Unilever (UL) 26 Jul 222022 Q2 Earnings call transcript

Hello, and welcome to the Unilever's Q2 and Half Year 2022 Results. [Operator Instructions]. We would like to now hand over to Richard Williams, Unilever's Head of Investor Relations, to begin the presentation.

Thank you. Good morning, and welcome to Unilever's half year results update.

to XX XX minutes. remarks Q&A followed prepared around of expect be minutes, around by We

All transcribed on today's the of webcast screen. is available live,

related non-GAAP I forward-looking Alan. said, can draw attention to the First, your straight over statements And measures. disclaimer and with that to to

ability Graeme run the against and Richard, performance Then first the the share build strategic delivered XXXX an our update to in results half outlook. performance quick to through given and will everybody. to our We've brands. give on a the inflation, XXXX. priorities. the how we're This Unilever's of take Thanks, I'll to we continue is quick first our that to details commodity half our in morning, response that's going good you significant does invest today. growth price been will overview on of and and in of us

of the implemented cost will priority line our We've that disposal acquisition again improve few spot cost ekaterra markets, said, to we're up Input recently versus recent in how show Graeme or prices the and several and have external in X. And of And growth with rates half even about and continued significantly channels have threat strategy, business, China. and know in run category That Our the with the inflation starting through change completing likely and organization a focus. successfully we though that challenging. still by in higher pandemic most minute continues spikes tea X, us is of eased And does cover environment of levels. very to inflation we at in being rolling increased exposure the Nutrafol. and our infection with performance second July behaviors. big lockdowns peak our is the I'll dramatically the on are support will record year The the sometime see with brands, commodity a simplify all of key ago. a weeks, remains and spending confidence countries model impact new Unilever in in speed, portfolio, accountability recession to consumer to well costs patterns the still year. performed as

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winning share. of with XX% competitively We continue to business win our

XX% the QX. this down reported is in from expected, As we

basis the are XX%, prepared on But margin earnings Underlying XX% we to that's not points we more with are that Graeme lead quarter compromise per was period gave first last competitiveness X% of strong results. business. we long-term a before, the versus pricing. flow €X.XX, as hit accept And where Underlying as free the year point We a operating to is will €X.X versus year. XX% increase our health we last short-term on and careful places guidance and levels share same which that. to within reduction remains the pricing is of in cash a billion. XXX give an we at to to details push some said of

Let with strategy, on half growth priorities the innovation. first strategic of from I'll through X me now our detail and some start brands get and Unilever's Compass into performance the lens

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a half growth second as better brand navigate by priority And was XXXX. in support levels is and functional bigger, relentless focus superiority. being remains at underpinned Ensuring brand the first half we planned. and Our product investment innovation our absolute on in as competitive is the up into that our euro

strategic the Health under evidence business, pillar into move the spaces. in business. amount brand is the billion. extremely wish huge into disposal in work the of establish pure-play to of for Tatcha of is with on and online Nutrafol portfolio. on owners. world's The some must July that higher was U.K., in July. Liquid to Nutrafol of Prestige the Health transaction expansion effects & our of States, dermatologist-recommended welcome of investment second Ventures Our return mature We with strong fully-fledged clinical And China. XX%, solutions the a I.V. the largest #X Wellbeing delivered We Wellbeing It's quarter say delivered part early of direct-to-consumer. growth its the particularly in another largest market. second a channels, proportion Prestige in I helped without some the see acquisition. brands of off-line great into to we Unilever acquisition launch to It's quarter hair of which XX% quarter into the growth Xst announced €X.X every Sales entirely Unilever's ekaterra the our new to with robust by this the & growth tea the consumers completed an brand and this United the portfolio growth minority it's and of accompany other for portfolio. are underpinned a investor side ekaterra the the of success exciting the almost a And completed in challenging prior culmination

and benefit continues our Beauty look from X.X%, with at Wellbeing Health in Growth our very and with U.S., geographies, price, India, U.S. Let's slightly emerging and driven momentum was strongly. changes now negative. strong key volumes Prestige at priority growth by portfolio China maintained The markets. our the to & the U.S. that contributing

are to challenges results already As the built competing strong that's offline, growth, importance into the growth is third in quarter. anticipated see we moderated as brands QX driven and consumers return and post as tiers. labor impact those Indian due market This is up the see with India, with of competitiveness to we've and This declining. U.S. and by down purchase. by stores particularly weakness XX.X% are up been The ongoing growing XX.X%, the number in then primarily that caused to improving the quickly, will E-commerce situation customer in emphasizes consumers, the continued price service broad-based availability. is researching in we the growth areas. to of but U.S. consumption up digital X.X%. greater markets continue channels presentation, growing has consumers the price in a on inflation path Indian reported, physical and of volumes and and The is value, purchasing volumes online rural but it portfolio

of China and in grow the both lockdowns down quarter We course, declined in the April and reflected by impact market X.X% on mostly ability ahead the of confident with are we continue volumes performance. to that HUL's This, the to deliveries, see market share strong very last-mile May. XX.X%. consumer in of of reflects and

