All right. Good morning, everyone. Please, may I ask you to take your seats as our next session is about to begin? Our next session features François-Xavier Roger, CFO of Nestlé, hosted by Bernstein Analyst, Bruno Monteyne. And if you have any questions, please scan the QR code on the second page of your pamphlet. Thank you. Thank you. Good morning, everybody. François, thank you very much for having you here. Just for the people in the back, can you please put the QR code there on the back of the screen? So anybody, if you want to ask questions, it's a lot more fun asking your questions, so please scan that. It will appear on the iPad here, and we'll get your questions at the end of the sessions. So, François, good to have you again here. The biggest question on my mind really is the sustainability of the organic growth of Nestlé. You know, between you and Mark, an amazing job going from like the 3-3.5 to the 5-5.5. I would argue, most investors are convinced you can remain, you've achieved that transition. Now, anything in life tends to slow down, me particularly, but definitely most product categories. You have a big dependence on premium coffee, premium pet food, very big, very high growth, sort of naturally slowing down. And so, sort of two-part question: Do you need to keep doing deals to avoid slowing down? And actually, given the importance of premium coffee and premium pet food, is it even feasible to find enough deals to avoid the slowdown in the Nestlé organic growth expectations? Okay. Good morning, Bruno. Good morning, everyone. I would have said yes, a few years ago, that we needed clearly to address our portfolio in order to secure what we call mid-single digit growth, which is between four and five, four and six, because we did not have a portfolio at that time that was geared for mid-single digit growth. I think we have done a lot, as you know, we have rotated about 22% of our portfolio in such a way with significant disposal, significant acquisition as well. By the way, the amount for both of them is equivalent, CHF 22 billion of acquisition, CHF 22 billion of disposal, which gives us today a portfolio where we are confident that we have a portfolio which is geared for mid-single digit growth. Can we improve the portfolio further? Yes. So we can continue being active, and we will continue being active. I think we have a duty, by the way, to look at opportunities without being forced to do anything. I don't want to be arrogant or complacent, but at Nestlé, to a large extent, most of the deals we are looking at are, to a certain extent, nice to have. The, very few are must have, because we have a good geographic footprint, we have good leadership positions in our categories, so we can do some add-ons, but most of the, the deals that we are looking at, we should not make a desperate move to get them at any price. So we need to be very disciplined as well, which is what we have done in the past. So we don't need really to go for M&A in order to secure that mid-single digit growth, but it could help us. It could complement a little bit and strengthen some of our position in some of our businesses. And it, maybe if I go one step further, Bruno, I think that we had exceptional growth. We, as the entire industry over the last couple of years, obviously inflated by pricing, which is relatively artificial. There is no value there anywhere, because we just pass through whatever we receive in terms of input cost inflation without creating any value. So we are not really necessarily interested in pricing. We are much more interested in RIG, because this is where we create value through volume, through mix, and we believe that going forward, as it was the case before the pandemic, the bulk of our growth, probably 2/3, a good two-thirds of our growth, maybe more, should come from RIG as a combination of volume and predominantly mix, where we create value. Now, mid-single digits, 4%-6% is obviously quite a wide band, François. I just want to reask one particular. Do you think without any deals, there would be no slowdown in organic growth at Nestlé till the next three-five years? Or you could still stay within the 4%-6%, but I feel, surely, most categories over time tend to have a slowdown impact. You don't think that's necessarily the case? No, because most of our categories are growing structurally at mid-single digit growth. There will be a slowdown from the current level where we are. Today, we are at eight. But okay, once again, it's coming from- Ignoring that. But we can go down to around five. If you look at our main categories, pet care, coffee, most of these categories, water, or confectionery, most of these categories are structurally growing without any significant tailwind from pricing at a mid-single digit level. So we have some categories that are probably growing at a slightly lower level. Take frozen, for example, in the U.S., that's not a mid-single digit category. That's a low single digit category, but it's a smaller part of our business. By the way, don't conclude from that, that we should not stay within that category, because we can assign a different role to such a category, which is about margin improvement, which is about cash flow generation as well. But the vast majority of our portfolio is structurally growing at mid-single digit level, and we aim at, by the way, doing better than these categories, market share-wise. Because my interpretation was always that the Aimmune deal was an attempt of having a third leg of growth, as some of the other legs kind of slow down, and therefore, if the Aimmune deal didn't happen, you were sort of short of a third leg