Unilever PLC Q4 FY2025 Earnings Call

Hello, and welcome to Unilever's full year results announcement. Thank you for joining us. In a moment, Srini Phatak, our Chief Financial Officer, will take you through a detailed breakdown of Unilever results for 2025. But before that, I would like to share with you a few reflections on our performance last year. Let me start by saying that we have delivered a solid year, fully in line with our commitments despite challenging conditions. When I took over as CEO, I made clear that one of my biggest priorities was to ensure that in Unilever, we could both perform and transform. 2025 has demonstrated our ability to evolve. We delivered a good performance, delivering competitive volume growth, positive mix, and gross margin expansion, with sequential improvement throughout the year. We sharpened the portfolio. The successful demerger of Ice Cream combined with 10 deals, including acquisitions like Minimalist, Wild, and Dr. Squatch and the disposal of several non-strategic brands means that we have rotated 15% of the total portfolio in 2025. We have significantly elevated the offering of our brands, stepping up their functionality, aesthetics, and sensorials. Strong innovation plans and a decisive shift to social-first demand generation models also contributed to a strong improvement in the brand superiority scores of our brands, a key reason for our ability to outperform markets. This is empowered by another increase in our brand and marketing investment. We improved our execution, reflected by our continuing strength in developed markets and our improved performance in emerging markets, including the successful operational results in key markets like Indonesia and China. We have also acted decisively to correct performance gaps in areas like Home Care and Deodorants in Brazil or U.S. hair businesses, in which we expect significant improvements during 2026. We drove cost discipline and improved overheads by 50 basis points through the continuing delivery of our productivity program that is significantly ahead of schedule. We are moving at a speed to build a business that drives desire and scale in our brands and execution excellence. There is much still to do, but we have entered 2026 as a simpler, sharper, more focused business, better able to capture the many growth opportunities that exist across our categories and our channels. Our performance in 2025 gives us added confidence that we are on the right track, as Srini will now highlight in taking you through the numbers. Srini?

