about the price volume mix, I mean, we have been working hard to improve that balance, the price volume mix.

Dawn Allen: Yeah. If we think about the price volume mix, we have been working hard to improve that balance, the price volume mix. You have seen in the quarter the step-up in volume performance with volume mix at 1.4%. Where is that coming from? We have obviously talked about Asia Pacific and significant volume growth in Asia Pacific in the quarter. We also saw a big step-up in North America to 2% in terms of volume mix on the back of all of the execution activities, innovation that Brian has talked about. Those two step-ups in the quarter were offset by EMEA, where volume mix was down on the back of a very tough macro picture in Europe, and obviously softness in the Middle East given what's happening there. If we look to H2, we continue to focus on a balanced price volume mix.

Speaker #1: Okay. Thanks, Dawn.

Speaker #5: Thank you.

Speaker #1: Next question.

Speaker #3: And you've seen in the quarter the step-up in volume performance with volume mix at 1.4%. Where is that coming from? We have obviously talked about Asia-Pac and significant volume growth in Asia-Pac in the quarter.

Speaker #4: Our next question is from David Hayes with Jefferies. Please go ahead.

Speaker #5: Thank you very much. Good morning, all. So two from us. It just came back to the growth profile in the second quarter. Obviously, doing a three, but still that four-plus ambition midterm remains a loof.

Speaker #3: We also saw a big step-up in North America to 2% in terms of volume mix on the back of all of the execution activities innovation that Brian has talked about.

Speaker #5: And when it's a relatively benign cold and flu season. So I guess the question is, there's lots of moving parts, as you talked about, Brian, Asia cold and flu, what does it affect Middle East, US momentum's building, Brazil execution improvement.

Speaker #5: So just that gap, can you kind of quantify what broadly the big ones are that lead to that gap there? And I guess where that leads me is, would you expect to do 4% plus to the second half as those gaps are resolved as you're kind of alluding to?

Speaker #3: Those two step-ups in the quarter were offset by, Emil, where volume mix was down on the back of a very tough macro picture in Europe and, obviously, softness in the Middle East given what's happening there.

Speaker #5: And then the second question, just on the margin, obviously very impressive margin delivery you talked again about some of the drivers of that. So the question is, A, is the supply chain delivery a little bit lumpy?

Speaker #3: If we look to the second half, I mean, we continue to focus on that balanced price-volume mix. We would expect to see a step up in volume mix in H2 versus H1, particularly given that we have cold and flu in Q4.

Dawn Allen: We would expect to see a step-up in volume mix H2 versus H1, particularly given that we have cough, cold, and flu in Q4. As I said, from a pricing perspective, I would expect pricing to be broadly similar H2 versus H1. To come to the third part of your question, there have been activities, whether it's Amazon Prime Day, whether it's World Cup, where we've had activities in terms of US soccer. What I would say is obviously they've both been successful for us. If I think about phasing Q2, Q3 or sell-in, sell-out, there's nothing significant to call out in that respect.

Speaker #3: And as I said, from a pricing perspective, I would expect pricing to be broadly similar. Second half versus first half. And then to come to the third part of your question, I mean, I guess there have been activities whether it's Amazon Prime Day, whether it's World Cup, where we've had activities in terms of US soccer.

Speaker #5: Just give us a sense of cost of goods sold inflation in the first half versus what you might expect in the second half. Thank you so much.

Speaker #1: Thanks, David. Listen, I'll take the first one, and then I'll pass the questions on margin and supply chain over to Dawn. So listen, on the growth profile, by the way, you are right that we are below our four to six percent medium-term ambition.

Speaker #1: And we are very focused on getting back to there. If you take a step back, David, on what we need to be to get to that four to six percent ambition, and then maybe what is the difference between that and Q3, I think in one area, is emerging market growth, which we saw sequential improvement.

Speaker #3: What I would say is obviously they've both been successful for us. If I think about kind of phasing Q2, Q3, or selling, sell out, there's nothing significant to call out in that respect.

Speaker #1: At 6.4% in the quarter. We do expect that that can get to high single digits. And we would expect that to get there in the second half.

Misha Aminadze: That's all clear. Thank you.

Mikheil Omanadze: That's all clear. Thank you.

Speaker #2: Okay. Thanks, Dawn.

Speaker #5: Thank you.

Brian McNamara: Okay. Thanks, Dawn. Next question.

Speaker #2: Next question.

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

Speaker #4: Our next question is from David Hayes with Jefferies. Please go ahead.

Speaker #5: Thank you very much. Good morning, all. So, two from us. It just comes back to the growth profile in the second quarter. Obviously doing a three, but still that four-plus ambition midterm remains aloof.

David Hayes: Thank you very much. Good morning, all. Two from us. Just came back to the growth profile in Q2. Obviously doing a 3, but still that 4%+ ambition midterm remains aloof in what is a relatively benign cold and flu season. I guess the question is, there's lots of moving parts as you talked about, Brian. Asia cold and flu-

Speaker #1: So and what is driving that? Certainly, we've seen mid-teens growth in India. We're confident that will continue. We talked about Latin America and the improvement we've seen in Q3.

Speaker #1: We talked about a bit about China, in high single digits in Q2. The other piece that's been a drag to that high single digit growth has been Middle East.

Speaker #5: And what is a relatively benign cold and flu season. So I guess the question is, there are lots of moving parts, as you talked about, Brian: Asia cold and flu, what does it affect; Middle East; US momentum is building; Brazil execution improvement.

Brian McNamara: Yeah

David Hayes: positive effect, Middle East, US momentum's building, Brazil execution improvement. Just that gap, can you kind of quantify what broadly that the big ones are that leaves that gap there? I guess where that leads me is, would you expect to do 4%+ through H2 as those gaps are resolved, as you're kind of alluding to? The second question, just on the margin, obviously very impressive margin delivery. You talked again about some of the drivers of that. The question is, A, is the supply chain delivery a little bit lumpy? You just got a lot of savings in H1, might be a bit less in H2. On the COGS inflation, I guess some of the contract manufacturing rolls off in terms of the agreements.

