Reckitt Benckiser Group plc

Good morning and welcome to Racket's Q1 Trading Update. I'm here with our CEO, Chris Licht, and our CFO, Shannon Eisenhardt, who will take you through some prepared remarks before we then take your questions. Before we start, I would like to draw your attention to the usual disclaimer in respect to forward-looking statements contained on page five of our R&S published this morning. I'll now hand over to Chris.

Thank you, Nick. Good morning, everyone, and thank you for joining us. We have delivered a solid start to 2025. with our overall Q1 performance in line with the guidance provided in March. Core record delivered 3.1% like-for-like net revenue growth and volume growth of plus 0.3%, closer to 1% when excluding the SAP pull-forward impact in Q1 last year. Emerging markets was especially strong, reflecting improved in-market execution, double-digit growth in intimate wellness, debt hole, and VMS, and continued momentum in China and India. We've continued to execute our strategy to transform Racket into a more efficient, world-class consumer health and hygiene company. Our sharpened focus on our power brands is delivering both better results and market share gains. Innovation is continuing to drive category growth across many of our markets, with Lysol Air and laundry sanitizers, as well as Mucinex's recent launches, all delivering strong performances and share gains in North America. We have not been immune to market-wide trends within certain categories. In particular, with the timing of the peak of the cold and flu season this year, retailers held higher inventory levels in seasonal OTC as we entered the quarter, with destocking evident through Q1. As you would expect, we've been closely monitoring the evolving situation around tariffs. From what we know, and given where tariffs sit today, we are confident in our ability to mitigate the impact over the short to medium term through a number of levers, including our strong gross margins, our excellent brand equities with pricing power, our geographically diversified supply footprint, including limited Chinese imports to the U.S., and our in-flight manufacturing investments to increase local production such as our new Wilson, North Carolina facility. Despite the macroeconomic and consumer backdrop becoming more uncertain in recent weeks, we are maintaining our outlook for the year while remaining watchful of the evolving landscape. With respect to our planned exit of essential home, we are continuing to progress the separation. The new management team is focused on improving the performance and completing the separation process that is well underway. We are encouraged by the interest that we have seen in the business, and we continue to seek an exit in 2025, although we recognize that market conditions may impact this timeframe. All other elements of our strategic delivery are progressing well. Our Fuel for Growth program has continued to deliver in line with our expectations. Meat Johnson Nutrition is trading well despite a challenging comparative period, and we continue to defend ourselves against all cases in the ongoing litigation. Our new organizational structure is working effectively, and we look forward to sharing insights from our leadership team around how our category organization is driving growth and operational excellence at our investor seminar in May. Let me now pass you to Shannon to take you through our group and segmental performance in Q1 and the drivers behind that.

