Direct reports. All right. Well, good afternoon, everyone. Welcome to the UBS Global Consumer and Retail Conference here in New York City. My name is Peter Grom. I am the U.S. Consumer Staples Analyst here at UBS, and we are very excited to have joining us this afternoon, John Faucher, Executive Vice President, Head of M&A, and Chief Investor Relations Officer from Colgate-Palmolive. Over the past few years, Colgate has implemented several strategic initiatives that have resulted in improved financial delivery. Recently, the company outlined their 2030 strategy that will help the company deliver strong and top and bottom line growth looking ahead. In terms of format for today, I have a number of questions that I plan to ask John for the first 35 minutes or so. For the last 10-15 minutes, if there's any questions that you all have, please feel free to submit them. They'll show up here on this iPad. I'd be happy to ask any questions on your behalf. Before we start, however, I am required to read a legal disclaimer. As a research analyst, I'm required to provide certain disclosures relating to the nature of my own relationship and that of UBS with any company on which I express a view on this call today. These disclosures are available at www.ubs.com/disclosures. Alternatively, please reach out to me, and I can provide them to you after the call. With that, John, thanks for joining us today. Thanks for having me, Peter. Always good to see you. Maybe starting with the 2030 strategy, and I guess I wanted to start like, you know, just getting your perspective on it, right? You recently completed the 2025 strategy that was really focusing on re-accelerating top-line growth following what had been a more challenging time for Colgate. I know you touched on some of this at CAGNY, but as we think about the next five years, can you maybe compare and contrast the 2030 strategy versus 2025? Is this a continuation of many of the many changes that you've implemented, or is this, you know, are there more meaningful changes, if you will, happening within the organization? I mean, as always, you'd like to say the answer to that is both, right? There's a lot of meaningful changes, but I think the overall viewpoint is that this is evolutionary, not revolutionary, right? We'll start with 2025 and what worked and, you know, what we needed to change when we looked at 2030 and then how we see that going forward. In 2025, you know, we entered the 2025 strategy not really growing, right? We had been growing primarily through FX-driven pricing through the mid-2010s, and, you know, we weren't driving dollar sales growth. We weren't driving bottom-line growth. Our EPS had stalled. We looked at this and said, "Okay, how do we create a new growth mindset around the organization?" That was really the language that Noel used in putting together the 2025 strategy. It was about re-accelerating the top line, building innovation, making progress on digital and data and analytics, scaling those capabilities across the organization, and getting back to a solid financial footing where we were delivering, again, dollar-based sales growth, dollar-based EPS growth to deliver on TSR, right? That was the step function that we needed when we looked at the 2025 strategy, and we think that went really well. We didn't deliver against everything, but, you know, if you can deliver against 75% of the strategy, longer term, you're gonna be ahead. As we looked at 2030, it gave us an opportunity because for 2025, we needed to prove to the organization that we could grow again, that we could execute against a strategy. Now we have strong belief within the organization about 2030, which I think allows us to be more aspirational. Again, evolutionary, not revolutionary, but really pushing in terms of some of these areas where we say, "Okay, we can deliver real change." Right? If you look at how we've talked about this, it's a little more complicated how we present it internally, but we focused on five pillars, which Noel has talked about at a couple of different conferences, and it's really the global strength of our brands. How do we deliver against that? We have Colgate, which is the most penetrated brand in the world. It's in just slightly under 60% of the world's homes. It's a great opportunity for us. We've got high market shares, great brands across the world. We are focused on scaling our capabilities in areas like data, digital, analytics, and AI. AI sort of touches on all of these actually. We are focused on innovation, right? One of the things that we have talked about in 2030 is that we need to deliver more impactful innovation, particularly premium innovation, and particularly in the United States. That's a big opportunity for us when you look at what can change going forward versus the last plan. We are gonna focus on omni-channel demand generation, right? That's something that we have talked a lot about. Diana Schildhouse, our VP for Growth and Strategy at Hill's, talked about how Hill's is putting that type of demand-driven model into place to deliver the right content to the right people in the moments that matter. Then finally, culture. You know, everyone internally