David Hayes: —positive effect, Middle East, US momentum's building, Brazil execution improvement. Just that gap, can you kind of quantify what broadly that the big ones are that leaves that gap there? I guess where that leads me is, would you expect to do 4%+ through H2 as those gaps are resolved, as you're kind of alluding to? The second question, just on the margin, obviously very impressive margin delivery. You talked again about some of the drivers of that. The question is, A, is the supply chain delivery a little bit lumpy? You just got a lot of savings in H1, might be a bit less in H2. On the COGS inflation, I guess some of the contract manufacturing rolls off in terms of the agreements.

Speaker #1: So our Middle East, Africa business was flat. In Middle East, we are disproportionately big in the Middle East. So if I look at my market shares in the Middle East, in many cases, they're double where they are on the market.

Speaker #5: So just that gap, can you kind of quantify what broadly the big ones are that leads that gap there? And I guess where that leads me is, would you expect to do 4% plus to the second half as those gaps are resolved as you're kind of alluding to?

Speaker #1: So brands like Panadol and Pakistan is an 80-plus kind of share. And what we've seen is we've seen declines in the market in both Dubai and Pakistan.

Speaker #5: And then the second question, just on the margin. Obviously, very impressive margin delivery—you talked again about some of the drivers of that. So, the question is, A, is the supply chain delivery a little bit lumpy?

Speaker #1: That said, verse Q2, we expect that to improve in the back half. And not expecting wars to stop or anything like that, based on our plans and what we're going to do and the activations we're going to drive.

Speaker #5: Was it a little bit you've got a lot of savings the first half might be a bit less than the second. And then on the cost of goods sold inflation, I guess some of the contract manufacturing rolls off in terms of the agreements just give us a sense of cost of goods sold inflation in the first half versus what you might expect in the second half.

Speaker #1: So we expect to see an improvement on that as we go into the back half. The other piece is, we said, listen, US, for us to get to that growth number needs to be in that three to four percent range.

David Hayes: Can you just give us a sense of cost of goods sold inflation in the H1 versus what you might expect in the H2? Thank you so much.

Speaker #1: I'm very encouraged by the progress we're seeing in the US. Again, not complacent, not declaring victory, but really feel good about the progress that they're making.

Speaker #5: Thank you so much.

Speaker #2: Thanks, David. Listen, I'll take the first one and then I'll pass the questions on margin and supply chain over to Dawn. So, on the growth profile—and by the way, you are right that we are below our 4–6% medium-term ambition.

Brian McNamara: Thanks, David. Listen, I'll take the first one. I'll pass the questions on margin and supply chain over to Dawn. Listen, on the growth profile, by the way, you are right that we are below our 4% to 6% medium-term ambition, and we are very focused on getting back to there. If you take a step back, David, on what we need to see to get to that 4% to 6% ambition, maybe what is the difference between that and Q3, I think in one area is emerging market growth, which we saw sequential improvement at 6.4% in the quarter. We do expect that will get to high single digits, and we would expect that to get there in the H2. What is driving that? Certainly, we've seen mid-teens growth in India. We're confident that will continue.

Speaker #1: And we think it's very encouraging. And then Europe, you would expect Europe to be in a kind of low single digit kind of two to three percent growth.

Speaker #2: And we are very focused on getting back to there. If you take a step back, David, on what we need to be to get to that four to six percent ambition, and then maybe what is the difference between that and Q3, I think in one area, is emerging market growth, which we saw sequential improvement.

Speaker #1: Obviously, it's a bit lower than that as we look at the back half. That's the algorithm to get us in the four to six range in a confident way.

Speaker #1: On the back half, listen, I'm not going to guide beyond what we've already said, which is confidence in the three to five percent. And the building blocks that I've laid out, which is you see the progress in North America.

Speaker #2: At 6.4% in the quarter. We do expect that that can get to high single digits. And we would expect that to get there in the second half.

Speaker #1: We expect to have less of that drag from the Middle East going forward. And then obviously, cold and flu, which will be more Q4 focus.

Speaker #2: So and what is driving that? Certainly, we've seen mid-teams growth in India. We're confident that will continue. We talked about Latin America and the improvement we've seen in Q3.

Speaker #1: What we're expecting to see is growth verse a year ago verse two years of decline, not expecting to see it as high as it was in 2024, just as a benchmark.

Brian McNamara: We talked about Latin America and the improvement we've seen in Q3. We talked a bit about China in high single digits in Q2. The other piece that's been a drag to that high single-digit growth has been Middle East. Our Middle East & Africa business was flat. In Middle East, we are disproportionately big in the Middle East. If I look at my market shares in the Middle East, in many cases, they're double where they are in the market. Brands like Panadol in Pakistan is an 80-plus kind of share. What we've seen is, we've seen declines in the market in both Dubai and Pakistan. That said, verse Q2, we expect that to improve in the H2 and not expecting wars to stop or anything like that based on our plans and what we're going to do and the activations we're going to drive.

Speaker #2: We talked a bit about China in high single digits in Q2. The other piece that's been a drag to that high single-digit growth has been the Middle East.

Speaker #1: And then Dawn, maybe I pass it over to you to the margin questions.

Speaker #2: Yeah. Yeah. So as I said earlier, in terms of the margin, progression, this is coming from the productivity savings in supply chain. And just as a reminder, there's three parts to that.

Speaker #2: So, our Middle East Africa business was flat. In the Middle East, we are disproportionately big. If I look at my market shares in the Middle East, in many cases, they're double where they are in the market.

Speaker #2: The first one is around complexity reduction. So harmonizing packaging formulations, optimizing the number of SKUs. Operational, the second one is operational efficiency. So this is all about debottlenecking in the plants, process improvement, equipment, optimization.

Speaker #2: So brands like Panadol and Pakistan is in 80-plus kind of share. And what we've seen is we've seen declines in the market in both Dubai and Pakistan.

Speaker #2: That said, versus Q2, we expect that to improve in the back half. And not expecting wars to stop or anything like that based on our plans and what we're going to do and the activations we're going to drive.