of growth. You would not agree on that? No, it was not to substitute, slowing growth in some of our categories. I mean, first of all, it's true that we have created a new leg to a certain extent with VMS, not, not necessarily, with allergy, but with VMS, vitamin minerals and supplement, which is there again, in a category that is structurally growing, in the mid-single digit space. But we are not running out of growth opportunities, take coffee, for example, this is a category that responds superbly well to innovation. This is a company where we still have a low level of consumption in many markets.... Take the example of, China, India. You could tell me, François, you're nice, but I mean, these are tea markets. I read in the press recently that I think here in the U.K., coffee consumption, the U.K. is a tea market by origin. But I understand that at the beginning of this year, actually, coffee exceeded tea as in terms of consumption in the U.K.. I think Japan is probably close to that stage as well, which was traditionally a tea market. And so we see really a pent-up demand and an accelerated demand for coffee consumption in coffee in India, in China, which are huge markets. Take pet care, this is a market that okay, we have, we will go probably this year for a fourth consecutive year of double-digit growth. We won't be able to maintain double-digit growth, but which is there again, partly pulled by pricing. We are very confident on the fact that we will be able to maintain high single-digit growth in pet care through innovation, market share gain, e-commerce, and so forth. We don't believe that we are running out of growth on most of our categories, and that we need to do investment in order to substitute the growth. Okay. Thinking about A&P, you disclosed it for the first time, I think it was 6.9% in 2022. But you also suggested it was a low point because whatever the specific dynamics in 2022, what was the level of A&P pre-COVID, and can you get back to that level? Yes, we can get back to the level. So we were at 6.9% last year. We are going to be probably around 7.5% this year. We will continue investing even further in 2024. So, it will be most probably in 2024, above 7.5%, and we like investing in marketing. The level pre-COVID, is it the right benchmark? Yes and no. At the end of the day, we look less at the amount in absolute value or the percentage of sale. We look at the quality of what we do. So what matters is, what shall we do in order to support our brand? What shall we do in order to support our sales? Which is not necessarily a precise number, either by value or by absolute, as a percentage of sale, but we will continue investing for sure. Okay, um- We are, I think even, you know, we hesitated a little bit in the past to disclose that amount because we know that numbers disclosed by some of our peers are not necessarily consistent in terms of content. So, which is a reason why it's always a little difficult to compare. But from what we could see in terms of comparison, we are relatively well-positioned in terms of investment in our industry. Okay, let's be a bit careful, maybe from time to time, comparing with other industries. But, in our industry, we are reasonably well positioned. Let's not forget either that because of our scale, the amounts that we are putting on the advertising markets are quite significant at the end, because we have scale. Next, thinking about EBIT margin. I think François, a few years ago, before we went to this commodity peak, you argued that the rate of margin expansion at Nestlé would slow down, largely because of the cost of transitioning to a sustainable world would be higher and you needed to invest in that. If I'm not mistaken, you used to say, "Look, historically, we had about 40 basis points annual EBIT margin expansion, probably 10-15 more because of that." Now, a lot has happened since then, you know, whether it's the cost of commodities, the cost of sustainability, looking at some of the reports on sustainability progress, sometimes it's harder than people planned. Has that cost of moving to your sustainability targets increased since that first discussion two years ago? Not really actually. If you look at it, when we started that exercise three years ago, we said that for the first five years, 20-25, we would spend about CHF 5 billion. Roughly speaking, CHF 1 billion a year, obviously ramping up. We will spend this year, probably around CHF 1 billion, but I can tell you over the first five years, we will be probably, maybe a bit below what we expected to do in terms of investments. We, we call that an investment, even if everything goes to the P&L. And so we will probably spend a little bit less than this CHF 5 billion while achieving our objectives. So I would say the cost of the sustainability investment is pretty much in line with what we thought, and I would say probably a bit lower than what we thought. The reason being that we have learned a lot, we have improved a lot to develop our own way, to spend wisely and with a view of getting a return. The return is not necessarily what we expect to get in terms of additional sales, because it's very difficult to measure, even if we know that 70% of consumers take sustainability as an important attribute in their purchasing decision, but doesn't mean necessarily that they will pay a higher price to start with. But we have developed methodologies in order to be more efficient and more effective in what we do. We look at a concept which we call internally, net impact value, which is on the one hand, minimize the investments or the cost, and on the other hand, maximize the