at Colgate understands that we have a very strong corporate culture. So many people have been in the organization for 20 years, 30 years, 40 years. How do we tap into that strength of culture and really create a high-impact culture that can help us win? Those are the five pillars. I'm sure we can talk about more of them as we go forward, but, you know, what it's really doing is, again, getting us aspirational about how we can accelerate change going forward. Yeah. I mean, one of the pillars I wanted to touch on was innovation. I'd be curious, you know, innovation has always been a focus for the company. What's different as we look out over the next five years? I think as you think about your long-term aspirations on the top line, how big of an impact can this change when you think about the 3%-5% target? Sure. I think, you know, innovation will be key to the 3%-5% target, right? If our categories are growing 2%-4% longer term, in order to deliver against our 3%-5% long-term organic sales growth target, we're gonna need to gain share, right? The best way to gain share is to innovate, is to drive category growth even faster. You know, we're seeing that in the U.S., right, where the categories are weak, but some of the categories are growing a little bit faster. It's premium innovation that's driving that growth, body wash being a great example of that. If you look at innovation, one of the things we talked about with the 2025 strategy was we focused on core innovation, right? Taking those big businesses, 60%-70% of sales and saying, "Okay, we can't have leaky buckets." We need to innovate on core. That's brands like Colgate Total, Science Diet, Palmolive, Protex, etc. Making sure those brands stay healthy. Those are big pieces of our business. They have high levels of household penetration, and, you know, once you have those leaky buckets, they become very difficult to stop. We also talked about faster growth adjacencies. What segments of the categories are growing faster, right? That was basically things like whitening, right? We looked at faster growth channels and markets, okay? Focusing on things like e-commerce, what have you, as ways to grow the business faster. Those really helped us as we looked at innovation over the last 5 years. What we've done since then is we brought more process and more strategy into the center, right? Because we're run by geographic divisions, and a lot of the innovation was happening within the divisions themselves, and we still need to do that, right? You still need to innovate for the local market. What we felt was there was a way to generate more scale across the organization by doing more of the innovation work from the center. We built up the muscle, for example, in enterprise oral care, which is our oral care group in the center that can help drive innovation around the world. Then we developed a new process, and again, Noel talked about this at CAGNY, which starts with strategy, okay? Strategy is we have to understand our consumers, what are their need states, what are they looking for? The example we talked about at CAGNY was whitening, right? Where 66% of consumers in whitening, and whitening is a universal need. They have unmet needs within the category. We go into discovery, right? Which is, okay, how do we discover ways, new products, new concepts that will meet those needs? That's really the research angle. That's where we can go in and use AI, for example, to develop new concepts. We've talked about how we're using, you know, AI to develop new product concepts at CAGNY both of the last two years, right? We come up with those concepts, and then we're gonna test them, right? We can test them using what we call digital twins, which is where you can basically create AI-generated panels that allows you to get feedback on the concepts, so you can see what's going to work. Then the next piece is incubation, and this is something where we are building truly new muscle in terms of incubation. You know, a lot of these truly impactful new products are gonna start off small. You know, you're not launching something that's gonna have, you know, 1%-2% market share right off the bat, right? You start small, maybe it can be e-commerce, maybe it can be brick-and-mortar. Again, maybe we're just testing solely through AI to see how big could this product be. We understand, okay, how do we iterate? Is the concept right? Is the target right? Is the media correct that we're going after? Once you've proven that concept in incubation, that's when you go to scale, right? That's when you say, here's again, a company that has the, you know, the Colgate brand has the highest household penetration in the world. We're in 220+ countries and territories around the world. Scale and scaling fast should be a huge competitive advantage for us. We're getting better at it. Still a lot of work to do. The best example is probably Colgate Optic White Purple, where we launched this in China. Massive hit on Douyin and, you know, very simple concept, which is you take purple toothpaste, most people have a little bit of yellow on their teeth. The purple and the yellow create a temporary whitening effect. Really easy to