Haleon plc

Good morning. Thank you for attending today's Hellion Half Year 2026 results. My name is Sarah and I'll be your moderator today. All lines will be muted during the presentation portion of the call with opportunity for questions and answers at the end. If you'd like to ask a question, press star one on your telephone keypad. I'd like to pass the conference over to our host, Jo Russell, Head of Investor Relations. Please go ahead.

Thank you very much. Good morning, everyone. Welcome to Halion's conference call for our half year results. I'm Jo Russell, Head of Investor Relations, and I'm joined this morning by Brian McNamara, our Chief Executive Officer, and Dawn Allen, our Chief Financial Officer. Just to remind listeners on the call that in the discussions today, the company may make certain forward-looking statements, including those that refer to our estimates, plans and expectations. Please refer to this morning's announcement and the company's UK and SEC filings for more details, including factors that could lead to actual results to differ materially from those expressed in or implied by such forward-looking statements. we have posted today's presentation on the website this morning along with the video running through the results in detail so hopefully you've all had the chance to see that ahead of this call and with that i'll hand back to the operator and we can open for q a thank you again if you would like to ask a question please press star followed by one on your telephone keypad to remove your question press star followed by two again to ask a question press star one

As a reminder, if you are using a speaker phone, just remember to pick up your handset before asking a question. We'll pause here briefly as questions are registered. Our first question is from Cedric Bunar with Citi. You may ask your question.

CEDRIC BUNAR, Yes, good morning, everyone. Hi, Jo, hi, Brian, and hi, Dawn. Just a couple of questions, please, one on top line and one on margin. The one on top line will be about North America. Could you just shed some light on the progress you've made there, especially maybe quantify the shelf reset benefits and also how we should think about the organic growth sequence for the rest of the year with the various building blocks. And then on margin, I mean, I guess another profit beat, but how would you assess whether the business actually remains invested enough and what are the KPIs you would have internally to make sure no category and no market starts over earning? Thank you.

Great. Thanks, Cedric. Listen, I'll take the first question and I'll probably kick off the second and then pass to Dawn. So first of all, I felt good about the progress in North America. Maybe I just start with a bigger step back, Cedric. So as you all saw, 3.1% organic sales growth in the quarter. So that's a sequential improvement from Q1, which was 2.2%. And we definitely saw a better balance of price and volume mix with volume mix at 1.4%. so a few other maybe highlights emerging markets obviously another sequential improvement at 6.3 percent and we do look to see that uh strengthen in the uh in the back half one of the drags to the emerging markets was middle east where we have a disproportionately kind of large market share versus the balance of our business there and and we've just seen significant market declines in places like dubai and and Pakistan. Now, we believe that will get better in the back half based on our plans, not counting on the market to do anything different or the war to end. So I would say those are two key building blocks. And then Europe. Europe has been more challenging. What I'd say is we ended the quarter where we expected. In line, but probably a bit stronger in North America, a bit weaker in Europe. So we've definitely seen the Europe market, which is declining. And we were relatively flat up, I think, point four percent or so. So in the corner. So now getting to North America, three point one percent growth with two percent volume. I maybe put it in three buckets of what we're seeing. One is the stronger execution, and we've talked about that. That's the shelf-free steps, the self-placements across key categories and key customers. The second, I say, innovation is delivering. We've launched the third pillar of our clinical range and clinical repair in the U.S., and that's doing extremely well. But it's beyond that. We've launched things like Centrum Age Defy, Excedrin Rapid Relief. and innovation is performing well. Maybe the third pillar is around e-commerce. So, you know, we're seeing good momentum in e-commerce, strong double digit growth and twice the market rate. So for me, listen, good progress in the US. I feel good about that. Still more work to do. Very encouraged by the progress. um and certainly we're going to have a stronger second half than first half and we're confident in that and that's obviously embedded in our in our guidance of holding our guidance of three to five percent Now maybe moving to your margin question, I'm going to pass it to Dawn to maybe talk a bit of the margin and the building blocks, but maybe I'd start with a bit of your question on investment, just my perspective. So I think we are investing in the business. I mean, A&P in the first half grew 3.2%, broadly in line with sales slightly ahead, but broadly in line with sales. and our AMP is roughly just below about 21% as an AMP percentage of AMP. So I think it's strong investment and growth. And there's specific areas where we've we've increased investment and we're constantly doing resource allocation just to ensure that we're investing behind the key growth areas that we believe we have one ring room and uh key innovations so i feel like we're invested well in the business now that said our priority is growth if we don't want to invest in the business um just for the sake of investing we want to invest where we see growth opportunities Listen, in the second half, we expect to step up in investment and growth, and that will show up in A&P. It'll also show up in different areas, like we're investing in China and Andoian because we have a good business Andoian. Our portfolio is a bit less exposed to that channel, but we're growing 100%, and we see more opportunities there. So we're going to invest more there, and we're going to invest some more in activations in the U.S. where we see opportunity. We're going to drive things. so let me let me leave it there the only other thing i'd say before i pass it to dawn is what the growth margin and productivity has enabled us to do is have the p l flexibility to invest where we need to but also drive um you know strong eps growth if it if it makes sense but to be clear we're not holding back on investing in the business we feel like we're investing where we need to be and we see opportunities we'll invest more dawn maybe a bit on the margin