Thank you, Fernando. Before I turn to the results, just a brief point on the basis of reporting. All the figures that I refer today are on a continuing basis, which excludes Ice Cream. Comparative figures have been restated to reflect the demerger of the Ice Cream business. So all growth, margin, and cash metrics are presented on a like-for-like basis. For the full year, underlying sales growth was 3.5%, with volumes at 1.5% and price at 2%. Looking beyond the single year, performance over a 2-year period highlights the underlying momentum of the business, particularly in Beauty & Wellbeing, Home Care, and Personal Care, we delivered compounded annual volume growth of 3.6%, 3.1%, and 2.1%, respectively. In 2025, we saw a clear sequential improvement through the year, with quarter 4 growth at 4.2%, with a step-up in volumes to 2.1% and pricing at 2%. This reflects our disciplined execution and a sharper focus on volume-led growth. Our 30 Power Brands, which represent more than 78% of the group turnover, continued to grow ahead of the average, delivering 4.3% underlying sales growth for the full year, with volumes up 2.2%, in line with our medium-term growth algorithm. This performance has been sustained over time, with Power Brands delivering a 2-year compounded annual growth rate of 5%, including 3.4% volume growth. Power Brands have the first call on incremental resources, with 100% of our incremental BMI in 2025 being invested behind them. The performance we see reflects the impact of those prioritization choices. Momentum strengthened further in the fourth quarter with Power Brands delivering growth of 5.8%, driven by volume growth of 3.5%. Beauty & Wellbeing delivered balanced growth across the year, with underlying sales growth of 4.3% evenly split between volume of 2.2% and price at 2.1%. Dove, Vaseline, and our premium brands continued to outperform, delivering double-digit growth, reflecting the strength of our innovation and focused execution. Category performance varied across the year, reflecting different stages of portfolio reshaping, innovation delivery, and execution. Hair Care was flat overall, with pricing offset by lower volumes. Within this context, Dove Hair continued to deliver double-digit growth, driven by the rollout of its fiber repair range across multiple markets. Total hair care performance in North America was flat, reflecting portfolio simplification actions, while softer market conditions in some emerging markets weighed on volumes. Core skincare delivered mid-single-digit growth. Vaseline again stood out, delivering double-digit growth for the third consecutive year and becoming our eighth largest brand. Wellbeing remained a key growth engine, delivering double-digit growth for the year, led by volume. Liquid I.V. and Nutrafol both delivered double-digit growth, with Liquid I.V. reaching 2 important milestones: becoming a billion-dollar brand and achieving a record U.S. household penetration of over 18%. OLLY delivered high single-digit growth, and it is now an over $500 million brand. Prestige Beauty delivered low single-digit growth. Hourglass and K18 continued to grow double-digit, and Dermalogica and Paula's Choice returned to growth in the second half. In the fourth quarter, Beauty and Wellbeing growth stepped up to 4.7%, with volumes up 2.8%. This performance underpins a 2-year compounded annual volume growth rate of 3.3%, reflecting improved execution and a stronger performance across several key Asia Pacific Africa markets as the year progressed. While market growth moderated in Wellbeing, we delivered volume growth above 5% for the quarter, continuing to materially outperform the market. Meanwhile, our core portfolio delivered improved growth with Hair Care at mid-single-digit growth. From a profitability perspective, underlying operating profit in Beauty & Wellbeing was EUR 2.5 billion in 2025, with an underlying operating margin at 19.2%, down 20 basis points year-on-year. This reflects a significant improvement in overhead efficiency, with increased brand and marketing investments behind Power Brands and premium innovations supporting long-term sustainable growth. Personal Care delivered underlying sales growth of 4.7% for the full year, with a much stronger competitive performance driven by the momentum in the United States. The U.S. remains a big growth engine and a benchmark for the execution across the business group. Price contributed 3.6%, largely reflecting commodity-driven increases, with volumes growing 1.1%, supported by premium innovations, particularly in Dove, which delivered high single-digit growth. Strong volume growth in developed markets led by North America more than offset softer conditions in Latin America where volumes declined, but the performance remained ahead of the category. Deodorants delivered low single-digit growth, supported by both price and volume. Dove again led performance, delivering double-digit growth, with scaling of whole body deos across 15 markets, reinforcing our leadership in the category. In the fourth quarter, growth improved sequentially to mid-single digits as actions to address product format mix in Brazil began to gain traction. Skin Cleansing delivered mid-single-digit growth led by price and continued premiumization. Oral Care also delivered mid-single-digit growth, driven by strong performances in CloseUp and Pepsodent with premium whitening and natural innovations in Asia Pacific and Africa. During the year, we further strengthened Personal Care's portfolio through the acquisitions of Wild and Dr. Squatch. These acquisitions enhance our exposure to premium segments, and are expected to contribute meaningfully to growth over time. In the fourth quarter, underlying sales growth remained strong at 5.1%, led by North America and Asia Pacific and Africa. Growth was driven by price and supported by positive volume, reflecting the positive trajectory of the business and the sustainability of U.S.-led momentum. From a profitability perspective, underlying operating profit in Personal Care was EUR 3 billion. Underlying operating margin increased by 50 basis points to 22.6%, driven by improvements in gross margin and overhead efficiency. We continue to invest behind our brands, most notably in the U.S. and in the premium segments, in line with our strategic priorities. Home Care delivered underlying sales growth of 2.6% for the year, with growth primarily being volume-led at 2.2% and a modest contribution from price of 0.4%. Performance improved sequentially through the year, supported by strong growth momentum in Europe, driven by premium innovations and improved execution and performance in India. Fabric Cleaning was flat as strong performance in Europe was offset by a softer performance in Brazil. The corrective pricing actions were taken earlier in the year to restore competitiveness. Wonder Wash continues to go from strength to strength, following its launch in 2024, and it's now established in more than 30 markets. This demonstrates the speed at which we can roll out high-impact innovations at scale. Home and hygiene delivered mid-single-digit growth led by Cif and Domestos. Growth was supported by premium innovations, including Cif Infinite Clean and the continued rollout of Domestos Power Foam beyond Europe, extending our leadership in hygiene formats. Fabric enhancers delivered high single-digit growth led by volume. Comfort, one of our billion-Euro brands performed particularly well, supported by premium formats and fragrance-led innovation with strong momentum across several emerging markets. In the fourth quarter, growth accelerated to 4.7% driven by 4% volume growth, underlining the recovery of the business. India was a key contributor to this momentum, with Home Care delivering mid-single-digit volume growth, led by strong performance in liquids across Fabric Wash and Household Care, and reaching its highest ever market share. Brazil, Home Care's second-largest market, also returned to growth in the quarter, further supporting the overall improvement. From a profitability perspective, underlying operating profit in Home Care was EUR 1.7 billion, with an underlying operating margin of 14.9%, up 40 basis points year-on-year. This reflects improved overhead efficiencies and disciplined brand investments focused on fewer high-impact innovations, partly offset by a decline in gross margin. Foods delivered underlying sales growth of 2.5% for the year, with 0.8% from volume and 1.7% from price. Growth was ahead of the market, driven by strong performance in emerging markets, while developed markets were broadly flat amid weaker consumer demand. Against that backdrop, this represents a solid performance, with clear evidence of competitiveness across our core brands. Hellmann's continued to perform well, delivering mid-single-digit volume rate growth for the year. This was supported by the continued strength of its flavored mayonnaise range, now scaled across more than 30 markets and established as a EUR 100 million platform, demonstrating our ability to premiumize at scale. Cooking Aids delivered low single-digit growth, driven primarily by price. Knorr grew low single digit, with softer retail conditions in developed markets offset by volume and price growth in emerging markets. Unilever Food Solutions was flat, volumes were positive in North America, offset by declines in China, reflecting weaker out-of-home consumption. We expect the UFS performance in China to improve during 2026. In the fourth quarter, underlying sales growth was 2.3%, with volumes up 1.3%, reflecting a market environment that remained subdued into year-end. From a profitability perspective, Foods delivered a record year, with underlying operating margin increased by 130 basis points to 22.6%, the highest level achieved by the business group. Underlying operating profit was EUR 2.9 billion. This reflected portfolio pruning, disciplined pricing, productivity gains in gross margin, tight overhead control, alongside continued focused brand investments in line with our food strategy. We delivered balanced growth across developed and emerging markets despite a more uneven macro and consumer backdrop through the year. This highlights the advantage of our geographic footprint. In developed markets, we grew ahead of our categories despite consumer conditions softening, particularly in the second half. In emerging markets, performance improved throughout the year, reflecting decisive actions we took to address challenges, alongside improved execution, a step-up in innovation and a more focused channel execution as well as an improving trading environment in several key markets. Developed markets, which represent 41% of the group turnover, delivered underlying sales growth of 3.6% for the year, a sustained outperformance versus the market. Growth moderated in the second half as the macro and consumer backdrop softened, with fourth quarter underlying sales growth of 1.7%, with slower market growth in both the U.S. and Europe. North America was a standout performer. Underlying sales grew 5.3% for the year, with volumes contributing 3.8%, reflecting continued share gains and the benefits of multiyear reshaping of our portfolio towards Beauty & Wellbeing and Personal Care. Premium innovations, supported by strong retail execution, continue to underpin growth, allowing us to outperform the markets despite more subdued consumer conditions. In the fourth quarter, growth moderated as category conditions softened across the segments. Despite this, our portfolio performance remained resilient, reflecting the strength of our portfolio and execution. Europe delivered low single-digit underlying sales growth for the year. Home Care and Personal Care performed well, supported by the volume growth and the continued rollout of Wonder Wash and whole body deodorants. This was partly offset by softer conditions in Foods, where we continue to outperform the market. Growth across Europe was uneven, with good momentum in France and Italy offset by softness in Germany. In the fourth quarter, underlying sales were flat, in line with the slowing market environment, but our performance remained robust relative to the categories. Emerging markets, which account for 59% of the group turnover, delivered underlying sales growth of 3.5% for the year. Performance improved sequentially through the year, with growth accelerating to 5.8% in