understand, great for social media, great for Gen Z. It was a big hit in China. We have now rolled that out to every single division around the world much more quickly. You know, we're using AI-driven content. It's an example of how we can get better at that scale piece, but still one where we probably need to build the most muscle going forward. I guess building on some of this AI discussion, an area I wanted your perspective on is just this clean room concept and this promo AI tool where you're driving better personalization, you're finding ways to optimize purchases, repeat purchases, etc. How big of a concept is this, and what's the opportunity as you scale this across the organization? Okay, two separate concepts here in terms of clean rooms and promo AI, and I'll talk about both of them, right? They're both about driving higher ROI on our spending, right? This is the issue, that, you know, the best way to deliver growth, and, you know, look, we're focused on productivity in all of this, but the best way to deliver margin expansion is to grow the top line faster. We're focused on taking the spending that we have and making it more effective. Clean rooms, basically what we do, and Hill's is the best example of this, and Diana Schildhouse talked about this at CAGNY. What we do is we take our first-party data, and we pair that with the retailer second-party data, and then our media partner's third-party data, and we combine them in a data privacy-driven environment so that we can target our media more effectively. That can be by demographics, that can be by purchase behavior. We can even focus on what media works better with different consumers. It creates a very high-level data environment where we can generate significantly greater ROI on that spending. As Diana talked about it, we have about 70% of our U.S. media for Hill's that is being spent through clean rooms, which we think is very much at the high end of what's going on in CPG right now. That's clean rooms. Very exciting. We're continuing to work to roll that out across other retailers. Obviously, with Hill's, which has a more bigger digital footprint, you can get more of that media covered, but it's a huge opportunity everywhere. Promo AI is a little separate. It's a little bit different from that because it's really focused more on the trade spending, right? What we call gross to net. That's the money that you don't see that's above the net revenue line. What we know there is most of that spending is effective, but it's difficult without taking the spending away to see what the impact is. Obviously, if you take the spending away you lose that volume. What we've done there is we've used large language models, and we take our shipment data and we take our retailer category consumption data, and we run billions of different scenarios to create a prescriptive output. That prescriptive output will solve for the variable that we choose. That could be volume, that could be sales, that could be margin. It will tell us, here's the promotional cadence that you should have to solve for sales or margin or volume, right? Maybe you want to run a 2-week promotion on MaxFresh the first 2 weeks of the month, and you want to be running a 1-week promotion on Optic White the third week of the month, et cetera. It'll come up with a more prescriptive model for us to implement with our retail partners. What we're seeing is very strong returns on that. That is data-intensive. It's labor-intensive, right? Because you have to build these models. Once you've done that, it can continue to learn, right? That's the beauty of these AI models. You know, over time, it will get better and better as we feed more data in there. Both of them allow us to look at our spending, one above the net revenue line, one in the advertising line, and try to maximize that ROI. No, that makes sense. I guess on the advertising line, you know, there's a lot of changes that's happened in the last five years, next five years. One of the things that I think has allowed the company, and you've talked about this quite a bit, has been the focus on reinvestment and advertising. I know my guess is this is going to be a continued focus as even as we think about the years ahead. A question I often get is just how do we think about it really from here, especially as we were just discussing on the data, that AI is allowing you to be more efficient. How should we think about that percentage of or advertising as a percentage of sales, you know, longer term? Sure. I mean, the key on advertising is, are you spending the money effectively? Are you driving higher ROI? Are you delivering growth, right? We look at that, and we basically say, "Okay, we can do a much better job of measuring the effectiveness of our advertising spending." We now have tools to raise the ROI on that spending. You know, we think that gives us, you know, the ability to spend more money on advertising because we can spend it smarter and with greater results. You know, yes, we are seeing a higher return. If we can deliver the dollar sales growth we need to, the gross profit growth we need to fund incremental advertising while still delivering competitive earnings