Good morning, and welcome to Unilever's Third Quarter Trading Statement and CEO update. Today's agenda will run as follows. Firstly, Graeme will update you on our quarter three performance and the outlook. I will then share my action plan to lift Unilever's performance to achieve our full potential. We will leave plenty of time to take your questions at the end. Before I hand over to Graeme, let me share a few key messages with you. The quarter reflected solid progress. Price growth moderated as expected and three of the business groups, Beauty and Well-being, Personal Care and Home Care, delivered volume growth. Nutrition and Ice Cream, however, continued to see volume declines and weaker overall performance. In part, this reflects the fact that these business groups are later in the commodity cost inflationary cycle and had to price in the first half of the year, but our performance in Nutrition and Ice Cream needs to improve from here. Overall growth remained above our 3% to 5% long-term range. It was driven by the biggest brands and the largest innovations, more of these teams later. I'm not happy with our overall competitiveness. Although there are positions where we are fully competitive and some areas where we have made conscious choices to delist unprofitable volume, there are still too many situations where we are losing share because, for example, competition is premiumizing faster or executing better than we are. This is a focus area for my action plan. Overall, we remain on track to deliver our full year guidance, and our outlook remains unchanged. Let me hand over to Graeme, who will take you through the third quarter trading performance.

Thank you very much, Hein. We delivered underlying sales growth of 5.2%, driven by 5.8% of price, with volumes down 0.6%. This leaves year-to-date growth after nine months at 7.7%, with price up by 8.1% and volumes down 0.4%. Price growth has continued to moderate as expected, and as Hein just indicated, Beauty and Well-being and Personal Care are now delivering balanced volume growth and Home Care moved into positive volumes in Q3. Nutrition and Ice Cream are still responding to high input cost inflation and also working on portfolio improvement, especially in Europe, and this has resulted in continued negative volumes for those two business groups. I'll provide more detail in a few minutes, but although the landscape remains volatile, we do see the path back to positive overall volumes at group level as pricing moderates, and this gives us the confidence to maintain our outlook for the full year. Business winning came in at 38%. Now that's a drop versus the half year. Our competitiveness is simply not good enough, and Hein will lay out our action plan to address this in just a few minutes. Here is our third quarter underlying sales growth in perspective against the last four quarters. It shows that price growth has moderated as cost inflation eases. Volumes, whilst remaining negative overall, were positive in Beauty and Well-being, Personal Care, and Home Care. They were negative in Nutrition and Ice Cream, which, as I said, are later in the inflation cycle with a larger footprint in Europe where we have not yet recovered the full extent of the cost inflation. Now this is important because our profitability in Europe has declined quite significantly, and European margins are now well below the Unilever average. The €1 billion plus brands accounted for 56% of turnover and continue to outperform with 7.2% growth in the third quarter. The e-commerce channel grew by 17%, and it now represents 16% of the total business. Beauty & Well-being reported 7.4% growth in the quarter, which was nicely balanced between volume and price, which both came in at 3.6%. This is, in fact, the third quarter of volume growth from Beauty & Well-being. The growth there was driven by Prestige beauty and Health & Well-being with brands like Liquid I.V., Nutrafol, Olly, Dermalogica, Paula's Choice, Hourglass, and Tatcha all performing strongly. Growth in Prestige Beauty and Health & Well-being was volume-led and ahead of their markets, so it was competitive. Sunsilk grew well in here, helped by the success of the core relaunch, while the premium Nexxus brand performed strongly, combining professional salon heritage with molecular protein science. Core Skin, which is our skincare business outside the Prestige Beauty unit, grew through Vaseline, which continues to reflect the success of the multiyear glutathione innovation in Southeast Asia. The AHC brand in North Asia continued to decline due to the channel reset we're undertaking for that brand. Personal Care reported 8% growth in the quarter, again, well balanced with 3.9% volume and 4% price. Here again, volume was positive for the third quarter. Deodorants delivered double-digit growth, driven by Europe and Latin America. Rexona continues to invest strongly behind our 72-hour nonstop protection technology, and Dove deodorant grew well through a global brand relaunch. Both of these are large, multiyear, big scale innovation programs. Skin cleansing delivered balanced growth with improving volumes as pricing moderated. The LUX brand benefited from a superior product relaunch, which offers clinically proven skincare benefits, and we also relaunched Dove Men Plus Care in the U.S. and in the U.K. Together with the strong performance in the deodorants, this led to the Dove brand overall delivering double-digit growth for Personal Care. Home Care growth was 5.3%, with a return to volume growth of 0.4% and price up of 4.8%. Volumes were positive in most regions with the exception of Europe, where we saw pricing largely offset by reduced volumes. Fabric Cleaning grew well. OMO benefited from a relaunch with naturally derived stain removers delivered through our Easylift technology. Surf also grew strongly. Whilst on Fabric Enhancers, which is a more discretionary category, we had a mixed picture with strong growth in Turkey but more muted growth elsewhere. Home & Hygiene saw good performance from Sunlight Dishwash and strong growth from both the Cif and Domestos brands. Nutrition grew by 5.6% with price at 9.8% as we responded to continued material cost inflation. Volume was down by 3.8% in Nutrition with Europe, the main driver reflecting the impact of both pricing and portfolio reshaping to exit unprofitable SKUs. This also impacted the headline competitiveness of Nutrition. And as Hein said earlier, we are very focused on building this back.