Thank you, Chris, and good morning. As previously outlined, from the 1st of January this year, we have moved to our new reporting segments of Core Racket, Essential Home, and Mead Johnson Nutrition. Within Core Racket, we are reporting three geographic areas, and are also providing like-for-like net revenue growth across our four global categories. In Q1, we've reported like-for-like net revenue growth of 1.1% across the group, driven by 3.1% growth in core record. As Chris highlighted, within core record, we saw very strong growth in emerging markets, up 10.7%, with 6.8% volume growth, and a 3.9% price mix impact. China continued to deliver strong results with excellent volume and share performance across key power brands in intimate wellness and germ protection, as well as in the VMS segment of self-care. India also performed well, up high single digits, driven by strength in Dettol and Harpix. Our LATAM business saw a modest year-on-year decline as it cycled a tough comparative Q1 due to the sell-in phasing ahead of an SAP implementation in Q2 of last year. Europe saw a 1.7% like-for-like net revenue decline, with volume down 4.7% and price mix of plus 3%. This performance was against a strong Q1 comp last year, which saw significant inventory restocking and a positive phasing of shipments. In the context of slowing market growth in the quarter, we did see good market share momentum, particularly in self-care. Finnish also saw market share momentum, although like-for-like net revenue was broadly flat, as we lapped a high base due to innovation launches in the prior period. Our North American business saw volume decline of 1.8% and price mix of positive 0.9%, leading to a like-for-like net sales decline of 0.9%. Sellout in the quarter remained in growth despite retailer inventory destocking impacting VMS and Mucinex performance, particularly in the drug channel. We saw improved in-market execution with good growth in mass retail and club. Lysol grew low single digits as it continued to benefit from recent innovation launches, despite a slower than expected capacity ramp up to meet strong consumer demand. Now moving on to our global categories. Across self-care, seasonal OTC brands declined mid-single digits. primarily as a result of higher retailer inventory levels at the start of the period, partially offset by strong double-digit growth across our VMS portfolio, led by Mufri in China. Germ Protection saw high single-digit like-for-like net revenue growth, led by double-digit growth in Dettol, as the brand benefited from new innovations in with growth also supported by Lysol, where emerging market adoption continues at pace. Household care saw a modest decline as a function of continued competitive dynamics across the auto dish category, particularly in North America. In Europe, we've seen improved market share performance in Finnish in Q1, as it moves back into gain territory for the quarter. Emerging markets' performance was solid as market penetration continues to drive sales growth. We saw very strong performance in Intimate Wellness, driving strong market share gains through innovation and in-market execution. We launched our first, first-to-the-world innovation, Durex Intensity Condoms in Europe, made from nitrile, and had continued success with our Intima brand in China. Now turning to our non-core segments. As anticipated, essential home like-for-like net revenue declined in Q1. Essential home includes our pest brands in Latin America, which lapped a strong pest season, and much of our business in Brazil, which lapped additional sell-in ahead of an SAP implementation in Q1 last year. We estimate that implementation had roughly a 2% impact on essential home performance. In North America and Europe, we saw market share decline, reflecting continued competitiveness, particularly in the U.S. air care category, with some improving share trends in Latin America. Mead Johnson Nutrition saw like-for-like net revenue growth of negative 0.5%. As we move through 2025, we've rebuilt our supply and availability positioning following last year's disruption from the Mount Vernon tornado. We're pleased to be rebuilding market shares as expected, noting the supply constraints in the second half of 2024 led to a missed cohort of babies when samples and supply were reduced. The quarter also saw a challenging comp with Q124 benefiting from the private label supply challenges and Nutramigen stock refill following our voluntary recall the prior year. We are continuing to progress our £1 billion share buyback program, and as of last Thursday, we had bought back £815 million of shares since this current program commenced in July 2024. Looking ahead to the remainder of the year, we are maintaining our fiscal 25 guidance as set out with our full year results, while remaining mindful of the evolving landscape. We expect group like-for-like net revenue growth of plus 2% to plus 4%, with growth in Mead Johnson and Essential Home second-half weighted. In core record, we continue to target 3% to 4% revenue like-for-like growth for the year, More specifically, for Q2, we expect Europe to deliver low single-digit growth. We expect North America to show low single-digit decline, given the weaker consumer backdrop, as well as the reset of our seasonal OTC business with PE-free reformulated products. We expect emerging markets to continue to deliver mid to high single-digit growth in Q2, and into the second half of the year. And we expect both Europe and North America to deliver growth in the back half as well. As we said previously, our Fuel for Growth program is expected to help drive adjusted operating profit ahead of net revenue growth, and we expect to deliver another year of adjusted diluted EPS growth. With that, let me hand back to Chris to wrap us up.

Thank you, Shannon. Let me briefly summarize the key messages from the call this morning. We've delivered a solid start to the year with strong performance in emerging markets, good market share momentum, and strong sellout. We continue to execute against our strategy to make Reckitt a more efficient, world-class consumer health and hygiene company. And while we're mindful of the macroeconomic backdrop, our resilience reflects the performance of our high-growth, high-margin power brands across global markets, and we are on track to deliver our full year 25 in line with our guidance. Now, let me stop there, and we're very happy to take your questions.

Thank you. Please press star followed by the number one if you'd like to ask a question, and ensure your device is unmuted locally when it's your turn to speak. If you change your mind or your question's already been answered, you can withdraw from the queue by pressing star followed by two. Our first question today comes from Rashad Kawan with Morgan Stanley. Please go ahead. Your line is open.

Hey, good morning, Nick, Shannon, and Chris. Thanks for taking my questions. A couple for me, please. So within CORE, Europe and North America came in weaker than what you had guided in early March for the quarter. Clearly, the environment has gotten weaker since then, and you talked about slowing categories. growth in Europe in particular, Shannon, in your remarks, but can you talk about what drove the delta versus expectations and what gives you confidence in your guide for the rest of the year? And then second question on essential home. So minus 7% in Q1. I think you had talked about Q2 being negative as well. What gives you confidence that you can offset that in the second half to deliver on the low single-digit growth for the year? And does the delivery here so far in the quarter change how you're thinking about any eventual exit and timing? Thank you.

