Good morning or good afternoon all, welcome to the Haleon Q1 2023 trading update. My name is Adam, I'll be your operator for today. If you'd like to ask a question in the Q&A portion of today's call, you may do so by pressing star followed by one on your telephone keypad. I will now hand the floor over to begin. Sonya, please go ahead when you are ready. Good morning, everyone, and welcome to Haleon's conference call for our first quarter trading statement. Thanks all for joining us in what I know is a busy results day. I'm Sonya Ghobrial, Head of Investor Relations. I'm joined this morning by Tobias Hestler, our Chief Financial Officer. Just to remind listeners on the call that on the call 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 U.K. and SEC filings for more details, including factors that could lead actual results to differ materially from those expressed in or implied by any such forward-looking statements. This morning, we'll run through a small number of slides before opening the call for Q&A. For those listening to our webcast, if you'd like to ask a question, please use the dial-in details on page two of today's press release. As you will have seen, two weeks ago, we provided an update with our AGM. Normally, we'd expect our Q1 trading statement to be before the AGM. This year was an exception due to the impact of the date of incorporation of Haleon. Whilst the focus today is on revenue performance, we've also provided group profit and margin detail on both the reported and adjusted basis, with a full reconciliation, including for organic revenue growth in the appendix. For information, we do not intend to provide quarterly profit data on an ongoing basis, and will only do this for as long as Pfizer reports our results as part of its financial statements and until our registration rights agreement with Pfizer and GSK terminates. With that, I'd like hand the call over to Tobias. Great. Thanks, Sonya, good morning, everyone. Let me first start with our first quarter highlights. As you have seen from our AGM trading update a couple of weeks ago, we had a strong start to the year, with 9.9% organic revenue growth, driven by a healthy combination of both positive volume mix as well as increased price. This performance is particularly impressive considering that we lapped the 16% growth in Q1 last year. Our power brands continued to deliver good growth of around 10%, with strength from Parodontax and our respiratory brands Theraflu, Otrivin, along with a recovery in Voltaren. Our local growth brands were also strong, up 14% with double-digit growth from Fenbid, Contac, Rometacin, and Flonase, just to name a few. Growth was underpinned by the exceptional execution across our teams. With a number of new innovations, including PanaNatra in Australia, the expansion of our gummies range for Centrum, and the launch of Emergen-C Crystals in North America. Our growth was profitable with inflationary cost pressures offset by price and efficiencies across the business, resulting in strong operating leverage. It was a strong start to the year, as you saw in our AGM trading update, we were pleased to increase our organic sales guidance to be towards the upper end of the prior four-six range shared previously. All other guidance remains unchanged. We are on track for our deleveraging target. Turning now to our first quarter results. Revenue of GBP 3 billion reflected 9.9% organic revenue growth. Adjusted operating profit increased by GBP 60 million to GBP 691 million, up 3% constant currency, resulted in a 23.1% margin, down 140 basis points constant currency. Margin was down for two reasons, much as expected from, one, adverse transactional foreign currency, and two, higher stand-alone costs, given we demerged from GSK in July last year. I'll come back to this shortly. Turning to the drivers of revenue growth in more detail. Revenue increased 13.7% to GBP 3 billion on a reported basis. There was a 380 basis points benefit from translational foreign exchange, mainly due to the year-on-year sterling weakness compared with our major trading currencies, including the U.S. dollar and euro. All in all, we delivered 9.9% organic sales growth with 2.8% volume mix and 7.1% price. It's worth bearing in mind that the 2.8% growth in volume mix cycled the ERP systems cut over and distribution model change last year, which fully reversed in Q2 last year. The 7% price increase included the annualization of pricing taken last year, along with a one-point benefit from hyperinflation economies, for example, Turkey and Argentina. Looking now at performance across our categories. Looking at the quarter, I was particularly pleased that our health revenues grew 6.6% or up more than 8% excluding the system cutover. Sensodyne was up high single-digit, underpinned by continued share gains, benefiting from innovation and strong growth across a number of markets, including Middle East and Africa. In the U.S., Sensodyne was up double-digit, reflecting consumption growth and pricing, along with normalizing retailer stocking patterns. Our other growth driver in the category, parodontax, was up double-digit. As expected, VMS organic revenues declined 3.7%, largely due to a decline in our immunity brand, Emergen-C, which had a tough comparative in Q1 last year from the Omicron wave. Centrum, where consumption patterns are more steady, saw high single-digit revenue growth globally. Pain relief revenues were up 11%, with Panadol and Advil up low and high single-digit respectively. Voltaren saw high single-digit growth with strength in Central Eastern Europe, China, and the U.S.. Respiratory revenues were strong, driven by increased consumption from cold and flu incidences, along with the rebuilding of inventories given low levels at the end of last year. Digestive health and other revenue was up 7%, with strong growth across Benefiber and TUMS, along with mid-single digit