Thank you, Graeme. When I spoke to you in July, just a few weeks after taking up the role, I said that I would come back to you in October with a more considered view of the business. And I'm delighted to have that opportunity today. Over the course of the next 40 minutes or so, I will set out my initial reflections, look at strengths and in particular, the opportunities as I see them, outline how those opportunities are being captured in a target detection plan; and finally, set out what all this means in terms of value creation. And of course, I will leave plenty of time at the end for questions and comments. The last three months have been very intense, but also, I believe, productive. In that time, I have followed up my earlier trips to the U.S., China, and India with visits to other important Unilever markets in Southeast Asia, Africa, and parts of Europe. I've heard the views of our own people through a highly structured listening and engagement program, which has enabled me to connect with or hear the views of several hundred Unilever employees. I engaged extensively with Unilever leadership executive and with a wider group of the Company's most senior leaders, including through a number of specific work streams, the relevance of which I will come back to later. I have gone through an annual strategy review exercise with the Unilever Board of Directors and followed up my earlier engagement with investors by meeting with key business partners, including customers, banks, agencies, and suppliers. And finally, I had the privilege to engage on Unilever's sustainability agenda with policymakers and with some of our NGO partners at last month's UN General Assembly meeting in New York. Throughout this time, I've listened openly, intently, and respectfully. I'm now a little over 90 days as CEO of a company that has been around just in its present form for over 90 years. I stand before you here today, therefore, with humility, but also with real conviction; the conviction that there is potential to be realized and value to be unlocked. All the activity of the last three months has reaffirmed my initial view of the business, namely that Unilever is a company of many strengths. Whether in the strength of its category positions with 80% of the business in number one or two positions, in the penetration of its brands, with over 3.4 billion daily users of Unilever products, in the depth and sophistication of its channel footprint in the caliber of its people, and in the scale of its reach, especially in future growth markets. In the quality of its R&D capabilities, with 20,000 patented innovations and in its leadership and know-how on sustainability, these strengths and qualities are felt across all of the five business groups. I've reviewed the business groups in some detail over the last three months, assessing the contribution each can make to Unilever. From all this, I am clear that the best value creation opportunity we have comes from driving accelerated levels of growth, quality organic growth across all of these businesses. In the interest of time, I don't intend to dwell further on our strengths today. Not because they aren't important, but from all my engagement so far, I feel that these strengths are widely recognized, understood, and obviously a tribute to all who have built this business over a long period. But the best way to honor the past is to be honest about the present. That means recognizing that across a number of important metrics, the quality of performance has fallen short. Taken over the last six years, volume growth has been lagging, competitiveness has struggled to get to and stay at the levels expected, and that's not good enough. Gross margin has been in decline and EPS growth stagnant. We see this reflected in the TSR performance on a three-year basis that falls below the Company's stated ambition. Remedying that and returning Unilever to the top three of its TSR peer group is a top priority. We know what it will take: stepped up volume growth, rebuilding gross margin, consistent delivery, and generating strong cash and attractive returns, and I'm confident that we can do that. But it does mean confronting some harsh realities.

Thank you, Hein. As you mentioned, during the course of the year, we have heard multiple perspectives on growth, margin stability, and competency. I appreciate that clarity on our comprehensive approach is essential moving ahead, especially in a dynamic market. Across all business segments, we need to ensure we're adapting swiftly to updates in consumer behavior, rather than sticking to rigid solutions that may no longer be effective.

For example, we have outstanding science and technology capabilities, yet I see them dissipated across too many small projects and not leveraged sufficiently across big multi-category platforms. Our product superiority scores are good and actually improving, but we need to be brilliant at executing across all consumer benefits. We're not there yet. This means going from technical product superiority to a consumer-perceived overall brand superiority. Let's turn to our work on sustainability, which is truly pioneering. Unilever's reputation in this area is well-deserved. But again, our efforts are being spread too thinly. We have too many long-term commitments that fail to make a sufficient short-term impact, and the latter is what the world needs right now. We have a modern globally connected supply chain, but not yet the disciplined focus on net productivity that I would expect. In other words, we need gross margins to improve faster than the trajectory we are currently on. We have an outstanding global talent base, but not the performance culture to match, and converting the talent of our people to step up performance could be one of our biggest unlocks and I have a great passion for that. We have incredible global reach and a wonderful portfolio of brands, as I said, but insufficient discrimination when it comes to prioritizing the biggest brands and the biggest opportunities. Our focus on purpose is laudable, it inspires many people to join and stay with Unilever. So we must never lose it. But I don't think we advance the cause of purpose by force fitting it across every brand. These are the realities, and it is important to confront them early on, head on, not least because they are not only resolvable, but actually represent our biggest opportunity.