yeah good morning good morning everyone so look i think that what's important to say on the margin is we have delivered the margin through efficiency we are driving long-term sustainable improvements in our supply chain so to brian's point the margin has not come from cutting investment it's not come from taking too much price when you look at our pricing our pricing is in line with inflation and this is a really important point that it is coming from efficiency so the 120 basis points improvement in margin in operating margin constant currency is coming from gross margin up 140 basis points and we also have a 40 basis points benefit coming through fx which if you think about you know it's quite nice to have a tailwind from fx for a change and to Brian's point that is pulling through and driving strong eps in the business and it is giving us flexibility and agility and why that's important is when you look at the second half We will start to see costs come through from the Middle East impact as we roll off fixed price contracts and our hedging positions. and it means that given that we've got the strength in the supply chain productivity program it means we won't have to take exceptional pricing to cover it we will be able to absorb that cost which means from a margin perspective we also expect in half two that we will deliver high single digit operating margin growth as we have you know operating profit growth as we have in half one So let me take your second part of the question, which was about AMP and the KPIs and how we think about AMP. So people buy our brands because they are superior, meaningful, differentiated and salient, which means that people are aware of them. and therefore continued strong investment in amp you know at 20.9 as it is today is really important for our brands and the way that we think about that there's probably three main areas in how we think about it so the first question is are we buying efficiently and if you look at the first half we have mitigated the majority of our inflation in terms of how we are how we are buying that media the second piece is are we spending effectively we have quite a sophisticated market mix modeling tool where we look at the incremental retail sales growth and ROI around that spend and both of those are up in the first half and the third question are we driving growth through reach and relevance and when we think about this we're trying to match our spend with where consumers are consuming that media or where they are getting you know where they're getting their media from 60 percent of our spend is allocated to digital and we continue to increase that spend behind social and expert which are both up in the first half so when we think about amp we keep it quite dynamic so in areas where you know we're performing really well like oral health Thank you very much. was weak in Q1. Obviously that's an area where we would shift investment to other areas so that all the time, you know, it's very dynamic so that we're ensuring that we're making our money work harder and we, you know, we continue to look for opportunities to invest.

Good. Thanks Dawn. Next question. Thank you.

Thank you. Our next question is from Guillaume Delma with UBS. You may ask your question.

Thank you very much. Good morning, Brian, Dawn, and Jo. A couple of questions for me. The first one on respiratory health. We had another week quarter in Q2. I think it shaved off 150 basis points of your organic cells growth. So my question is, of the three buckets of cough and cold, allergy, smoker's health, which are the ones where you would expect an improvement materializing relatively quickly? And is your confidence in OSG, organic sales, accelerating in the back half largely underpinned by an expected sequential pickup in recipe? Or do you think the acceleration should be more broad-based than that in the back half? And then second question, just China, high single digit growth in the second quarter, despite low incidence of cough and cold and some negative pricing. So maybe can you touch on what is driving what seems to be, I guess, double digit volume growth in China? and how should we think about this pricing pressures? Is it more of a one-off? Is it, you know, the cost of competing in that hospital channel? And does this have any negative implications for your margins in the region? Thank you very much.

