Sarah Simon

Sarah Simon asked about the importance of the cold and flu business for securing shelf space and retailer negotiations. She questioned how much Haleon needs to own this business to become a 'steady compounder' with predictable top-line growth, given that it currently causes significant top-line issues.

Answer

Brian McNamara, CEO, affirmed the enormous role of cold and flu in consumer health and for consumers, noting that while the last two seasons and Q1 2026 have been down, historical trends suggest future growth. He acknowledged that the current situation is exacerbated by multiple U.S. headwinds. McNamara emphasized that cold and flu is a very important category, and Haleon feels good about its portfolio and market positions. He believes it will continue to play a crucial role for customers, especially in category management around pain and cold and flu, where common brands exist.

Sarah Simon asked about the importance of the cold and flu business for securing shelf space and retailer negotiations. She questioned how much Haleon needs to own this business to achieve a steady, predictable top-line growth, given it's currently causing the biggest issue for consistent performance.

Answer

CEO Brian McNamara emphasized the enormous role of the cold and flu category for consumers and in consumer health. He noted that while two consecutive down seasons (2024, 2025) and an expected down Q1 2026 are rare, the category is expected to grow over time. He acknowledged that the current situation is exacerbated by multiple headwinds in the U.S. environment. McNamara stated that cold and flu is a very important category for Haleon's customers, playing a key role in category management alongside pain relief, and remains an important part of Haleon's portfolio.

Sarah Simon asked two questions: first, about the extraordinarily high growth of AB InBev's non-alcohol beer portfolio compared to peers, seeking to understand the differentiating factors. Second, she inquired about the strategy for exporting the RTD business, which is currently largely concentrated in the U.S., to other international markets.

Answer

CEO Michel Doukeris attributed the non-alcohol beer growth to significant investments in technology for superior products (great taste, 0 calorie/gluten/sugar options), leveraging strong existing brands (e.g., Corona Cero, Michelob ULTRA Zero), and substantial marketing investment, including global platforms like the Olympic Games. For RTDs, he clarified that the business is globally larger outside the U.S. He highlighted the meaningful expansion of Flying Fish, a flavored beer liquid, into 10 new countries, targeting different demographics and flavor seekers. Additionally, Cutwater is expanding to Canada and other markets, with a global portfolio (NÜTRL, Brutal Fruit, BEATS) also seeing international expansion, indicating a vast untapped opportunity outside the U.S. and Africa.

Sarah Simon questioned the exceptionally high growth of AB InBev's non-alcohol beer portfolio compared to peers, asking what unique strategies were driving this success. She also inquired about the company's approach to expanding its RTD business beyond its current concentration in the U.S. to other international markets.

Answer

CEO Michel Doukeris attributed non-alcohol beer success to significant investment in superior product technology (resulting in great taste and diverse options), leveraging strong existing brands for non-alcohol versions, and substantial marketing investment behind mega platforms like the Olympic Games. For RTDs, he clarified that the global RTD business is larger than the U.S. segment, highlighting the meaningful expansion of Flying Fish to 10 countries and the diligent international rollout of Cutwater (starting with Canada) and other brands like NÜTRL, Brutal Fruit, and Beats, indicating vast untapped opportunities outside the U.S. and Africa.

Sarah Simon asked about the consumer environment in Mexico, noting other companies have flagged weakness, and requested clarification on the 'scope' impact that affected European volume results.

Answer

CFO Fernando Tennenbaum attributed the negative scope impact primarily to the phasing of the San Miguel integration and certain financial items. CEO Michel Doukeris addressed Mexico, stating that underlying consumer behavior and brand demand remain strong, with Q1 volume impacted by calendar shifts and weather rather than a fundamental consumer slowdown.

Sarah Simon of Morgan Stanley asked whether ready-to-drink (RTD) beverages are sourcing volume more from beer or spirits and requested concrete examples of drivers behind the strong U.S. gross margin expansion in the quarter.

Answer

CEO Michel Doukeris responded by citing third-party data indicating that 80% of RTD volume comes from spirits and wine, not beer. He highlighted that the company's own RTD brands, Neutral and Cutwater, source 75% of their volume from spirits and wine. Regarding U.S. margins, he pointed to ongoing, company-wide productivity programs in logistics, breweries, and back-office functions as key drivers of the improvement.

Sarah Simon asked about the impact of discontinuations generally across the group, specifically requesting quantification in terms of volume. She also inquired about the growth of Dr. Squatch during fiscal 2025, given its rapid growth prior to acquisition.

Answer

CEO Fernando Fernandez stated that Dr. Squatch's performance has been good since acquisition, growing double-digit, and is expected to be a significant contributor to growth in 2026, counting in USG from September 2026. CFO Srinivas Phatak mentioned that M&A/disposal impacts are listed, but discontinuations of SKUs happen in the normal course of business, primarily affecting non-Power Brands, as previously discussed by Fernando.

Sarah Simon asked if Unilever was observing any negative impact on its businesses or consumer sentiment in the U.S. due to the government shutdown.

Answer

CEO Fernando Fernandez stated that Unilever had not seen any significant impact from the government shutdown on consumer sentiment. He noted generally low consumer sentiment levels and a clear market bifurcation between stock-owning and non-stock-owning households, which he believes explains the resilience of their premium portfolio and continued strong volume growth in the U.S.

Sarah Simon of Morgan Stanley asked for an update on the impact of tariffs on the business and inquired about the potential for more disposals to accelerate the portfolio shift towards beauty and personal care.

Answer

Acting CFO Srinivas Phatak stated that the cost impact from tariffs is manageable and within guidance, with inventory builds being a temporary measure for supply resilience. CEO Fernando Fernandez confirmed a disposal plan of €1.5B to €2.0B is in progress, focusing on non-core assets, to accelerate the strategic shift, but disposals will be executed to protect value.

Sarah Simon asked for an update on the premiumization strategy in Personal Care, the potential risk to the B2B Nutrition business in China, and where Unilever stands on its net productivity goals for cost of goods sold.

Answer

CEO Hein M. Schumacher confirmed the desire to premiumize Personal Care continues, focusing on the 'masstige' segment, and noted that the China Food Solutions business remains strong with high single-digit growth. CFO Fernando Fernandez explained that COGS productivity is a continuous effort driven by value chain interventions and CapEx allocated to margin expansion, rather than a fixed-point target.

Sarah Simon of Berenberg asked about the impact of shifting from cash-based to share-based bonuses on adjusted EBITDA, requesting the size of the cash bonus in the prior year's first half for a like-for-like comparison.

Answer

CFO Brent Wissink clarified that for European operations, a bonus of approximately €25 million paid in shares last year shifted below the adjusted EBITDA line. The U.S. bonus of €33 million, however, was already expensed within EBITDA.

Sarah Simon from Berenberg asked if the company is observing a shift in client advertising spending, such as a move from brand-focused campaigns to performance-based marketing.

Answer

Chairman and CEO Arthur Sadoun confirmed a profound, accelerating shift in client spending. He highlighted two key trends: the move from third-party cookies to first-party data, which drives growth for Epsilon, and the shift from paid media to owned media ecosystems, which fuels demand for Publicis Sapient. He concluded that Publicis is uniquely positioned with its data and tech engines to lead clients through these structural changes.