So let me summarize this section by being crystal clear. Our approach to optimizing the portfolio will be based on a recognition that there is more pruning to be done. A continuation of bolt-on acquisitions with a higher bar for acquiring in line with the criteria I have outlined. No major or transformational acquisitions in the foreseeable future. Let me turn now to the second shift we are making, what we are describing here as productivity and simplicity—fewer things done better and with greater impact at lower cost. This won't just be an action list, but rather a guiding philosophy for the way in which I think we should run the business.

Thank you for your attention to our strategy and the path ahead. I value the engagement we've had, and I look forward to delving deeper into our plans as we roll out our initiatives aimed at reclaiming market presence and strengthening brand loyalty across our core offerings.

Good morning. Thank you for joining the call. My name is Jemma Spalton, and I recently joined Unilever as the new Head of Investor Relations. Our first question is from Rashad at Morgan Stanley. Rashad, please go ahead.

A couple from me, please. So first one, back in December when the team laid out the multiyear framework of 5% organic growth you talked about wanting to get to the upper end of that target. The increased focus that they have on standing up the levels that you spoke about today, is that still the right way to think about where you'd like to end up within that 3% to 5% range in the medium term? And then my second question specifically on Q3 on nutrition and acquired volumes. A bit of a level of deterioration there particularly in Europe, of course, which you guys touched on. Is it a question of taking too much pricing in Europe and that's impacting volumes? What can you do in the near term to rectify the dynamic and start to win back share again? And then on the market share metrics, basically, is that kind of what drove the sequential deterioration quarter-on-quarter?

I noted roughly three, but you were breaking up here and there. So let me try to get to all three, but if I miss something, please correct us. So first of all, on the financial framework and our growth ambition of 3% to 5%, yes, that is indeed our medium-term growth ambition and we're confirming that here to date. Your question on Europe and one pricing, look, I don't think that we have priced too much, certainly not. In fact, if you look at total input costs and to the extent that we have price, we have not fully recovered inflation and margins—gross margins, particularly in Europe, remain somewhat under pressure. I think if you—and that's sort of a bridge to your third question on market shares, if you look at what's happening in Europe, I believe that, and I'm pointing that out in the action plan as well, it's also a matter of making sure that we come with the right innovations that we develop the market accordingly and that we simply do a very good job there. So pricing may have played a role in consumers gravitating towards value segments, such as private label, for sure. That is playing a role. But at the same time, I don't see the current levels of pricing to be a hindrance for us to grow in the future. Does that sort of—did I capture all three elements, Rashad, I just want to make sure.

Our next question comes from Warren at Barclays.

It's Warren here at Barclays. Two from me. First one on market share. Last quarter, it was 41%. This quarter is 38%. Obviously, that's not good enough. I guess you needed to be in the 50% and ideally close to 60% to be top quartile in staples. What I'm trying to understand is how much of that is real share loss? You mentioned not enough of the portfolio in premium spaces like peers. How much is kind of technical in terms of SKU reductions and the fact that the share metric you use doesn't cover some of the fast-growing parts of your portfolio like Prestige Beauty? I'm just trying to understand a little bit what's real here and how realistic and how quickly can we get back into that at least 50%? And how do you want to measure competitiveness within Unilever? I just want to understand what's the key API going forward? That's the first one on market share. The second one is—and sorry to be cynical on this. But we have heard about bigger bolder innovation for years at Unilever. It's been a big mantra and something about getting better returns on marketing spend. I know Rich Slate, your head of R&D has been talking about bigger bolder innovation already for a long time, and that's been happening. So I'm not 100% clear, what's different? Can you perhaps be more specific about what you consider to be bigger, better, bolder and better returns that would be helpful because I guess the issue here is that your volume mix, five-year track record is kind of 1%. And as pricing rolls over to get to the kind of top end of the 3% to 5%, you do need that roll mix to start to move into the kind of 2%, 3% range. And it sounds like bigger, bolder innovations and better returns are keys to that. I was wondering whether you can just give us a little bit more granularity and what's behind that and how do you define that?