Our China turnover, of of our markets. June. half strong in we to restrictions in came from €XX.X the some first XX%, competitiveness and nearly billion see easing did begin remains emerging

with different really aggregation. and However, EMs consumer helpful comprises structures different dynamics. markets very particularly not is It a

we So of good our in higher due adjust partly are pantry we and adjusting we high bit Turkey. see portfolio extremely reality growth, demand if the In prices, to example, market navigate markets Turkey, Not detail. channel a consumer offer performance in be we the for our more key right we right successfully. in conditions the some pack ensuring emerging position Despite product helpful see thought formats to volumes holding to the shared and to consumers our these that We're of loading. might and surprisingly, inflation. it in in strengthen little discounter up, channels sizes

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the taking market channel some to & outlets brands levels, ensure From Foods e-commerce does smaller Home much & a store points. to Care the With in proximity less our inflation independent the now and Personal we're brands trading in to relevant as continues cities, price Care, Refreshment. so action Beauty cover grow, major seeing high in channel are returning perspective, We're growth. to mini all down or that consumers cheaper in

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just quarter, our brands price in the was offset under high down to partially the line ability over on USG invest level was by our necessary is was LatAm in up expectations. price XX% X%. in very Our much to the of by volumes protect This XX% volumes and impact with increases

to USG close superiority We color to and fiber a already its in Age success And all competitiveness. of brand I architecture portfolio that to pack of that But offerings price delivery the the give from ensure functional economic consumers examples example to impactful cover Pond's relevant our great and to also great with premium pay can unlock has mentioned. laundry cover premium in our attention the finally, chart. offer dilutable that. Relevant run tougher continued and care which propositions They you times. and here premium quarter. can like very new to and quick XX% bottom during need that Miracle protection the which Dishwash price Indonesia. ways in a the points. OMO like see see of emerging example strong at such propositions, of And to the continue And value solutions Africa, brands, to And critical remains these mention provide markets also the some as innovation you I'd

with economic not certainly homogeneous needs they're great not offer price. So through that opportunities possible great while The group. great just are and the insights more emerging those times, deliver difficult products brands markets for lowest living to right value X local meet

the to to that future. Worth in from expertise the was and X% XX% reflects coming growth in Pure grew in consumer noting channel-specific treatment and in of the and the these invest first in a COVID premium And care the hair leading aimed of Clear half. and range, next, examples, channels needs innovation. half Dove X the all months, China, turnover online lockdowns products our recent and U.K., high that scalp couple launched achieve XX% channel which the the So as designed platforms. channels. Lifebuoy in meet impact and the technology value we've with omnichannel in increase right years, grown younger BXB play retailers in to of masks do primarily in is in well flat, continue bundled e-commerce of transaction the of and male density our for just China. as We from the Unilever's value first they're to has E-commerce

the and out focused in a went start business groups, a categories, center, of model. technology-driven the live The on moment significant groups backbone their It new new our and this from We'll It operating on benefit for a is the of corporate at performance. And Unilever implement set intention the low-cost the portfolios organization the power transactional creating. responsible strategies a Now business responsible business for our a for place. objectives all is difference change and I'm you Operations impairment simple to energy, the lean for groups simpler, And year, of Business model Operations make the is still model more we the new July. greater company. change marks model, urgency to They're now our Xst the one. our distinct the are faster, of monthly impressed with Business with the even agile, days fully already The to X Operations. accountability. more is Business early transactional for Unilever that later scale, Unilever new in that now Unilever year. processes Unilever's the It from by in update but the and are focus, strategy in and

a cautious company. people substantial coming to our basis. what will the too avoid quarter in groups new change the the new financials of be months We'll this presented of through bed be for the refine adjust of on we our being it, to for structure, our working. is declaring lens the third And September. the task And victory sharing to ways the Our business in restatement results is help are new in early

to of It's So the performance. judicious full early me identified strategic And the the summary of last disposals Unilever that underlying growth let starting our acquisitions. been our we in that repeat half coming see growth now of first consistency with and potential We're looks year. portfolio the to deliver. has focused line through priorities transformed

cannot performance. we to compete. am the was but half Of you, course, very exactly it more over what Unilever faster, pandemic, lies ahead, for with hungrier, before fit the business on And stronger, different that, first than that I to more details confident know Graeme, a is

Thanks, Alan. Good morning, everybody.