growth in ENO. Smoker's Health was up low single digits, skin health brands were up low teens, with ChapStick performing well. Let me now move to look at geographic segment performance. We delivered strong organic revenue growth across all our regions. Our emerging markets saw 17% growth, which included a 3% benefit from pricing taken in hyperinflation economies. Emerging markets made up 35% of our revenue, with growth led by China, up nearly 30%, along with broad-based growth in other emerging markets. Developed markets grew 6%. Looking at each region in more detail, starting with North America. Organic revenue increased 5.1%, with 3.6% price and 1.5% volume mix. The region saw low single-digit growth in Oral Health and a 20% decline in VMS, lapping the comparative from strong emergency demand last year. As I said before, one thing we have observed is that emergency demand has been skewed towards times of COVID demand. Having said that, innovation remains strong. We recently launched Emergen-C Crystals, which allows consumers to use the product without water. While it's early days, initial feedback has been strong. Pain relief was up low double digits, driven by pricing and continued strong demand for Advil. Voltaren was also strong, up mid-teens%. Respiratory health was up in the low 30%, benefiting from sustained cold and flu incidences and restocking following low levels of inventory at the end of last year. This was underpinned by continued uptake for successful new innovations, including Theraflu Max Strength and FLONASE Headache & Allergy Relief. Turning to Europe, Middle East, Africa, and Latin America. Organic revenue increased 13.1%, with 12.6% price and 0.5% growth in volume mix. As you will recall, this region was the most impacted from the ERP cut over last year. Excluding this impact, the region would have shown mid-single digit volume growth. There was strong growth in Middle East Africa, helped by Sensodyne and Panadol. In Europe, revenue was up double digit, with broad-based growth, including Germany, which was up middle single digit. Across the categories, Oral Health saw good growth, largely driven by Sensodyne, up high single digits, and parodontax, which was up low teens%. We're seeing good consumer uptake for a number of brand innovations, including parodontax gum and breath. In VMS, the region saw a mid-single digit decline, reflecting capacity coming on stream last year and a temporary decline in some local brands. Having said that, Centrum was up high single digit, reflecting our continued activation and strong execution across the region. Pain relief revenue was up high single digit, reflecting good growth from Panadol and Voltaren. Respiratory sales were up in the mid 30% range, driven by a strong cold and flu season, significantly ahead of last year. Theraflu and Otrivin saw particularly strong growth, helped by new innovations, including Theraflu Pro Naturals. Digestive health and others saw sales up high teens with good growth across most of our brands. Finally, turning to Asia Pacific. Organic revenue increased 11.7%, with 3.4% from price and 8.3% from volume mix. Growth from pricing was lower than our other regions, given the less pronounced inflationary environment. As a reminder, this region was not impacted by the ERP systems cutover. China, our second-largest market overall, was up nearly 30% following the easing of COVID-related restrictions and subsequent rise in cases. Elsewhere, as we expected, Australia and New Zealand declined high single digits given the high comparative last year from COVID-related demand. Looking across the Asia Pacific region as a whole, our local growth brands performed particularly well. Within the categories, Oral Health saw low single-digit growth, underpinned by strong growth in denture care and parodontax. Sensodyne saw good growth in Japan and India, offset by weakness in China. In VMS, we saw high single-digit growth underpinned by successful consumer campaigns for Centrum and in pain relief. Sensodyne revenues more than doubled, and Voltaren saw strong growth following the reopening of China. Respiratory revenues were up in the mid-30s, driven by Contac in China, which also more than doubled. Turning now to our operating performance. We delivered GBP 691 million of adjusted operating profit, an increase of GBP 60 million. Adjusted operating profit was up 3% constant currency. I'm pleased to report strong execution with pricing and efficiencies, helping to offset inflationary cost pressure with positive operating leverage from strong revenue growth. During the quarter, we saw the impact of the prior year ramp-up of the standalone costs, which had approximately 180 basis points negative impact. As you'll recall, in half one of last year, we were a segment of GSK and so incurred a very limited amount of these, which then subsequently ramped up through the year as we built out our teams and infrastructure to be a standalone company. We had a large year-over-year impact of these costs in the first quarter. We expect the negative margin impact to reduce from Q2 as we cycle over the comparators, which included more of those costs. As expected, we also incurred GBP 25 million in transactional FX losses, largely from the US dollar and our Swiss cost base. This had a 90 basis points adverse impact on our Q1 margins. This effect will continue in the second quarter. From Q3, we will cycle over the base effect from last year, and the impact of the Swiss franc depreciation was more pronounced. There was also a GBP 39 million benefit from movement in foreign exchange on a translational basis. Taken together, this resulted in a 10% reported increase in adjusted operating profit and a 23.1% margin. As I mentioned earlier, at the AGM, we increased our organic sales guidance. We now expect to achieve organic sales growth towards the upper end of our 4%-6% range, in line with our medium