Thank you, Warren, for your questions. Let me first talk a bit about competitiveness. And first of all, as you say, the way we look at competitiveness—I don't think there's one metric that is perfect. The way I sort of look at it is a combination of three. So, business winning is the one that we have used in the past. Then there is a market share or a market-based competitiveness and then there's turnover-weighted competitiveness and market share development. The reality is I look at it across all three. And you're absolutely right. When you look at business winning and we express business winning here in value is under pressure. And for sure, all our efforts are aimed at improving from here. But then if you look at okay, what is really covered in business winning? It's roughly 80% of our business, 20%, which is Prestige Beauty, UFS, Food Solutions and our Health & Well-being segment for example, are not covered. And yes, they are growing quite well. If we would convert business winning value into volume, it would also look a little different. If you look at it on a market-weighted metric, actually, you would see a much more positive picture. But for consistency reasons for now, we have used business winning as the key metric. Once again, we simply need to win from here. What we intend to do in the new year is to give you a more comprehensive picture on competitiveness, not potentially focus on this one metric per se. Of course, we will always report out on business winning. Internally, it will remain—that actually we will prioritize business—the competitiveness as an important element of the total remuneration framework. Then if you talk about some decisions that we've made. We have rationalized our SKUs by roughly 20%, 21% year-to-date. That's quite significantly. Certainly, this has contributed to that business winning percentage. We also took some conscious decisions particularly in Europe to delist some of our parts of our portfolio given pricing and of course, given the whole inflation game. So yes, that has played a role, but I don't want to dwell on that for too long. When it comes to innovation, look, I understand. If you look back over the last couple of years and looking back at our volume track record and potentially what you've heard before. But I am very confident actually about the science and technology part of our business. This is one area where I—and I said that I think in the video, we have spent a disproportionate amount of time and what we've been particularly focused on is understanding what are the key differentiating technology platforms that we have, where we have deep knowledge, and that will allow us to expedite a multi-year innovation program behind our top brands. I know we have that. We have talked about that with the leadership, and we're going to unlock that. I feel that with the bigger and the bolder choices that we're making, the clear focus behind our top 30 brands initially, which will ensure a greater degree of delivery. I do believe that this is going to be a sustained source of growth for us. I talked a bit about in the video about biotech technology, I talked a bit about renewable packaging and biotech-type platforms. Those are the ones that I believe were very strong at and are fueling most of our business.

Thank you, Hein. Our next question comes from Guillaume from UBS.

Two questions for me, please. Firstly, it's on today's strategy update and a point of clarification on your financial ambitions. Apologies if I missed it, but the line was breaking on the first question. So on underlying sales growth, you kept the 3% to 5% range. But since December of last year, Unilever was more guiding for the upper end of 3% to 5%. Just wondering if there was any change there? And still on your financial ambitions in terms of operating margin expansion. No change there still expected to be moderate, but I guess, does it mean that the vast majority of your gross margin recovery will be reinvested as opposed to flowing through to the EBIT line over the next few years? I guess to put it bluntly, I see consensus for 100 basis points operating margin improvement for the next two years. Would you see that kind of magnitude as consistent with your financial ambitions? And then my second question is on your renewed focus on EPS growth. I was wondering, what's your mindset here and whether you look at EPS growth in constant currency or on a reported basis? Because the flip side of deriving 60% of revenues from emerging markets is that foreign exchange tends to be, on average, a significant adverse impact. Curious to hear if this is something you're taking into account, and if you would actively pull some levers, I'm thinking pricing, and savings to ensure consistent EPS growth year after year in euro terms.

Let me take the first part and then I'll hand over to Graeme to comment a bit more on your EPS question. But first of all, on the financial ambition. So you're right. The financial framework that we laid out, including the growth ambition of 3% to 5%, is a medium-term goal. The guidance that we've provided for this year, which is to be above 5%, still holds. So there's this year guidance and then there's a medium-term framework. Now if you talk about the medium term and the moderate margin expansion, I think you said is right. The focus will definitely be on expanding gross margin and bringing that back to pre-pandemic levels. We do see a path towards that. But as indicated in the action plan, I feel that there is opportunity for us to invest more behind our brands, and we will progressively do so. But obviously, only if we know for sure that some of these innovation platforms that I just talked about, as well as the superiority thinking and so forth, are really taking hold, and we are sure that the increased spend will actually deliver returns. So we will see some progressive increases, but it will differ a bit by business group and by brand. The same goes for our increased investments in R&D. The plan projects us for R&D to accelerate investments there to just above the turnover growth levels. Yes, there will be part of that that will be reinvested. But all in all, the algorithm is leading us to a moderate margin expansion. Graeme, on the EPS side.

Very interesting question actually. Thanks for asking it and pointing it out. What we do is we look at and measure both within the business, but we're very aware of the fact that the real returns that we deliver to shareholders are denominated in current rates of growth, not constant rates of growth. So in the short term, what we can do as managers of the business is deliver constant rate earnings growth. But what is actual real value creation, of course, reflects what we can deliver in euros and dollars in hard currency. As you point out, with 60% of our business in emerging markets, there's usually quite a difference between those. Now when you go back and look at it over time, when we measure the difference between the two, it's pretty much a sign curve; that's the way that currencies tend to operate on the translation of our results into euros when we report them every quarter. But if you go back and look at it over time, even though there are large differences like this year, as I think we guided to in the video, we expect the difference to be about 9% negative between constant EPS and current EPS for this year. That's quite a big number actually relative to history. But there's very much a sign curve effect. If you go back over time and take a longer-term view, usually, the difference between both in Unilever is about 1.5% to 2% on the average. When we set our strategies and our financial plans when we talk to the Board about EPS growth, we talk about constant. We also talk about current, and we size our plans with that 1.5% to 2% in mind. We obviously have to make sure that we are, for example, pricing for that in some of the economies where we have devaluing currencies.