Sure. Thanks, Rashad, for your questions. So, I mean, I think you sort of hit the nail on the head with your first answer or your first question, which is certainly if you look back to where we were at when we shared our full year results with where we currently sit today, I think the overall macro environment has gotten weaker and has been more volatile than certainly what we would have seen when we were guiding for the front half of the year. We did see strength in emerging markets, obviously, with double-digit growth in Q1. If you look at Europe and North America, both coming in slightly short of our original guide, I'd pick it apart as follows. I think for North America, what we saw, frankly, was a bit of a steeper drop off of the season than what we would have expected. And then that was compounded with the fact that we did see more significant retailer destocking. And so that had a bit stronger impact on our seasonal OTC business than what we would have expected. I think as well what we've seen is that as we look month by month, we are seeing a bit of a slowdown in the category growth rates of the categories where we play in North America. However, what I do want to emphasize is that we do continue to see strong sellout results in North America, and we continue to see market share developing positively in North America across most of our categories. From a Europe standpoint, I would emphasize those positive points, which is that our categories are continuing to grow across Europe, and we are seeing, again, strong sellouts, and we're seeing market share momentum and market share gains across Europe. I think that we have, however, seen, again, a bit of that volatility around the consumer. And while it's to a lesser extent, we are seeing these macro volatility and uncertainty impacting consumers in Europe a bit as well.

On essential home, look, I would say, obviously, it's a soft performance in the quarter. As we talked about, there's a number of really good reasons for that. We're lapping a very high pest season rate. We had the phasing of shipments in Latin America from the SAP transition. And so we expected this. We also finished 24 a bit ahead of what we thought, and that caused January to be a bit softer. What I'll tell you, though, is that this business is a very stable business. The earnings model is very resilient, and we're satisfied with what the business is doing from an earnings model standpoint as we've started the year. We expect Q2 to be sequentially significantly improved from Q1, and we expect growth in the back half, as Shannon said. And those expectations are grounded in, you know, a series of concrete building blocks, you know, our promo activity and calendar launches, et cetera. So I actually am not so concerned about the performance in essential home as I look ahead. I don't think that is what would cause us to have maybe a different timeframe for the transaction that we initially indicated. When we say market conditions, it's not because we're seeing some change in the demand picture that would meaningfully alter performance in the business. When we say market conditions, it's just more of a question of the fact that, you know, I think all stakeholders in the global markets are, you know, less certain about the outlook, right? There's simply more concerns about where the economies that we're talking about are going and, you know, transactions are either taking longer to get done or currently not getting done. And so we are just highlighting the fact that those market conditions could cause the timeline to shift for essential home and that exit. However, that's certainly not what we're looking to execute on that and we're continuing to seek that exit and we'll keep you posted when we can share more about that but we thought it was reasonable to indicate that obviously we've seen a very significant change in the market context.

Thank you very much.

Thank you. Our next question comes from Gillum Dalmas with UBS. Please go ahead.

Thank you very much and good morning Chris, Shannon and Nick. Two questions for me as well please. The first one is on the very strong volume performance of both intimate wellness and germ protection in the quarter. Just wondering here if there were any one-offs in the quarter that flattered a little bit this performance or should we just see it as a genuine combination of good underlying demand And share gains on your part. And therefore, we should expect some continued strong volume development for both divisions in the coming quarters. And then, I mean, going back to essential home and you saying this morning that market conditions could impact your plan to exit the business by the end of this year. I'm wondering, is there any alternative plan? So is it just down to owning the business maybe a bit longer until market conditions improve? Or would you also consider other options, such as a separate listing or even bringing back essential home into core racket?

Great. Let me take those in turn. So I think, as you rightly point out, we've seen some really strong volume growth emerging markets led by China and India and really in the germ protection and intimate wellness spaces there are no meaningful one-offs in that that is just simply strong organic performance our businesses have very good momentum we are launching a lot of successful innovation into the market and we're scaling other innovation platforms and so we absolutely expect that to continue now of course you know, these economies may also not be immune to any shocks that could roll through the global economy. But as we sit here today, we fully expect sustained strong volume growth in China and India and in other emerging markets as we go through this year. So I'm very pleased with that. This is a clean performance and there's no significant one-offs to highlight. In terms of Essential Home, look, we've said from the get-go that we will be open to consider any and all options for this exit, but that we think that Essential Home is an attractive business and provides a platform for strong value creation. That belief of ours has been confirmed in the interactions we've had to date. There's been good interest in this business. And so I don't today think that there's any reason for us to actively pursue any other avenues of exit. But as you say, it certainly is possible that the current environment for transactions could impact the timeline. Should we learn more about that as we go along, we'll keep an open mind. But as I sit here today, I don't have any sense that we need to change direction.