the we quarter, operational Our the X.X% of USG. second the continue putting posting competitive X.X%. Of conditions has on X broad-based in we our the strategy we very than into grew good through choices price in growth pretty a anticipated us. had fact, line down predicted that that to at was up focus for the we this, last this growth the the tracking by what are and performance excellence lockdowns our click challenging impact across in our we has and was After specific stepped growth. historical in we growth with off minus volumes as strategic elasticity X.X%, X.X% outlined. quarters QX and inflationary lens. X divisions. aim in all results, the volume the rising regional our of now feel in to shorter-term X If inflation. response quarter, China, performance And first presented much in just sequentially now when X.X% price delivered We over If growth are Pricing models drive Alan half of commodity for is better,

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especially of double-digit largely was growth growth by the for acquisitions and XXXX. reopened. versus impact billion, channel we volumes. year of offset Food X.X% single-digit with Turnover with Underlying pricing for was of strong all a cream year the X.X% contributed across growth, minus the the year sales QX grew both full strength lower and positive growth X% our with with X.X% up ice and our Solutions of being and €XX.X strengthened strong of Prestige rates, Prestige of XX.X% Elasticity for low Refreshment the line grew brands X.X% levels X.X% price minus in to few Asia. of there We & supply in nuances, volume. with U.K., from growth been LatAm all delivered and have main posted growth disposals from on and Foods performing across X.X% half as much very XX.X% a America the currencies X.X%, out-of-home as Personal Germany inclusion volume saw Latin and stepped now in-market saw on XX.X% a translation are Beauty QX spot reported that. and Paula's minus up North turnover positive America Health currency reflect expect despite against had in expectations Based the brand, Care quite to constrained moving of good XXXX. X.X% price driver X.X% local our Wellbeing. So positive & & region. the a effect and our parts and the full euro. we're and the volume. the experiencing. we in nearly impact around basket would X.X% Choice, France Currency Whilst Beauty Europe execution

to more which muted success growth products in the by a North mission the possibilities driven digits, America India that X.X% mid-single Hair the larger partially price low move and with which brand for of fragrances volume. double-digit Refreshment grew second to sprays. of X.X% the with categories improve Health proteins bathrooms a with Care a China. decline occasions the girls in continue everywhere. some strong forged volume offset in of in our stepped Price divisions. new Prestige benefiting across was success has is quarter, InterContinental Unilever guest vitamins, Personal to Wellbeing open up in plastics personal and and Care impact decline & helped perform longer-lasting this. volume growth from our in their social protection growth in X.X% with care work versus with skin in order in IHG's markets. and year. footprint. International back and the expect offsetting the XX.X% supply And on in packs grew forward delivered grew with a along of continued from look partnership performances of going XX-hour & by small a digit we will volume. is Pond's Food double-digit Sunsilk prior of & Hotels strongly, tap decline X.X% quarter U.S. and with significantly health and to return of in Growth first reduce flat by now full Turning single-use ever Care best as mission, Beauty growth and price see Group QX by to of and into Beauty is channels, a and the supported all Activ-Infusion, on superior hair, oils Skin to to up delivered of the Sunsilk body protection and Axe our of brand with India, for continues to restage single strong growth Rexona Deodorants the and blend our

the Cream Magnum which in in Northern & price Jerry's, prepandemic Out-of-home to Cornetto both Cream U.S. having quarter. innovations. Hellmann's brand Something and Nothing double-digit is a in Cornetto Ben price issues, took quarter into campaign impact out-of-home Sales waste. at led from the now Hellmann's the driving our and start. recovery waste the the especially Solutions is second QX. Continued on in the into professional Food with season the are strong growth by Classics off were the and Solutions. growth Hemisphere flying growth third a new whilst in Ice despite the and drove step-up Remixed higher Magnum by quarter. chefs, was food both strong, lockdowns the delivered volume supported constrained XXXX, that and reduce to in Turn positive food Performance in which and supply benefited serves traction, channel Food continuing as business, gaining is ice X% and impact of cream China purpose than growth from Ice in real are a Soft

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quarter supported detergents. in with by South coupled second Asia of latter the positive accelerated towards with the a the by delivered Beads. shifting the Fragrance both Comfort success double-digit helped increases, price with and Fabric China, performance in ever strong more by and enhancers Comfort format liquid category Turkey volumes, Brazil

water good return professional hotels. the plastic of concentrated, less is per the in to travelers for stains We time cycle. the White, meaning unbeatable range the the found also with launch and with needing stain is Perfect also common energy less hospitality wash, in channel This coincide wash removal industry, in saw the growth and whilst OMO of to packaging super

and year. Home Perfect win operators, quadruple hospitality hygiene the was as for more Hygiene for less a consumers really for for used were is So last & the they guests, and OMO muted growth White planet. products disinfection Unilever, than

we're is cost me and now how it. shift gears Let inflation business managing specifically environment, how our the impacting to

in the pressures cost we're previous that time these shows Now cost that we recent spot some discussing falls in facing. of chart some pressures despite and This course palm we continued of the prices inflation the material the oil quarters in April, billion of quite €X.X volatility particular remain spent commodity In seeing year. global markets. kernel aluminum, over are we the which projected the demonstrates net

reminder, the inflation that after cetera. is savings, we buying cetera, after see et changes, material absolute net Just impact after product efficiencies, logic a as et