Speaker #2: And the third one is about optimizing our broader network in terms of what we do in-house, what we co-manufacture. And when I think about that holistic program, it continues to deliver incredibly as lumpy.

Speaker #2: So, we expect to see an improvement on that as we go into the back half. The other piece is, we said, "Listen, US—for us to get to that growth number—needs to be in that 3% to 4% range."

Brian McNamara: We'd expect to see an improvement on that as we go into the H2. The other piece is we said, listen, US, for us to get to that growth number needs to be in that 3% to 4% range. I'm very encouraged by the progress we're seeing in the US. Again, not complacent, not declaring victory, but really feel good about the progress that they're making, and we think it's very encouraging. Europe, you would expect Europe to be in a low single digit, 2% to 3% growth. Obviously, it's a bit lower than that as we look at the H2. That's the algorithm to get us into that 4% to 6% range in a confident way.

Speaker #2: I'm very encouraged by the progress we're seeing in the US. Again, not complacent, not declaring victory, but really feel good about the progress that they're making.

Speaker #2: We track the pipeline of potential future savings. So we track that into the future. When I look at half two versus half one, that's looking good.

Speaker #2: And we think it's very encouraging. And then, for Europe, you would expect Europe to be in a kind of low single-digit, kind of 2% to 3% growth.

Speaker #2: In terms of the COGS piece and increasing costs, so we have seen a small increase from Middle East in the first half, particularly in freight.

Speaker #2: Obviously, it's a bit lower than that as we look at the back half. That's the algorithm to get us in the into that four to six range in a confident way.

Speaker #2: As I said earlier, I would expect that to increase in the second half as we come off some of the contracts. So when I look at the gross margin, we've had 140 basis points improvement in the first half.

Speaker #2: On the back half, listen, I'm not going to guide beyond what we've already said, which is confidence in the 3% to 5%. And the building blocks that I've laid out, which is you see the progress in North America.

Brian McNamara: On the H2, listen, I'm not going to guide beyond what we've already said, which is confidence in the 3% to 5% and the building blocks that I've laid out, which is you see the progress in North America. We expect to have less of that drag from the Middle East going forward. Obviously cold and flu, which will be more Q4 focused. What we're expecting to see is growth versus a year ago, versus 2 years of decline. Not expecting to see it as high as it was in 2024, just as a benchmark. Dawn, maybe I pass it over to you to the margin question.

Speaker #2: We expect to have less of that drag from the Middle East going forward. And then, obviously, cold and flu will be more of a Q4 focus.

Speaker #2: I would still expect us to deliver improvement in the second half, will it be to the same extent given that we'll be absorbing some of the Middle East costs?

Speaker #2: What we're expecting to see is growth versus a year ago versus two years of decline, not expecting to see it as high as it was in 2024, just as a benchmark.

Speaker #2: I think that depends on how much those costs are. But as I said, we would expect to absorb that. So I think some growth in gross margin.

Speaker #2: And then Dawn, maybe I pass it over to you to the margin question.

Speaker #2: I think the other thing is the other things to talk about, we will continue to invest in the business. So you saw as in the first half, AMP, we increased ahead of revenue.

Speaker #3: Yeah, yeah. So, as I said earlier, in terms of the margin progression, this is coming from the productivity savings in supply chain. And just as a reminder, there's three parts to that.

Dawn Allen: Yeah. As I said earlier, in terms of the margin progression, this is coming from the productivity savings in supply chain. Just as a reminder, there's 3 parts to that. The first one is around complexity reduction. Harmonizing packaging, formulations, optimizing the number of SKUs. The second one is operational efficiency. This is all about the bottlenecking in the plants, process improvement, equipment optimization. The third one is about optimizing our broader network in terms of what we do in-house, what we co-manufacture. When I think about that holistic program, it continues to deliver incredibly well. I don't see it as lumpy. We track the pipeline of potential future savings. We track that into the future. When I look at H2 versus H1, that's looking good.

Speaker #2: Second half, we'll continue to invest. The other thing that we will have in the second half is the benefits from the operating model changes.

Speaker #3: The first one is around complexity reduction. So harmonizing packaging, formulations, optimizing the number of SKUs. Operational, the second one is operational efficiency. So this is all about debottlenecking in the plants, process improvement, equipment, optimization.

Speaker #2: And we said at full year that we expected that in total, to be in the range of 175 to 200 million, of which one-third, broadly one-third, we expect to be in this year.

Speaker #2: And a bit similar to the supply chain productivity savings, we'll decide how much of that do we reinvest in terms of future capabilities and how much do we drop through.

Speaker #3: And the third one is about optimizing our broader network in terms of what we do in-house, what we co-manufacture. And when I think about that holistic program, it continues to deliver incredibly well.

Speaker #2: So when you look at that overall, as I've said, I would expect half two operating profit to also be high single digit, but different moving parts in the P&L.

Speaker #3: I don't see it as lumpy. We track the pipeline of potential future savings, so we track that into the future. When I look at H2 versus H1, that's looking good.

Speaker #2: And when you look from an EPS perspective, I mean, 12% growth in EPS in the first half, is very strong. I would also expect strong EPS growth in the second half.

Dawn Allen: In terms of the COGS piece and increasing costs, we have seen a small increase from Middle East in the H1, particularly in freight. As I said earlier, I would expect that to increase in the H2 as we come off some of the contracts. When I look at the gross margin, we've had 140 basis points improvement in the H1. I would still expect us to deliver improvement in the H2. Will it be to the same extent, given that we'll be absorbing some of the Middle East costs? I think that depends on how much those costs are. As I said, we would expect to absorb that. I think some growth in gross margin. I think the other thing to talk about, we will continue to invest in the business.

Speaker #3: In terms of the COGS piece and increasing costs, we have seen a small increase from the Middle East in the first half, particularly in freight.

Speaker #3: Thank you. Thank you.

Speaker #1: Thanks, Dawn. Next question.

Speaker #3: As I said earlier, I would expect that to increase in the second half as we come off some of the contracts. So when I look at the gross margin, we've had 140 basis points improvement in the first half.