Thank you very much.

Our next question is from Jeremy Fialka with HFBC. Your line's open.

Hi there. Can you tell us a bit more detail about what the sell-out trends are across your business in North America and Europe? I guess particularly if you take the latest ones as we go into the quarter. And so bearing in Bearing that in mind, the fact that your sellout is positive, why do you expect that North America goes negative? Is there still going to be some sort of a kind of a destocking effect, or can you spell out the size of this phenylephrine impact there? And then the second thing is just on essential home, you talk about the new management team there. Can you talk about some of the changes that they have implemented since coming into the business? and to where you see any kind of concrete signs of improvement given the relatively soft number that you printed today. Thanks.

Sure. So I'll take the first question around sellout in Europe and North America as well as the guide for North America for Q2. I'd start with Europe. I'd say we've talked about the fact we continue to see strong momentum of our market shares. We talked about that in Q4, and we're very happy to see that trend continuing in Q1 in Europe. From a sellout standpoint, we've generally been seeing sellout in our categories across Europe in the mid-single-digit range. And so we talk about in our release the fact that we have some comps from prior year that are causing that distortion between what we're seeing from in-market sales versus the reported net revenue for Europe. From North America, I'd say we have seen a bit of a consumer slowdown as we look month by month. And so our sellout started sort of mid-single digit. We're seeing that as more low single digit in the most recent reads in North America, which I think is probably intuitive and consistent with what you might be seeing or hearing elsewhere. The reason that we're guiding North America down for Q2 is The primary driver of that is really the fact that we will be resetting our Mucinex shelf towards the end of Q2 in advance of the season to reflect our new formulations of Mucinex that are PE-free. And so that's something that we take care of in advance of the season coming in to ensure that the shelf is set and ready for the season in Q3. And frankly, there's a bad guy associated with that that you see in Q2. And then as we have reorders, you'll see a good guy from that transpire in Q3. So that's really the biggest driver of the guide for North America being down in Q2.

So just the approximate magnitude of that, sorry, that PE impact on North America, do you think? How much do you think shifts Q2, Q3 just because of that issue?

Yeah, I don't have a specific number to say, but what I'd say is if you think of North America being down low single digit, that would be the biggest driver for that.

Chris? Yeah, I think the only thing I'd add is, I mean, generally sellout trends are positive, as Shannon is saying. And even though we're seeing some slowdown, we're still in positive territory, and we do expect that to continue. So I think that's an important thing to take away from the call today. In terms of the management team, look, I'm pleased with the work that the new team in Essential Home has done to date. They are working hard on the separation process, which is going well. They've designed the new organization for Essential Home, and they're well along the path of staffing that and operating that as a separate commercial business. And I think they're moving at pace. I know that they also would like to post some stronger numbers and that's their entire focus now. What they're very focused on is executional excellence and rolling out what has been a successful playbook for Airwake in Europe to other markets and then really capitalizing on what is a strong high margin cash generative business and realizing its full potential. So I'm pleased with what they're doing. They're a very experienced team. They have spent a lot of time in these businesses, and I have a lot of confidence in them. And as we talked about, the Q1 performance in Essential Home is not indicative of the underlying strength of these categories and brands. There's a number of one-offs that help to explain that number for the quarter. And as we've said, we fully expect Q2 to look meaningfully better, and for the back half, to generate growth.

Thanks.

Our next question comes from Victoria Petrova with Bank of America. Your line is open.

Thank you very much, Chris. Thank you very much, Shannon. Last time you talked to the market, you disclosed your winning market share metrics. Can you maybe provide an update for the first quarter and also briefly talk about increasing U.S. competition on one side or North America competition on one side and quite significant pricing on the other side of things? How should we think about it? Are you pricing in line with the market? Should we expect further price increases on the back of palm oil price dynamics and overall? And maybe you could also put it in the context of price elasticity of the demand globally and in North America specifically. And my second question is related to your seasonal OTC products. Are you confident that this talking is over? towards the end of the first quarter and that you will be entering the new flu season with clean inventories in retail channel. How confident are you about that? And is it embedded in your second half positive organic growth guidance? Thank you.