Our net latest inflation a around second lower €X.X of is with half little €X.X the billion nearly view already first into and material around at baked the half. €X billion billion projected for

Now covered uncertainty half, half sustained, takes contracts second that cost of if this also hedging, second fully our and spot spend, into base. levels they're is the for little the price time inventories through enter to falls, and XX% now reducing for it a of but meaning

levels inflation Gross to peak was therefore, was high useful year me price XX%, consumer last pricing. that as XXX basis margins. then measure for half, XXX has when demand and turnover within points, turnover prior despite expecting responsibly in fully hit guided marketing fact reflecting investment and basis elasticity margin was been half the from we of the growth, it cost a are of course, down significantly, versus to less but points driven second a was XX currencies that stepping so was brings High year. range. is will to up We while of by the year inflation. that's Underlying billion, to competitive €X.X mean and continue offset the turnover managing the down growth down on dynamics. percentage constant €X.X and year-on-year up not BMI and our Brand margin this billion This operating pricing basis in points, sufficient

tailwind levels buyback analysis strategic offset on The some by were focused the more Constant mainly reassures support this financing points are of down in profit margin, Overheads behind and programs leverage due internal earnings program. the impact our that by the we year, Our are productivity investment favorable tax in and for mix as said, per and by X.X%, the versus the prior year. we one-off positive the X% the share mix, underlying Underlying of which by rates, currency prior in X.X%. changes would Based an currency a current rate in one-offs reasons a tax, us earnings contributing The settlements. currency XX.X% profit basis higher now turnover year to around spot on of the to progresses. and expect effect and effective up partially tax than changes favorable some per XX.X% increase favorable remain translation rate priorities. costs X%. year competitive our rate led XX on higher were as with lower main share full I offset in operating reflects up were share with earnings

to and disciplined a approach it. continue We has adopt key to X capital allocation, elements to that

R&D. invest anticipated, our to BMI continue into we First, had includes we as but also operations. into now business in This and CapEx, which is increasing post COVID,

are is the the model. importance call CapEx emphasize in fundamental investment them the our that margin, their latter out underpinning operating key to here but our needs, X A in enabling supply This customers know our consumer supply in us theme chain. understand chain, and an to business better to investment whether included is or platforms. I to Now I and that customers with digital digital, relationship serve our run our to in efficient better be marketing,

resets America. and significant priority Europe markets we're U.S. North a increase making and new site multi-category are for also And cream to underway. networks in premium in and China investments ice supply our capacity investing in We chain network India in with our in

to so portfolio, to returns capital portfolio the selective details, covered Alan shareholders. allocation not earlier, and a acquisitions finally, our towards we reposition this but higher continue repeat from Secondly, growth. perspective I'll bolt-on disposals to And use

the was we operating higher in and by buyback and early program now that cash a That's million dividend which attractive prior partially over of to CapEx and cash the the with first ongoing launch €X.X working tranche and the down reflected half our Free the completed, tax, intention third versus €XXX to in addition profit year, in our billion capital. flow quarter. In offset €X share €XXX improved we're well-advanced million tranche billion XXXX XXXX pay, it's second also billion. €X.X

at ratio increased X.Xx, X.X to end net Our of with leverage our the debt-to-EBITDA XXXX broad target. line from in

cash billion Our €XX.X billion, at by our program, from the but partially closed, the free reflected delivery. were tea net they're bank, cash The disposal currency in up increase share paid, offset movement, debt they stands these any adverse in proceeds The so after at the buyback €XX.X an driven of year-end. by and from not are level the numbers. yet received flow quarter was dividends

billion year-end increased driven surplus full negative €X increase offset was liabilities rates, billion today. pension returns to as by €X the on assets. pension The at by partially from Our investment interest lower

So what in XXXX for higher by end growth to expect And and of above previously X.X% further be does pressure outlook beyond? be the With to with price range the the pricing, guided some mean top sales now XXXX of this that volume. on we underlying driven X.X%. for will

while We long-term for our growth will inflationary health pressure navigate to investing brands. the support the of

and expenditure. and advertising, simpler momentum model our cost organization we and invest will capital have built, new discipline delivering the improved continue will We competitively leaner without in losing we And in have our designed. embed R&D operating to in we the maintaining

be for to XXXX XX%, guided margin We full expect our operating of XX%. underlying and range between the XX% within year

the hard to be for euro full overall very rates savings drive then across actions the to if year, continue will we of continue unchanged. lines exchange the largely around same earnings take levels And We expect and all P&L.