Speaker #4: My next question is from Column Elliott from Bernstein. Please go ahead.

Speaker #5: Hi. Good morning. Thank you. I wanted to start with oral care, please. The 6.2 is obviously objectively a fantastic growth number, but at the same time, I think it's also the slowest quarterly growth for nearly four years.

Speaker #3: I would still expect us to deliver improvement in the second half. Will it be to the same extent, given that we'll be absorbing some of the Middle East costs?

Speaker #5: One of your biggest oral care competitors reported yesterday a mid-single digit decline in organic sales. So their oral care business. And so I guess you're probably benefiting from their struggles as I think you have been for the past several quarters.

Speaker #3: I think that depends on how much those costs are. But as I said, we would expect to absorb that, so I think some growth in gross margin.

Speaker #3: I think the other thing is, the other things to talk about—we will continue to invest in the business. So you saw, as in the first half, A&P, we increased ahead of revenue.

Dawn Allen: You saw it in the H1, A&P, we increased ahead of revenue. H2, we'll continue to invest. The other thing that we will have in the H2 is the benefits from the operating model changes. We said at full year that we expected that in total to be in the range of GBP 175 to 200 million, of which one third, broadly one third, we expect to be in this year. A bit similar to the supply chain productivity savings, we'll decide how much of that do we reinvest in terms of future capabilities and how much do we drop through. When you look at that overall, as I've said, I would expect H2 operating profit to also be high single digit, but different moving parts in the P&L. When you look from an EPS perspective.

Speaker #5: But they're not a bad company, I don't think, and I don't think anybody would say that they are. So I think it would be dangerous to assume that they will continue to be such a big share donor over the longer term.

Speaker #3: In the second half, we'll continue to invest. The other thing that we will have in the second half is the benefits from the operating model changes.

Speaker #5: And so I guess what I'm getting at here is, can you talk a bit about the sort of mover, the moving pieces, the drivers of longer-term?

Speaker #3: And we said at full year that we expected that, in total, to be in the range of $175 million to $200 million, of which broadly one-third we expect to be in this year.

Speaker #5: What the sustainable growth rate for that oral care business should be? And then my second question, I was really interested in your comments around what Andres is doing to fix LATAM, Brian, without meaning to be too pejorative.

Speaker #3: And a bit similar to the supply chain productivity savings, we'll decide how much of that do we reinvest in terms of future capabilities and how much do we drop through.

Speaker #5: It sort of strikes me that fixing price gaps really should be bread and butter for a company of your size. And so I guess I'm surprised that you need to be poaching senior leaders from Unilever to do that.

Speaker #3: So when you look at that overall, as I've said, I would expect half two operating profit to also be high single digit, but different moving parts in the P&L.

Speaker #5: And I guess my question is, can you speak a little bit to the infrastructure in your business around this kind of competitive intelligence? Do you think this Brazil Sensodyne pricing example is just an isolated incident, or do you systematically need to be doing more to improve this kind of infrastructure across the company?

Speaker #3: And when you look from an EPS perspective, I mean, 12% growth in EPS in the first half is very strong. I would also expect strong EPS growth in the second half.

Dawn Allen: I mean, 12% growth in EPS in H1 is very strong. I would also expect strong EPS growth in H2.

Speaker #5: Thank you.

Speaker #1: Thank you. Thank you.

David Hayes: Thank you.

Speaker #2: Thanks, Dawn. Next question.

Brian McNamara: Thanks, Dawn. Next question.

Speaker #1: Okay. Thank you, Callum. So I'll take these questions. So on oral care, 6.2% still feel very good about that. I expect that that will improve in the back half.

Speaker #4: My next question is from Colin Elliott from Bernstein. Please go ahead.

Operator: Our next question is from Callum Elliott from Bernstein. Please go ahead.

Callum Elliott: Hi. Good morning. Thank you. I wanted to start with Oral Care, please. The 6.2 is obviously objectively a fantastic growth number. At the same time, I think it's also the slowest quarterly growth for nearly four years. One of your biggest Oral Care competitors reported yesterday a mid-single digit decline in organic sales for their Oral Care business. I guess you're probably benefiting from their struggles, as I think you have been for the past several quarters. They're not a bad company, I don't think, and I don't think anybody would say that they are. I think it would be dangerous to assume that they will continue to be such a big share donor over the longer term.

Speaker #5: Hi. Good morning. Thank you. I wanted to start with oral care, please. The 6.2 is, obviously, objectively a fantastic growth number, but at the same time, I think it's also the slowest quarterly growth for nearly four years.

Speaker #1: Nothing really to see from the 7.3 on half year to the 6.2 in Q2. And within that, Sensodyne continues to be very strong, Paradontax continues to be very mid-single digit kind of growth on denture care, which is kind of what we expect.

Speaker #5: One of your biggest oral care competitors reported yesterday a mid-single-digit decline in organic sales in their oral care business. So, I guess you're probably benefiting from their struggles, as I think you have been for the past several quarters.

Speaker #1: Listen, this is a business that's grown at this level for years. In the past, and if I think about our competitors, our competitors in oral care are both fantastic companies and fantastic competitors.

Speaker #1: They have a ton of respect for both of them. A lot of times, what you see is what we're driving is incremental category growth and incremental consumers into the more premium segment of the category, via the innovation we have.

Speaker #1: So again, if I look at clinical white, then clinical enamel, and then clinical repair this year, in all three cases, they were the largest innovations in the US market.

Callum Elliott: I guess what I'm getting at here is, can you talk a bit about the sort of moving pieces, the drivers of longer term, what the sustainable growth rate for that Oral Care business should be? My second question, I was really interested in your comments around what Andres is doing to fix LATAM, Brian. Without meaning to be too pejorative, it sort of strikes me that fixing price gaps really should be bread and butter for a company of your size. I guess I'm surprised that you need to be poaching senior leaders from Unilever to do that. I guess my question is, can you speak a little bit to the infrastructure in your business around this kind of competitive intelligence? Do you think this Brazil Sensodyne pricing example is just an isolated incident?