per share, dollar-based EPS that delivers top-tier TSR, we think that investing back into the business is the right choice. That creates the sustainability, the duration of the organic sales growth, right? We think it's the market's confidence in our organic sales growth that helps our PE multiple, right? You wanna have confidence in organic sales growth to drive the PE multiple. You wanna deliver dollar-based EPS growth, and, you know, that's what creates, along with, you know, the dividend, the competitive TSR that we're looking to deliver. You know, we wanna deliver operating leverage, right? We wanna deliver that through driving the gross margin. We wanna deliver that through productivity programs like FTG and SGPP. We'd like higher advertising to, you know, we wanna fund the advertising while still delivering that margin expansion through other line items. Makes sense. I guess, you know, maybe pivoting to category growth. I would love just some perspective on what's happened, call it, over the last 12 months. Obviously, a lot of moving pieces across your various businesses, geographies, what have you. I mean, what have been the biggest surprises where maybe things come in better than you would have expected, maybe conversely, where things have been more challenging? I guess when you compare your business to maybe some other consumer staples companies that aren't really facing maybe the same structural challenges, have you been able to really uncover why demand, maybe more in the developed markets like the U.S., has been a little bit more challenging? Yeah, I mean, so I'll start with sort of a general view of where things are. You said sort of what's better, what's worse, what have you. I mean, I'll start with Europe, which is probably the one market where it's been very much in line with our expectations. You know, we've talked about Europe as a market where if we can get slightly positive pricing and slightly positive volume, we think that's a good output. We, you know, we have our team there has done a tremendous job working with our revenue growth management programs, right? Because Europe was a market where we had negative pricing basically for flat or negative pricing for 30 years. Then obviously with the strong inflation we had in 2022, 2023 and 2024, we delivered mid-single-digit pricing. We knew that that wasn't sustainable. Through strong innovation, through great negotiation, through a lot of product relaunches, we've been able to continue to get slightly positive pricing, and we think that's likely to continue. Emerging markets have generally, I think, held in, you know, well. You know, you look at Mexico, which I think is holding in very well in the context of a weaker U.S., which we can talk about as we go through this. You know, Brazil's been good. There has been a couple of pockets of, I would say, relative softness in Latin America that we'd called out before, in the Andean region, Central America. You know, we saw a little bit of a blip there in the third quarter. They bounced back in the fourth quarter. We think they're hanging in not quite as strong as Mexico and Brazil. Asia, you know, China has been generally a little bit soft from a category standpoint. You know, we have two businesses there. Colgate China has done very well, very e-commerce-focused, social commerce-focused. We talked about Purple delivering great innovation, China for China innovation that's driving that e-commerce business at very high premium price points. Our H&H business, which has struggled a little bit more with the category because it's much more focused on brick and mortar. We have improved the execution there. We have new innovation coming through. We have new ODG work being done there. I think H&H is gonna get better, but that's still a work in process. China, from a category standpoint, continues to be, you know, a little bit soft, particularly in brick and mortar, but with e-commerce positive. India, from a category standpoint, had a little bit of a hiccup late last year. On top of that, you had the GST implementation, which created a little bit of extra volatility. Categories in India seem to be okay at this point. You know, and then, Africa Eurasia, which is, you know, a smaller region for us. You know, we're still getting FX-driven pricing in some markets. We're still getting inflationary pricing in some markets, and volume demand has held in well. You know, Africa Eurasia, the results that you see continue to be pretty consistent growth there. The volatility from country to country can be high because of the nature of those markets, but it's a great division for us, and they've done a great job. You know, the bigger delta has been the U.S. You know, when we spoke a year ago at this conference, you know, the categories were soft, and we're trying to determine why. You know, I think there's still a little bit of that from that standpoint. I think, you know, we're not seeing population growth, which I think is having an impact. I think there is still consumer concern about prices broadly because you're seeing this expressed in volume, right, not in pricing. The whole K-shaped economy impact is there. We're seeing growth