Great. Thanks, Guillaume. Listen, I'll take the first question on respiratory and I'll pass the China question to Dawn. So listen, on respiratory health, you're right, three buckets in respiratory health, cough and cold, allergy, and the smallest piece being smokers' health. So first of all, on cold and flu, cold and flu is about half the size of in Q2 than it is in Q1. It's off season, so it tends not to be as volatile. You are right that contact, which is a very big cold and flu brand in China, just saw very little, if any, pickup in the quarter. We believe that's just an extension of what was a very difficult cold and flu season. and I'll get back to cold and flu in the back half in a second then you have allergy which did well in q1 it was down a little bit in q2 just a phasing of the season piece and and you know you just expect that that's normal you tend to see some uh seasonal swings in allergy but it's never the to the degree of uh of cold and flu and the impact and then third is Smokers Health. Listen, Smokers Health still declined in the quarter but it is it's declined at a lower rate than it did in Q1. So we're starting to see a stabilization of that business as we go forward and we have plans in place where we're like most things like in the U.S. in general we're seeing better execution and we're seeing improvement as they go. Now on cold and flu as we look at the back half and cold and flu we know that we've had two years of of um of decline in cold and in cold and flu and i think i've said in the past and associate with the category for over 20 years. It's not necessarily common that that happens, but it's not unheard of. We've obviously done all the work to understand is that a cyclical or a structural thing? We believe it's cyclical. What we're assuming in the back half is we see growth off of this two years of decline. We still don't expect it to be at the level it was from two years ago. and obviously in cold and flu that's more q4 q4 weighted because that's when the cold and flu season is so that's a bit of the the frame around uh respiratory and what we're seeing Dawn you want to talk a bit about china yeah so let me take the question let me take the question in three parts so let me talk about asia pac then i'll talk about china and then i'll come on to your specific question around um hospital channel and price so

When we look at AsiaPac, when you look at the growth profile of AsiaPac over the last few years, more than 80% of that growth is coming from volume and that's a really good growth profile for that region. I think obviously you know and you see that also coming through in in the year today and actually even stronger even stronger growth in q2 china is a really important driver of that so china was a high single digit in q2 Main drivers, so we increased investment in Doyen, Doyen grew more than 100% in the quarter, you know, and key brands that underpin that were in South Centrum, Caltrate, you know, are really strong in terms of driving growth in Doyen, and we have actually doubled The amount of content creation in that channel. So that's a really strong driver of performance. The other strong driver of performance was actually on Voltaren, where we increased our presence. Voltaren 2%, innovation continues to do really well. And we have actually put that now through the hospital channel. Hospital channel is a channel that we have always been in in China. That's not new. what's new is now Voltaren is in that channel which is you know which is a real positive if i put all of that together and then talk about pricing so you're right pricing was pricing was negative in asia pac in q2 i'm not worried about that it was driven by you know going into hospital channel where we have a volume-based procurement pricing model um as well as you know investment in doy in but when you look at the gross profit growth Thank you very much. in that region.

Thank you very much. Okay, thanks, Dawn. Let's go to the next question.

Thank you. Our next question is from Nicolas Suron with Bank of America. You may ask your question.

Hi, Brian. Hi, Dawn. Hi, Jo. Just two questions for me, please. The first one is on your VMS business. Do you think there's any consumer need that your current portfolio is not really able to address and do you think that you need to do M&A to do that? It's a bit of a Sony question. And the second one is going back to the pain relief, big acceleration Q2 versus Q1. Maybe if you could just explain to us the key drivers behind the acceleration and whether you think mid-single digit is the growth for that business going forward. Thank you.