term up. All other guidance remains unchanged. Before opening to Q&A, I'd like to provide you with some information to help with modeling between the first and second half of this year. On revenue, we expect organic revenue growth to be higher in the first half of 2023 as we move through the year and annualize pricing. On margin, we would expect a lower margin in the first half than for the full year. While we continue to expect positive operating leverage in 2023, it's important to keep in mind a couple of factors which will impact the year-on-year movements in the first half. We have guided to an adverse transactional foreign exchange having an impact on the full year of around 40 basis points. As you know, we started to see the impact of adverse foreign exchange in the second half of 2022, this will continue into the first half of 2023. We shared last year that our standalone costs were around GBP 200 million. We expect a similar amount in 2023, the phasing of these costs is different year-on-year. In 2022, standalone costs were skewed to the second half of the year, with around 70% of costs incurred in the second half of 2022. In 2023, these costs will be more evenly balanced through the year, there's an adverse impact year-on-year in the first half on margin. To sum it up, Haleon has delivered a strong first quarter performance with strength across both our power brands and local growth brands. We delivered operating profits growth, and strong operating positive leverage across the business. This gives us confidence that we are on solid foundations to deliver our full-year guidance. Given the momentum across the business in what remains a challenging market environment, we remain confident of delivering on our medium-term guidance, as we stated in this morning's results release. With that, I would like to hand back to the operator to open up for questions. Thank you. As a reminder, if you'd like to ask a question today, please press star followed by one on your telephone keypad now. When preparing to ask your question, please ensure you are unmuted locally. Our first question today comes from Iain Simpson from Barclays. Iain, please go ahead. Your line is open. Good morning, everyone. Couple of questions from me, if I could. Firstly, I wondered if we could dig a little bit into Oral Health and the growth rates there. As a whole, it grew six point six. You've said that parodontax grew double digit. You've said that Sensodyne grew double digit in the U.S.. I was just wondering what the sort of drags on growth in Oral Health were, 'cause obviously, you know, something's got to be growing significantly below that double digit to get the division as a whole coming out at six point six. Any help there to unpick it would be great. Secondly, in respiratory, I appreciate that it's difficult to know for sure, but any thoughts as to where, inventory levels in the distribution were in respiratory, as we kind of exited Q1, and whether that restock across respiratory and I guess to a lesser extent, pain, had pretty much normalized and or whether we should expect to see any sort of restock benefit in Q2 as well, and perhaps any attempt to quantify the restock benefit in Q1? Thank you very much. Sure. Thanks, Iain, for the question. Let me start with Oral Health. I think on Oral Health, you know, a bit of a drag in China. As I mentioned, weakness there, the overall market's down and also some work for us to do on our execution there. Confident that also this will come back. Secondly, we have still a what we call a family Oral Health business, branded mostly under Aquafresh, which I think had a weak quarter. It's, as you all know, not strategic for us, so we're deprioritizing that, and I think that's ultimately what that's the delta to the drag of the growth and pulls it back to the overall results, which in my view were very strong with six point six reported and over 8% if you normalize the impact of the systems cut over. Just on the systems cut over on the categories, it was mainly in Oral Health and a little bit in pain relief. Across the regions, it was mostly in EMEA, LatAm and very little in the U.S., nothing in APAC, in the APAC region. On your second question on respiratory. We think, as we do, by the way, every year, we manage down our inventory towards the end of the season. We believe by end of Q1 that inventory levels in cold and flu are at the right level. They're healthy, and healthy in a way at last they should be, as we're getting out of the season in the, in the Northern Hemisphere. I think talking to our regions, I think they've managed, they've managed that, they've managed that well. I don't expect any shift between Q2 and Q1. Yeah. We've given you, I think there was a bit of help on that in Q1, because as you remember, COVID demand really shot up, sorry, cold and flu demand, largely driven by COVID, really spiked up massively in late December, both in China with the change in the COVID policy and then secondly in the U.S., which means shelves got wiped out and there was probably a bit of restocking happening very early in the year from that demand that was created in December. As we went through the quarter, the team's done what they've always done, manage demand down, so you exit the season at a healthy level. Yeah. Very clear. Thank you. Thanks, Iain. The next question is from Guillaume Delmas from UBS. Guillaume, your line is open. Please go ahead. Thank you very much. Good morning Tobias and Sonya. I have a couple of questions. The first one is on the slide in your appendix. I think it's slide number 20, where you provide some color on the key moving parts affecting your quarterly organic sales growth this year. When I look at Q2, I see a couple of pluses, so the reversal of the cut over in China, no minuses. Would it be fair to assume another strong print in Q2 may be at or above the level of Q1? Have you seen any material changes