the fourth quarter, including 3.2% volume growth, reflecting the impact of decisive actions taken earlier in the year, alongside a return to growth in Latin America. Asia Pacific Africa delivered underlying sales growth of 4.6% for the year, with volumes contributing 3%, and price 1.6%, reflecting strengthening of execution across several key markets. Momentum strengthened in the fourth quarter, with APA delivering underlying sales growth of 6.9%, driven by volume growth of 5.7%. In India, underlying sales grew 4% for the year, with volumes up 3%. Growth accelerated in the fourth quarter to 5% with volumes up 4%, reflecting market share gains, a gradual recovery in market growth, and the normalization of the trade environment following GST adjustments in the third quarter. Performance was led by our premium Personal Care portfolio and strong execution in laundry liquids. In Indonesia, underlying sales grew at 4% for the year, with a sharp recovery in the second half following a comprehensive reset of the business. Alongside price stabilization and trade stock normalization, we stepped up innovation and significantly increased social-first brand activation, strengthening relevance and demand across our core categories. As execution improved, availability and affordability were sharpened. The performance stepped up materially, with growth accelerating to 17% in the fourth quarter against soft prior competitors. In China, underlying sales growth was flat for the year with clear improvement in the second half, including mid-single-digit growth in the fourth quarter. Actions to reset the business, including strengthening go-to-market execution and accelerating premiumization supported this improvement. This was led by Beauty & Wellbeing and Personal Care despite overall market growth remaining weak. In Latin America, underlying sales grew 0.5% for the year, reflecting a broad-based market slowdown amid ongoing macro and political uncertainty. Price growth of 5.9% largely offset a volume decline of 5.1%, with elevated price elasticity continuing to wane on volumes as consumer demand remained under pressure. The region, however, returned to growth in the fourth quarter. For the year, Beauty & Wellbeing and Foods both delivered low single-digit growth. In Foods, performance was supported by Hellmann's, led by the continued strength of the flavored mayonnaise range in Brazil. In Beauty & Wellbeing, growth reflected improved execution and the strength of the core brands. During the year, we took targeted actions in Brazil to restore competitiveness, including corrective pricing in fabric cleaning, and adjustments to the format mix in Deodorants. Home Care returned to growth in the fourth quarter, providing a clear indication that these actions are beginning to gain traction. One Unilever markets delivered mid-single-digit growth with positive volume and price, and were accretive to both group sales and profit growth in 2025. This performance reflects the benefits of radical prioritization and sharper focus in our smaller markets. Turnover for the full year was EUR 50.5 billion, down 3.8% versus the prior year. This was driven by significant currency headwinds, with FX reducing turnover by 5.9%. The currency impact was broad-based, reflecting a weaker U.S. dollar, alongside depreciation across a number of emerging market currencies, including several of our large markets. This was only marginally offset by strength in a small number of currencies. Excluding currency, turnover increased by 2.3%, driven by underlying sales growth of 3.5%, partly offset by portfolio actions as we continued to sharpen the business. The net impact from acquisitions and disposals was negative 1.2%. Within this, acquisitions contributed 0.6%, driven by Minimalist, Wild, and Dr. Squatch, all performing in line with their acquisition business cases. This was more than offset by a disposal impact of 1.8%, reflecting the exits of Unilever Russia and the China water purification business in 2024. Disposals of Conimex, The Vegetarian Butcher, and Kate Somerville were completed during 2025. Underlying operating margin expanded by 60 basis points to 20% in 2025, reflecting a structurally strong margin profile. Gross margin contributed positively, expanding by 20 basis points and marking the third consecutive year of gross margin expansion. Importantly, following the Ice Cream demerger, gross margin is now at a structurally higher level of 46.9%. This reflects a fundamental shift in the shape of the group, alongside improvements in mix, price, and sustained delivery of savings. Our productivity program and the ongoing cultural shift enabled a further 50 basis points reduction in the overheads. Since the program began, we have delivered more than EUR 670 million of savings and are well ahead of the plan. We remain on track to complete the EUR 800 million program in 2026. Brand and marketing investment increased by 10 basis points to 16.1% of turnover, the highest percentage in over a decade, and 300 basis points higher than 4 years ago. This reflects a clear choice to prioritize investment behind our strongest brands and innovations, consistent with our focus on sustainable growth and long-term value creation. 100% of the incremental BMI was allocated behind Beauty & Wellbeing and Personal Care. Underlying operating profit was EUR 10.1 billion, a decline of 1.1% versus the prior year. In line with our multi-year priority, in 2025, we delivered hard currency underlying earnings growth. Underlying EPS rose to EUR 3.08, up 0.7% versus the prior year, with sales growth and margin expansion together contributing 6.5% to EPS growth. Net finance costs were broadly flat year-on-year, reflecting active balance sheet management and disciplined funding decisions. Net finance costs represented 2.1% of average net debt, underscoring the resilience of our financing structure following the Ice Cream separation. Tax contributed positively, adding 1.3% to underlying earnings per share as the underlying effective tax rate decreased slightly to 25.7%. This reduction reflects the mix of earnings and the benefits of local tax optimization measures. Our share buyback programs contributed 1.5% to underlying EPS. These positives were mostly offset by currency, which had a negative impact of 8.8% on the underlying earnings per share. On a constant currency basis, underlying earnings per share grew by 9.5%. Following the separation of Ice Cream, an 8 for 9 share consolidation was implemented in December 2025 to ensure comparability of earnings per share, share price, and dividends, with prior periods being restated accordingly. Sustainability remains a fundamental part of Unilever's strategy and is managed with the same discipline as our financial performance, with clear accountability and a direct link to remuneration. In 2025, we reached an important milestone on plastics delivering both on our multi-year targets due this year. This reflects sustained focus and investments and demonstrates our ability to deliver against complex commitments. Free cash flow for the year was EUR 5.9 billion, representing 100% cash conversion. Compared with the previous year, free cash flow was around EUR 400 million lower, reflecting costs associated with the Ice Cream demerger, including separation-related tax on disposals. Excluding these demerger-related items, free cash flow was EUR 6.3 billion, underlining the cash-generating strength of the business. Net debt at the year-end was EUR 23.1 billion, an absolute reduction of EUR 1.4 billion following the Ice Cream separation. This reflects the combined impact of cash generation and the demerger offset by dividends, acquisitions, and share buybacks. Net debt to underlying EBITDA closed at 2x, remaining within our target range and consistent with our capital structure objectives. Turning to returns. Our underlying return on invested capital was 19%, placing us in the top 1/3 of the sector. Our ROIC benefited by around 100 basis points from Ice Cream demerger, reflecting the higher quality and the lower capital intensity of the group following the separation. Overall, ROIC remains firmly in the high teens, which we continue to view as a key guardrail for capital allocation and a core pillar of a multi-year value creation model. Our capital allocation is clear and disciplined and remains focused on 3 priorities: growth and productivity, actively shaping the portfolio, and delivering attractive capital returns. Starting with growth and productivity, we continue to invest at scale where it matters most. Brand and marketing investment was 16.1% of turnover, while capital expenditure was 3.1% of turnover. Importantly, more than half the CapEx is directed towards productivity and margin initiatives, reflecting our focus on strengthening the underlying economics of the business while continuing to support our brands and innovation agenda. Turning to the portfolio, we remain value-focused. We are continuing to simplify the portfolio through targeted disposals while pursuing bolt-on acquisitions aligned to our strategy. Our focus remains on Beauty & Wellbeing and Personal Care, with emphasis on premium segments, digitally-native brands, and e-commerce exposure, particularly in the U.S. and India. Finally, on capital returns, we returned EUR 6 billion to shareholders in 2025, comprising EUR 4.5 billion in dividends and EUR 1.5 billion in share buybacks. This reflects our capital allocation priorities, with a clear preference to maintain in principle a 70-30 balance between dividends and share buybacks. Taken together, this provides consistency and visibility, supported by strong cash generation and disciplined execution. We continue to transform the portfolio in 2025, allocating capital towards higher growth premium segments while exiting businesses that no longer fit our strategic direction. Taken together, 2025 represents a step change in portfolio transformation. With the Ice Cream demerger and 10 transactions completed or announced during the year, we materially increased the focus and the growth profile of the group. On the acquisition side, the additions of Magnum, Dr. Squatch, and Wild strengthen our exposure to Beauty, Wellbeing and Personal Care, premium segments and digitally native e-commerce led brands, with particular emphasis on the U.S. and India. At the same time, we were decisive in simplifying the portfolio. We completed exits from lower growth non-core businesses, including Conimex, The Vegetarian Butcher, and Kate Somerville and announced further disposals such as Graze, Indonesia tea and the Home Care business in Colombia and Ecuador. These actions further sharpen the focus of the group and reduce complexity. The Ice Cream demerger is the most significant step in this portfolio transformation. It reflects a deliberate decision to simplify the group, increase the strategic focus, enabling both Unilever and the Ice Cream business to pursue testing strategies, capital structures, and growth priorities more effectively. Overall, the scale and pace of change in 2025 underline that this is a different Unilever, one that is actively transforming its portfolio to drive higher-quality growth and stronger returns over time. Turning to 2026, our outlook reflects the progress we have made and a disciplined focus on what we can control in a slower market environment. On growth, we expect underlying sales growth for the full year to be at the bottom end of our multi-year range of 4% to 6%. We expect underlying volume growth of at least 2%, maintaining focus on our volume-led growth and outperforming slower markets. On margins, we are confident of a further modest improvement to the underlying operating margin. Our structurally strong gross margin will continue to benefit from value chain interventions, fueling ongoing reinvestment into our brands. In 2026, we expect inflationary pressures in select commodities, with the overall inflation being lower than 2025. As before, margin progression is an outcome of our choices, not the short-term objective in its own right. On capital returns, we have announced a new share buyback of EUR 1.5 billion, reflecting confidence in the strength of our balance sheet and the consistency of our capital allocation framework. We also continue to expect sustained attractive and growing dividends, supported by strong cash generation. With that, over to you, Fernando.