Our next question comes from Bruno at Bernstein. Bruno, please go ahead.

When I sort of listen to the planned new update, it's clear that some of the actions in almost all the actions about focusing on proud brands, product superiority, it could have been part of the Capital Markets Day before Christmas. But I guess that's only natural and to be expected. It's unlikely to come up with some silver bullet, an action that people haven't talked about. So I tried to prefer to like focus on the weaknesses, what do you identify as not having gone well in the past? And you have some slides on there, but it tends to talk about the outcomes, let's say, low volume growth, low earnings growth. But that doesn't really explain why sort of Unilever. What did it do wrong? What's wrong with Unilever that is in this position? This discussion has been gone for a few decades. So, I'm going to try to probe a little bit deeper in your view since the time you've been there why this is happening in that. I'll give a few suggestions to see what you think about it. So how much of that performance is really attributable to the Board and the governance because for a bit you talk about weak performance target we stressed; surely, those are part of the Board, are they failing? Is just replacing the Chairman, therefore good enough? The second one is company leadership, but that's why the performance is weak. I'm thinking, for example, that your own reference execution levels, CapEx, was great for years that it was high enough to support the growth. Was that with a mistake? Less or even more importantly, what is the culture of the Company that's wrong and therefore probably still wrong? I'm just reminiscing about one of my colleagues here asking about excuses of why competitive needs might be so low by referring to other parts and not captured. That seems to be a culture of complacency sort of referring to what isn't captured on focusing on the per measure. So if you could just try to comment and discuss why the performance has been so weak? Is it the Board, company leadership? What is its culture, all of the above or something different? Now my second question is building on the previous question; you're targeting 3% to 5% organic. I think Graeme sort of agreed that the kind of negative impact of FX, structurally about minus 1.5%. So you're really saying that the Company is targeting a net revenue euro growth of about 1% to 3%, which is probably barely in line with euro inflation.

Thanks, Bruno, for your questions. I'll take certainly the first part and refer the second one to Graeme, but I think that can be a fairly short answer. Let me talk about the first part. And it's a pretty wide-ranging question. And yes, I talked a bit about it in the video, but let me just reiterate a few points. I think the question on what is wrong with Unilever, look, I don't think you would hear me go there. I would say, look, Unilever has very, very strong fundamentals and many strengths. But at the same time, sometimes there is a sunny side and sunny side meets to a shadow side, and that's what I tried to point out in the video, but let me just give you a few examples. Unilever has strong science and technology capabilities without a single doubt, and I think this comes back to the question of Warren, why haven't we delivered these innovations that at scale? Well, you need to be disciplined on making choices behind which brands to do what, but also what technologies are really differentiating and where can we make them scalable and multi-year—that's super important, not stop and start. I think that may have happened somewhat. If you think about a team like sustainability, I think we have spent a huge amount of time and investment and thinking in this area, and it has led to a —yes, I think to us being certainly perceived as the leader in our field. That's in general, that's a positive. But it may have diluted our efforts somewhat in that area. When you think about our talent base and about performance culture, look, I think Unilever has outstanding people. There is no doubt about it. We are the preferred employer in many of the markets that I visited and where we operate. But at the same time, there is an opportunity to dial up the performance edge. That is, as you say, not a silver bullet. That comes back to a number of very specific actions, but mostly it's related to making clear choices, setting clear priorities, and simplifying everything that we do. Look, I can go on, but then I would repeat my video, but I think those are for me some of the key points. Is that the Board? I wouldn't comment on that, or the leadership. Every incoming CEO inherits a situation and looks at that situation through his or her lens and then tries to improve from there. That's exactly what I'm doing, and yes, we're making some changes today to the course of action to the leadership and so forth, and that underscores, I think, the direction that I'm very keen to take. Overall, it's about discipline, clear priorities, walking the talk, and making sure that the Company is truly steered with a much higher emphasis toward performance. That's where I would summarize it.

Thank you, Hein. Regarding your second question, I think we've made it very clear that the 3% to 5% growth ambition for the medium term remains, bearing in mind that there's work to be done within that framework. We believe that it's sufficient to connect the dots to deliver strong performance metrics aiming for the upper end, but requiring disciplined execution and the right market conditions to achieve that consistency over time.

Our next question comes from James Edward Jones at RBC. James, please go ahead.

Yes. Thank you very much. So similar to Bruno's question really, I was struck by the way you talked about competitive buying as a driver of gross margin improvement. And what were you doing before? This feels like a really basic thing, and I wonder if it's symptomatic of some of what we've heard this morning. So if there's greater upside than we realized by stopping doing things badly. The second question, I guess, is you said there will be no transformational acquisitions. What about transformational disposals? Will you consider splitting the group up if the food business doesn't improve its performance?