in premiumization. You look at a category like body wash, where what's growing is the $10, $11, $12 body washes, and what's declining is the sort of $2-$4 body washes. The consumer seems to be a little nervous. There's not a lot of incremental pricing that's out in the market right now. The categories are still a little soft. You know, in the shorter term, we're, you know, we're losing a little market share in toothpaste. You've been able to see that in the numbers. I think that's gonna get better as we go into Q2, Q3, as we have more innovation coming in. It's a slightly softer start from that, from that standpoint. But I think between Optic White and some shelf share gains on Max White, we think we have an opportunity to change the dynamic there. No, that's really helpful, John. Maybe to, you know, dive into some of those regions a bit more, maybe starting with North America, and you alluded to it's still a little bit softer. One of the other dynamics last year was this concept of inventory destocking, and I think there's a lot of debate out there in terms of what that looks like as we lap this. Just any update on that standpoint. Then related, right, you know, clearly categories are still soft, but when we think about the guidance for this year, you know, what's kind of contemplated from like a U.S. category perspective? Sure. I'll start with the second one. The U.S. categories, we were pretty blunt on the Q4 call, and then Noel talked about this at CAGNY. We were not building in any material impact. You know, maybe slightly better in the back half of the year. But our long-term organic sales growth target is 3%-5%. Our guidance for this year is 1%-4%. Embedded in sort of the midpoint of that range would be categories continuing at the current pace. As Noel said at CAGNY, that's kind of what we're seeing now. Categories continuing at that rate. You know, I think as we look out into the back half of the year in the U.S., you know, we're optimistic that I think you're gonna see, again, continued innovation. I think everyone realizes that innovation is really the way to drive the categories right now. We have increased premium innovation, probably the most I've seen in North America, in my tenure at the company, that'll be kicking in really in the second quarter. I think you'll see more of that. From an inventory standpoint, I think you know what we have seen is less what we would consider sorta true destocking, which is, okay, we have eight weeks of inventory, we're gonna go down to six. I think what we have seen more is, which has the same impact, shipments below consumption, right? As retailers look out and say, "6 months from now, 9 months from now, if the category isn't growing, I need less inventory than I had anticipated." You know, we would argue that's not technically destocking, but the fundamental premise is the same, which is that you're probably gonna continue to have shipments slightly below consumption from that standpoint. Even as we start to lap it, you would still anticipate that kind of continuing unless we see an acceleration, if you will, in category growth. I mean, in theory, right, at some point, you start shipping with consumption, and that should get better, but this has all lasted a little bit longer than we would have anticipated. Our assumption is, you know, steady state until we start to see it. To be perfectly candid, it's a little bit easier for us to build that level of conservatism into the model because we're seeing stronger growth in emerging markets and because our other big U.S. business in Hills continues to grow faster than its category. Yeah. I do wanna pivot to Hills in a second, but I guess just bigger picture, right? You can't fully control category trends. Just maybe weaving in some of the commentary we started with, you know, and the changes within the organization, is the company better prepared to deal with maybe some of these near-term challenges today versus maybe, you know, 5 years, 6 years ago? Definitely. I think, you know, the key thing is, you know, five or six years ago, we weren't growing and we weren't winning, right? We didn't have that growth mindset, as I mentioned before. I think we have a different viewpoint in terms of what it takes to win. You know, it's different than what it was 10 years, 15 years ago, right? You know, back in sort of you think about the early 2010s, you know, our categories kinda grew on their own. You had population growth, you had per capita consumption growth. You had Carrefour growing square footage every year. You had inflation-driven pricing in emerging markets 'cause you had good emerging markets GDP growth. A lot of that went away over the last 10 years-12 years. Sitting there and saying the category is gonna grow 2%-4% or 3%-5%, and we can execute and gain share to grow ahead of the category, that mindset had to shift. We're much more focused on growing the categories ourselves. I think we are better set up. The shape of the P&L is dramatically different from that standpoint, right? We have built up the advertising to sales ratio, as you said, and that gives us flexibility to make decisions, right? If you look at 2025, our advertising