Speaker #5: And so, I guess what I'm getting at here is: can you talk a bit about the sort of mover, the moving pieces, the drivers of longer-term?

Speaker #1: In that given year, in the toothpaste category. And there's more to come. So I look forward and I see more innovation coming that we already have in the can.

Speaker #1: And then post the clinical range, we already have very clear view of what that pipeline looks like. And I really feel good about that.

Speaker #1: A lot of times, when you see our competitors moving around on stuff, it tends to be because they're fighting each other. And again, do not take any of them lightly.

Speaker #5: And I guess my question is: can you speak a little bit to the infrastructure in your business around this kind of competitive intelligence? Do you think this Brazil sensor line pricing example is just an isolated incident, or do you systematically need to be doing more to improve this kind of infrastructure across the company?

Speaker #1: But we've been consistently driving that growth through new users, new penetration. And it's the very simple thing, which is, now half the people in the world have sensitive teeth, a bit more than a third of those people use a sensitivity toothbrush toothpaste.

Callum Elliott: Do you systematically need to be doing more to improve this kind of infrastructure across the company? Thank you.

Speaker #1: And we continue to drive that growth. And by the way, well beyond the US, by the way, I mentioned earlier India. India our second largest market, second only to the US, over 20% growth.

Speaker #5: Thank you.

Speaker #2: Okay, thank you, Callum. So, I'll take these questions. On oral care, 6.2%—still feel very good about that. I expect that will improve in the back half.

Brian McNamara: Okay. Thank you, Callum. I'll take these questions. On Oral Care, 6.2%, still feel very good about that. I expect that that will improve in the back half. Nothing really to see from the 7.3 on H1 to the 6.2 in Q2. Within that, Sensodyne continues to be very strong. parodontax continues to be very strong, mid-single digit kind of growth on Denture Care, which is kind of what we expect. Listen, this is a business that's grown at this level for years in the past. If I think about our competitors, our competitors in Oral Care are both fantastic companies and fantastic competitors. I have a ton of respect for both of them.

Speaker #1: Two years ago, we introduced a low-income consumer SKU in India at 20 rupee. It took a bit of time for that to kind of gain critical mass.

Speaker #2: Nothing really to see from the 7.3% on half year to the 6.2% in Q2. And within that, Sensodyne continues to be very strong, Parodontax continues to be very strong, and mid-single digit kind of growth on denture care, which is kind of what we expect.

Speaker #1: In the last quarter, it was over 40% of our volume was driven by that low-income SKU, and half our growth is coming from that.

Speaker #1: So I think we have a very broad-based program. And also, there's Paradontax, by the way, which grows consistently in the mid-teens. So overall, do not complacent.

Speaker #2: Listen, this is a business that's grown at this level for years in the past. And if I think about our competitors, our competitors in oral care are both fantastic companies and fantastic competitors.

Speaker #1: But the ups and downs of our competitors in any given quarter tend to be less relevant to us than just our agenda and what we're driving on the on that.

Speaker #2: They have a ton of respect for both of them. A lot of times, what you see is what we're driving is incremental category growth and incremental consumers into the more premium segment of the category, via the innovation we have.

Brian McNamara: A lot of times what you see is what we're driving is incremental category growth and incremental consumers into the more premium segment of the category via the innovation we have. Again, if I look at Clinical White, then Clinical Enamel, and then Clinical Repair this year, in all three cases, they were the largest innovations in the US market in that given year in the toothpaste category. There's more to come. I look forward, and I see more innovation coming that we already have in the can. Then post the Clinical range, we already have a very clear view of what that pipeline looks like, and I really feel good about that. A lot of times when you see our competitors moving around on stuff, it tends to be because they're fighting each other. Again, do not take any of them lightly.

Speaker #1: Because the other pieces were also a much less promotion-driven business, to be clear. We invest quite heavily in advertising and promotion in dental detailing.

Speaker #1: So we don't necessarily get into the fray on fighting the promotion game. So that's what I say. Listen, in Latin America, as I said when we created the new operating.

Speaker #2: So again, if I look at Clinical White, then Clinical Enamel, and then Clinical Repair this year, in all three cases, they were the largest innovations in the US market.

Speaker #1: Model, I was aware that we needed to make a change in Latin America. I want to be very clear, also made the decision that having Latin America and Middle East Africa and India, given the growth profiles and the opportunities, and having the right talent in those businesses, I think was very was a decision I made.

Speaker #2: In that given year, in the toothpaste category. And there's more to come. So I look forward and I see more innovation coming that we already have in the can.

Speaker #2: And then post the clinical range, we already have very clear view of what that pipeline looks like. And I really feel good about that.

Speaker #1: And I think it's going to pay dividends for the longer term. Understand your comment and agree with your comment, but like anything else, Callum, when people are trying to run a business and drive the business and taking different pricings, every now and then you have a misstep.

Speaker #2: A lot of times, when you see our competitors moving around on stuff, it tends to be because they're fighting each other. And again, do not take any of them lightly.

Speaker #2: But we've been consistently driving that growth through new users, new penetration. And it's a very simple thing, which is now half the people in the world have sensitive teeth; a bit more than a third of those people use a sensitivity toothpaste.

Brian McNamara: We've been consistently driving that growth through new users, new penetration, and it's the very simple thing, which is now half the people in the world have sensitive teeth. A bit more than a third of those people use a sensitivity toothpaste, and we continue to drive that growth. By the way, well beyond the US, by the way. I mentioned earlier India. India, our second largest market, second only to the US, over 20% growth. Two years ago, we introduced a low-income consumer SKU in India at INR 20. It took a bit of time for that to gain critical mass. In the last quarter, it was over 40% of our volume was driven by that low-income SKU, and half our growth is coming from that. I think we have a very broad-based program.

Speaker #1: Would we have caught that of Andres didn't go in? I would expect we would have. It happened at some point in the back half of last year.

Speaker #1: He happened to be put in place and do it. So listen, he's a great talent. I'm really happy to have him. I'm happy to have him and Kadar and Aslam or to our new leaders across our three regions.