Thank you, Srini. As we look ahead, we expect conditions to remain challenging, with soft markets in many parts of the world. Our confidence in the future stems from the significant progress we made in 2025, and we entered '26 as a very different looking business, one that is not only simpler and more focused, but also now bid to deliver consistently. We are building a sales and marketing machine founded on 3 fundamental shifts that transcend our whole business with 7 clear growth priorities. Let me take them in turn. The 3 fundamental shifts encompass our brands, our organization, and our people. Our brands are benefiting from a desired scale model that is elevating every stage of the journey, from product development right through to the way we reach and engage with consumers, to the way we execute in both offline and online retail. Where fully deployed, we have seen incredibly strong performances in brands Dove, Vaseline, Persil, and Hellmann's. We are making our organization fit for the AI age, transforming every link in the value chain, particularly around the consumer. That means deploying AI to supercharge demand generation, scaling and hyper-targeting marketing content, partnering with consumer facing LLMs, and working with retailers on agentic shopping models, creating a future-fit model for how our brands are discovered and shopped. And our people are embracing a new play-to-win philosophy approach where the demands may be greater, but our targets are sharper, accountability is clearer, potential rewards are higher, and with the highest ever differentiation between best and worst performers. When it comes to our growth priorities, this will be increasingly familiar to you by now. They involve honing in and doubling down on our biggest growth opportunities across categories with more Beauty, more Wellbeing, more Personal Care, across geographies with the U.S. and India as clear core markets for Unilever, and our growth segments and channels focusing on premiumizing the portfolio and further increasing our exposure to e-commerce. These 7 areas are already driving a large proportion of our growth. And with the additional focus on investment we are bringing to them, we see opportunities to go considerably further. I look forward to going deeper on these fundamental shifts and growth priorities at next week's Cagny conference in Orlando. Nowhere does the robustness and validity of these transformation and fundamental shifts and strategic growth priorities show up more clearly than in the strength and quality of our innovation program. You have seen in our results today how effective our premium innovation is when we create or grow categories, like powder hydration, short-cycle laundry, probiotics in surface cleaning, flavored mayo, all powered by our superior science in residual aesthetics and elevated sensorials. We are doubling down on this approach in 2026 with an excellent pilot of innovation, leveraging our multi-year scientific streams and introducing new ones. And many of our Personal Care innovations will be activated alongside our sponsorship of the FIFA World Cup 2026, an exciting moment for us and our brands. A simpler, more focused company is not an end in itself; it is all about delivery, consistent delivery. That's what we are concentrated on. And while there is a lot more to do and more to prove, we are confident that '26 will be another big step forward in moving to a model and an approach that is built for delivery. The key elements are all there. First, our mantra is and will remain volume growth, positive wins, and gross margin expansion. We are laser-focused on these very clear metrics. This is a route to sustained success for Unilever and top shareholder returns, and we will continue to invest accordingly to achieve these objectives. Second, with the well-executed separation of Ice Cream now behind us, and with other recent bolt-on deals successfully completed, we have a sharper portfolio radically focused around our strongest categories and our biggest brand. Third, with our emerging markets strengthening and developed market continuing to outperform, we have a real opportunity now to leverage one of Unilever's most distinctive assets, our global strength. Fourth, our capital allocation priorities, as you heard from Srini, are crystal clear, focused on driving growth and productivity by supporting our brands, sharpening our portfolio, and maximizing margin initiatives, while at the same time, delivering strong capital returns to shareholders. And finally, the strength of the organizational change at Unilever over recent years can hardly be overstated. The heavy lifting has been done. This is now a new business, simpler, leaner, more accountable, with P&L ownership now squarely in the hands of our category-led business groups, all backed up by differentiated reward to the right of performance. All these elements give us the confidence that we are moving towards a model and an organization built for consistent delivery even in markets that will remain tough. Thank you for your attention. We look forward now to taking your questions.

