Guillaume Delmas

Guillaume Delmas asked about Haleon's organic sales growth guidance of 3%-5% for 2026, seeking clarification on the main drivers behind the expected sequential acceleration compared to the 3% posted in 2025. He also questioned the confidence in the medium-term ambition of 4%-6% when the company has delivered below the bottom end of that range for two consecutive years.

Answer

Brian McNamara, CEO, explained that the 2025 growth was impacted by a soft cold and flu season, particularly in the U.S., but noted competitive performance and market outperformance. For 2026, he anticipates material market improvement, continued focus on category growth, and enhanced competitiveness through A&P investment, innovation, and sharper commercial execution. He expects the U.S. to return to growth, supported by Q2 shelving resets and distribution gains. McNamara reiterated confidence in the 4%-6% medium-term growth, citing attractive categories, premiumization, and emerging market opportunities, despite acknowledging current market uncertainty and a softer Q1 cold and flu season.

Guillaume Delmas asked about the main drivers behind Haleon's 3%-5% organic sales growth guidance for 2026, signaling sequential acceleration from 3% in 2025. He also questioned the confidence in the medium-term ambition of 4%-6% when growth has been below the bottom end for two consecutive years.

Answer

CEO Brian McNamara explained that 2025 growth was below expectations due to a soft cold and flu season, particularly in the U.S., but Haleon delivered competitive performance. For 2026, he anticipates material market improvement, continued competitiveness through A&P investment, innovation, and sharper commercial execution, with the U.S. returning to growth. He highlighted Q2 shelving resets and productivity programs (220 basis points gross margin improvement) enabling high single-digit operating growth. CFO Dawn Allen noted Q1 2026 cold and flu season would be below a year ago. McNamara reiterated confidence in the 4%-6% medium-term range, citing attractive categories, premiumization, low-income consumer opportunities, and expected stronger performance in North America and emerging markets like India and China.

Guillaume Delmas asked about the underperformance of Haleon's North America segment in Q2, questioning if it was due to lower category growth, sell-in vs. sell-out discrepancies, or share erosion, and its prospects for recovery. He also inquired about the significant increase in A&P spending, its focus areas, and the outlook for future investment.

Answer

CEO Brian McNamara acknowledged North America's challenges, citing a tough consumer environment, a shift to value channels, and retailer inventory pressures, while noting consumption is slightly ahead of a down market. He detailed specific actions for Advil and Centrum. CFO Dawn Allen explained that the A&P increase was funded by supply chain productivity and focused on supporting innovation, key growth markets, and expert recommendations, with a similar investment level expected in H2.

Guillaume Delmas from UBS Group AG inquired about the underperformance of Haleon's North America segment in Q2, seeking to understand the drivers such as category growth, inventory, and market share, and its future outlook. He also asked about the significant increase in A&P spending, its allocation, and expected future trends.

Answer

CEO Brian McNamara addressed the North America challenges, citing a tough consumer environment, a shift to value channels, and retailer inventory pressures. He noted consumption is slightly ahead of a down market but acknowledged mixed performance in pain relief (Advil) and VMS (Centrum). CFO Dawn Allen explained that increased A&P spend, funded by supply chain productivity, is focused on innovation support, key growth markets like India, and expert recommendations, with an improved ROI of 4%. She expects a similar investment shape in H2.

Guillaume Delmas of UBS Group AG questioned the underperformance of Haleon's North America segment in Q2, asking for an analysis of its causes, such as category growth, sell-in versus sell-out discrepancies, or market share erosion, and its prospects for recovery. He also inquired about the significant increase in Advertising and Promotion (A&P) spending, its specific investment areas, the return on investment, and the outlook for future spend.

Answer

CEO Brian McNamara acknowledged the challenges in North America, attributing them to a difficult consumer environment, a channel shift to value and e-commerce, and retailer inventory pressures. He noted that while overall consumption is slightly up, performance in pain relief (Advil) and VMS (Centrum) was mixed, and outlined corrective plans. CFO Dawn Allen explained that the 130 basis point increase in A&P spend was enabled by supply chain productivity and is being invested to support innovation, key growth markets, and expert recommendations, with a similar level of investment expected in the second half.

Guillaume Delmas asked about Unilever's pricing outlook for 2026, considering lower inflationary pressures and increased promotional activities, and whether contrasted pricing developments are expected by region or category. He also requested details on the key building blocks supporting the modest margin improvement in 2026 and any anticipated phasing for margin or underlying sales growth.

Answer

CEO Fernando Fernandez projected 2026 pricing around 2%, slightly below the long-term average, noting some increased promotional spending in foods but not in emerging markets. CFO Srinivas Phatak explained that 2026 commodity inflation is concentrated in palm kernel oil and surfactants (impacting home and personal care), with deflation in some food/packaging commodities. He highlighted wage inflation and imported inflation. Phatak expressed confidence in gross margin expansion in 2026 (higher than 2025) driven by mix, procurement savings, commodity risk management, and capital investment in savings. He committed to keeping overhead increases lower than sales and noted potential higher currency headwinds in H1 2026, but no material margin phasing differences.

Guillaume Delmas of UBS Group AG asked about the sustainability of current Brand and Marketing Investment (BMI) levels and the innovation strategy. He also questioned if the Foods division is now a key margin improvement engine for the company.

Answer

CEO Fernando Fernandez stated that the current BMI level of 15-16% is competitive and sustainable, with a focus on 'fewer, bigger, better' innovations on power brands. Regarding the Foods division, he expressed satisfaction with its strong performance, high margins, and cash generation, driven by the strength of Hellmann's and Knorr, positioning it as a highly competitive and valuable part of the portfolio.