Speaker #2: And we continue to drive that growth. And, by the way, well beyond the US. I mentioned earlier, India is our second-largest market, second only to the US, with over 20% growth.

Speaker #1: On my leadership team and reporting directly to me, and it's all part of this operating model change we've made, which was all about driving growth and agility.

Speaker #2: Two years ago, we introduced a low-income consumer SKU in India at 20 rupees. It took a bit of time for that to gain critical mass.

Speaker #1: Happens to be providing also some efficiencies that Don mentioned, which will help us in the back half. But it's all about streamlining and simplifying what we did.

Speaker #2: In the last quarter, over 40% of our volume was driven by that low-income SKU, and half our growth is coming from that.

Speaker #1: So. Okay.

Speaker #5: Thank you.

Speaker #1: Next question. Okay. Next question.

Speaker #2: So I think we have a very broad-based program. And also, there's Parodontax, by the way, which grows consistently in the mid-teens. So overall, we are not complacent, but the ups and downs of our competitors in any given quarter tend to be less relevant to us than just our agenda and what we're driving on that.

Speaker #2: Thank you. Our last question. Our last question is from Edward Lewis with Rothschild & Co. Redburn. Please go ahead.

Brian McNamara: Also there's parodontax, by the way, which grows consistently in the mid-teens. Overall, do not complacent, the ups and downs of our competitors in any given quarter tend to be less relevant to us than just our agenda and what we're driving on that. The other piece is we're also a much less promotion-driven business, to be clear. We invest quite heavily in advertising and promotion and dental detailing. We don't necessarily get into the fray on fighting the promotion game. That's what I'd say. Listen, in Latin America, as I said, when we created the new operating model, I was aware that we needed to make a change in Latin America. I want to be very clear.

Speaker #6: Yes. Thanks very much. A couple for me, more bigger picture. I guess first one, Brian, if I think about the investor day last May, you talked about wanting to treat or wanting to reach a billion more consumers.

Speaker #2: Because the other pieces were also a much less promotion-driven business. To be clear, we invest quite heavily in advertising and promotion in dental detailing.

Speaker #6: You've made investments in India. You've made investments in China this year. But the world's got a bit more volatile. So just sort of an update on how you're thinking about that longer-term view.

Speaker #2: So we don't necessarily get into the fray on fighting the promotion game. So that's what I say. Listen, in Latin America, as I said when we created the new operating model, I was aware that we needed to make a change in Latin America.

Speaker #6: And then Dawn, when I think about investor day, things like AI were obviously mentioned, but it's just made so much more impact on our lives now, I presume all of us are using it so much more.

Speaker #6: So when I think about your sort of outlook in terms of how you're thinking about driving margins, how much more of a benefit are you seeing from sort of deploying these kinds of capabilities than you would have thought before?

Speaker #2: I want to be very clear. I also made the decision that having Latin America and Middle East, Africa, and India—given the growth profiles and the opportunities, and having the right talent in those businesses—I think was a decision I made.

Brian McNamara: Also made the decision that having Latin America, Middle East, Africa, and India, given the growth profiles and the opportunities, having the right talent in those businesses, I think was a decision I made, and I think it's going to pay dividends for the longer term. Understand your comment, agree with your comment, like anything else, Callum, when people are trying to run the business and drive the business taking different pricings. Every now and then you have a misstep. Would we have caught that if Andres didn't go in? I would expect we would have. It happened at some point in the back H2 of last year. Listen, he's a great talent. I'm really happy to have him.

Speaker #1: Thanks for the question, Ed. And I'll pass it to Dawn on that AI question. Listen, we set out a strategy that had two ambitions: billion more consumers and delivering industry-leading shareholder returns.

Speaker #2: And I think it's going to pay dividends in the longer term. I understand your comment and agree with your comment, but like anything else, Callum, when people are trying to run a business and drive the business and take different pricing actions, every now and then you have a misstep.

Speaker #1: I think both of those were really important. What that did in the organization is opened up the opportunity in strategically for us to go after the low-income consumer, where we see opportunities that haven't been addressed before.

Speaker #2: Would we have caught that if Andres didn't go in? I would expect we would have. It happened at some point in the back half of last year.

Speaker #1: Now, some of this low-income consumer stuff does take time to build momentum. If I talk about India in the 20 rupee pack, you have to sell a lot of 20 rupee packs to start having an impact on that business.

Speaker #2: He happened to be put in place and do it. So listen, he's a great talent. I'm really happy to have him. I'm happy to have him and Kadar and Oslam or to our new leaders across our three regions.

Brian McNamara: I'm happy to have him and Kadar and Özlem, which are our new leaders across our three regions, on my leadership team and reporting directly to me. It's all part of this operating model change we've made, which was all about driving growth and agility. Happens to be providing also some efficiencies that Dawn mentioned, which will help us in the back half, but it's all about streamlining and simplifying what we do. Okay?

Speaker #1: That is having an impact on that business. 20% growth, half that growth is coming. And it's so much more than just offering packs, by the way.

Speaker #2: On my leadership team and reporting directly to me—and it's all part of this operating model change we've made—which was all about driving growth and agility.

Speaker #1: It's the route to market. It's the communication. It's the education. It's the dental detailing. So that strategic shift for us is really important because that's something that we see as a long-term, medium-term, long-term growth opportunity in emerging markets.

Speaker #2: It happens to be providing also some efficiencies that Dawn mentioned, which will help us in the back half. But it's all about streamlining and simplifying what we did.

Speaker #2: So. Okay.

Speaker #5: Thank you.

Callum Elliott: Thanks, man.

Callum Elliott: Next question. Okay, next question.

Speaker #2: Next question. Okay. Next question.

Speaker #1: We have some really good proof points of where it's working, and we are now evaluating how we can make that we are in the process of making that broader in other areas.

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

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

Speaker #1: And we've done much more than India, but I've talked about India because it's the one that started and now we're and now we're two years in.

Speaker #6: Yes, thanks very much. A couple from me, more bigger picture. I guess, first one, Brian, if I think about the investor day last May, you talked about wanting to treat—or wanting to reach—a billion more consumers.