The heavy lifting has been done. This is now a new business, simpler, leaner, more accountable, with P&L ownership now squarely in the hands of our category-led business groups, all backed up by differentiated reward to the right of performance. All these elements give us the confidence that we are moving towards a model and an organization built for consistent delivery even in markets that will remain tough. Thank you for your attention. We look forward now to taking your questions.

Our first question comes from Celine at JPMorgan. Celine? Moving to the second question, Warren. The second question comes from Warren Ackerman at Barclays.

Yes. Fernando, Srini, Jemma, Warren here at Barclays. Can you hear me okay? an echo.

Yes, we can, Warren.

So, Fernando, could you discuss the emerging market outlook for 2026? Specifically, I'd like to focus on Brazil, India, China, and Indonesia. Can you cover some key topics of interest, such as the situation with Brazil deals? Has there been a proper reset for China and Indonesia, or is that behind us? What should we expect in terms of volumes in 2026? Moving on to another geographic question regarding the U.S., which has clearly slowed down compared to Q3. Could you share your thoughts on U.S. category growth? Are there any signs of pricing pressure in the U.S., and what is your confidence level regarding deliveries in 2026? What innovations can we expect out of the U.S. in that year? Lastly, if possible, I would like to ask Srini about the productivity savings. Has the EUR 800 million target been achieved, and what should we anticipate in terms of productivity in 2026?

Thank you, Warren, and good morning, everyone. I'd like to emphasize that our presence in emerging markets is a strong long-term competitive advantage, driven by favorable population growth rates and potential for improved margins. Our emerging markets portfolio is well-diversified across geographies, categories, and price segments, providing us with resilience against market fluctuations. We feel confident about our progress in these markets. Currently, aside from Latin America, which is seeing stagnant market volume growth, we are experiencing growth in the Asia Pacific and Africa regions, with around 3% volume growth. Our performance in India is on the rise, supported by favorable economic conditions and the strengthening of our brand presence. Our operational metrics in India are improving, especially in rural and traditional trade channels. We are gaining market share in Home Care, contributing to 40% of our business, and we've achieved the highest market share recorded recently. In China, we are seeing gradual improvement, particularly in the second half of 2025, thanks to our strategic changes in e-commerce. We anticipate a better performance in China for 2026. In Indonesia, we have a newly established leadership team that is effectively resetting the business fundamentals. We're operating with historically low stock levels in our distribution network, eliminating previous challenges related to churn and pricing conflicts. We have relaunched our eight top brands, and while we benefitted from a weak comparison in the fourth quarter, we are closely monitoring our sales growth, which has increased in the past four quarters. Other markets, including Vietnam, Pakistan, Bangladesh, and Arabia, are also showing improvement. In terms of Latin America, the market has remained flat, with minimal growth observed in the latter half of last year, particularly in Mexico and Brazil, although we are encouraged by growth in the fourth quarter, primarily driven by our Foods segment and solid performance in Beauty & Wellbeing. We've implemented quick corrective actions in Home Care pricing to enhance competitiveness, and we expect improvements in the Deos category soon. Our efforts to rebalance investments towards aerosols, which generate higher revenue and profits per use, are supported by retailers, and we are adjusting product placements in numerous stores. We expect the Deos category in Latin America to significantly contribute to growth starting in the second quarter. In summary, I am optimistic about emerging markets in 2026. Moving to the U.S., our volume growth in North America has been consistent over the last three years, with 3.9% in 2023, 4.2% in 2024, and 3.8% in 2025, reflecting a significant transformation in our portfolio and a strong focus on retailer relationships. December and January saw a market rebound, and we are starting 2026 positively in North America. While we experienced some slowdown in Wellbeing in the fourth quarter, which had about 5% volume growth compared to strong double-digit growth in the initial three quarters, we remain confident in our ongoing growth in this segment despite facing some issues with our Liquid I.V. product and increased customer acquisition costs for our Nutrafol direct-to-consumer business. Overall, I am optimistic about our growth potential in emerging markets as well as in the U.S., given our solid performance over the past three years.

Thanks, Warren. On the productivity savings, I think we've said it in the press release. Cumulatively, we have now delivered about EUR 670 million of savings. The program is ahead of our own plans and internal plans and schedule. Most of this benefit, you will actually see in our SG&A line under the lower heads line, while some part of it was in supply chain overheads. From a 2026 perspective, we expect to at least deliver the balance, EUR 130 million, that was a commitment we set about EUR 800 million, and we'll continue to go further on that. And more as a cultural shift that we have really made in the company is, we'll continue to keep our SG&A costs and other overhead costs at run rates which are lower than the turnover, and therefore, in a sense that productivity, therefore, becomes an ongoing habit.

Our next question comes from Guillaume at UBS.

A couple of questions for me, please. The first one is on the pricing outlook for 2026. Fernando, can you maybe shed some light on how you expect price growth to play out this year, particularly given the sequentially lower inflationary pressures you're expecting for '26? And also, it seems a pickup in promo activities in many of your categories and regions. So it would be interesting, did you hear if you anticipate some or maybe contrasted pricing developments by region or product category this year? And then the second question, probably for Srini. Could you maybe walk us through the key building blocks that support your confidence in achieving this modest margin improvement in '26? And in terms of phasing, anything you would flag at this stage, be it for margin or for underlying sales growth?

Thank you, Guillaume. Well, I think that the category and geographical footprint of Unilever offer in the long run around 3% pricing. That's the kind of normal pricing we have seen in the last 10 years. This year, we probably see that a bit lower than that, around 2%. We have seen some increased promotional spending, particularly in promotional intensity, particularly in Foods, but it's not dramatic. We have not seen really an increase in promotional intensity in emerging markets. So overall, I would expect pricing to be around the 2% level. Commodity inflation, Srini can give a bit of background on that.

You're absolutely correct. Fernando provided a good summary of the pricing outlook. In 2026, commodity inflation won't be widespread but will focus on a few key materials, particularly palm oil, canola oil, and surfactants, where we anticipate ongoing year-on-year pressure. It's important to note that inflation in the Home Care and Personal Care segments will be higher compared to other categories. Additionally, around half of our inflation typically stems from imported inflation or currency devaluation in emerging markets, making this a significant factor. It's also worth mentioning that we are experiencing deflation in certain commodities, particularly in some food-related areas and crude-related items like packaging. It's crucial to understand the distinctions between the various commodities we deal with. We also acknowledge wage inflation in the market, which we'll manage through improved productivity and pricing strategies. Regarding gross margin, we've had an impressive story, having increased our gross margins consecutively over the past three years, with a total increase of over 330 basis points. Our current gross margin stands at 46.9%, reflecting a healthy and sustainable business model. The mix will remain a vital factor as we combine our portfolio and geographic strategies. Our procurement savings program has shown remarkable effectiveness, consistently outperforming the market across various commodities and contributing positively to our bottom line. We've also enhanced our commodity risk management practices, allowing us to hedge and mitigate risk effectively. Over the past 18 to 24 months, over half of our capital investment has been allocated towards savings initiatives, and this trend will persist. Given these factors, we are confident that our gross margin expansion in 2026 will surpass that of 2025, which is crucial for continuing to invest in our brands. In 2025, we achieved a 16% margin, and we plan to further increase spending on both our Power Brands and Beauty and Personal Care segments. In terms of overheads, we aim to keep their increases below our sales growth, building inherent productivity into our plans. Overall, this positions us to achieve a higher gross margin, which we can reinvest, leading to what we refer to as modest margin expansion. Regarding your question about phasing, while we don't expect significant differences between the first and second halves of the year from a margin perspective, we will likely face slightly higher currency headwinds in the first half, reflective of the base period in 2025. However, we expect to remain within a reasonable range for the full year.

