Celine Pannuti

Celine Pannuti questioned Haleon's overall guidance, specifically the balance between top-line performance and margin improvement. She noted the strong margin delivery and cost savings but highlighted low volume growth (1% over the past three years) compared to peers. She asked what volume level is needed to achieve 4%-6% growth and whether more reinvestment or a review of price positioning is necessary to accelerate volume growth.

Answer

Brian McNamara, CEO, emphasized that Haleon is investing in the right areas, with A&P and R&D both up over 7% last year, enabled by gross margin improvements. He acknowledged that a lower cold and flu season impacts overall volume. Dawn Allen, CFO, stated a focus on driving volume growth, aiming for a 60/40 price-volume mix split. She noted that Asia-Pac's growth is 80% volume-driven and that EMEA, LATAM showed a more balanced mix in Q2 and Q3 2025. For North America, she expects improved volume growth in 2026 due to actions like ending destocking, reducing Smokers' Health drag, distribution builds, and strong activations, anticipating an improved price-volume mix split.

Celine Pannuti questioned Haleon's overall guidance, focusing on the balance between top-line performance and margin improvement. She noted strong margin delivery but disappointing top-line growth, with volume at 1% over the past three years, below best-in-class. She asked what volume level is needed for 4%-6% growth and if the margin/volume discrepancy implies a need for more reinvestment or a review of price positioning.

Answer

CEO Brian McNamara affirmed that Haleon is investing in the right areas, with A&P and R&D both up over 7% in the last year, enabled by 220 basis points of gross margin improvement. He acknowledged the impact of a lower cold and flu season on overall volume. CFO Dawn Allen emphasized a strong focus on driving volume growth, targeting a 60/40 price/volume mix. She noted Asia-Pac's 80% volume growth and a more balanced mix in EMEA/LATAM during Q2 and Q3 2025. For North America, she outlined actions for 2026 volume growth, including ending destocking, reducing drag from Smokers' Health, distribution builds, and strong activations, expecting an improved price/volume mix.

Celine Pannuti of JPMorgan Chase & Co. took a broader view, questioning management's confidence in the 4-6% medium-term growth target given that volume/mix has been around 1% for three consecutive years. She also asked for the outlook on the EMEA and LatAm regions, noting that other companies have reported weakness there.

Answer

CEO Brian McNamara attributed the low overall volume growth directly to challenges in the U.S., while highlighting that volume growth accelerated in both EMEALATAM and APAC in Q2. CFO Dawn Allen added that Europe is proving resilient, with strong performance in Oral Health. McNamara concluded by reaffirming confidence in the medium-term growth algorithm, which is underpinned by productivity improvements that fund investment and drive operating leverage.

Celine Pannuti asked about the consistent ~1% volume/mix growth over three years and what gives management confidence in the 4-6% medium-term guidance. She also requested an outlook for EMEA and LatAm, given peers noted weakness, and followed up on whether profit growth might be reinvested to stimulate volume.

Answer

CEO Brian McNamara attributed the low aggregate volume growth to U.S. challenges, contrasting it with accelerating volume in EMEALATAM and APAC. CFO Dawn Allen added that Europe remains resilient, driven by oral health. McNamara reiterated confidence in the high single-digit operating profit growth target, enabled by gross margin improvements from productivity, which allows for continued investment.

Celine Pannuti from JPMorgan Chase & Co. questioned the confidence in the 4-6% medium-term growth target, given that volume/mix growth has been around 1% for three consecutive years. She also requested an outlook for the EMEA and LatAm regions, noting that other consumer companies have reported weakness there.

Answer

CEO Brian McNamara attributed the low aggregate volume growth directly to challenges in the U.S. market, while pointing to accelerating volume growth in EMEALATAM and APAC. CFO Dawn Allen elaborated, stating that two-thirds of APAC's Q2 growth came from volume and that Europe remains resilient, driven by strength in oral health and successful innovations. McNamara reiterated confidence in the medium-term guidance, supported by productivity gains.

Celine Pannuti asked for the drivers behind the 175 basis point margin decline in the U.S. and sought clarity on the H2 margin outlook for the region, considering a prior-year tax credit and continued A&P investment.

Answer

CFO Tobias Hestler attributed the U.S. margin decline to two main factors: the negative impact of volume decline from retailer destocking on gross margin, and a significant step-up in A&P investment to support new launches and drive sell-out growth. He confirmed investment would continue in H2, including for the Eroxon launch, but did not provide specific segment margin guidance.

Celine Pannuti asked about the sequencing of growth for 2026, given the 4% target, potential Q1 weakness in the US, and normalization in Asia/Indonesia. She also inquired about the wellbeing and beauty category, specifically actions to reconnect with growth in the US, expectations for internationalization, a normalized growth rate for the business, and the outlook for hair care in 2026.