me That you and remarks. delivery, a volume normalize. improve that, through savings and And mix, and before, we back as not for in conditions our margin we Looking 'XX let leverage, beyond to with pricing, Q&A. setting Richard target. will market be said 'XX concludes hand I prepared as And expect XXXX, to margin

Graeme. you, [Operator Thank Instructions].

is SocGen. Hayes at Our first from question David

Two me. questions from

Obviously, second question market is second and the big If pricing market CPI earlier Firstly, whether a market because not is into pricing. where And to point the at LatAm there? trying lower, just year. I kind erosion a, any share are your quickly market XX%, running And the profile, specific for Brazil as XX% a coming the you're from, so to you they're back next on on outlook the b, going XX%. just markets? where followed half margin to understand, leader of share, getting Mexico, seeing about contributor look that growth and in as again, that's

in A&P through XX much going dynamics in margin for contributor have points can talk So pricing? of wonder to could interpretation? the And is up second on fair second to previous spend the of pricing half, you half, the margin basis, maybe A&P how XX% the of half. actually already you if seem to also just less place a I see any that spend And percentage on terms implied, that versus basis a the expectations. Is in first perhaps versus progression being we what alluded

Graeme on LatAm, Great. question deal can up on and pick Thanks, with I'll David. your margins.

But the driven they've many So pricing. masters landing But reflect full LatAm the on by It's that pricing since in experienced years. it our cost highest is yet yes, categories. actually LatAm. something we've extremely been this all It Ninja increases. is of doing are it. pass-through for doesn't at you're all They're XXXX right, seen

at And is the America just XX% we total only in through share, more winning me which in business So normally the Latin around detail of level XX%. increases. for you so is than we've just at cost company, a the MAT, far percent passed give level let one

the share to at commodity ForEx high So levels depreciation of driven double measured same winning. whammy as of the we by and levels high business have pricing managed hold increases, by very time, land and of market

And Latin team by in LatAm. direction. huge good Graeme, our different heading differences a So similar margins? not in job all within markets so the done there's They're across far America.

our mean, is said, I yes, full margin as So of XX%. expectation still year at we've

at half first XX%. is The

below second it's That's Frankly, be years case X margin principally the to do last XX% been been sales mix half expect the halves, X that case. XX%. we second And over is still the So first half of is below always to now that's second as margin. covered. the we're our due half course, between phasing that half. inflation of our but of €X.X said, billion in the I and consistently the expecting margin

last So of, a I second half And to of number. it's billion compares was that in a certain €X think year. fairly the figure it

data Just on that. on one point other

XX% plus to inflation, cost of and that's total inflation around covered logistics inflation controlled materials net In about terms factories, inflation XX% of cost our we're in terms in pricing. the

the lagging good effect we're expression, the that, pricing that between of think, seeing. and we're the David, is So through that I putting cost a

So that will half. in second the the be margin lower the principal of driver

in Alan for As our rates And order we second we invest more our did it said, early we're think to and said can better driving that And P&L than high. current it's brand in extremely I we as the with continue in in being shape was continuing is investment. that We that to think constant growth invest that concerned, A&P protect more more to investment comparison we'll as far keeping proactively, constant equity in invest behind do is our half brands. of investment, rates, and a back pricing earlier, of brands. that. the brand the million €XXX marketing The for half in first important to BMI and reason but in that as is rates,

In terms because point we'll invest happens be. actual the you basis to can expect the what the in what more and of the brands. say hard depends basis top on pricing of terms that lot continue will movement a behind to But it's points, our with line

Thanks for David. the question,

question, Warren Next of Barclays. Ackerman

I've Barclays. at here Warren couple well. a as got

QX, David also can the below must said now basis, just that to winning in First you MAT we a And now, one I of in so I into XX%. XX-month is, said at competitiveness. and quarter. bit mean portfolio was on second LatAm assume more QX mean XX% guess was a XX% you the XX%

warning light categories it's but second the scratching been is try was geographies, Europe, are QX, that? in the head around areas, a one outlook imagine out-of-home I step comment then that there XXs? now if where bit work generally, see which to USG overnight for specifically volume if Walmart about tell yesterday geographies could more trade you categories, quarter? bit? you talking squeeze just the was housekeeping elaborate what So If know your just just I the you on are of, could sort out in guess, HX, down, I can to us maybe quite you number aggressive trade starting And a down. which in ice in on of and competitiveness back little I And a my has a areas in don't can I which cream. the on

Okay.