in your trending environment in April that would make us a little bit more cautious? My second question is on VMS specifically. Sequentially there, we see an improvement for both Centrum and Culturelle in the first quarter. Should we see that as evidence that the VMS category is re-accelerating already, or is it more down to some significant share gains for both brands? Related to that, on Emergen-C, can you maybe remind us how much of your revenues in VMS are derived from Emergen-C? Would it be fair to assume that Emergen-C will be far less of a drag to your VMS performance from Q2 onwards? Thank you. Good. Thanks. Thanks, Guillaume. Let me start with your VMS question first, right? I think working it backwards. Yes, Emergen-C is going to be less of a drag of growth because it was up massively in Q1 of last year. I think you might remember from the full year results where I had shown the total U.S. demand, there was this massive spike from the Omicron wave. We've always seen Emergen-C with immunity claim pretty much correlating with that and relating directly due to that. I think this year we just saw the reverse of it, that it came down again against this very, very high base in the prior year. Of course, we're moving a little bit out of... Emergen-C is also a little bit more seasonal, so we're moving out of the season, as well as we get into the summer months. Yes, Emergen-C, less of a drag. Yes, as you've seen, Centrum and Caltrate, both very healthy, exactly what we've always said. Geographic expansion, activation of Centrum around the world, further innovation on the product, as well as the ability to take price, and also Caltrate doing well in China. That covers the three largest brands in the categories. I think we have some local VMS brands. They had a bit of a mixed performance in Q1. We had, for example, a brand like Scott's in Southeast Asia. Again, we're cycling in Southeast Asia over a lot of COVID-related demand last year that came down. There's another brand we have in Italy where there's a different shipping and promotional pattern this year. I think those are temporary declines that will come back, yeah. If you take the big step back on VMS, to take a four-year stack on it, 7% growth over 4 years on an annualized basis, which shows you that we've been able to continue to grow. The consumers that came into the category are staying, in addition to us driving growth from innovation and expanding the brand, yeah. Now with respect to the Q2, we're not giving any growth guidance for four quarters. What we put into the appendix is just a few things to keep in mind. I think as a plus last year, by the way, was it improved sales last year. The year people forward pulled increased the sale, declined the sales last year, it's reversing out this year. As I said just earlier, I mean, we would expect sales growth in the first half to be stronger than the second half from a number of the factors that I had explained. Thank you. Thank you. The next question comes from Farhan Shaikh from Credit Suisse. Farhan, your line is open. Please go ahead. Hi. Good morning, guys. Thanks for the question. A couple from me as well. I think you mentioned you had an annualization of pricing and an incremental pricing in Argentina and Turkey. Should we expect further incremental pricing in your markets as you look to offset particularly the transactional effects headwind in H1? Whilst we're there, could you also update us on the hedging policy and the potential associated costs with that? Secondly, there was a very strong performance in North America at Sensodyne and Voltaren. Should we see this as a turnaround in performance, or are there any short-term dynamics that we should be aware of? Thank you. Good. Thanks. Thanks, Farhan. Look, on hyperinflation, I think the team has done a really good job in taking the necessary pricing to offset the impact. I think that will be probably most pronounced in countries like Argentina and Turkey. We believe. Look, it's hard to predict where it's going. I would say from where we sit today, I would expect the full year impact, or the tailwind from this hyperinflation on the organic growth rate to be less for the full year than it is now, because we're starting cycling over some of those pricing actions in the second half of the year, yeah. I mean, as you saw, we've made it transparent to you how much it was, because it just, it's a tail to the organic growth rate, but it will be less as we go through the year. We've also, I think on your hedging question, I think as we said, we started hedging for example, the Swiss franc over time, also then hedging on the Australian dollar, so currencies that are widely available. I think it's very hard to hedge emerging market currency. I think that is one that there will always be a certain impact on that. Just on hedging more broadly, of course, I mean, it's gonna remove or reduce the volatility, but at some point it's gonna catch up on us because it's not gonna, you can't hedge currencies forever, but it's just gonna smoothen it out over time as we start doing that. Yeah. I think in North America, I think look, very pleased with the performance. I think Voltaren now, I think last year there were the private label came to the market as obviously as expected, so I think it's stabilized from that. There were a lot of launches into that, into that category, and I think it's very clear that we're winning and then gaining share with Voltaren, which is positive. Secondly, on oral health, also good performance. I think good launch performance, success with price increases, and the brand being also good volume growth. Prior year, we had some movements in trading patterns. Those have normalized, so there was maybe a little bit of an impact on that. Having that normalized, which, you know, your weekly orders sometimes go a little bit up or down. I think ultimately good underlying