Great. Thanks, Nicolas. First on the VMS business, listen, I think first of all we like our portfolio and we have seen by the way if we look at Centrum in the US specifically we've seen improvement in the first half of the year so mid single digit growth and actually If I look at latest consumption data, so now we're into July, you're starting to see double digit consumption behind the activations and the shelving resets and everything we're doing on that business. So we do like the portfolio we have. Listen, there are higher growth spaces within VMS we don't participate in, and we're looking at that also organically. How can we introduce new products under Centrum? How can we drive that? One example I would give you is our GLP-1 variant on Centrum, which we launched in the US as part of our broader GLP-1 effort to support consumers on that journey. and activate in retail. So, you know, I've always said every portfolio can benefit potentially from a bit of bolt on M&A, a bit of divestment as we go. But I feel good about the portfolio we have. And, you know, I'm confident that while the VMS has been a bit of an up and down business for us over the last few years to acknowledge that we have plans in place where we feel like we're going to get that to a place where it can deliver the growth that we would like. On pain relief, it was a stronger quarter in pain relief. and I think that links to a to a few things first I say we saw strength in Voltaren and that linked to a launch in China by the way of a Voltaren 12-hour variant that's doing very well also in the US we're seeing some strength in Voltaren behind some of those changes we've talked about across shelving because we also saw benefits from from shelving across Voltaren Panadol has grown you know uh healthy growth and ahead of our are global number and that's behind good activations but also you know the rollout of panadol dual action which is the combination of acetaminophen and ibuprofen we market that under abvel dual action in the u.s but outside the u.s we market that and we've launched that under under panadol And overall, I'd say a stabilization and slight growth of share in Advil. So we're starting to see some, you know, we're starting to see share growth in Advil, which we'd expect, although the category is still, you know, a bit muted, but we're ahead of the category. So overall, I feel there's some fundamental things that are happening in pain relief that helped drive those numbers. Thank you. Okay, thank you. Next question.

Thank you. Our next question is from Warren Ackerman with Barclays. Please go ahead.

Yeah, good morning, Brian, Dawn, Joe. It's Warren here at Barclays. Apologies if this question has been asked before because I just jumped on late, multiple results today. So I just want to just dive a little bit deeper on a couple of places. Latin America, Brian, looks like it's accelerated from low singles to high singles. Can you talk a little bit about the new team that you've got in Latham and kind of what you're doing differently in terms of price pack architecture and understanding kind of local consumers better? And do you think this kind of step up in Latin America is Thank you for joining us today. in Q2 versus Q1. Just wondering whether you can outline, is there anything weird happening in the pharma channel? Is it Germany? You know, what are you seeing in terms of kind of consumer dynamics in that region? That would be super helpful. Thank you.

Yeah, thanks, Warren. And I don't think either of those questions were asked, so I'll take them both. um listen on latin america you're right what we saw was kind of uh flattish in q1 and we're seeing high single digit growth in q2 i would say is that sustainable in the back half i'd expect to see similar and many more. spent many years at a company in a Colombian-based company called Quala in Latin America and then spent some time at Unilever once that company was acquired. Clearly a deep, deep, deep understanding of the Latin American markets. and the consumer. And I think he has come in and has done a very robust assessment of what is happening and has taken actions. One of the actions we talked, Warren, that I believe I've mentioned in the past is very quickly identified a bit of an opportunity in Brazil and a few other markets on our price gaps on Sensodyne. very quickly did a pilot test and saw that would drive double digit volume growth. We've executed against that. So we've taken pricing down. And again, it wasn't broad based pricing on Sensodyne. It was a particular skew on Sensodyne and the price gap versus one of our competitors that got a little out of whack. But we've made that change and we moved. And I'd say just purely on execution across the region, understanding moves we need to make and looking as we go forward, a better capitalizing on the low income consumer, where obviously we have a tremendous case study in India. on the low-income consumer that's driven now over 20% growth on Sensodyne and also huge opportunities we're seeing in Centrum and Area. So I think he's making good progress, again, on all this stuff, encouraged with the progress. You never want to declare victory. We're not complacent. But I feel like the back half, what we're seeing in Q2 is sustainable in the back half. On Europe, there's no question what I said earlier, Warren, you may not have been on, is that if I look at where we ended up in the quarter, it was in line with our expectations of what we thought we would deliver in the quarter. It was a bit better in the U.S., but it was a bit tougher in Europe. So there's no question that we're seeing a tougher market in Europe and we're seeing kind of low single digit declines in the categories. Now that said, as you saw, we delivered roughly flat results up 0.4% or so. We are growing market share in Europe. Sensodyne continues to perform well and broadly we're performing. I feel like, listen, as we look at the balance of the year, we're not counting on anything changing in the Europe dynamic. Obviously, we're just very focused on driving our execution, driving our innovation, delivering the growth that we think we can get in that market. But we certainly have seen a tougher backdrop in Europe than we had seen as the year has gone on. Super, Brian. Thank you. Okay, next question.