Our next question comes from Jeremy at HSBC.

Could you provide more detail about Europe, which seemed relatively flat at the end of the year? Does that indicate entirely slower markets, or did your relative performance decline somewhat? What is the outlook for the region in 2026? Additionally, regarding the Power Brands compared to other products, there seemed to be a significant difference from what I remember in Q4. Can you discuss the weaker performance of the non-Power Brand segment and how you plan to manage that portion of the business to ensure it doesn't negatively impact your overall turnover? Are you comfortable with the more substantial growth of Power Brands compared to everything else that you observed in the quarter?

Thank you, Jeremy. In Europe, we did experience some slowdown in the last quarter, with markets becoming more flat. However, we continue to outperform the market, especially in Home Care and Personal Care, which are both doing exceptionally well. Our Home Care business is increasing its share across Laundry and Household Care, and our Deodorants business is also performing very strongly. We have a robust innovation pipeline set for 2026 in these categories and believe we will maintain our competitiveness. We’re currently in negotiations with retailers, and everything is progressing well, so we don't anticipate any significant impact from that. The main challenge in Europe has been in Foods, which has seen a gradual decline, particularly in the Netherlands and Germany. Conversely, our performance in Italy and France has been very good, and the U.K. has been solid for us, though Poland has been a weak point. Since Foods constitutes 40% of our European business, it does have an impact. Nevertheless, we are confident that we can sustain the improved performance we've seen in Europe over the past couple of years. Regarding Power Brands and non-Power Brands, Power Brands now account for 78% of our revenue, which is up from around 75% 18 months ago. They are growing robustly, with close to 6% underlying sales growth in Power Brands and 3.5% overall. Our focus is on investing in the strongest assets, particularly in Beauty & Wellbeing and Personal Care. Non-Power Brands, which make up 22% of our revenue, experienced a negative volume growth of 1% for the year, which accelerated to minus 3% in the fourth quarter due to some discontinuations and geographical factors. However, we believe that focusing on our strongest assets remains the right strategy. Combined performance in Beauty & Wellbeing and Personal Care has shown 4.5% growth for the year and 4.9% in the fourth quarter, with Power Brands in that segment nearing 6%. This will be our continued focus as we manage the rest of the portfolio accordingly. I also want to mention that our smaller markets, part of the One Unilever initiative, performed excellently in 2025. This organizational change, which involved a 35% reduction in headcount, delivered 5.2% growth and over 250 basis points of margin expansion. These smaller markets are key growth drivers for us, and we are managing them more simply and sharply, with a clear focus on the portfolio, which gives us confidence in their potential.

Our next question is coming from Celine at JPM. Celine, we're trying your line again. Celine, can you hear us?

Yes. Can you hear me?

We can.

Excellent. So I hope I'm not asking something that's already been asked, but my first question would be on the sequencing of growth for the year. So you're looking to grow around 4%. I understand maybe pricing, 2%; and volume, above 2%. But then you've been flagging probably some weakness in the U.S. in the first quarter, and I presume a normalization in Asia or at least in Indonesia. So can you talk about how we should expect these to evolve throughout the year? And my second question is coming back on the Wellbeing and Beauty category. If you can talk about, on the Wellbeing side, what you're doing in the U.S. to reconnect with growth. And as well, what is your expectation about internationalization on that business? And what can we expect as that business, I would say, more normalized growth rate to be, if I could use that word. And I think on that division too, if you can talk about Hair Care and what we should expect for '26.

Thank you, Celine. We are projecting our top line growth at the lower end of our midterm guidance of 4% to 6%. Naturally, there may be some quarters where growth falls below or exceeds 4%. We won't provide quarterly guidance, but we have made a strong start in January and have much to accomplish in the coming weeks to complete the first quarter. Overall, we are optimistic about achieving at least 2% volume growth for the year and around 4% for overall top line growth. Regarding Beauty & Wellbeing performance, when looking at the combined results for Beauty & Wellbeing and Personal Care, we achieved aggregated growth of 4.9% in the fourth quarter and 4.5% for the entire year. Within this segment, our largest brand, Dove, had another exceptional year, growing by 9%, which includes 7% volume growth on top of the previous year's 7% volume growth. Skincare also performed solidly, with excellent results from Dove and Vaseline, which has seen double-digit volume growth for the second consecutive year. In Hair Care, we witnessed improved performance over the year, particularly with the successful relaunch of Dove Hair, which is seeing growth exceeding 20% in markets like the U.S. This positive trend is expected to be implemented globally, with completion anticipated in all key markets by mid-2026. We foresee better results from Sunsilk and Clear, which were impacted by challenges in Brazil and China in 2025. Additionally, in Prestige Beauty, we experienced acceleration, with the second half of 2025 outperforming the first half, highlighted by strong performances from brands like Hourglass and K18, our newest acquisition. We need to enhance the retail performance of Dermalogica and improve Paula's Choice. A full relaunch of Paula's Choice is set for March this year, and we also need to boost the brand's performance in the professional channel, which accounts for 30% of our business. In the Wellbeing segment, we had another successful year, with our three largest brands: Liquid I.V. achieving 16% growth; Nutrafol at 23% growth; and OLLY growing by 9%. These brands predominantly serve the U.S. market. We did notice some softening in the fourth quarter, largely related to overall market growth. We delivered about 5% volume growth in the quarter and expect a softer first quarter due to strong comparisons, but we remain confident in the long-term growth potential of our Wellbeing verticals and in our ability to maintain and expand our leadership positions in these markets. There are a couple of issues we need to address, such as a decrease in the share of assortment for Liquid I.V. among a key customer in the group channel and rising customer acquisition costs for Nutrafol. However, our teams are actively working on solutions, and we expect to resolve these issues quickly.

Our next question comes from Jeff at BNP.