Let And announcement point you. Graeme We me if on want that cream. decide with competitiveness. can have ice lift reconcile Walmart we also talk of view on can with Graeme how performance about last U.S. to strong night. share a out-of-home our the to carpet the do the

we when talking line not winning winning. Warren, on So Business strict for you measure, as a Flat about harsh and for shares very competitiveness, know count are share. hold count us is gaining market on MAT. to we're is us going only the we does which

aggregate You'll on know from the our last moving you engagements picture full that business to year winning cannot to total. get annual quarterly

that order are land we're of of time in on ahead price. some pricing declines competitiveness limited compromise and volume period low We prepared the to and a tolerate market, to single-digit for

across Some world cell-by-cell. examples of the it's actually, where we gaining, it's are and

winning body So Mexico we're share. cleansing, and hand body, also China body places U.K. like cleansing,

we example, your close cream It's share are moved in had foods sure business U.S., where across winning to a ice shares. A we keep losing on in last the Europe. a actually, We've to have the and where places there, we've are gone don't the ahead conceded for where of carefully eye, cells a in portfolio. of a have few Europe watching to part question unprofitable there there. losses cells that our particularly Foods lot of mass make to sustained we've number U.S., of price share. the we've Some And from

XX%. the the MAT our above it's keep to you to basis today. And we've I continue want think ability posted see invest can Graeme? to see, you As that dropped our it in actually reflected is in that priority an but We XX%, to from XX% on brands. numbers

I'll pick point. the Walmart up

the you around just of couple last of of First things all, we out release that. A course, that contextually put saw, I night. think

sort durables of part comments, wrong As probably words think the I but it a lot the... durables, read around was the I'm of here, the the of is I this using

apparel. and merchandise General

merchandise apparel, go. General there and you

consumables, I and guess business which Walmart's and is durables So part less around clothing, the of they that's describe what we represent. that as

it research earlier, is store, of I they this the and one that done U.S. shopping the expose visit some a the U.S. we're of of seeking think online seeing, a from lot but suppose, around as think earnings And in on of the course, in is include, value probably outlook, the and I customer retail, up. more being drivers with consumers, active believe will just engaged But of believe generally value, I that a I then shift actively more you well, currency seeing like, that would with visiting terms the overall to done in when that being a store Walmart digital, U.S. footfall think to in-store in offline a they're and them have as digital, we Alan channels are mentioned decision. what And we I if dollar reporter. impact there's pre-shopping, think channels. sort of

picture we're really the that Warren. seeing that's there, So

category talk in just a of terms Now general volumes, sort let at level. me of

the Care, of most because Home most that's down are taken we've in volumes where Our pricing.

cream, strong said levels XXXX. to now the to from which prepandemic elasticity Health in Food So benefit BPC. more course, and the Beauty there. out-of-home And we Prestige you & it's get and second. In back business, the I'll benefit in muted in recovered on & which is a see above of Wellbeing, our the of Foods come get BPC, It's in Service ice where levels more impact we Refreshment, the I've from muted

lot cream just bit the volume we've business, of & by which a the because of down Wellbeing down brands And XX.X%, of discussion, than volumes that key you, down, a In impact our in X%, competitiveness India, Health addition the that brand reflects with that is a of had value very cetera. related in growth we're of it was Really, business America which covered has little that in have a trends for areas finally that's North less through and is go but X.X%, again, Alan And well-positioned despite up in And of single-digit channel have only trends which particular in we despite we and was footprint. in volumes to Just price trading American market mentioned ice a to which volumes And covers some the decline. were our a BPC in I where all pricing. one you. built course, earlier. And actually is volume of got of that and cash capturing et which and from down in significant spoke America, seeing come a perspective quarter on we trade-up and our price carry. double-digit Latin down big volumes it the a course, a presence cream, Latin about reflects portfolio. XX.X%, but very if geography the in just America, of high price on largely for to Prestige for it then, maintain portfolio value. North then challenges and from trade America, but growth service China, big first of Latin trading a the X.X%, to tiers, higher been high strength India well, saw pricing is ice bit a still benefits, call, lockdowns, volume and coverage both pricing

ice So just cream our cream business. a business out-of-home our of XX% reminder, is about ice total

just cream at XX% the out-of-home. pretty cream got ice closed. high first In But honest. good is then pretty because in-home the half, a against in-home was flat, the you in-home, very ice half. So grew be big the over it's remember, out-of-home It out-of-home cream first to XX% the channel pandemic when was base, XX% And as in the the business boost ice significant during largely that's contributor.

Graeme. Thanks,

at next to your which question, is Bruno straight So Monteyne Bernstein.

in come few Things full were year a inflation despite than for seem based better being locked you've million the a of net months these down few a ago by to mean be has months material said. €XXX lot I costs it already on your everything ago.