Thank you. Thank you. Our next question is from Misha Amanadze with BNP Paribas. You may ask your question.

Thanks, Monigal. So one question on cold and flu, please. Can you please remind us what's the timeline for the selling for the season? And also one of your competitors speaks a lot about major innovation in cold and flu coming. Do you see this as a bit of a challenge for you? The second question would be on price volume split for h2 you did say that you're not intending to take any material pricing but should we think about h2 being a bit balanced between price and volume and the last question would be on one-offs were there any notable one-offs benefiting your q2 delivery thank you

Good. What I'll do is let me take the cold and flu question and then I'll pass it on to the second part of that question and then the one-off question. So listen, on cold and flu, the sell-in happens as we speak. So July and August typically is when sell-in happens in cold and flu. um you know it's as expected typically in cold and flu the the big um potential for the any seasonality effect happens later in the year in Q4 um as far as competitive activity listen nothing we were unaware of and we feel like we have good plans in the U.S. and you know combined with all the executional improvements that we are seeing and then the plans we have behind our cold and flu portfolio again never take never complacent never take anything for granted so we're aware of launches of multiple competitors and we feel good about our cold and flu plans in the back half.

um Dawn yeah so if if we think about the price volume mix i mean we we have been working hard you know to improve improve that balance the price volume mix and you've seen in the quarter the step up in volume performance um you know with volume mix at 1.4 percent where is that coming from we have obviously talked about asia pac and you know and significant volume growth in asia pac in the quarter we also saw a big step up in north america you know to two percent in terms of volume mix on the back of all of the execution activities innovation that Brian has talked about those two step ups in the quarter were offset by emil where you know volume mix was down on the back of a very tough macro picture in europe and obviously softness in the middle east given what's happening there if we look to the second half i mean we continue to focus on that are balanced price volume mix we would expect to see a step up in volume mix half two versus half one particularly given that we have cough cold and flu in q4 and as i said from a pricing perspective i would expect pricing to be broadly similar second half versus first half and then to come to the third part of your question i mean i guess you know that there have been activities um you know whether it's amazon prime day whether it's world cup um you know where we've had activities in terms of us soccer what i would say is obviously they you know they've both been successful for us if i think about kind of you know phasing q2 q3 or selling sell out i you know there's nothing significant to call out in that respect okay thanks next question our next question is from david hayes with jeffries please go ahead thank you very much good morning also two from us just came back to the growth profile in the

The second quarter is obviously doing a three, but still that four plus ambition midterm remains aloof in what is a relatively benign cold and flu season. So I guess the question is, there's lots of moving parts, as you talked about, Brian. Asia, cold and flu, what does it affect? Middle East, U.S. momentum is building, Brazil execution improvement. So just that gap, can you kind of quantify that? what broadly that the big ones are that leaves that gap there and I guess where that leads me is would you expect to do four percent plus through the second half as those gaps are resolved as you're kind of alluding to and then the second question just on the margin obviously very impressive margin delivery you talked again about some of the drivers of that so but the question is a is the supply chain delivery a little bit lumpy was it a little bit you know you've got a lot of savings the first half might be a bit less than the second and then on the cost of goods sold inflation, I guess some of the contract manufacturing rolls off in terms of the agreements. Can you just give us a sense of cost of goods sold inflation in the first half versus what you might expect in the second half? Thank you so much.