output. Maximize the output means reduce as many carbon tons as we can, reduce as many cubic meter of water as we can, eliminate as much as we can in terms of non-recyclable, non-reusable plastic, for example. And we put ourselves in a position to make choices and to make arbitrage. So for example, today, there are some specific geographies where the cost of this investment with a better impact is lower in some emerging markets, for example. There are some categories today where we do have the solutions that allow us to reach our sustainability investments at a reasonable cost. In some other categories, we better wait, because technology or science is not necessarily ready today. So we do select the project that we go for by geography, by category, by nature of project as well. And as a consequence of that, we are more efficient than we thought initially. The other thing is that technology and science is evolving very quickly and do help us. So we don't see, you know, the sustainability case as something that is tougher than it was. And we have learned a lot, and so it's pretty much in line or it's even frankly, better than what we thought. Now, there's a few public targets that investors tend to remember, that it's a 2025 plastics and packaging targets, 2030, have your first big greenhouse gas emission, sort of reduction target as well. We're getting closer and closer. Any risk to any of those 2025 and 2030 targets at this moment? It's not in the bank yet, but we are reasonably confident on the fact that we'll achieve most of these targets. So if you look at greenhouse gas emission, we will reach the 20% reduction of our 2018 base by 2025. Don't forget, one thing is that there is a time delay of about two years with this project. So it's not because it may look like what we have achieved in 2012 is a little bit far away from what we need to achieve in 2025. But since a lot of the investment that we have done last year, for example, will pay off usually next year, or what we do now will materialize in terms of impact in 2025, there is about a two-year delay. So don't be worried if you don't see a very strong takeoff at the beginning. So we are very confident that we will get there for greenhouse gas emission. If you look at design for recycled plastic, for example, we are currently at 82% rate of design for recycling. We will be with the objective of more than 95% by 2025. So if I look at all of our KPIs, and I could give you some other ones, we are basically on track to get there. So no, we don't see any major challenges. It's not an easy one, huh, but we don't see any issue cost-wise, and we are on the right track to get there. Because thinking about plastics, the recycling, obviously, a big part is actually using recycled plastics rather than designing. I remember you had this fund for, what was it? Food- grade recycled plastics. Are you on target also for actually using recycled plastics within your own products? Yeah. So if I take, for example, virgin plastic use, so we to reduce virgin plastic, we had an objective—we have an objective to get to 30% reduction by 2025. Today we are at 10%, and we are confident that by 2025 we will be at 30%. So I think globally, everything is really moving in the right direction with what we do. A bit more shorter- term, the consumer been super resilient in the last few years against all expectations. Do you see any sequential slowdown anywhere globally in the consumption behaviors within your business? I would say yes and no. If I take it by zone, let's start with Europe, where we are today. We were actually, at the beginning of the year, quite, worried about the consumer in Europe in the context of a possible energy crisis- Yeah and energy shortages, which actually did not crystallize. So we are a bit more optimistic today than we were. Although, the consumer sentiment is still a little bit weak and fragile in Europe. In the U.S., we have been surprised so far to see a lot of resilience, probably with consumers having, maybe valid for Europe as well, having seen a lot of savings from the pandemic, that they could afford, spending and investing, on the one hand. Huge subsidies in the U.S., and that is coming to an end. Both, I would say, the savings left over from the pandemic on the one hand, and, second, the subsidies, massive subsidies by local government, federal government, is coming to an end. If you look at it today, there is not much left apart from a little bit of student loans and so forth, but SNAPs and everything is really disappearing or moving down significantly. It starts to impact a little bit consumption, although many of these subsidies actually were not something that we were directly benefiting from, and we see a little bit of evidence of it, maybe for some categories where we are a little bit more impacted, like frozen in the U.S. But apart from that, we are not heavily exposed to these subsidies, but we do see a little bit more of a slowdown there. In emerging markets, very resilient consumption, I must say, quite amazing. We expected that, over the last two years, consumers would suffer a little bit more because of the affordability needs, and it did not really crystallize. And finally, in China, we can't complain because this is the only zone where we still had, in the beginning, in the first six months of the year, positive RIG. But it's a little bit less than what we expected. So it's positive. There is some sign of recovery, but not as strong as what we thought. Just one final remark, though, to avoid any misunderstanding. The food and beverage market worldwide is evolving in negative territories by volume, which is quite