Guillaume Gerard Delmas

Guillaume Gerard Delmas from UBS sought clarification on the 'slower start' guidance, asking if it implied a sequential slowdown from Q4 and if H1 margins would be down. He also asked about the drivers and sustainability of strong North American volume growth.

Answer

CEO Hein M. Schumacher confirmed the guidance implies a sequential growth slowdown in Q1 from Q4's 4%, with an expected ramp-up through the year. He did not provide quarterly margin guidance but noted the productivity program is ahead of schedule. CFO Fernando Fernandez attributed the strong North American performance to a fundamental portfolio transformation, driven by high-growth Wellbeing and Prestige businesses and an improving Personal Care segment.

Guillaume Gerard Delmas sought clarification on guidance, asking if the 'slower start' implies a sequential slowdown from Q4 and if H1 margins would be down. He also asked about the drivers and sustainability of North America's strong volume growth.

Answer

CEO Hein. M. Schumacher confirmed a sequential growth slowdown from Q4 into Q1 is expected. He reiterated that the 45% gross margin is a new base and that the 2025 guidance fully includes Ice Cream for the year. CFO Fernando Fernandez attributed the strong North American growth to a fundamental portfolio transformation towards higher-growth areas like Wellbeing and Prestige, as well as improved performance in Personal Care, making the regional business of much higher quality.

Guillaume Gerard Delmas asked about the outlook for pricing, the risk of negative pricing in developed markets, and changes in consumer behavior. He also inquired about the growth drivers for Health & Wellbeing and the impact of China's muted market on Prestige Beauty.

Answer

CEO Hein M. Schumacher noted that pricing has moderated but expects it to normalize with moderate inflation, while observing heightened promotions in Europe. He confirmed the international rollout of Health & Wellbeing brands like Liquid I.V. and stated that Prestige Beauty's exposure to China is very limited. CFO Fernando Fernandez added that the China strategy is focused on high-end brands like Hourglass and OLI.

Guillaume Gerard Delmas asked about trading conditions in North America, including pricing normalization, promotional intensity, and the sell-in versus sell-out gap. He also inquired about the second-half organic sales growth outlook, questioning if a recovery in Pain and Respiratory would push growth to the top end of the 4-6% range.

Answer

CEO Brian McNamara addressed North America, acknowledging H1 was impacted by inventory reductions and a proactive destock of phenylephrine products, but expects net sales to accelerate in H2 due to strong underlying consumption. CFO Tobias Hestler confirmed the H2 organic growth outlook implies a 5-9% range, placing it at the upper end of the full-year guidance at a minimum.