Jean-Olivier Nicolai

Jean-Olivier Nicolai asked for an update on TRESemmé's performance in U.S. hair care, its expected trend into Q4, and its impact on U.S. price mix. He also requested an update on the global rollout of Liquid I.V., including the number of countries and priority geographies for 2026.

Answer

CEO Fernando Fernandez confirmed that TRESemmé is 'back to growth' in Q3, particularly in styling, following corrective actions after an initial repositioning. He noted that the main issue in U.S. hair care was the conscious delisting of some brands. For Liquid I.V., he reported excellent U.S. performance, approaching $1 billion revenue, and its successful rollout to eight international markets, including Western Europe, Australia, urban India, and Canada.

Jean-Olivier Nicolai of Goldman Sachs requested more detail on COGS inflation for the business excluding Ice Cream and asked about the growth trajectory, potential capacity constraints, and global opportunity for the Liquid I.V. brand.

Answer

CEO Hein M. Schumacher highlighted Liquid I.V.'s phenomenal growth, noting it is 7x larger since acquisition and that any previous capacity constraints have been resolved. CFO Fernando Fernandez specified that of the projected €0.8 billion in material inflation, 55% relates to palm oil and surfactants impacting core categories, while 25% is from cocoa, primarily affecting Ice Cream, thereby clarifying the cost pressures on the remaining business.

Jean-Olivier Nicolai requested more detail on COGS inflation for the business excluding Ice Cream and asked about the growth of Liquid I.V., specifically regarding any past capacity constraints and its global expansion potential.

Answer

CEO Hein. M. Schumacher described Liquid I.V. as a phenomenal success, now 7x larger since its acquisition and expanded into seven new markets. He acknowledged some past capacity constraints have been resolved and the company remains bullish on its growth. CFO Fernando Fernandez detailed that of the expected €0.8 billion in material inflation, about 55% is from palm oil and surfactants (affecting Beauty, Personal, and Home Care) and 25% is from cocoa (affecting Ice Cream).

Jean-Olivier Nicolai inquired about the reasons for the slowdown in the U.S. beauty category and its potential impact on Paula's Choice, and asked when the increased marketing investment would translate into improved market share metrics.

Answer

CEO Hein M. Schumacher explained that the slowdown in Prestige Beauty is not seen as structural and the company will continue to invest in its strong, digitally native brands. Regarding market share, he noted that while it takes time to turn, they are seeing 'green shoots' in recent data and expect an improving trajectory in the second half, consistent with previous statements.

Jean-Olivier Nicolai asked if there were signs of consumer weakness in specific U.S. demographics or states. He also inquired about the drivers of the strong Q1 gross margin improvement and its sustainability.

Answer

CFO Fernando Tennenbaum explained that the Q1 gross margin benefited from a tailwind from last year's FX and commodity dynamics, which will likely face more pressure later in the year. CEO Michel Doukeris added that Q1 U.S. industry weakness was mainly due to weather, not consumer health, and that the company's broad portfolio, covering all price points, remains resilient.

Jean-Olivier Nicolai from Goldman Sachs inquired if marketing spend as a percentage of sales would need to increase to support premiumization. He also asked about the potential P&L impact from the weakening Brazilian real and Mexican peso next year.

Answer

CEO Michel Doukeris stated that the current marketing spend is effective and that efficiency is prioritized over a fixed percentage-of-sales metric, citing scale benefits from mega brands and platforms. CFO Fernando Tennenbaum noted it's too early to forecast 2025 FX impact but said current conditions suggest a more ordinary year, unlike the major swings seen recently.