unusual. It is the case in the U.S., it is the case in Europe, which means people are consuming less. Are they eating less? Are they wasting less? Are they eating more out of home? Difficult to know. I don't think that it will last, but let's not forget that we do operate in slightly declining markets by volume, which did not happen that much in the past. I don't think it will last, but still. How long has it been going on so far, the declining volume? Since the beginning of the year, I think, off my tongue. Now, everybody thinks and talks about deflation. I think if I ask you, do you see deflation? You will say no, and you will say, "We don't see any risk of deflation." So I'm gonna phrase the question differently: If we came back here next year or in 18 months and there had been deflation, where do you think would be the most likely areas where you could have had deflation, if it will happen? So we don't see the time for deflation. First of all, we had massive inflation. Last year, we received, basically, CHF 8 billion of additional cost in terms of raw material, packaging material, transportation, energy, labor, and so forth. By the way, we passed on CHF 8 billion of pricing, but that led to 160 basis points of gross margin loss. So we, we have retained actually, quite a lot as a consequence of that, and this is not the end of it. Inflation is not over. We, we still have a salary and wage inflation. Energy is moving back again. I mean, oil prices are moving back again. You have general inflation probably in most countries, around 4%-5%, so that's not the end of it. We still have raw material, increasing. Robusta prices are moving up. Coffee, no, sugar prices, cocoa prices are moving up again. And you know, everybody's excited about deflation. I look at the basket of commodities for Nestlé. It is true that today we are about 20%-25% lower than the average of last year, but we are 30% higher in our basket of commodities, 30% higher today than we were on average between 2015 and 2019. So we are at a high level, and we are even 40% higher than we were in 2019. So this is not the time for deflation. I'm not saying that tactically, some categories and so forth, we will do some tactical whenever needed for consumers and so forth, whenever it makes sense, some tactical deflation. But once again, we are at a relatively high level of commodity pricing, still with an environment where there is still inflation in the background anyway. If there is deflation, as I said, we could see some items with probably price decreases. That would be probably clearer in categories where we have less premiumized businesses. So whenever we are premiumized, anywhere, there is a sensitivity to pricing, so it's unlikely to happen in premium segments of our portfolio. It is more likely to happen in mainstream segments of our portfolio. You're thinking there about dairy, some parts of confectionery? Dairy, confectionery, probably- Ready meals? No, confectionery, no, because you have sugar and cocoa increasing, but probably maybe a bit more in dairy, for sure, possibly in food. Yep. Now, you did guide to positive rates or positive volumes in the second half. Is there any economic assumption behind it? Let's say we have to have a soft landing, or is it resilient enough if we do see the slowdown for maybe expected in Europe earlier? Well, the guidance we gave for... is that we expect to be with positive RIG in H2. So I confirm that. We, we do expect that to happen. Where we are fairly advanced already in the year, this is linked to four main factors. I would say it's relatively independent from the economic environment between now and the end of the year. This is essentially linked first, to the fact that we have an easier base of comparison, but that's not limited only to that. The other thing is that we do invest much more in marketing as we speak. So as I said, we expect to raise our marketing investment by about 100 basis points in H2 this year versus the same period of last year. We don't do a lot of pricing anymore, so pricing is very specific, very targeted, but we have not done a lot of pricing since the beginning of April. And finally, as you know, we embarked into fairly ambitious portfolio optimization program, which had a negative impact on RIG and volume last year and in the first part of this year, but with an objective of having a positive impact in the medium term, which is starting to happen already. So we start benefiting from that. One example of it is the fact the objective was, for example, to increase our service level, the number of orders that we fulfill, which was at a low level, which means that we were not in a situation to meet all underlying demands on the orders that we received. Our service level has improved very, very significantly since the beginning of the year, since we have embarked on that project, by really focusing on high value, high volume, high margin SKUs, dropping in a certain number of cases, the effort that we were doing before on low margin, low volume SKUs. So it does make a lot of sense to go into that program. You did mention something about the U.S., some of the support programs rolling off, and it might have an impact. Do you expect the promotional intensity in the U.S. to start going back to pre-COVID levels on the back of that, or you don't see any threat of that yet? We do see anyway, if you look at the industry in general, and this is the case for us, over the last two years, we were in a supply constraint environment, and we are moving now. We are, like the industry, in a generating demand. So, which means that supply issues are lesser or disappeared, basically, and