Thanks, David. Listen, I'll take the first one and then I'll pass the questions on margin and supply chain over to Dawn. So listen, on the growth profile, by the way, you are right that we are below our 4% to 6% medium-term ambition, and we are very focused on getting back to there. If you take a step back, David, on what we need to be to get to that 4% to 6% ambition, and then maybe what is the difference between that and Q3? I think in one area is emerging market growth, which we saw sequential improvement at 6.4% in the quarter. We do expect that that can get to high single digits and we would expect that to to get there um in the second half so uh and what is driving that certainly we've seen mid-teens growth in india we're confident that will continue we talked about latin america and the improvement we've seen in q3 and we've talked about a bit about china in um in high single digits in q2 the other piece that's been a drag to that high single digit growth in it has been middle east so our middle east africa business was flat In Middle East, we are disproportionately big in the Middle East. So I look at my market shares in the Middle East. In many cases, they're double where they are the market. So brands like Panetol and Pakistan is an 80 plus kind of share. And what we've seen is we've seen declines in the market in both Dubai and Pakistan. that said verse q2 we expect that to improve in the back half and not expecting wars to stop or anything like that based on our plans and what we're going to do and the activations we're going to drive so we'd expect to see an improvement on that as we go into the back half the other pieces we've said listen us for us to get to that to that growth number needs to be in that three to 4% range. I'm very encouraged by the progress we're seeing in the US again, not complacent, not declaring victory, but really feel good about the progress that they're making. And we think it's very encouraging. and then Europe you would expect Europe to be in a kind of low single digit kind of two to three percent growth. Obviously it's a bit lower than that as we look at the back half. That's the algorithm to get us into that four to six range in a confident way. on the back half listen well i'm not going to guide beyond what we've already said which is confidence in the three to five percent and the building blocks that i've laid out which is you know you see the you see the progress in north america we expect to have less of that drag from the middle east going forward um and then obviously cold and flu which will be more cute for focus uh what we're expecting to see is growth versus a year ago verse Two years of decline, not expecting to see it as high as it was in 2024, just as a benchmark. And then Dawn, maybe I pass it over to you to the margin question.

Yeah. So, you know, as I said earlier, in terms of the margin progression, this is coming from the productivity savings in supply chain. And just as a reminder, there's three parts to that. The first one is around complexity reduction. so harmonizing packaging formulations you know optimizing the number of SKUs operational the second one is operational efficiency so this is all about de-bottlenecking in the plants process improvement equipment optimization and the third one is about optimizing our broader network in terms of what we do in-house what we co-manufacture And when I think about that holistic program, it continues to deliver incredibly well. I don't see it as lumpy. We track the pipeline of potential future savings. So we track that into the future. When I look at half two versus half one. That's, you know, that's that's looking good in terms of the in terms of the COGS piece and, you know, increasing costs. So we have seen a small increase from Middle East in the first half, particularly in freight. as I said earlier I would expect that to increase in the second half as we as we come off some of the contracts so when I look at the gross margin we've had 140 basis points improvement in the first half I would still expect us to deliver improvement in the second half you know will it be to the same extent given that you know we'll be absorbing some of the Middle East costs I think that depends on how much those costs are but as I said we would expect to absorb that so i think some growth in gross margin i think the other things the other things to talk about we will continue to invest in the business so you saw us in the first half amp we you know we increased ahead of revenue second half will continue to invest the other thing that we will have in the second half is the benefit from the operating model changes and we said at full year that we expected that in total to be in the range of 175 to 200 million of which one third broadly one third we expect to be in this year you know and and a bit similar to the supply chain productivity savings we'll decide how much of that do we reinvest in terms of future capabilities and how much do we drop through so when you look at that overall as i've said i would expect half to operating profit to also be high single digit but different different moving parts in the p l and when you look from an EPS perspective, I mean, 12% growth in EPS in the first half, you know, is very strong. I would also expect strong EPS growth in the second half.