performance on that brand, in the, in the U.S. Thank you. The next question comes from Rashad Kawan, Morgan Stanley. Rashad, your line is open. Please go ahead. Hey, thank you for taking my questions, and good morning, Tobias and Sonya. A couple from me, please. First one is you accelerated obviously your pricing over the quarter, particularly in EMEA and LatAm. I guess two-part question there. Have you seen any changes in demand elasticity as a result? You know, just kind of following up on Farhan's question, are you still looking at taking additional pricing this year? My second question is around China. Can you talk about a little bit more about kinda what you're seeing on the ground there? You mentioned it was up close to 30% with, you know, Fenbid growth particularly strong, some Sensodyne weakness. I mean, what are you seeing across the rest of the portfolio? How's the recovery kinda come in relative to your expectations, kinda how do you see that play out for the rest of the year? Thank you. Sure. Good. On your question on pricing and elasticity. We've not seen negative reaction from consumers on the pricing, we have been taken. I think very consistent to what we've talked about last year. We believe our products do not have a high elasticity. I think probably has a lot to do with our brand portfolio being all therapeutic. Secondly, also our products are not in your daily, weekly, or monthly shopping basket either. I think that makes these products sticky. It's very consistent to prior prices that we have seen. Of course, we watched it tightly. I mean, where we have sort of near perfect data is in the US, when you look at private label. Private label shares over the last year have been stable. Actually in the last 1 month and the last 3 months, actually, private label has lost share. I think the branded products have gained share. We're not seeing any widespread move or change of people taking private label off the shelf. If you take it down to subcategories, it's the same as we talked at full year. There is 1 or 2 of the smaller subcategories that are more pronounced to private label, where there were small moves, but we've not seen any broader change in consumer behavior. The same is also true across our European markets, Western European markets. If you think about Asia, it's a much less pronounced pricing environment anyway, less inflation. We also have taken less pricing there. If you look at our emerging market footprint, where we've taken a lot of pricing, I think I would call this more business as usual in quotation marks, so the team pricing up to what they can do. Last but not least, I think you've seen volume going up. I think we've continued to deliver volume growth. We did so throughout all of last year and again in Q1, which I think so the team is doing a good job in pricing at a level that we're still able to do both growing volume and growing price. About additional pricing. I think, look, we got the majority of our price increases through. I think the team will do what is needed as we go. Of course, especially in emerging markets, to say that that's a bit unpredictable. I would expect, you know, the majority of the pricing having been taken, there might be something to come. As you said, recycling over, you know, 3% in Q1 last year, which went then up. I think you also have the base effect that comes in, yeah. In China, I mean, I think it's. I mean, of course, I mean, there was this massive spike of COVID-related demand. I mean, if we just speak to our employees, I mean, there's no good official data. I mean, if I speaking to our teams there, we believe probably more than 80% of our employees had got sick at some point with COVID or cold and flu-like illnesses. There was a lot of demand. The team actually did a brilliant job of using our local manufacturing there to, you know, triple the output and able to ship to demand. That helped us meet the demand on products like Contac and Fenbid, yeah. On a product like Fenbid, actually, part of it is the demand. The other part is also we're coming back with the product because the product was actually pretty much blocked before. When the restrictions were still in place, if you bought the fever-reducing medicine, then your app that you needed to use to move around the country freely moved from green to orange to red. Actually, it blocked you buying a fever-reducing medicine, and that block has removed. I think that our Fenbid product was sort of not selling at all or at very, very little. I think there's a comeback of that to sort of normal level, plus then this massive extra demand too that came from the COVID change. Other brands, I think, look, I mean, VMS was up low double digits, the brand is calculated also doing well, Centrum doing well. I think then Oral Health was soft. I mean, overall, the market is down. There was free product given out. I think Oral Health, I think, the market isn't yet where we want it to be. I think that is coming back. Overall, I think, look, we've done well. We've reacted very, very agile to the change in a policy, and we're able to meet our consumer needs doing that. Thank you. Very helpful. Thank you. The next question comes from Celine Pannuti from J.P. Morgan. Celine, your line is open. Please go ahead. Good morning. Thank you for taking my questions. My first question is on your top-line guide for the year. You seem to say that some of the strong growth in Q1 is an impact we were seeing in Q2. We still have a good growth in Q2, but then a slowdown in the second half. I wanted to understand how much of a flu season variability is embedded in your guidance, i.e., or what kind of flu season do you have in? You know, if the flu season were to be good or bad, what kind of variability that would have as an impact on the growth in the second half? My second question, probably a bit related, so you help us with the H1 margin moving parts. That implies