we are getting at the end of our own supply constraint. So we need to move into generating demand. We limited marketing spend last year, for example, because we were in a supply constraint environment. Today, we are reinvesting again. By the way, we never reduced our promotional spend ourselves, and even in order to bring more affordability to consumers last year, we did do even more promotional activities and promotional spend. We will continue doing it, but the focus that we are doing today is much more on investing in marketing, which is the part that we reduced. But yeah, and in the market, the fact of moving from supply constraints to generating demand does mean that we see more promotional activities in the market as well, and more specifically in the U.S., to answer your question. I'm just going to do a little side point. This isn't working for the question, so if somebody could try to fix it, please. Just as a reminder to the audience, if you do have questions, please, use the QR code. We have to take your question and then- All right, I'll keep going. But thinking about your capital allocation, currently, your size of your share buyback and the dividends is bigger than your free cash flow. We've seen the leverage going up. It's not a great time for additional debt. Should we expect a reduction in the size of the share buybacks, and do you have to rethink how you think about that capital allocation? Let's, let's put things in perspective. If you look at our current share buyback program, CHF 20 billion over three years to be completed by the end of next year, and the previous program, same size, same, the same duration. It was CHF 20 billion, and it is CHF 20 billion, but actually the reality, it's CHF 10 billion, because half of it has been financed for the previous program and the current program by disposal. So half of it corresponds to return of cash proceeds. In one case, the disposal of Nestlé Skin Health for more than $10 billion, and in the second case, the reduction of our investment in L'Oréal for about EUR 9 billion, a little bit more than EUR 9 billion. So the reality that the share buyback program that we have today is not really CHF 20 billion, but is really, in reality, more CHF 10 billion. If you look at it over three years, it's more or less CHF 3 billion a year, CHF 7 billion of dividends, so which mean that the cash return to shareholder outside of disposals is about CHF 10 billion a year. Our cash generation revolves around 10-12 billion, actually, closer to 12 billion, and it will be about 12 billion soon. It will be more than 10 billion this year, which mean that we can easily finance the dividend and the share buyback, excluding the impact of disposal, which is neutralized by itself through our cash flow generation. This last year, our cash flow generation was artificially low due to the fact that we decided it was a voluntary decision to increase our inventory level in the context of a possible energy crisis in Europe. This year, we will be back to around CHF 10 billion of cash flow, free cash flow, and next year and the following year, we should be around CHF 12 billion. So I don't see any issue to finance CHF 7 billion of dividend and maybe CHF 3 billion of share buyback. Just one additional word on share buyback. We have done share buyback program over the last couple of years. Don't take it for granted that once we complete the current program, which we will complete at the end of next year, automatically we will go for a new one. Okay, this is part of the thing that we need to revisit. What is our leverage at that time? What is the cost of financing in the market? What are the external growth opportunities that we have? What is our leverage and so forth? So we will revisit the need for share buyback or not in due time, probably in the course of next year. In the meantime, let's complete the one that we have started. Thank you. Now, back to some of the sustainability program. You are quite leading in the Income Accelerator. I think we talked last year as well about the progression towards living income, for farmers. Can you, given that you've been up and running for a little while, how broad is the program today? Do you have an indication of what percentage of your farmers are on the living income, or the Income Accelerator, and when would you plan to have all farmers on that program? So the program is working well. We started to scale it up. Today, we have about 10,000 farmers that are participating to the program, and we expect to get, over time, probably 160,000. So, but it was important to test it. It has been very well received, both with what we could see by the partners doing it. Just as a reminder for many people, this program is very different from what we did before, because if we want to help farmers, this is not necessarily about buying cocoa at a higher price or buying raw material at a higher price. By the way, when you do that, you give a better service to large farmers, which are not the one that we want to target. We want to support more the smaller farmers. So the fact of helping smaller farmers to increase the productivity of what they do, helps them to send their kids at school and so forth. But increase their productivity is, for example, train them to prune their cocoa trees. And by doing that, they increase significantly their productivity, and so this makes a lot of sense. And frankly speaking, what we could see ourselves, what our partners, independent partners, have seen as well, the result is very attractive. So which is the reason why we want now to scale it up from the 10,000 farmers involved to 160,000 