First of all, on buying, and I would like to put it in a bigger context of improving our gross margin, and we tend to talk about gross margin pretty much from a top-line perspective, driving better mix and so forth. But I'm renewing a significant emphasis on the cost and on the productivity side in the next two years over the plan period. This means we're basically going to work all three levers. For me, this includes buying, logistics and distribution, and the manufacturing side through network improvements. Now if you think about buying where the main upside sits, and this is something that I'm seeing happening today, it's the new organization structure that we have implemented, allowing for a significant amount of complexity reduction. If you think about a business group like Home Care, who is really looking at it through the lens of the big power brands, the Dirt is Good brands, for example, and saying, okay, how many variants do we need? Can we eliminate complexity? Can we scale down the number of ingredients? I think all of the business groups are essentially finding out that there is an opportunity to leverage our scale significantly better. That’s, I think, where we see a critical upside, but the same goes for the network. When you look at it through a very specialist lens of a business group to say, hey, liquid shipping is, of course, much more expensive than powder shipping, just to give you one example. In some cases, you want to bring the factories a bit closer to where the market is, in some cases, you want to have a bit more distance. Optimizing around that, I feel, is gaining a lot of momentum, and that's where I see significant upside. But it is all about expediting it and executing these plans well. The ask that we have, as we said, was an expected restructuring that we will execute on a year-on-year basis of roughly 1% of turnover. Your second question on large-scale M&A. Look, at this moment, and I think I've laid it out, we see the biggest value creation opportunity in operating our current businesses very well. That's why we've laid out the action plan of today. Is that portfolio forever? Look, the situation is dynamic. Things can always change at some point in time. I believe that the current—the value creation opportunity that is on the table is really to improve our business that we have while we continue to optimize the portfolio in like we've done in the last two to three years or so.

Next question comes from Tom Skykes at Deutsche. Go ahead, Tom.

Thank you. Good morning, everybody. Just going back to the points on rebooting the culture within the business, how opaque was the performance management before of the top 400 managers? How differentiated will be bonus and pay remuneration be now compared to how it was before? When you look at the senior management team, I appreciate that there's an external Chairman. Obviously, congratulations to everybody who has moved into new positions, but you're coming back into the business and there's obviously largely internal appointee. So why not try and reboot the culture more by bringing in more external influence? Is there anything in the HR, IT systems that you think just provides a kind of natural level of inertia to changing the performance culture? Briefly, just on you mentioned the product superiority was 70% that you have a broader level of criteria to measure that now. When you say there's obviously the disconnect between the 70% product superiority and the competitiveness at 38%. Looking at it another way, what percentage of your portfolio do you think is fit for purpose to improve the competitiveness, and where do you need to get to, please?

Thanks, Tom. There were quite a number of questions. So let me go through them, but please remind me if I miss something. The first question is a topic that's very close to my heart, and I'm very passionate about, which is as you call it, reboot culture, but essentially to dial up the performance culture. I'm very excited about the opportunities there. It starts with setting very clear priorities. It starts with setting very clear and stretching goals. It starts with bringing ultimate transparency on the progress of all of these, and it starts with linking remuneration to these objectives and making sure that there are direct consequences. I think that links to your question on remuneration and what are we doing? A few things that I want to say about that. On remuneration, there is a proposal on remuneration for executive directors that we've gone through with quite a number of you and that will be for voting next year in the AGM. So that links our executive director compensation more directly to shareholder interest. But then, as you say, probably even more important is what do we do internally? Let me just give you just two examples where I feel that we're making a change. For approximately 15,000 employees, and that is not factory personnel, so it's office and manager level; for 15,000, we have changed the remuneration structure. We have taken out the long-term incentive plan to which they have very little line of sight to, but we're going to dial up remuneration and the performance component on in-year performance. Still, the payout to them will be partially in long-term plans, such as shares and so forth; we're taking—we're dialing up their in-year performance. Secondly, we're significantly increasing the line of sight in terms of remuneration structure. So where people were rewarded on a total Unilever level, we're increasing the component in total remuneration for the business unit or business group that they are directly responsible for to the vast majority of their variable pay. Now these are just two examples of measures that we have taken as part of this action plan and that I'm going to communicate right after this call to the whole Unilever internal community. So I think that's something just to emphasize. When it comes to externals, I believe that I was really on the CFO appointment; for example, this was about an action plan, and this is about making business progress. I believe that, after a long and thorough search, it was super clear that Fernando is by far the best partner for me in doing that. He has an outstanding operational track record, he's an economist and a finance leader by background, and I'm confident that together we're going to accelerate on this plan, a plan that he is square behind.

Okay, we can do that. I'd like to add a bit, just to circle around your point. We're aligning the performance management and remuneration mechanism to encourage a more engaged approach to our financial targets. We want to empower our management further to make impactful decisions and maintain accountability and focus in achieving our strategic goals.