quite a step-up as well in margin in H2. I would understand that maybe you have no effects transaction and maybe lower standalone cost on a year-on-year basis. At the same time, probably a much lower pricing benefit and as well as less operational leverage. Can you give us a bit more comfort about that margin expansion in the second half? Thank you. Sure, Celine, thank you. Look on the cold and flu season, right? I mean, it's clearly, you know, Q1 we've done well. We capitalized on the benefits with agility the team had. We have that. I think that the strong delivery in Q1 was the key reason we upgraded the guidance for the year because we've delivered on that. For the rest of the year, I think it's very much in line with what we said at full year. It's very hard to predict where cold and flu demand will be for two reasons. One is we don't know what's gonna happen for out-of-season use, so we're gonna see that and we can probably talk more about it when we talk early August, the half-year results. Because, I mean, what we've seen last year and the last two years, there was a lot of out-of-season use of cold and flu products because we had Omicron with being having cold and flu-like symptoms. I think this is one we don't know. Right now it's still there, but we need to see if that happens, and that then has an impact on growth versus last year of plus or minus. We're ready if it comes, but if it doesn't, it would be a drag. That's unpredictable. For the next season, which is then the winter season, in Q3, we would expect to repipe the trade, very much similar to what we did in prior years. For Q4, we would normally assume an average season. It just depends on, we get a spike like we had last year that there's an early season or not, but normally you cover most of what you do from Q3. I mean, broadly, we still think on, you know, on a full year, up to, you know, 1 percentage point up down from a cold and flu swing, I mean, which is also I think what you've pretty much seen in Q1, right? Because not all the Q1 gains were just seasonal. There's also we do pricing, we do launches. That's what it comes down to. Look, we'll keep you updating it. We report it as a separate category, and give you as much transparency as we can on that. On half 2, the margin being higher in half 2, I think again to do with this cold and flu. We shift the seasonal demand for cold and flu in Q3. Second half has higher sales mainly on respiratory and without an associated A&P with it, because the A&P has been spent through the season in Q4 and into Q1. There's a mismatch between the spend and when we make the margin. There's also these higher sales, then of course have an impact on a higher gross margin, as you get the benefit from that. I think that's probably the biggest drivers on half one. Of course, year-over-year, yes, you'll see, as I've done with the building blocks, we're starting to cycle over the negative transactional impact and also the standard on cost in the second half of the year, if you do your year-over-year planning, yeah. One other thing, Celine, I maybe just mention, is just on that revenue thing as well. Just think about, you know, obviously we've delivered some really strong growth in China in Q1, which we have said around 30%. That benefit of Fenbid and Contac, et cetera, is not gonna continue at that rate as we move through the year. I'd just keep that in mind as well. Thanks, Sonya. Thank you. May I just ask an extra one on that? You also mentioned some replenishment or restocking in U.S. oral, I believe. How material was that? Sorry, can you repeat that? In Oral Health. Yeah. I wrote in your commentary during the presentation. Oh, restock. Yeah. In U.S. Oral, that's what you mentioned. Yeah. Yeah. Yeah. Yeah. Last year. Well, I'd say last year in Q4, in Oral Health, you were impacted by some retailers lowering their levels of stock. That's now washed through. You're not seeing that happen continue again. Anymore. Yeah. That's it, yeah. Yeah. Thanks, Sonya. Thank you. The next question comes from Bruno Monteyne from Bernstein. Bruno, your line is open. Please go ahead. Hi, good morning. Tobias, I would like to talk a bit more about that margin discussion from just them. If H1 is down by 80, 90 basis points, that would almost imply the second half is up by that amount. That would mean the exit rate of margin in the second half is around 23.4%. Is that the right level to think about to start thinking about 2024 margin, the usual operating leverage comes on top of that? Is there actually fundamentally H2 margins will always be higher than H1? How do we think, is that the right starting point at 23.4, or should we take out seasonality? The second question is more related to the U.S.. You know, pricing is lot lower there than in the other regions. Can you just remind me why that is? Did you do more pricing earlier on, or why is it so much lower? Can you also comment on the market share performance of Sensodyne, whether it's in the U.S. or in Europe? Are you still gaining market share or not? Thank you. Great, Bruno. I think on the half 2 margin, I think I would always expect half 2 margins to be better and higher, right? That really comes from us shipping the manufacturing and shipping and selling the seasonal cold and flu seasonal demand in Q3 and early Q4, and then really only activating our advertising and promotion spend on that income and sales latr in Q4, actually when the season starts hitting. Somewhere from November on, you're starting to go on air with those products, and then you're gonna advertise those throughout the whole winter months. While, you know, the inventory sits there and gets depleted towards Q1. I think that's probably the most we've seen this historically in the prior businesses as well. I think that's why I don't think half 2 margin is a guide for half 1. Plus, of course, of course, we wanna have the agility to invest