Thank you. Thanks, Dawn. Next question.

Our next question is from Colm Elliott from Bernstein. Please go ahead.

Hi, good morning. Thank you. I want to start with oral care please. The 6.2 is obviously objectively a fantastic growth number but at the same time I think it's also the slowest quarterly growth for nearly four years. One of your biggest oral care competitors reported yesterday a mid-single digit decline in organic sales for their oral care business. and so I guess you're probably benefiting from their struggles as I think you have been for the past several quarters but they're not a bad company I don't think and I don't think anybody would say that they are so I think it would be dangerous to assume that they will continue to be such a big share donor over the longer term and so I guess what I'm getting at here is Can you talk a bit about the moving pieces, the drivers of longer term, what the sustainable growth rate for that all-care business should be? And then my second question, I was really interested in your comments around what Andres is doing to fix LATAM, Brian, without meaning to be too pejorative. It sort of strikes me that fixing price gaps It really should be bread and butter for a company of your size and so I guess I'm surprised that you need to be poaching senior leaders from Unilever to do that and I guess my question is can you speak a little bit to the infrastructure in your business around this kind of competitive intelligence? Do you think this Brazil Sensodyne pricing example is just an isolated incident? or do you systematically need to be doing more to improve this kind of infrastructure across the company thank you

Okay, thank you, Callum. So I'll take these questions. So on oral care, 6.2% still feel very good about that. I expect that that will improve in the back half. Nothing really to see from the 7.3 on half year to the 6.2 in Q2. And within that, Sensodyne continues to be very strong. Paradontaxin seems to be very strong and mid-single digit kind of growth on on denture care, which is kind of what we expect. Listen, this is a business that's grown at this level for years in the past. And if I think about our competitors, our competitors in oral care are both fantastic companies and fantastic competitors and have a ton of respect for both of them. a lot of times what you see is what we're driving is incremental category growth and incremental consumers into the more premium segment of the category via the innovation we have so again uh you know if i look at clinical white then clinical enamel and then clinical repair this year in all three cases they were the largest innovations in the u.s market um in that in that given year in the toothpaste category There's more to come. I look forward and I see more innovation coming that we already have in the can. Then post the clinical range, we already have a very clear view of what that pipeline looks like and I really feel good about that. a lot of times when you see our competitors moving around on stuff it tends to be because they're fighting each other um and again do not uh take any of them lightly um but we've been consistently driving that growth through new users new penetration and it's the very simple thing which is Now, half the people in the world have sensitive teeth, a bit more than a third of those people use a sensitivity toothpaste, and we continue to drive that growth. And by the way, well beyond the U.S., by the way, I mentioned earlier India. India, our second largest market, second only to the U.S., over 20% growth. Two years ago, we introduced a low-income consumer SKU in India at 20 rupee. It took a bit of time for that to gain critical mass. uh in the last quarter it was over 40 percent of our volume was driven by that low income compute and half our growth is coming from that so i think we have a very broad-based program and also there's paradigm attacks by the way which grows uh consistently in the mid-teens so overall do not uh complacent but peen uh but the ups and downs of our competitors in any given quarter tend to be less relevant that to us than just our agenda and what we're driving on the um on that Thank you very much. As I said, when we created the new operating model, I was aware that we needed to make a change in Latin America. I want to be very clear. Also made the decision that having Latin America, Middle East, Africa, and India, given the growth profiles and the opportunities, and having the right talent in those businesses, I think was a decision I made, and I think it's going to pay dividends for the longer term. um understand your comment i agree with your comment but like like anything else callum when when people are trying to run the business and drive the business and and taking different pricings every now and then you have a you have a misstep would we have caught that if andreas didn't go in i would expect we would have It happened at some point in the back half of last year. He happened to be put in place and do it. So listen, he's a great talent. I'm really happy to have him. I'm happy to have him and Kadar and Aslam, which are our new leaders across our three regions. on my leadership team and reporting directly to me and it's all part of this operating model change we've made which is all about driving growth and agility happens to be providing also some efficiencies that dawn mentioned which will help us in the back half but it's all about streamlining and simplifying what we do so okay next question okay next question our last question

Our last question is from Edward Lewis with Rothschild & Co. Redburn. Please go ahead.