over time. From 10 to 160,000, what kind of time frame, approximately? It's going to take a few years, because we, we need to make sure that we do that properly. Any learning so far? Because obviously, you are only bridging part of the gap with the hope that other income boosting... Any material learnings from the 10,000, whether things are going better than expected, any changes? I think it's in line with what we expected. No, no negative surprise there. Second, the sustainability topic that we've sort of written and discussed about is palm oil. You probably know our view, that we think companies should look more actively for palm oil alternatives. What's Nestlé's view in terms of its desire to look for palm oil alternatives? So we are looking at alternatives like algae, precision fermentation through R&D, like alternative sources of oil, like mango oil and so forth. And we believe it is our duty to look at that. That being said, just to be clear, there is not one single solution that will make it all. So we will need to use a certain number of alternatives, but there is one thing or one that will substitute entirely. So we will need to continue to use palm oil if we want to be efficient. So as a consequence of that, we will develop some alternatives, but they won't be sufficient individually, so it's a whole set of alternatives, and we will continue using palm oil as well. As a consequence of that, we need to continue in our programs to act as a responsible citizen when using palm oil as well. I think that we have done quite a lot. More needs to be done. We need to work with other partners in order to make sure that we have a reasonable use of palm oil. You mentioned the algae-based alternatives. I think you might have even some investments in some biotech companies that get alternate. Are there any commercially available products of Nestlé that use these alternatives already? Not to my knowledge, not at scale. The issue is more that we are still at an early stage of development of these solutions, but we know that none of them will be scalable to the extent where we will be able to substitute entirely what we use in terms of palm oil. But some, some will help, certainly, but not with a very, very large, on a very large scale. In the world of food here in Europe, there's a lot of discussion about ultra-processed foods. This idea that it isn't just about calories or the particular ingredient, it's the way the food has been produced, in that that causes our bodies to respond badly. Clearly, Nestlé would probably score as quite a few of the foods on the ultra-processed foods. What's Nestlé's view on either the science, the threat of ultra-processed foods, and how are you responding to consumer concerns in that area? Well, we need to be very conscious of what consumers are worried about, because we need to address that. We are working in the business of developing nutritional products, so we pay very much attention to these issues. We are working very actively in order to reduce the number of ingredients we use. So we have been working for years on the concept of what we call clean labels, which means kitchen cupboard ingredients, limited number of ingredients. If we can, on the front of the pack, but we know that consumers don't want to see on the long list, a long list of ingredients with some stuff called acid, whatever, E, E-24, whatever, which consumers don't know what it is. So already for a few years, we have tried to get rid of that and limit the number of ingredients and go to kitchen cupboard ingredients. So we have moved in that space, and we will continue to do it with a view to offer nutritional products there. Let's not demonize packaged food either, because we need to be careful with that. First of all, packaged foods overall is extremely safe. I think it has never been as safe as what it is today, on the one hand. And packaged food is also, without necessarily talking always of ultra-processed food, but packaged food is contributing to limit food waste. If you look at the food and beverage industry in its totality, the food waste is about a third of the food doesn't make it to the consumer and is wasted. With packaged food, it is 11%, the waste, so it does contribute as well to reduce waste. But let's find the right balance between having processed food and packaged food without going to the ultra-processed food, as you said, with potentially some negative impact or negative perception by consumers, which is the reason why we are moving into this concept of clean label, limited number of ingredients as well. So I understand what Nestlé is doing here, going on a similar path, but clearly, the claim of ultra-processed food, that it's, you know, the way of processing is unhealthy. Has Nestlé made any statement whether they agree on that science or disagree on that view? No, we have not made any public statement talking about that. But I think that we need to be careful as well. What is the definition of ultra-processed food? So, which is the reason why before we start making statements, we need to have a little bit of clarity on our side and on the side of the industry as well, on what do we call ultra-processed food. Okay. And we're now on to the questions of the audience, so please, keep contributing to this. The first question, François, is, are you seeing a slowdown in pet care? Some peers have mentioned this talking. Okay, so we keep on having the question, and we keep on saying, "Not really." We hear some background noise from some of our competitors, for example, that the market is slowing. We don't see a clear slowdown. We continue seeing the market, including in