Okay, sounds good. I will take those in turn. So on market shares, look, we... We disclose the CMU metric at the full year, and we give an update at the half year in terms of how we're doing. So we're not normally disclosing those numbers in the quarter, but I understand that there's interest in this topic. And the fact is that we've started the year really well with market shares. So I'm pleased with where we are. As you might recall, we showed steady progression in our market shares through the course of 24 years. and ended up just shy of our long-term goal of 60% in whole or gain. And I'm really pleased that we've continued that trend, and it's looking quite positive on market shares. You know, Finnish is doing meaningfully better, which was a big priority for us. Mucinex is back in gain. So, I mean, these are really big businesses for us that are showing their strength. And so on market shares, while we're not disclosing the metric, I can tell you I'm quite confident in where things are shaping up. as we've come through the first quarter. In terms of pricing, look, in North America, it is quite a competitive market in many places. Like I said, we are actually seeing some good share results with Finnish, with Lysol, with Mucinex. But I think North America will remain competitive. The consumer is concerned, right? We know consumer confidence is down. We can see consumption patterns are changing. And so I think it will remain competitive. We're actually not taking a lot of pricing in that context. So the vast majority of our price mix that we're reporting for Q1 is coming from Europe and emerging markets. So I think that's an important thing to note. And I don't think in general we're pricing ahead of our market. Obviously, when we launch premium innovation, we launch that at higher price points, and we always work to drive some mixed benefits in our business. So I would say those are the main drivers here. As it relates to palm oil, it's an important ingredient for our soaps business, and we're paying a lot of attention to it. But I don't think that that's going to keep us from being successful. Our dead tall franchise is gaining share and is doing well in a place like India, and that's really where that issue is the most profound. In terms of seasonal OTC, what I would say is you never know what a season looks like before you're in it and you don't really know what retailers do on the margin. But we have seen some pretty significant destocking, and so I don't expect that to continue. The normal rhythm of this business, which I don't think will be any different this year, is that as we sit here in April, we're sort of done with the season. And then it's a clean slate and people make decisions in terms of orders and everyone generally in the retail environment wants to be in stock. with these high-margin important products that drive traffic to the store, especially with strong brands like Mucinex. So I don't really see any change in the outlook for the season. We're expecting a normal season next year or this year and next year, and we'll update on that as we get closer to it. But I don't see any changes until we're in the midst of that season.

Thank you very much.

You're welcome.

Next, we have David Hayes with Jefferies. Please go ahead.

Thank you. Good morning, all. A couple from me. So just on the guide for the core and the second quarter, you obviously guided very helpfully the regions as we've touched on. So when we run those numbers, it looks like second quarter is about a three as well. So the first half is low threes. and you talked at March about being very similar, first half and second half in core. So is there a guide really towards the bottom end of the three to four now, or maybe going back to your PE ingredient, Moose, the next point, was that not expected in March and that you do expect now a bit more of an acceleration, better performance in core in the second half, which means you could be well within the three to four range that you're still got in the outlook? And then second question, just in terms of the restructuring cost savings, ongoing process. I mean, is there an element of mindset distraction going on here that maybe means you're not as focused on full performance in the markets? And I guess in terms of margin levels, you're obviously looking to get margins up, but to be fully competitive consistently, is that something that you do look at and consider whether price points, brand spend needs to be maybe a little bit more competitive to your point about competitive markets? at the moment. And I guess maybe related to that as well, two and a half questions, sorry. Just on the Lysol capacity uplift that seems to be behind plan, can you just talk about why that is and whether that is something that's running a few weeks late or whether that's something that will be back to where you want it to be perhaps later in the year? Thank you.

Okay, let's take those between Shannon and I. Let me just hit on the point around execution. Look, I'm actually pleased with how our teams are executing. I mean, we are seeing excellent performance in emerging markets. We're seeing, like we said, good, positive sellout in Europe and North America, notwithstanding that shipments have moved the way they've moved, and we've discussed the details of that. But I think the best indication of how we're executing is how we're doing on market share. And like I said, it's continuing to improve. It's quite strong. as we expected. And so I actually think that that's a very good indication that we are able to execute through the changes that we're going through and through a very difficult external macro picture. So I'm pleased with our ability to execute, and I suspect that that will continue. That's our whole focus. Over to you, Shannon.