Two questions, if I may. The first one is with respect to innovation, you've made quite a few comments about it. But could you just tell us what are the sort of big new renovations that you've got coming to market this year that we should be expecting to hear quite a lot about as the year progresses? And the second one, really just a housekeeping issue, but are you able to quantify the magnitude of the TSA receipts that you'll be getting from Magnum?

Thank you, Jeff. Well, first of all, I would like to highlight that our first pennies go to continue investing behind the innovations that have been very successful in the last few quarters. The Dove Hair relaunch, Persil Wonder Wash, Vaseline Gluta-Hya and Vaseline Pro Derma, the flavored range of Hellmann's that is really driving significant growth, all these platforms are above the EUR 100 million, EUR 200 million. So this is really going very, very fast, and we continue investing behind them. There is new innovation hitting the market in multiple categories. I would like probably to mention the UV repair range of Dove hitting the market in January in countries like China, Indonesia, Thailand, Vietnam, South Asia, and the Philippines. The derma scalp range of Dove Hair, with a focus in developed markets. I would call out particularly Vaseline lips. That's a 100 million franchise already. We are gaining share in every single market around the globe. We see lips as an entry for younger users into Vaseline, and we are very excited with the kind of Gluta-Hya range in lip care that we are bringing into the market. The rollout of the seal press range of TRESemmé that has been a big success in India. We are rolling out that across Asia. Nexxus, a big relaunch in the U.S. and significant innovation in China and Indonesia. In China, Nexxus is really one highlight of our performance. In Personal Care, many things are coming into the market, but I would like to highlight also the importance of the activation around the FIFA World Cup. This should be a real support for our performance, particularly in quarter 2 and quarter 3. In Foods, continuity to the development of Hellmann's flavored mayo, but we are entering with protein caps in North with the launch in the U.S. and scaling into European markets during the year. These are just some of the things that we are doing. So our innovation machine, I believe, has improved a lot in the last 2 to 3 years. Now our focus is ensuring that our execution capabilities are in line with the improvements that we have done in product development and innovation. But a good plan for the year. And as I mentioned before, our absolute priority is investing heavily behind the big winners that we have in the portfolio now.

On the TSA, we are not publicly disclosing the total cost. However, there are three key points to note. First, since it is cost-plus, the markup we apply to these services is minimal and relates to IT and other commercial functions. Second, most of these TSAs consist of separate, individual contracts. We anticipate that between 2026 and 2027, the majority will decrease as the Magnum Ice Cream Company begins to take over these activities. Lastly, we have established clear plans to manage these contracts effectively and ensure that there are no stranded costs at Unilever. Overall, we have a solid strategy in place that benefits both companies.

Our next question comes from Olivier at Goldman Sachs.

Fernando, Srini, and Jemma, could you provide an update on the strategy for Prestige Beauty first? Some brands are performing well like K18 and Hourglass, while others are not. Do you need more brands for the portfolio to achieve larger scale? Also, what does the M&A landscape look like currently? Next, in relation to Food, you had impressive margin improvement, reaching 22.6%. This is significantly above historical trends. What is driving this improvement, how sustainable is it, and do Food Solutions have better margins compared to the rest?

Good. I will cover Prestige, and Srini will cover the Food margin question. In Prestige, you are right. We have had a great performance in brands like our Hourglass, K18, not so well in Dermalogica, and Paula's Choice. Even in Dermalogica in the retail is showing a lot of strength, but the brand is exposed to a professional channel that is declining, and we need to address some issues there. The Prestige market is changing dramatically. I feel you see less importance of travel retail. You see department store practically disappearing. You see a huge growth of the e-commerce channel. And I believe this gives us a lot of opportunities. And we consider our presence in Prestige a natural continuity of our presence in Skin Care and Hair Care. So that's how we see that. We are working in a much more integrated way, particularly in areas like Asia, in which channels of specialist beauty are not so developed and e-commerce is really taking the lead in developing the prestige market. We are always scanning the market for opportunities. Our acquisition criteria are very, very, very clear. We look at brands that are digitally-native with the big exposure to e-commerce, in categories in which we can add value, and there are a set of criteria that we follow with a lot of rigor. But we will not rush into acquisitions if the right asset doesn't emerge. And at this stage, we have not acquired in Prestige recently because we have not seen any asset that really fill any gap in the portfolio that we can have. But super, super committed to Skin Care, Hair Care. To a brand like Hourglass, that is a real jewel in the cosmetic super premium space. We see Prestige as natural continuity of our presence in our Skin Care and Hair Care business.

On the Foods margins, we are actually quite pleased with the way the whole business has been managed and being operated. There is a very sharp strategic choice that we've made in terms of where to play, how to win. And what's also notable is actually the execution discipline which has come into this business, which is actually leading to our market outperformance across various markets and various segments. A lot of this really is read through gross margin. Some of the levers, which I explained earlier are also applicable to the Foods business, and therefore, I will not repeat them. Having said that, Foods business has also benefited significantly from some of the portfolio rationalization. We have, over the past 18, 24, 36 months, taken out or delisted the parts of the portfolio which were not value accretive. So I think that has really helped us. Second, we also have some very good whole pack price architecture, especially when it comes to Hellmann's and some of the innovations. Secondly, when it comes to the UFS business where we manage it extremely well with profitable accounts has also been a big driver for us. It's also important that the whole overhead element of savings, which we have executed in the company, are also benefiting from a food perspective. Having said that, we continue to invest well. I think that's the most important element because we see Foods as a growth business for us. So we are absolutely determined to invest to really grow the business. At an aggregate level, I think we are quite happy with the margins. The focus from here on for us is going to be more drive growth, volume-led growth, and not necessarily a big margin expansion.

Our next question comes from Sarah at Morgan Stanley.

I have two questions, please. The first is about the impact of discontinuations across the group. Can you quantify that in terms of volume? The second question is regarding Dr. Squatch. It was growing very quickly before you acquired it. Can you provide any insights into how much it has grown during fiscal '25?

Yes. I don't know if we will provide any discontinuation figure, Srini. But Dr. Squatch is an important acquisition for us. It will only count in our underlying sales growth from September next year, but the performance has been good since the acquisition, continuing to grow at double digits. It is a strong brand with a distinct proposition in the male grooming space, making significant progress particularly in the deodorant category after establishing a solid position in skin cleansing. We are very pleased to have Dr. Squatch in our portfolio and expect it to be a significant contributor to growth during 2026. However, as I mentioned earlier, it will only count in our underlying sales growth from September onward. We are pleased with its performance so far, which aligns perfectly with the business case we presented at the time of acquisition.