Ed Lewis: Yes, thanks very much. A couple from me, more bigger picture. I guess first one, Brian, if I think about the Investor Day last May, you talked about wanting to treat or wanting to reach a billion more consumers. You've made investments in India, you made investments in China this year, the world's got a bit more volatile. Just sort of an update on how you're thinking about that longer-term view. Dawn, when I think about Investor Day, things like AI were obviously mentioned, it's just made so much more impact on our lives now. I presume all of us are using it so much more.

Edward Lewis: Yes, thanks very much. A couple from me, more bigger picture. I guess first one, Brian, if I think about the Investor Day last May, you talked about wanting to treat or wanting to reach a billion more consumers. You've made investments in India, you made investments in China this year, the world's got a bit more volatile. Just sort of an update on how you're thinking about that longer-term view. Dawn, when I think about Investor Day, things like AI were obviously mentioned, it's just made so much more impact on our lives now. I presume all of us are using it so much more.

Speaker #1: Listen, I think this is listen, the volatility in emerging markets is always there. I don't think that will change. The consumer need that we see in the low-income consumer, and it's about providing by the way, it is about providing really great products at accessible price points in a way that helps meet their needs.

Speaker #6: You've made investments in India, you've made investments in China this year, but the world's gotten a bit more volatile. So, just sort of an update on how you're thinking about that longer-term view?

Speaker #1: And we're still we still believe that opportunity is there. Dawn, on AI?

Speaker #6: So, when I think about your sort of outlook in terms of how you're thinking about driving margins, how much more of a benefit are you seeing from deploying these kinds of capabilities than you would have thought before?

Ed Lewis: When I think about your sort of outlook in terms of how you're thinking about driving margin, how much more of a benefit are you seeing from sort of deploying these kind of capabilities than you would have thought before?

Edward Lewis: When I think about your sort of outlook in terms of how you're thinking about driving margin, how much more of a benefit are you seeing from sort of deploying these kind of capabilities than you would have thought before?

Speaker #4: Yeah. So I think you're right. No, AI is obviously a fast-moving space. And we are investing in AI, and we are seeing the benefits.

Speaker #4: So let me give you just let me give you just a sense of that. And I'll give you an example. Across supply chain, across our demand space in terms of growth, and then maybe just broader productivity.

Speaker #2: Thanks for the question, Ed. And I'll pass it to Dawn on that AI question. Listen, we set out a strategy that had two ambitions: billion more consumers and delivering industry-leading shareholder returns.

Brian McNamara: Thanks for the question, Ed. I'll pass it to Dawn on that AI question. Listen, we set out a strategy that had two ambitions, a billion more consumers, and delivering industry-leading shareholder returns. I think both of those were really important. What that did in the organization is opened up the opportunity and strategically for us to go after the low-income consumer where we see opportunities that haven't been addressed before. Now, some of this low-income consumer stuff does take time to build momentum. If I talk about India and the 20 rupee pack, you have to sell a lot of 20 rupee packs to start having an impact on that business. That is having an impact on that business. 20% growth, half that growth is coming. It's so much more than just offering packs, by the way.

Speaker #4: So in terms of supply chain, we have built quite a connected chain of AI interventions from consumption-based forecasting to production scheduling, preventative maintenance, and inventory deployment.

Speaker #2: I think both of those were really important. What that did in the organization is open up the opportunity, strategically, for us to go after the low-income consumer, where we see opportunities that haven't been addressed before.

Speaker #2: Now, some of this low-income consumer stuff does take time to build momentum. If I talk about India and the 20-rupee pack, you just have to sell a lot of 20-rupee packs to start having an impact on that business.

Speaker #4: So examples of that would be on our consumption-based forecasting, this is improved our forecast accuracy by 5 to 6 percent. It's also reduced our stock cycle times as well, which is obviously important in terms of our levels of inventory.

Speaker #2: That is having an impact on that business. Twenty percent growth—half that growth is coming. And it's so much more than just offering packs, by the way.

Brian McNamara: It's the route to market, it's the communication, it's the education, it's the dental detailing. That strategic shift for us is really important because that's something that we see as a medium-term, long-term growth opportunity in emerging markets. We have some really good proof points of where it's working, and we are now evaluating how we can make that. We are in the process of making that broader in other areas. We've done much more than India, but I've talked about India because it's the one that started, and now we're two years in. Listen, the volatility in emerging markets is always there. I don't think that will change the consumer need that we see in the low-income consumer, and it's about providing. By the way, it is about providing really great products at accessible price points in a way that helps meet their needs.

Speaker #2: It's the route to market. It's the communication. It's the education. It's the dental detailing. So that strategic shift for us is really important, because that's something that we see as a medium- to long-term growth opportunity in emerging markets.

Speaker #4: And if I look at our AI scheduling and digital twins, for example, as our NEON site, that's our DigiC-enabled work process solution has delivered a 5 percentage point in operational effectiveness.

Speaker #2: We have some really good proof points of where it's working, and we are now evaluating how we can make that—well, we are in the process of making that broader in other areas.

Speaker #4: And similarly, in terms of preventing unplanned shutdowns, for example, our dump garbage site, that's also delivered a similar level of operational improvement. So from a supply chain we are definitely that is definitely embedded as a study in terms of a holistic space.

Speaker #2: And we've done much more than India, but I've talked about India because it's the one that started, and now we're two years in.

Speaker #2: Listen, I think this is listen, the volatility in emerging markets is always there. I don't think that will change. The consumer need that we see in the low-income consumer, and it's about providing by the way, it is about providing really great products at accessible price points in a way that helps meet their needs.

Speaker #4: If we look from a demand perspective, we have embedded AI across insights innovation, marketing, and commercial execution. So all of the steps along that path.

Speaker #2: And we still believe that opportunity is there. Dawn, on AI?

Brian McNamara: We still believe that opportunity is there. Dawn, on AI?

Speaker #4: So from an insights perspective, we have a great tool that is enabling us faster and deeper access to actionable insights. From an innovation perspective, we're leveraging AI in terms of faster claims, generation, and in terms of marketing, we're actually leveraging AI in terms of reducing the cost of our content production.

