Sarah Simon

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 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 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.