Yes, thanks very much. A couple for me, more bigger picture. I guess first one, Brian, if I think about the Invest Today last May, you talked about wanting to reach a billion more consumers. You've made investments in India, you made investments in China this year, but the world's got a bit more volatile. So just sort of an update on how you're thinking about that longer term view. And then Dawn, when I think about Invest Today, you know, things like AI were obviously mentioned, but it's just made so much more impact on our lives now. I presume all of us are using it so much more. So when I think about your sort of outlook in terms of how you're thinking about driving margins, how much more of a benefit are you seeing from sort of deploying these kinds of capabilities than you would have thought before?

Thanks for the question, Ed, and I'll pass it to Dawn on that AI question. Listen, we we set out a strategy that had two ambitions billion more consumers and delivering industry leading shareholder returns. I think both of those were really important. What that did in the organization is opened up the opportunity and strategically for us to go after the low income consumer where we see opportunities that haven't been addressed before. Now, some of this low income consumer stuff does take time to build momentum. If I talk about India and the 20 rupee pack, and so on. you know that strategic shift for us is really important because that's something that we see as a long-term medium-term long-term growth opportunity in emerging markets we have some really good proof points of where it's working and we are now evaluating how we can make that we are in the process of making that broader in other areas and we've done much more than india but i've talked about india because it's the one that started and now we're uh and and and now we're two years in listen i think this is listen the volatility in emerging markets is always there i don't think that will change the consumer need that we see in the low-income consumer and it's about providing by the way it is about providing really great products at accessible price points in a way that helps meet their needs and um you know we're still we still believe that opportunity is there dawn on ai

yeah so i think you're right look ai is obviously a fast fast fast moving space um and we are we are investing in ai and we are we are seeing the benefits so let let me give you just let me give you just a sense of that and i'll give you an example across supply chain across our demand space in terms of growth and then maybe just broader productivity so in terms of in terms of supply chain we you know we have built quite a connected chain of AI interventions from consumption-based forecasting to production scheduling preventative maintenance and inventory deployment so examples of that would be on our consumption-based forecasting this is this has improved our forecast accuracy by five to six percent it's also reduced our stop cycle times as well which is obviously important you know in terms of our levels of inventory and if I look at our AI scheduling and digital twins for example at our Neon site that's you know our digitally enabled work process solution has delivered a five percentage point in operational effectiveness and similarly you know in terms of preventing unplanned shutdowns for example at our dump garden site that's also delivered a similar level of operational improvement so from a supply chain you know we are definitely that is definitely embedded as I said in terms of a holistic space if we look From a demand perspective, we have embedded AI across insights, innovation, marketing and commercial execution. So all of the steps along that path. So from an insights perspective, we have a great tool that is enabling us faster and deeper access to actionable insights. From an innovation perspective, we're leveraging AI in terms of faster claims generation and in terms of marketing we're actually leveraging AI in terms of reducing the cost of our content production and then in commercial execution in terms of AI around tools such as next best action that we talked about capital markets day that's also driving sales growth so actually quite a and end-to-end demand space ai capability that we're embedding and then the third area just more broadly across the organization obviously tools like co-pilot language translation with our tools like lingo and even if i think about you know finance in terms of some of our core finance processes like you know optical recognition in terms of invoices are also driving process improvements and savings so look I guess like everybody else you know we're on a journey Thank you very much.

great thanks dawn so um well that was the last question so thanks everyone for joining us today i look forward to catching up with you at upcoming road shows and meetings and as always feel free to reach out to the ir team with any further questions thanks for your interest and continued support enjoy the rest of your day thank you that concludes hellion your half years 2026 results thank you for your participation you may now disconnect your line