Answer

CEO Fernando Fernandez declined to provide quarterly guidance but reiterated confidence in delivering 2%+ volume growth and at least 4% top-line growth for the full year 2026, noting a good start in January. For Beauty and Wellbeing, he highlighted strong performance in Dove (9% growth, 7% volume) and Vaseline (double-digit volume growth for the second year), and accelerating hair care (Dove Hair relaunch success, global rollout by mid-2026). He mentioned Prestige Beauty's improved H2 2025, strong Hourglass/K18, and plans for a Paula's Choice relaunch. For Wellbeing, he noted strong growth for Liquid I.V. (16%), Nutrafol (23%), and Olly (9%), acknowledging Q4 softening due to market growth and specific issues (Liquid I.V. assortment, Nutrafol customer acquisition cost) but confidence in structural growth.

Celine Pannuti of JPMorgan Chase & Co. asked about the expected H2 volume acceleration for the business excluding ice cream and inquired about the M&A strategy, specifically the rationale for the Dr. Squatch acquisition.

Answer

CEO Fernando Fernandez expressed confidence in achieving approximately 2% volume growth in H2 for the remaining company, citing improving market conditions, strong brand performance, and a robust innovation pipeline. On M&A, he reaffirmed the strategy of bolt-on acquisitions in Beauty and Personal Care, highlighting that Dr. Squatch is a digitally native brand that fills a key gap in the premium male grooming portfolio.

Celine Pannuti of JPMorgan Chase & Co. questioned the visibility on achieving volume growth in 2025 given accelerating pricing, and inquired about the performance and outlook for the European region, which was previously a source of market share weakness.

Answer

CEO Hein M. Schumacher stated that while 2025 will see a more balanced contribution from volume and price, the company remains focused on volume growth driven by major innovations like Wonder Wash. He highlighted that market share in Europe has improved significantly, particularly in Home Care and Personal Care, and Unilever will continue to invest for growth in the region. He also noted that pricing actions are expected to materialize from Q2 onwards.

Celine Pannuti questioned the visibility on achieving volume growth of around 2% amid a slowing market and price increases, asking about the role of innovation and market share. She also inquired about performance and the 2025 outlook for Europe.

Answer

CEO Hein. M. Schumacher explained that while 2025 will see a more balanced volume/price split, the company remains focused on volume growth through 'fewer, bigger, better' innovations, highlighting 12 key platforms. He noted that market share in Europe has improved significantly, particularly in Home Care and Personal Care, and the company is determined to continue investing for volume growth in the region. Pricing actions are expected to take effect from Q2.

Celine Pannuti asked about Unilever's growth outlook, questioning if volume growth would accelerate in the second half despite headwinds in Argentina and Indonesia, and inquired about the potential for further gross margin and EBIT margin expansion.

Answer

CEO Hein M. Schumacher confirmed the full-year guidance of 3-5% growth will remain volume-led, with a similar volume/price split as H1. CFO Fernando Fernandez stated that while H1 margin expansion was strong, the company remains cautious for H2 due to increased competitive spending, moderate commodity inflation, and currency headwinds, setting a floor of 18% underlying operating margin for the full year.

Celine Pannuti asked for details on the Beyond Beer portfolio, including its current size, growth rate (27%), opportunities for expansion outside North America, its overall growth trajectory, and profitability both within and beyond North America. She also requested a breakdown of the building blocks contributing to the impressive gross margin performance in the quarter, especially given FX headwinds.

Answer

CEO Michel Doukeris stated that Beyond Beer now represents 2% of the total portfolio, up from 1%, and is growing at 27%, with over two-thirds of its volume being incremental. He highlighted the huge addressable market and mentioned successful brands like Cutwater and Flying Fish, noting that these products generally command higher prices and profitability per hectoliter than equivalent beer SKUs. CFO Fernando Tennenbaum explained that gross margin improvement stems from a strong brand portfolio with premium pricing and effective revenue management, combined with driving efficiencies in cost of goods sold, including managing FX and commodity impacts.

Celine Pannuti inquired about the current size of AB InBev's Beyond Beer portfolio, its growth trajectory, opportunities outside North America, and the profitability of this category both domestically and internationally. She also asked for the building blocks contributing to the impressive gross margin performance in the quarter, despite FX headwinds.

Answer

Michel Doukeris, Chief Executive Officer, stated that Beyond Beer now constitutes 2% of AB InBev's total volume, growing at 27%, with over two-thirds of its volume being incremental. He emphasized the vast addressable market beyond traditional beer and highlighted that Beyond Beer products generally command higher prices and profitability per hectoliter than equivalent beer SKUs. Fernando Tennenbaum, Chief Financial Officer, attributed gross margin improvement to a strong brand portfolio, enabling premium pricing and effective revenue management, alongside continuous efficiency drives in cost of goods sold, including managing FX and commodity impacts.

Celine Pannuti from JPMorgan Chase & Co. questioned the specific regional drivers for the cautious H1 outlook, particularly in China, and sought details on the sources of organic EBIT margin expansion beyond cost savings.

Answer

Interim CEO & Director Nik Jhangiani explained the cautious H1 outlook is due to the US consumer environment and challenges in China, though he hopes for improvement in H2. He stated that EBIT expansion beyond savings will be driven by optimizing trade investment and A&P spend for better returns and reducing non-working marketing dollars. He also noted low single-digit COGS inflation is being offset by productivity.