to sales ratio was down 20 basis points, and we would have liked it to be flat or up. But it was important for us to deliver in our, you know, to our aspiration of delivering consistent compounded dollar-based earnings per share growth. You know, having flexibility in the P&L, having taken advertising to sales up 150 basis points the year before, that really gave us that flexibility to, you know, make the right decisions, sustain investment, and, you know, scale capabilities and yet deliver dollar-based earnings per share growth. Yeah, I think we, you know, I think from a culture standpoint, from a growth mindset standpoint, and from a P&L standpoint, we're in much better shape to deal with difficult markets. Makes sense. Maybe just to round out, and you touched on this a minute ago, but Hill's, right? Would love to hear your perspective on kind of the opportunity from here, both U.S. and internationally. You can't fully control category growth rates, similar point, but, you know, this has been a key area of investment. You spent a lot of time getting the supply chain, you know, network adjusted, new facilities, capabilities, acquired others, I guess. Can you just talk about how these investments are unlocking value for Hill's longer term? Sure. You know, one of the things. We've talked a lot about advertising to sales, and I think one of the key points going back to when we started this strategy. If you go back 2016, advertising to sales was 9% at the company. Within that, we had so much FX pressure that that really put a lot of pressure on the margins to go up on our dollar-based businesses, right? If you go back 10 years ago, the North America margin was in the mid-30s%, and the Hill's margin was in the high 20s%, and we weren't spending enough behind either of those businesses. Back then, advertising to sales on Hill's was below the company average. Advertising to sales on Hill's now is above the company average, and we've increased sales dramatically over that time period. We have made significant investments. On top of that, as we discussed at CAGNY, between the clean rooms and the marketing mix modeling and these other factors, we have dramatically increased the ROI on that spending at Hill's. We have also invested significantly in innovation, and you touched on it. One piece of that was capacity, right? In order to run innovation, you need to basically stop your line so you can produce new products. If you're out of capacity, it's really tough to stop the line. We added dry capacity through the Red Collar acquisition. We added wet capacity by building our Tonganoxie facility. Now we've been able to innovate in new spaces, particularly within wet, right? Pouches, mousses, tins, all these other forms that are becoming significantly more important in the context of the category where you've seen, you know, a lack of growth in large dog kibble, and you're seeing strong growth in areas like small dog and cat, which are gonna have higher prevalence for wet food. That's given us a big increase. The other piece relates to the capabilities piece that I talked to before, right? We've invested significantly in data, in analytics, in digital, omni-channel, AI across the organization, right? But some of the highest return along with Colgate China on that is gonna come from Hill's because of the digital nature of that business. It's been a great opportunity for us to invest back, going back to the dollar-based revenue and dollar-based earnings growth. Hill's is two-thirds U.S., so it's a great driver of dollar revenue and dollar profit for us. You know, we continue to see great opportunities there. Hill's has a, you know, high single digit/low single digit market share in the U.S., and that's its best market, right? There is tremendous opportunity around the world, whether that's in Europe, Latin America, Asia, to drive significant market share growth. As we build out the relationship with vets, right, because that is a key piece of the business model. As we build out the relationship with vets, we can also layer on top of that Prescription Diet, which is the therapeutic side of the business, which provides even greater mixed benefits on top. Great. You know, maybe just some commentary on what you're seeing from a category perspective in pet. What are your expectations as it relates to category growth this year? I guess, you know, there's a lot of moving pieces. You know, your business is still gaining market share, but you're still kind of lapping this private label dynamic. As investors think about the growth trajectory of Hills, like what should we expect over the next, call it 6 months-12 months? Sure. What we've been saying the last couple of quarters is we've given you some insight into how the U.S. business is growing. Like the Hill's U.S. business, which doesn't include the private label impact, has been growing about mid-single digits, and we think the category is roughly flattish. You know, we continue to hear more from investors that I think than what we tend to see, that other companies are a little more optimistic that the category is beginning to slowly improve. For us, you know, there's some noise, could be, but