Okay, great. So, David, for the guide for Q2, I mean, the guide by geography for Q2 was really intended to provide an increased level of granularity for all of you, particularly given the fact that we are seeing a slightly different composition of growth across the three geographies. while for the group or for core record, we're still coming in very much in line or slightly ahead of expectations for Q1. I believe the language I used at full year was that we expected our growth to be relatively balanced across the year when I was describing core record. And that would continue to be my guide, but there was certainly no intention that I'm trying to now guide to the lower end of three to four. My expectation is that core racket will grow three to four percent for the year. I think we're off to a strong start. If your model is showing the front half around three percent, but I wasn't in any way trying to signal something at the lower end of our three to four guidance. And then on Lysol, what I would say to that is that we saw some impacts of that in Q1. As we look at Q2, our Lysol manufacturing is fully up and running. We're confident that we'll be meeting consumer demand. We shared the fact that in Q1, Lysol North America grew low single digits. We talked a lot at full year of the strength of Lysol growth in 2024, and my expectation is that we continue to see strong consumer demand. And now that that manufacturing is up and running, we will meet that demand.

Great. Thank you.

Thank you. And just as a reminder, if you'd like to ask a question, please press star followed by one on your telephone keypad. Our next question comes from Jeff Stent with BNP Paribas. Please go ahead.

Thank you. And good morning, everyone. Just reflecting on the call, there's been a lot of sort of discussion of various kind of one-offs and phasing impacts, et cetera. Could you quantify just for the group as a whole, what you estimate Reckitt's sellout would have been in Q1? Thank you.

Hey, Jeff. I can take that one. So I'm sure not surprisingly, I don't know that I have a specific number that I'd give you. What I'd say is if I piece it apart by geography, emerging markets, as you know, came in in Q1 10.7%, so call that double-digit growth. Europe, we've talked about the fact that what we're seeing our categories grow at in Europe is mid-single digit, so 4% to 6% growth. And we're pleased with the market share performance and the fact that we continue to gain market shares in Europe. And then those are our two largest geographies. Our smallest geography, North America, I'd say low single digit is sort of where we're seeing the market or the category growth. And again, pleased with our share performance in North America. So I guess I would let you sort of piece that together on what that math looks like versus the 3% we've reported.

Okay. Thank you very much.

Yep.

Thank you. And our next question comes from Tom Sykes with Deutsche Bank. Your line's open.

Morning. Thank you. Just firstly on the sale or a delayed sale of essential home, how would this effect you're thinking about cash return this year and next please and any buyback and financing that and then just on the um margin guidance you've given could you just confirm is that is that all in including translation and transaction effects or um constant currency or Could you just confirm in what context for FX the margin guidance is given, please?

Yeah. Let me start on essential home. Listen, I want to be very, very clear about this. Thank you for the question. We are not announcing any delay today to our essential home process at all. We are simply highlighting the fact that getting transactions done in this environment, as you know, is more difficult for lots of people and that it takes longer. to execute transactions in an environment like the one we're operating in. And that could change or that could stay constant for a while, and we don't know. So we're just letting you know that we're aware of that, and obviously it could potentially impact the timing of essential home. But I have no information today, and we're not intending to share that there's any delay whatsoever. We don't have any certainty about that information. We're still proceeding with this and seeking the exit, and we'll continue to do that. On margins?

Hey, Tom. On margin, the margin guidance is all in.

Okay. Thank you. If I could just maybe just wait. You have spoken a lot about destocking. Is destocking becoming apparent outside of OTC VMS at all in higher frequency? I guess particularly in North America. Is that something you think is going to become a little bit more pervasive across other categories at all? Sorry, thank you.

Yeah, I think the most pronounced impact we've seen is certainly in OTC, like you indicate, and in vitamins and supplements. But I think different retailers are making different decisions. As you're aware, different retailers in the U.S. are in very different situations in terms of their performance in the marketplace and other things going on in their businesses. We know that there's a lot of change in the pharma channel as an example. And so I think different retailers are making different choices, but the significant impact that we have seen is predominantly in OTC and VMS.

Okay, thank you.

Thank you. And just as a final reminder, please press star for level one if you'd like to ask a question. No further questions in queue.

Thank you very much for taking the time to listen to the call and we'll be in touch with you guys shortly and you know where we are if you have any questions today.