Just a short one. See, anything that we actually do from an M&A or a disposal perspective, you get a full list of those disposals and the impact. Discontinuations and new launches of SKUs happen in the normal course of our business. Having said that, some of these discontinuations actually sit in the non-Power Brands section. And Fernando actually gave you a bit of a flavor in terms of whether it is the tail list of SKUs in Beauty & Wellbeing or some of the elements in Foods. I think that's the right place to keep looking for it, and it gives you a bit of a sense in terms of what's happening there.

Our next question comes from David at Jefferies.

I have a question regarding Latin America. It seems that the recovery in volume there has occurred more quickly than you suggested in the third quarter. Can you clarify if that’s true and what factors contributed to this improvement? Were there specific innovations or a relaunch that played a significant role? Additionally, did this boost in volume affect the quarterly results in the fourth quarter, leading to expectations of flat to positive volume growth in the first quarter or the first half of the year?

Yes. Yes, we don't see in Latin America, any performance that is fundamentally different from what we said to you one quarter ago. The macro environment remains tough, both in Brazil and Mexico. Markets, as I mentioned, have been flattish. But we have intervened in some areas in which, as I mentioned before, we have scored some own goals, particularly in Home Care pricing and in Deos format focus. Our Food business continues performing very, very well, particularly Hellmann's having a blast in Brazil, gaining share penetration, brand equity. And Beauty & Wellbeing has had a solid performance. In the case of Home Care, as I mentioned, we are pleased with the reaction to our pricing correction; it is showing really impacting our volumes, particularly in Brazil. And in Deos, I believe there is much more to come. Some of the actions that we have taken are being implemented now, particularly the reset of planogram in thousands of stores across the region. We are really investing heavily behind aerosol format that as I mentioned before, has a much higher revenue per user and profit per use than some of the contract applicators, and we have strong support from the retailers in that space. So we are confident for 2026 that Latin America will have a much better contribution to our performance. I have been associated with Latin America for many years. I have never seen 2 bad years in a row in Latin America. So we are very confident that we will deliver in that region, and the team is super, super committed in the region to improve performance there.

Our next question comes from Tom at Deutsche Bank.

Yes. I wondered if you could just say a few words on the channel shift that is occurring in North America and how that's impacting you? We're obviously seeing very high growth on Amazon, and it appears that your shares are a bit lower on Amazon than they would be off. So what is the outlook for your share on that channel? And what's the effect of that channel growth? And particularly, I guess, as well is just the growth of smaller peers and what that then does to the cadence of your innovation because you're stating a lot of innovation globally, but it's not clear whether that is speeding up in any one particular market, if you say, particularly in North America. So are you combating the growth of smaller peers by fewer, bigger innovations or more iterative, please?

Thank you, Tom. Well, we continue having a strong performance in digital commerce. And I would say there are 3 types of digital commerce in which we have delivered strong performances. One is classic marketplace in North America, big retailers, they are like Amazon and Walmart.com. I have mentioned the performance last quarter; I will not repeat numbers today, but we are growing double digits with these people strongly in North America. Social commerce in places like Southeast Asia and China and quick commerce in India. So in all of them, we are growing double digits. We are growing our assortment through a special assortment of our core brands. And of course, through the portfolio of new brands that we have been acquiring, particularly in the case of North America, our focus in acquisitions has been in digitally-native brands with a strong exposure to e-commerce, and that has been working for us properly. We have not seen a significant slowdown in the North American market in the e-commerce side. Probably what you have seen, particularly in the month of October, that was very weak in the North American market, it was more related to physical stores with the offline channel. And there is always, of course, e-commerce opens an entry point to many small brands, but very few brands have been able to scale big. I continue thinking that brands like that or like Vaseline have significant competitive advantage also in online. When I said before that, that is growing 7% volume globally. When you look at that growth in e-commerce, it's practically 2x that. So good performance in digital commerce. Of course, this is accelerating, particularly in some markets in Asia, that is, I would say, a leapfrog of modern physical retail into e-commerce, but we are very well prepared to take advantage of that.

Our final question comes from Ed Lewis, Rothschild.

Yes. A couple of ones for me. I guess a lot of change, a lot of heavy lifting, as you said, Fernando, the last 2 years. So we think about 2026, is this really the first year that we should start to see the benefits of the revamped approach to innovation that you introduced a couple of years ago? And then for Srini, just on the CapEx plans, over 3% of turnover, how much of CapEx will be spent on what you call margin-enhancing activities? I think you were close to around 60% last year.

Thank you, Ed. A significant amount of organizational work has been accomplished. Last year, we divisionalized our sales force and separated Ice Cream, among other significant advancements in our productivity program. These are potentially disruptive initiatives, and the fact that we achieved a solid year in light of these efforts is important to us. Our product development and innovation capabilities are now in a much better position than they were three years ago. I wouldn’t have felt proud to stand in front of the Dove or Vaseline shelf back then, but I do now. This sentiment is something I share with many of our brands. There are still some execution aspects that need improvement, including issues like channel price conflicts in certain markets and specific problems in countries like Brazil that should not have occurred. We have initiated a program called perfect store to ensure that pricing and assortment visibility are managed consistently across Unilever. I am currently focused on this. A lot of heavy lifting has been completed, and we view 2026 as a crucial year to start seeing the benefits from the investments in the business, both in terms of money and time and focus over the years. Srini?

Over the past two years, our capital expenditures have been around 3%. Looking ahead to 2026, we plan to allocate approximately 55% to 60% towards productivity and savings initiatives. From a capacity standpoint, we are in a strong position, allowing us to push for greater savings. We are also open to increasing our capital expenditures to support further growth in our productivity efforts, but this comes with two conditions. First, each business case must stand up to scrutiny. We have raised the thresholds for both internal rate of return and payback periods, which are firm requirements. Every project must justify its cost, and if it does, we will proceed with the investment without it being a limiting factor. Second, we are dedicated to achieving 100% cash conversion, meaning we must generate sufficient cash to fund these initiatives. Our emphasis on leveraging productivity through capital expenditures is on track as we move towards 2026.

Cool. I believe there are no more questions. So thank you, everyone, for joining the call. And let me close by saying that I hope it's clear that first, we have delivered a very solid 2025 despite subdued markets and a very negative currency environment for Unilever. Second, that we enter 2026 as a simpler, more focused business with stronger brands and competitive level of investment. We're investing now 16% of our revenue in our brands, 3 years ago, we were at 13%. Third, that our geographical footprint is an asset, and we are very confident in a step-up in emerging markets in 2026. And fourth, that our key metrics don't change: volume growth, positive mix, and gross margin expansion to deliver earnings growth in hard currency. That's where the whole company is focused on. Thank you very much.