Next question comes from Jeff at BNP. Go ahead, Jeff.

The first one is, I appreciate that you said that you think you'll create most value just by running the existing business groups better. But if you could just explain in the new business group structure, what really is the value add of Unilever itself and in particular, keeping food and HPC together, given you've now got these separate business groups. That's the first question. And the second one is, I think Graeme explained that to hit top four TSR, which is your objective, you need to deliver the upper end of 3% to 5%. So with that in mind, why are you guiding just to 3% to 5%, not to the upper end of it because 3% to 5% would seem to be inconsistent with the other target for top five TSR.

Thanks, Jeff, for your questions. I'll take the first one and hand over to Graeme for the second one on the financial framework. Look, I mean, on the total, I think since the inception of Unilever of bringing together Lever Brothers and the Margarine Unie from the Netherlands, there have always been questions about are we better together? Or should there be more focus? I'm super well aware of that. But the first couple of months have convinced me that at this point in time, the biggest value creation opportunity that we have is simply to run these businesses better. Yes, there is a significant amount of synergy between the different portfolios, whether that's in buying, whether that's in developing digital and technology, whether that is – but also go to market if you think about it, and I spent quite some time in Indonesia and Africa, for example, if you deliver food products to distributive trade, that is all going in the same van. It's the same ordering pattern for HPC type of product. So the synergies are undoubtedly there. But apart from the synergy discussion, I believe, at this point in time, there is a value creation opportunity for all businesses to further improve. Graham.

Morning, Jeff. I mean, I guess the answer is that if 3% to 5% still covers it, albeit as the upper end, then it's still relevant guidance for us to give at this stage whilst we get the momentum moving. I do want to reiterate a point that I think I made earlier. Really, there's a big factor here about consistency of delivery, where I think the new organization and what Hein said around culture, performance focus, remuneration, et cetera. All of that helps in delivering that consistency. That's a much better way of running Unilever through the lens of the five business groups with end-to-end accountability and consistency of investment behind strategy. That's what's going to deliver the consistency. That's a key factor in that value creation algorithm and also the quality of growth you've heard our call out on the volume component, which we do need to step up.

Our next question comes from Karel at Kepler. Please go ahead, Karel.

Yes, two questions. The first one is on your European footprint and supply chain. We had quite some volume losses for a while now. Does this leave room for some optimization? And also, how do you look at the European brand footprint as I still see many local just dealers, and probably brands with a modest gross margin, particularly in the food and ice cream franchise. The second question is on the innovation agenda. R&D already sits within the categories for a while. So how can the disconnect and a focus on smaller things and related to that, if you want to deliver innovations more on scale, how does the fragmentation of your revenue base across countries and categories come into play?

Yes, obviously, good questions on Europe and with the volume pressure that we've had I think your question is mainly around do we see optimization opportunities on smaller brands. Look, I think at this point in time, as we talked about, our focus has to be on executing our top 30 brands very well. That sort of bridges a bit to your second question as well. Those top 30 brands constitute more than 70% of our total turnover. At this point in time, they probably wouldn't get that disproportionate investment in BMI as well as in R&D. That’s something that we're actually changing fast, and that’s where I see opportunity. Now that doesn't mean that we're on a path to quickly divest or sell or whatsoever, all the remaining brands, but we need to make sure that these engines are working, and as we actually show today, the top 30 brands are growing ahead of the Company average, roughly 7.5% versus 5.8% for the Company of 5.2% for the Company overall. So I'm confident that that is the right thing to do, and it will lead to a better execution of everything that we do. Do we see optimization opportunities in the portfolio in Europe, particularly on the food brands in the future? Yes. The situation is dynamic. We will continue to look for opportunities to optimize the portfolio around the edges, but I don’t want to comment on that further today. At this moment, I feel that we once again, we need to grow what we have, and we simply need to run our operations a little better in that respect.

Our next question comes from Celine at JPM. Celine, please go ahead.

The first one is on your growth rate of 3% to 5%. You said we wanted to improve the quantum or through the credit it, but there was no specific volume targets of volume ambitions. I'm a bit surprised by this because we have had, in the past, Unilever strategy where volume was really the center of the strategy, both in terms of top line market share gain. Can you elaborate on that? Specifically, I thought that was interesting, the point you made on premiumization driving mix and driving gross margin at the same time. Do you think that the portfolio of Unilever and its brand, and I'm thinking as well given 60% of the footprint in emerging markets, is the right portfolio right now to drive that premiumization at scale? My second question is on next year. If I look at the balance of potential easing cost inflation and how that fits to the P&L, we are looking at cost deflation. Some of that has already been evident in some of your emerging markets where yourself and competitors have all other prices. If I look at next year, I could have a huge gross margin expansion next year. But obviously, it will depend on how much reinvestment will be made in terms of pricing or promotion. Can you talk about that, how we should look at this equilibrium for the '24 period?