behind launches as well. It might change a little bit on that as well. On your U.S. question, the pricing in the U.S. in Q1 was lower. That was a bit lower than it was before because we shipped, we sold some short-dated inventory. On a number of brands, we have some short-dated inventory. There's a way to sell, there are special customers that sell... You're able to sell that through at a discount. That depressed the pricing number for Q1. I think that's temporary in nature. I think team doing the right thing, but that's why you get a slightly lower headline number on pricing for North America that we put out. Other than that, I think the team's done what we say in the pricing they put through. They've done well. I think there is no concerns on our ability to take price in the market. Yeah. I think on market share, I think at Oral Health, also in the U.S., I think we're look, I mean, it's good. I think we had a good Oral Health performance globally. I think we're, in my view, doing well against gaining share. What you have to be a little bit mindful of is that pricing was different across the players. You also have to look a little bit at volume because I think there's The pricing strategies, I think, are a little bit different across the players. I mean, as you know, our pricing philosophy has been we price up as much, only as much in order to make up the cost of the inflation and in order to maintain volume gains. Other players might have different philosophies of pricing more, but accepting volume declines as well. Overall, I think feel good about where the US is and also when they look at the launch plans as well, that what's coming through on innovation basis as well. We'll give you the market share numbers at half year. We believe you need at least six months in order for them to be meaningful, so we'll do it at half year and full year always. You're gonna see that when we put out our half year results. Yeah. Could I just come back on that first point? The seasonality in the margins. Obviously, your company is quite new, so you're not used to the usual level of seasonality in margin. At the group level, is the seasonality in H1 and H2 as big as 100 basis points? Is it materially bigger? What should we think order of magnitude seasonality difference? Look, I wouldn't give you that detail, right? I think you just see sales being always higher in the second half of the year, particularly on respiratory products. I think you see that also when you look historically in the numbers that we reported half one, half two, or, and especially on the respiratory side. Yeah. Okay. Thank you. Thank you. The next question comes from Chris Pitcher at Redburn. Chris, your line is open. Please go ahead. Hi, Chris. Hi, Chris. Can you make sure you're not muted locally? We will move on for now. The next question comes from Tom Sykes from Deutsche Bank. Tom, your line is open. Please go ahead. Thank you. Morning, everybody. Just coming back to your comments on inventories. I know you said you'd run them down as usual. You also said that you don't really know whether you're going to get the out-of-season demand or not. Would you say the inventories are where they should be expecting decent out-of-season demand or where they should be expecting a normal low season, please? Then could you just repeat the comments you made on the power brands versus the local brands, please? I think you said local was up 14. Obviously, there's China hyperinflation, et cetera, in that figure. Could you just give what your longer run expectations are for local versus power again, please? Thank you. Sure, Tom. Look, on the cold and flu inventories, I think we believe we are in a healthy place towards the end of, towards the end of the season, right? I think as it normally would be, right? Look, I mean, there is different. Ultimately, there's only so much we can influence. If a retailer decides they wanna hold more or less stock, that's ultimately up to them. We just make sure that we're not overstocked because we don't wanna be caught up in Q3 when the big restocking happens, that you say, "Oh, by the way, there's still a lot of inventory, right?" And I think, look, it's usually easier to do when you have large retailers where we buy the data, and we know exactly how much they have. I think when you look, when you go into markets or results or individual pharmacy, that's a big job of the sales force to do to ensure that the pharmacies have ramped down and have the normal base amount that they need to get through the summer. That's always, you know, it's not that there's no cold and flu through summer. There's always, there's always been a base amount. The question is just, it's a little bit more than that. I mean, this is not spiky, right? I think when you look at the last two years, the out-of-season demand, it didn't come in the cold and flu waves. It was sort of a consistently slight higher demand that went through the summer. If you remember the charts I put in at that full year, right? I think we don't. It's not the winter season where you have to be ready for these massive demand swings that spike up, where you suddenly the weekly demand goes up three, four times, and then comes down again, right? It's more this question on throughout the summer, is it gonna be higher or lower than we had in prior years. On the power brand, what I had said is that the power brands were up 10%, the local growth brands were 14. I think overall, I think between power and local growth brands, these are our growth drivers. We would expect them to drive the majority of our growth because that's what we allocate our A&P, that's where we have our innovation, these brands need to drive our growth, yeah. I mean, that local growth brands, you know, in a quarter did a bit more can happen. I think this time it just happened because there's a number of respiratory brands in there that have done particularly