So the better. improvement probably is underlying

elasticities increased your are better sales guidance, than you your You've expected.

very news would at correct period be in basically But the faster of of I'm in the P&L, margin that you're reinvesting a reading have in not your change. all is same So upside you that that correctly doesn't a good that incrementally growth. time, short any interpretation? Would guidance time.

a going Thanks, years fast shift Bruno. make short execution better, the second it first to categories, the answer sure higher means geographies. been half. but The cost step environment yes. is we're growth half to in working to be peak the winning muscle the is isn't that the inflation for looking still we've -- Things into our important And portfolio to are up heavier now than

avoiding deliberately is stepping are preserve in our should high-quality disappointment margin compounded want steady to we that line, investment we the And a are any levels signal We on top margin the to that our target. We're we up preserve as priority growth. without a to ability then any step away our we brands, the do want from target need anticipating. ability that margin to

the need to a preserve ability slightly should our in we target So yes, answer, avoiding that's the invest answer more short studiously we're longer brands to a margin is to. but

for the Thanks short blunt Bruno. question,

Pinar Next is Stanley. question from Ergun Morgan

is one volumes. first The on

with are your line You've expectations. noted in that elasticities performing volume

And prices? pre-COVID targets margin is to Could look, reasons recover should one the that? anticipate recovering might seems an to but challenging from have bit too when actually. them. reinvest you're have and Then not here, do operating talk ahead, you're more benefits are levels? changed said you I expecting pulling follow-up consumers the ever improving you would 'XX, second higher you Looking inform goes outlook the a margins commodities to environment? a about tools you see digest looking little to any on to have margins a you you the idea of back 'XX to you retailers see Bruno's volumes pricing we weaker that to far? behind back? The if do Is just setting And Or margin because tone from as get the you appreciate

country. feel I than volumes think already to answers we've actually, organization where category, impact category volumes a in we us by measured brand And following moved first you watching of to by are is I allowing give of down will half sales anticipate reversed model greater pricing Pinar, second that more new full in far. a far brand, couple we fact, can But or as couple that very do that the questions. And of with have your by we straightforward prices speed in too I assure days. half by competition we country not that speed, also our pricing lands. are can be

of so our dynamic that And invest looking is P&L a across input managing, equation and brands. to competitiveness, in pricing we're very protecting our it the ability costs,

more blunt will Graeme, the do up prices And outlook? first expect go half. volume the the second and slightly So answer impact I margin be down in substantial is, in second in the half. to than half

was a questions. to Let of that faster course, that and the is used on subject, prompting think previous to growth as really had health we the it We our clear me be And just more margin have I target, we To this always make #X margin we the did consistent do continue invest I a in the remains our do of and language of in brands. delivering deliberately have which, to XXXX. change priority, language a outlook begin, we're target quarter going don't the statement that that sometimes I for honest, not. and lot

that remain margin committed we come X a cost through 'XX But in by some a growth from in So volatile a And that scenarios that. say still And through when savings. uncertain expect, we expression and we 'XX. profitable and about with that expect margins it's statement macroeconomic pricing, mechanics that But expect as P&L, of should do explained plays we to those of we're look continue it's perspective. will inflation better first our that and made very at to we we in we to that and kind implied think improve as increase that's how inflation 'XX that, to the do And normalization cost 'XX. in that able to mean and did over and 'XX, we've years. 'XX the the mix

question Next to Stent, Exane BNP. Jeff

there of back points nearly margin, couple you pretty was there and correctly, those years, that we were going at were COVID XXX to adamant if recall that -- a the approaching time costs I basis in go was If back. bounce of

on if maybe So costs your could I wondering and just expectation? update happened what's us you happened was to these benchmark to what's

Yes, we can, Jeff.

for here just I COVID we're minus right basis out think remember versus impact first dig points still a the half, that. favorable that -- the prior versus But If XX XX XXXX. year exact costs. of in let the from points basis leaves correctly, seeing me numbers I us

of that smaller in the Interesting X/X we've So I the would But of the is answer XX for us they way of we're seeing. costs. of basis down towards question, so back still XX become straight of we're so or COVID that kind about increases say the recovering XXXX. do a context gigantic these we're area the input recovered or costs points, versus XXX but focus

DB. at Tom Next question to Sykes

mentioned obviously your cost that is You HX. in peak inflation

the the pricing and have Is prices going of to pricing your was depreciation down depreciation, you depreciation billion? basically the roughly please? inflation up, HX, be to discussions Or €X.X Xx down? everything the cover is discussions, XX terms And need but In prices are basis coming I year own the go think you through to by the that at you on spot how then the the expected sales put when do moment full about more? some just points. And need just

in you the detail address can the point. level cost depreciation and Right. I'll outlook. try And more Graeme, explain one

the cost those at happen the not just remind, commodity pricing. of did on locked XX% And So to costs peak we've for second our inputs, Tom, in half. about lock-ins

that the have that for still half that softened instance, expect cover. clearly towards half. that half in have maintain the seen they've categories of said, we've the pricing a the to we've carry that in. would further very high level have territory versus in chart level second where That's still segments the commodity mean of that expecting to second a some in we locked So billion to of are back pricing second €X.X softening or ago. in price sequential we you'll record That does we're year prices, and being to the to right seen land a in now, on We some similar we'll increases where

have far? have the we answer, No. we so And all so And flow the put pricing short the yet? through seen costs all through No.