the U.S., which is our largest market, moving up volume-wise, in the U.S. We continue to see the pet population increasing as well. There might be some specific segments or subcategories within pet care, where we are not necessarily strong player, that experience some slowdown. I would mention one, which is treats, for example. If people return back to the office, for example, which is more the case today, they use less treats because they spend less time at home with their pets. If consumers have a little bit more pressure in terms of purchasing power, treats is more of a discretionary item. It happened that, for example, in treats, we don't have a sizable presence in treats. So you have some segment, like wet food, which is suffering maybe a little bit more than dry food. And so globally, we don't see a clear evidence of a slowdown as far as our business is concerned, which is the reason why, by the way, we decided to invest significantly, and we were really capacity constraints lately in the U.S. and in the rest of the world. What are your two most important objectives in successfully transitioning the CFO role to Anna later this year? And can you share any details what's next for yourself? First of all, I want to make sure that Anna succeeds in to succeed me. So we'll make sure that we have sufficient time in order to transfer whatever knowledge she needs to understand. But I'm very confident Anna is coming from a background where she has spent 15 years in the fast-moving consumer goods industry. She has been CFO of public companies two times, so I think that she's very well prepared to succeed. I think that it will be important as well that, and that does maybe other thing than what I've done. I think we have created a lot of value with Mark, with the team, over the last couple of years, but the value creation might be different as well. I'm a strong believer that, a significant portion of the value creation that we will generate in the future will come from digitalization, will come from data analytics. Just as an example, we spend close to CHF 30 billion today in marketing and trade spend, where we are, in my opinion, at the beginning of fully understanding what we can do. With digitalization, with data analytics tomorrow, we will be in a better position to optimize that. If we optimize our marketing and commercial investment by 10%, that means that we free up CHF 3 billion a year. Doesn't necessarily need to flow to the bottom line, but that's something that we can reinvest. I think Anna-... She's someone because of her business today, where she's probably very well equipped in order to deal with this kind of topic, given the industry where she comes, which is much more about that, data analytics and digitalization. So no, I'm sure that Anna will be super successful in doing that, so and I'll make sure that the transition will go very smoothly. I can't tell you much about my own next step. Just what I can say that I'm not retiring, which is the first thing. I don't know the exact date of my leaving because I need to wait. I want to understand first when Anna is joining us, but I'm sure you will hear in due time what my next steps will be, but I'm sure they will be exciting. How has the culture within Nestlé evolved over time? It used to be seen as very bureaucratic. Has this changed, with the new leadership in the last few years? Sorry, what was the first part of the question? How has the culture within Nestlé evolved over time? Is it still as bureaucratic as it was years ago? I never had the feeling, actually, that the culture at Nestlé was bureaucratic. If you look at, I don't know, I see the finance organization, I can speak easily about that. Globally, it's not a very large organization, but where the head office is not a very large office. For those of you who visit our head office in Switzerland, it's a beautiful place, but it's not that large, so we don't have so many people. Let me just give you a couple of example which illustrate it, since I have Luca in front of me. In investor relations, we have four people. So for a company of our size, I think that the team does a lot with actually a limited number of people. If I take our global tax team, it's 16 people, so it's not a lot of people. So, so we are. I think we are actually very efficient with a lean and mean organization, and we have been even leaner and simpler in terms of organization. If I look at the head office today, it's something like 20%-25% smaller than it was a few years ago. And that's what we wanted to achieve as well, and we continue working on that. By the way, we have launched new programs recently in order to accelerate decision-making and avoid duplication and so forth. So I don't have the feeling, frankly speaking, that we are a very heavy and administrative organization. Don't forget one thing either, is that Nestlé is a very decentralized organization. So, we... I mean, the business is, which is normal in the food and beverage business, is predominantly managed locally. The taste of people for food is very different between markets, even within Europe. So we manage our business predominantly locally, with some coordination from the center in Switzerland or at regional level. Can you talk about the relationship with retail partners? French markets are under pressure from retailers to food producers in terms of price gouging. Also more private label impact in during the negotiations. So how is the relationship changing with retailers taking the impact? Negotiations with retailers are always, I would say passionate, probably more in Europe than in other parts of the world. That's, that's normal