well. Also, we have some brands where we repiped, like on TUMS, you remember we had a recall last year. We repiped that, I think that also benefited the local growth brands, right? I think the hyperinflation impact isn't particularly different on the local growth brands compared to the power brands, because when you look at countries like Argentina and Turkey, they're selling a high portion of power brands as well. The mix isn't significantly different on those, yeah. Okay, many thanks. Thank you. The next question comes from Olivier Nicolaï from Goldman Sachs. Olivier, your line is open. Please go ahead. Hi. Good morning, Tobias and Sonya. Just two questions, please. First of all, considering the strong start of the year and the better profitability in Q1, could we expect another strong year of cash generation and therefore net debt to EBITDA to be very close to three times by year-end? Related to that, as a second question, one of your main shareholders commenting in the FT that they will start selling in a slow and methodical manner, could think that strong cash generation, but despite your high level of net debt to EBITDA today, would you consider participating in any potential placing or should we rule this out at this state? Thank you. Thanks. Thanks, Olivier. Look on cash generation, right? I mean, we're very confident that we're gonna delever to less than three during 2024. We're on track with that. From that point of view, no update on that. I think, look, I mean, overall, year started well, and overall confident in our ability to meet the targets that we have set out on that, yeah. On the Pfizer interview that popped up, I mean, I've really, I mean, can't comment on it. I saw it also in the press this morning, you would need to ask them on that. I think ultimately, not a surprise. They've always said in a sense they wanna... It's not strategic to them. They wanna, they wanna monetize it in an orderly and a reasonable fashion. Given that the selling window is opened, I think and that lockup is over, that would happen over time. I mean, for us, I think, really important, I mean, the capital allocation priorities we set out at the beginning of the year is, number one, investing in the business. Two, deleveraging and strengthening the balance sheet. Three, looking and exploring inorganic growth opportunities. As a fourth bucket, looking at dividend and share buybacks. You know from the AGM that we have the authority to do that, but clearly, I think any decision would follow the priorities we've laid out, which are the four that I just quoted. Yeah. Thank you very much. Our final question today comes from Chris Pitcher from Redburn. Chris, your line is open. Please go ahead. Hello. Can you hear me now? Yes, Chris. Yeah. Second time's lucky. Ah. Hi. Okay. Thank you for that. Apologies if my questions have been asked 'cause I had to drop off the call, but I'll be quick. On parodontax, given the comments you've made around the strength of growth in Asia and EMEA and backing out the other stuff, I mean, the brand looks to have grown 20%, 30%. Is that excessive? And if not, could you talk us through where the new marketing and the products are getting particularly good traction by country, and whether you're seeing any noticeable cannibalization from Sensodyne. The second one on skin health. Growth there has been improving sequentially. Now you're through the divestments. Should we reconsider the growth of that subcategory? I appreciate it's small, but it does appear to be emerging as quite strong growth. Did you give specific ChapStick growth? Thank you. Chris, look, I mean, on parodontax, I mean, overall, I think, it's, the growth is in the teens, which is, which is good. That's where we expect it to be, right? I mean, I think given the geographic expansion and also some of the launches that are happening, I think we're not concerned about cannibalization of Sensodyne because I think it's a... It's ultimately you have a, when you look at what the consumers need, you have a prevalent need, right? I think the prevalent need is either sensitive teeth or it is bleeding gums, right? I think ultimately you wanna solve, you wanna solve those needs. Really the goal for us is bringing consumer into the franchise. If you're predominantly concerned about bleeding gum, can I give you a parodontax? If also you're worried about sensitive teeth, I can give you the in the combination product, that additional benefit. In parodontax, I think when you look at when you look at bleeding gums and breath, I think it's also one where we make it more transparent to users what the consequences are of bleeding gums, of gingivitis, that it has a much bigger consequence. I think we believe there is, I think, much, you know, more people into the category and household penetration that can be increased through parodontax. Yeah. On your question on skin health, I mean, look, it's a little bit of an up and down, but I think what happened in Q1 of this year in skin health is I think ChapStick's done well, so I think a good start there. So I think that has helped. Look, I mean, I think it's, you know, the products we have are good. They follow our go-to market model. So from that point of view, happy to take and happy to take the good results. I mean, this is not a strategic category for us overall. I think in most of these brands tend to be more local or in the example of Benylin, a little bit more regional, a regional brand. Yeah. Cool. Thank you very much. Thank you. This concludes today's Q&A session, so I'll hand back to the management team for any concluding remarks. Great. No, thanks everyone for your questions, for engagement. Look forward to continuing the dialogue and we'll speak soon. Thanks very much and have a lovely day today. Bye-bye. Thank you. Thank you. This concludes today's call. Thank you very much for your attendance. You may now disconnect your line.