I think let depreciation. Graeme I'll a talk more about bit that, on

We've million And think long That double we levels. sales, the I slow of to half. to our half. in around takes investments close projects investment the this couple some us in of overall our just up we've back couple of because just depreciated in being because A back of about hundred of had CapEx. the been or depreciation is of had. A now. big down a That's remarks things pandemic. pre-COVID on of to getting out road bit. X.X% very a it, our fully for the you a capital which extensive Most in a it supply impacts number network terms word quite fulsome couple of CapEx chain in including reset the got of investment complete, little amortized have probably though, the you of in are the of stepped first if program about to heard me ERP prepared by up, coming that we've the application of India. expand might mention can rates can year, I this a the A comments

a extensive lot network operate which of capacity years that in change U.S. reset. China. upgrades making in got the next of is And India piece a will plan, significantly business the exciting a we're quite investing expansion business investment. there. of It's our over in Again, the investment So also quite We've very will couple it's in

those markets. So it's priority X across really

because on long-term right. sort very X.X% that of is about Now that, we think people CapEx of comparisons a often reminder the of one And probably level, percent turnover. CapEx long-term as do

those the but third if last I reminder, of that like-for-like look of contract you level third-party is our means get on when And years. our used a at the and long-term roughly a on analysis said is the or volume, of a X of XX now XX% manufacturing over X use have percentage probably sheet, sits parties to balance doubled about a of that you basis Just and times, CapEx course add few for analyses. this what points that you want our turnover CapEx, should about that's

So on sorry question for using your the But is, CapEx, talk yes. depreciation opportunity to Tom.

Tom. Thanks, great. That's

to Let's Goldman the question go at Ennis Sachs. from John

Tesco the ask seeing, we're the on guess of I anecdotally, Mars bit course. are with theme, from they again, I and Heinz apologies and Target U.S. or the But because retailer about a more in more pricing Kraft explicitly I please. Walmart same price to likes pushback the on negotiations, wanted of guess

have or XQ. year hedging next do do full the appreciate year? for the you on look NMI volatility. with the very how then question Obviously, recent the your is year steer into slightly it from months, the based to So to perspective? commodities into on I on of unwind given number from your half spot part second it the will and to now perspective, of Or business have figure is an have has usual prices, of outlook versus your current time first relative these inflation view begun of become And the and year? much moderated it's policies maybe better the strong year more next a NMI a And thing a in XXXX. hard my of the challenging have But this just still early your on start

discussions the been very our retail price are we always first where John, fact-based is much It's in growth our than being business on Yes. about to answer XX% focus on negotiations has the constructive your markets a in that in nonissue partners. cost. retailer with emerging of question more

moment there's Europe, locking That we've salt. have now in XXXX out come And the carryover don't commodities as first need significant inflation to back an price intense into Our half pushing going the but been think partially could commodities, pricing on there partners XX% engagement. will than I say balanced concerned, XXXX ball. price space are discussions a for external be through who's of what more increases, I offset anyone to a we negotiation. and on of rational precise the on of the a on moment still must half a period to There to far than as the environment. We're second of taken growth in We in We And the be the where a view future. we in U.S. you be the issues retail all recognizes XXXX. at future with forward moment. giving rationality in the pinch with position. commodity But too be the movements. depending Then a do the have in not I I any we've the disagreement similarly first But crystal agility outlook half. mindset losing comments price is much less will would with, sober despite in covered inflation there at are a a strong focused on at think there's overall, that patches partners. think tone say have deal of a It's our I'm retail that sleep on everyone

any you make make I do Alan, final remarks. question. that to summary last think we want probably the have to

I Yes, actually, would Richard.

to So the and course, not as impact period on the reflected that and to it's to and price a our comes organization. has of contextual of thanks, world simpler are inflation inflation morning. high of a to stay on remains in joining questions theme and reaping on the macroeconomic experiencing, the benefits see open yet, sustained going note, is operational and the David's how We've to slower excellence high on our of by continue in And we our we're price first execution our Unilever's signature good the growth. on focused call focused but like long-term protect varies And strategy able call priority likely for ability over and brands. P&L our us, inflationary bold to it's the top made America, be We're crystal moves our strategy of know the apply We but question to strengthen health our to from everybody, long-standing is we by and working. category high-quality, simple. environments, be growth, ability experience to portfolio. and to clear. line the leveraging invest pricing big It's geography, Latin that to have to reshape consistent How that from the

you. the everybody, you, listening, end you, there. Thank Thank Thank and we'll call Alan. for

you This joining. now today's Thank for concludes call. all

now lines. disconnect your may You