Tom

Tom from Barclays asked for insights into the key moving parts for Q4 by division, including color on realized pricing and volumes. He also followed up on the strong Q3 performance in North America, seeking additional factors beyond Calvert's contribution that might have offset Mexico outages.

Answer

Daniel Fairclough (Head of Investor Relations) outlined Q4 drivers: seasonal volume improvement in Europe, higher iron ore shipments from Liberia, and seasonally weaker volumes/lower lagged prices in North America, partially offset by improved Mexican operations. Genuino Christino (CFO) added that Calvert achieved record shipments with a higher-than-expected contribution, and strong cost management in Canada, along with good performance from the HBI and DRI plant in Texas, supported North America's results.

Tom asked about the underlying drivers of the accelerated growth in NeoGenomics' base clinical (non-NGS) business, questioning its sustainability given historical expectations of NGS cannibalization, and sought to frame expectations for PanTracer LBx's launch acceleration in 2026 compared to the 2023 solid tissue launch.

Answer

COO Warren Stone attributed base clinical growth to effective execution of the Protect, Expand, Acquire strategy, new product introductions (e.g., Claudin-18, c-MET), and increased productivity from the Q4 2024 sales force expansion. CFO Jeff Sherman added that improved operational execution and turnaround times are vital. Warren Stone noted that the organization's maturity and expanded commercial team since 2023 suggest a potentially larger acceleration for PanTracer LBx, with 2023 serving as a good starting proxy. Jeff Sherman highlighted that the sales force expansion was primarily in the community segment, positioning them well for new products.

Tom inquired about the drivers behind the acceleration in the base clinical (non-NGS) business, asking if it was due to better bundling, improved turnaround times, or other factors, and how sustainable this acceleration might be. He also asked for a comparison of the PanTracer LBx launch acceleration to the solid tissue launch in 2023, considering the expanded sales force.

Answer

COO Warren Stone attributed the base clinical growth to effective execution of the 'Protect, Expand, Acquire' strategy, new products like Claudin 18 and CMAT, and increased productivity from the sales force expansion initiated in Q4 last year. CFO Jeff Sherman added that improved operational execution and turnaround times were also vital. Warren Stone suggested using the 2023 solid tissue launch as a proxy for PanTracer LBx, layering on the impact of the expanded and matured sales force, which is primarily focused on the community segment.

Tom inquired about Unilever's positioning for the accelerating channel shift to digital commerce, specifically the pace of this shift in Europe, India, and other large markets. He also asked for details on the improvement in China and any potential impact of Chinese New Year timing on Q4 growth.

Answer

CEO Fernando Fernandez stated that digital commerce accounts for 17% of revenue, with strong growth across platforms (e.g., Amazon +15%, TikTok +70%), attributing this to a better-suited portfolio and high e-commerce exposure in the U.S. He noted accelerating quick commerce in India. CFO Srinivas Phatak added that China's improvement is encouraging, with all four business groups (excluding Ice Cream) returning to positive growth in Q4, driven by fundamental changes to their business model, digital commerce capabilities, and premiumization.