Speaker #4: Yeah, so I think you're right. AI is obviously a fast-moving space, and we are investing in AI, and we are seeing the benefits.

Dawn Allen: Yeah. I think you're right. Look, AI is obviously a fast-moving space. We are investing in AI, and we are seeing the benefits. Let me give you just a sense of that, and I'll give you an example across supply chain, across our demand space in terms of growth, and then maybe just broader productivity. In terms of supply chain, we have built quite a connected chain of AI interventions from consumption-based forecasting to production scheduling, preventative maintenance, and inventory deployment. Examples of that would be on our consumption-based forecasting, this has improved our forecast accuracy by 5% to 6%. It's also reduced our stock cycle times as well, which is obviously important in terms of our levels of inventory.

Speaker #4: So let me give you—just let me give you a sense of that. I’ll give you an example across supply chains, across our demand space in terms of growth, and then maybe just broader productivity.

Speaker #4: And then in commercial execution, in terms of AI around tools such as Next Best Action that we talked about, capital markets day, that's also driving sales growth.

Speaker #4: So actually, quite an end-to-end demand space AI capability that we're embedding. And then the third area, just more broadly, across the organization obviously tools like Copilot, Language Translation with our tools like Lingo, and even if I think about finance in terms of some of our core finance processes like optical recognition in terms of invoices, are also driving process improvements and savings.

Speaker #4: So, examples of that would be on our consumption-based forecasting. This has improved our forecast accuracy by 5 to 6 percent. It's also reduced our stock cycle times as well, which is obviously important in terms of our levels of inventory.

Speaker #4: And if I look at our AI scheduling and digital twins, for example, at our Neon site, that's our DigiC-enabled work process solution, which has delivered a 5 percentage point improvement in operational effectiveness.

Dawn Allen: If I look at our AI scheduling and digital twins, for example, at our Nyon site, that's our digitally enabled work process solution has delivered a 5 percentage point in operational effectiveness. Similarly, in terms of preventing unplanned shutdowns, for example, at our Dungarvan site, that's also delivered a similar level of operational improvement. From a supply chain, that is definitely embedded, as I said, in terms of a holistic space. If we look from a demand perspective, we have embedded AI across insight, innovation, marketing, and commercial execution. All of the steps along that path. From an insight perspective, we have a great tool that is enabling us faster and deeper access to actionable insights. From an innovation perspective, we're leveraging AI in terms of faster claims generation.

Speaker #4: So look, I guess like everybody else, we're on a journey. With AI, it is changing quite quickly. I think all of the things I talked about earlier, what that is enabling us to do in terms of supply chain productivity, the benefits that we're getting from the operating model changes, that's enabling us to test and learn in this space and build capabilities for the future.

Speaker #4: And similarly, in terms of preventing unplanned shutdowns—for example, our Dumfries Garden site—that's also delivered a similar level of operational improvement. So, from a supply chain perspective, that is definitely embedded as a study in terms of a holistic space.

Speaker #1: Great. Thanks, Dawn. So well, that was the last question. So thanks, everyone, for joining us today. I look forward to catching up with you at upcoming road shows and meetings.

Speaker #4: If we look from a demand perspective, we have embedded AI across insights, innovation, marketing, and commercial execution—so all of the steps along that path.

Speaker #1: And as always, feel free to reach out to the IR team with any further questions. Thanks for your interest in continued support. Enjoy the rest of your day.

Speaker #4: So, from an insights perspective, we have a great tool that is enabling us to have faster and deeper access to actionable insights. From an innovation perspective, we're leveraging AI in terms of faster claims generation, and in terms of marketing, we're actually leveraging AI to reduce the cost of our content production.

Dawn Allen: In terms of marketing, we're actually leveraging AI in terms of reducing the cost of our content production. In commercial execution AI around tools such as Next Best Action that we talked about Capital Markets Day, that's also driving sales growth. Actually quite an end-to-end demand space AI capability that we're embedding. The third area, just more broadly across the organization, obviously tools like Copilot, language translation with our tools like Lingo. Even if I think about finance in terms of some of our core finance processes like optical recognition in terms of invoices are also driving process improvements and savings. Look, I guess like everybody else, we're on a journey with AI. It is changing quite quickly.

Speaker #4: And then in commercial execution, in terms of AI around tools such as Next Best Action that we talked about at Capital Markets Day, that's also driving sales growth.

Speaker #4: So actually, quite an end-to-end demand space AI capability that we're embedding. And then, the third area, just more broadly across the organization, obviously tools like Copilot, language translation with our tools like Lingo— and even if I think about finance, in terms of some of our core finance processes, like optical recognition in terms of invoices— are also driving process improvements and savings.

Speaker #4: So, look, I guess like everybody else, we're on a journey. With AI, it is changing quite quickly. I think all of the things I talked about earlier—what that is enabling us to do in terms of supply chain productivity, the benefits that we're getting from the operating model changes—all that's enabling us to test and learn in this space and build capabilities for the future.

Dawn Allen: I think all of the things I talked about earlier, what that is enabling us to do in terms of supply chain productivity, the benefits that we're getting from the operating model changes, that's enabling us to test and learn in this space and build capabilities for the future.

Speaker #2: Great, thanks, Dawn. So, well, that was the last question. Thanks, everyone, for joining us today. I look forward to catching up with you at upcoming roadshows and meetings.

Brian McNamara: Great. Thanks, Dawn. Well, that was the last question. Thanks everyone for joining us today. I look forward to catching up with you at upcoming roadshows and meetings, and as always, feel free to reach out to the IR team with any further questions. Thanks for your interest and continued support. Enjoy the rest of your day.

Speaker #2: And as always, feel free to reach out to the IR team with any further questions. Thanks for your interest and continued support. Enjoy the rest of your day.

Operator: Thank you. That concludes Haleon half year's 2026 results. Thank you for your participation. You may now disconnect your line.

Half Year 2026 Haleon PLC Earnings Call - Q&A

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