I noted that three questions. One is around the composition of our medium-term 3% to 5% between sales and volume, question around innovation and premiumization, and the third one on the 2024 financial framework. I'll take the one on innovation. Graeme will take the one on the growth target and the 2024 financial framework. So, on innovation and premiumization, we have around 450 brands or so, but don't forget that once again, the 30 top brands constitute 70% of the total turnover and are growing faster. So that's number one. Secondly, I talked about big innovation and technology platforms. I called out three or so they fuel essentially almost all of the portfolio. We're not diluting our R&D efforts too much; at least that's not in the plan. In fact, we're trying to bring that somewhat more together. In terms of brands, so for example, Dirt is Good—we call it Dirt is Good, but it could be Persil in one country, it could be OMO in another country, it could be Surf in another country. These different brands originate technology-wise and innovation-wise from a very coherent innovation strategy that is enabled by the new organization. I think that about fragmentation. We have a pretty strong handle on that one. Regarding premiumization, we see premiumization across the emerging market world. That is an important theme, and we clearly want to participate in that, with the exception of Africa where mainstream consumers at this point are very focused on affordability for all the known reasons. Inflation hit them much harder than mainstream consumers in other countries. When looking at the world at large, I don't think that there is a premiumization game going on there. We are focused on making sure we drive entry packs so that consumers can participate in our brands and will grow up with brands and get that brand familiarity. Still, in the other areas of the world, we're actually very focused on premiumization, including in emerging markets. Graeme, on the 3% to 5% and the constitution of volume versus value and then 2024.

Let me actually start with the theme of cost inflation, the cost inflation outlook. We're guiding again for this year to the $2 billion of net material inflation that we saw last time we spoke. Obviously, that is weighted towards H1 versus H2 when we see a much lower level of inflation. I think it's fair to say we can see us coming out of this incredible inflation period that we've had now, and we expect our current outlook for inflation next year to normalize back to the levels that we had before we entered the inflation spike. The reason I mentioned that is because your diagnosis is quite right. That does provide a tailwind to gross margin that comes through. I don't expect that we will have deflation in pricing other than in a couple of specific areas; it's possible in India because a couple of our categories in India—fabric cleaning and skin cleansing—are very heavily correlated to the underlying commodity prices, and local competition reenters the market. We have to adjust pricing there in order to maintain competitiveness and our volume position. So, they are the two ones that I would call out. It does provide a tailwind of gross margin. As we've said, that provides the bank for reinvestment. We will reinvest, and this gets to your question about quality of growth now in sustaining consistent higher level of growth with better quality in the form of a higher volume component. Now, you're right; we've never guided to a specific number on volume, and we won't do that. But I think at the Capital Markets Day, this year, we said that we wanted to see that, and we broadly spoke about it being balanced between price and volume, roughly 50-50, but we want more volume as a component of our growth, and we want to deliver that more consistently. In terms of '24 guidance, we expect '24 will be within the framework that we've set out, of course, but we're going to come back to you with the full year results in February and give you more detail on 2024.

Our final question comes from Victoria. Please go ahead, Victoria.

I have just one question left on strategy. When I look at all the initiatives related to SKU optimization, focus key brands, change in culture. It's very similar to basically every other company in staples is doing. My question within this framework is with gross acceleration, do you expect market share gains? If so, why are you expecting to gain market share from? Is it private label on local producers in emerging markets and private label and developed, or do you see some specific sort of competitor characteristics where you think you can regain lost market share in recent years?

Look, very clear, yes, many of the themes that we are talking about you would recognize in CPG companies, and I agree with that, but it comes down to execution. It comes down to our abilities and our capabilities to do so. Since it's the last question, if you allow me, Victoria, I just want to reiterate something I think that's really important. I talked about opportunities to improve in Unilever, but I talk about that from a position of, hey, we have inherent significant strengths, but we need to dial them up where we can, we need to be much sharper in our choices that we make and we need to make things a lot simpler and do it with great level of impact. That's what the plan is about, and that's what we talked about. When you talk about share improvement, I think most importantly, we're not in the game here of just simply stealing share. For us, priority number one is to make the market and therefore, to develop the market and enlarge the categories. When I talk about innovation and technology platforms, they are very much aimed at making sure that we offer the consumer something extra, something that's not there, so that we, together with our retail partners, create more value for the category as a whole. If we do that well, since we are the number one or two in 80% of our business, in the category, that will mean that we will grow our share accordingly. Within that market development framework, we see, as we talked in the previous question, we see premiumization as an important trend, but there are others to address. I'm looking forward to coming back to you in the next couple of quarters and talking more on examples that I mentioned today in the speech.

Okay. Thank you. Thank you all very much for your questions, and we'll bring the call to a close there. If there are further questions, please do email into the IR team, and we will make sure we set up a time to speak to you. Thank you very much, and enjoy the rest of your day.

Thanks, everyone. Bye-bye.

This concludes today's call. Thank you all for joining, and have a nice day.