anyway, because you, you discuss, different interests. A lot of retailers are also very vocal because they talk to consumers, which I understand. But I mean, our business is different from theirs. At the end, I don't think that it's fair either to compare margins of manufacturers with margin of retailers. The, the retail industry margins are different anyway, structurally. I think that, these discussions are always passionate, but this is normal. They are, they are okay. In the end, I think that we do entertain good relationship, decent relationship and good relationship overall with most of our retailers. There are things as well, we always prefer, whenever appropriate, to build relationship with retailers where we jointly create value. We don't favor necessarily the price war or price discussion exclusively, because this is very often, if you just talk of price, price is important, but just talk of price, this is usually a lose-lose game for the retailer and for the manufacturer. It's much better that we talk price, but we talk other topics, other activities, like what can we do jointly between manufacturers and retailers to create more traffic in a store? Can we do promotional activities? Can we give you exclusivity on innovation, for example, in order to bring more traffic into your store, be it online or offline, by the way? That is usually more value creation. This is more of a win-win discussion between retailers and manufacturers. By the way, we managed to get those interesting value creation discussion with a large number of retailers as well. Can you explain Nestlé's interest in consumer health, given the past interest in Haleon? What are your criteria for acquisitions in this space? Well, we have done a few acquisitions in vitamin, minerals and supplements. Most of them have been very successful. So if I talk of Atrium Innovations with Garden of Life, if I talk of Vital Proteins, if I talk of The Bountiful Company, Orgain and so forth, don't forget that some of these businesses, we have doubled the size of these businesses in a very short period of time. Take Vital Proteins, we doubled the size of the business in 18 months after the acquisition. Orgain is doing extremely well. The Bountiful Company is doing, is delivering as per the plan. We have done extremely well, growing mid-teens for years with Garden of Life and the Atrium Innovations. We have a leading position today. We own 5% market share worldwide in VMS, and 12% in the largest market in the U.S. So we have an interesting position with a wide range of products in super premium with brands like Garden of Life, Solgar, in mainstream with The Bountiful Company, in affordability with Puritan's Pride, for example. We cover different channels as well, e-commerce, traditional trade, specialized stores as well. So I think that we have a good base to grow. The time is not necessarily for Nestlé Health Science today, barring any opportunity, but the time is not necessarily today for further acquisition. The time is much more to extract synergies, cost synergies, brand synergies, marketing synergies between the different assets. So this is what we are focusing upon. This is with that objective that we will, we will reach our margin above 18% by 2025. So it is less about external growth, it's more about extracting value by bringing more consistency between the different assets we have bought over the years. All these acquisitions you mentioned were quite small, François, and I think part of the question was that if you had looked at Haleon, that would have been a much larger portfolio. Would you, could you comment on what, you know, your view is on much larger transactions? No, Haleon is an interesting asset, but Haleon is in a space which is not the space we want to play into. Haleon is OTC, over-the-counter company, predominantly. We are not an OTC company. Just to clarify, we are interested in VMS, vitamin minerals and supplements. I know that Haleon and other companies do have assets in the VMS segment, but this is only one segment in their total business. They are much more in over-the-counter drugs. We are not in that segment. So we are playing in a more restricted area. Now, it is coming back to something you said previously. You were almost suggesting that the share buyback, excluding the disposals, would be smaller, and that will be revisited in the future. But you still have a very large L'Oréal stake. Would it be fair for investors to expect ongoing gradual reductions in that stake to keep funding large buybacks in Nestlé? I don't want to comment on that stake, but be aware of one thing that you will find the answer in my comment. We have reduced our investments in L'Oréal from formerly 24%- 20.1%. The 20.1% stake that we have has been selected because this is the minimum stake that we need to keep the equity consolidation. The equity consolidation is important because it has an impact on our EPS. So obviously, if we stayed there, it means that we did not want to go further down, or not just further down, because, I mean, we would have lost quite a lot. On the top of it, with that more than 20%, we have a certain number of rights attached to it, like two board seats and participation in two board subcommittees as well, which is the reason why this 20.1% stake is an important level that we did not want to cross, of at least not for a small, for a tactical move. An additional buyback should be considered a tactical move, so my implication. I'll let you conclude. Okay, thank you very much. We've come to the end of the time. Thank you for the audience. Thank you, François, for being here with us today. Thank you.