I think we would argue for now we're probably gonna call that it's still the same level, which again is kind of flattish. We're gonna focus on gaining share within those segments. Yeah, I think that's how we would describe it. I think the key for us going forward is, you know, to have more confidence in the category improving. We probably need to see an increase in household formation in the U.S. Right? It's large dogs and bags of, you know, large bags of dry dog food. That's really the declining part of the category right now. You know, we're still seeing increases. You know, people aren't buying houses. They're staying in apartments longer, so they're adopting small dogs, they're adopting cats. If we start to see people moving into houses, I think you'll start to see a move in the large dog business, and that should help get the category moving a little bit more. Okay. Maybe to round out the pet discussion, would love an updated view on kind of fresh, maybe an update on Prime100, you know, key learnings, thoughts on brand performance. Just as you think about fresh in the U.S., I mean, is this an area you would be interested in playing in longer term? Sure. On the last part, you know, we're still determining our plans on Max Fresh. You know, the purpose of buying Prime100 was twofold. One, it's a great business. You know, when we took a look at it, the more work we did, the more we realized, you know, its success in the vet channel and its success, particularly in looking at Derm as a segment from a therapeutic standpoint, was well-earned. Very strong formulas, good science behind it, great relationships with the vets, and that's one of the things that made it attractive to us. It was a profitable business, growing nicely, great management team. You know, it's a great business in Australia. It's coming in ahead of its expectations, and we are learning a lot about the way to do formulation in fresh, the way to do distribution, manufacturing, all those things. You know, where that leads remains to be seen, and when we have something to announce in terms of geographic expansion, we'll let you all know. Okay. Why don't we pivot to margins and, you know, starting with gross margin. I think despite kind of the inflation, FX pressure, you've been really able to deliver solid gross margin expansion in recent years. I think part of that has been driven by, you know, your productivity program, you know, Funding to Grow. You know, how much more runway is there in FTG? FTG is a fascinating program. You know, one of the things you learn when you come inside is productivity is a lot of work. It really is a lot of work. In a program like FTG, you have to have real processes in place that are running year-round because, you know, it's not like you can get to December 1st and be like, "Oh, FTG is done." No. January 1, we have to have a full pipeline of FTG. We do a great job. It's one of the things the organization is incredibly proud of, to create that consistency of the FTG model year by year by year. Again, what you really want is to generate top-line growth. That's the best way to generate operating leverage. You need that consistent productivity effort every single year. I think, you know, we are very confident that we can continue to deliver that. You know, the one thing I would say is it's interesting. FTG is not just a gross margin program. We talk about it in the context of gross margin, but there's FTG for corporate. Hope, who works with me, runs the FTG operation for corporate. You know, FTG can be interest expense, it can be whatever. But it's truly ingrained in the organization. I would expect our guidance included another good year from FTG. Okay. Maybe sticking with productivity, but as part of your 2030 strategy, you discussed a new strategic growth and productivity plan or SGPP. How is that different versus your standard cost savings program? Is there a way to frame how incremental this program could be on top of FTG? Sure. You know, we will have more discussion about. We've talked about the level of charges, which is $200 million-$300 million. We have not given you the savings targets yet. We will when that's appropriate. You know, but we have said returns from this program should be in line with our historical returns. You know, while funding incremental investment in advertising capabilities, what have you, is part of SGPP and also using it to help deliver dollar-based EPS growth is part of it, there's a big unlock from an organizational standpoint, right? We talk a lot about omni-channel demand generation or ODG. You know, fundamentally, there is a blurring of the lines that's going on right now between what is marketing, what is innovation, what is advertising, what is customer development, right? If you think about selling on TikTok Shop, right? TikTok Shop is media, but it's also commerce, right? You know, how do we have a more integrated view of how we deal with this new environment, right? That's gonna require, you know, it's a blurring of the lines in terms of organizational structure, and we're very much doing this on the fly, right? You know, we have examples of how we're doing it really well with Hill's and with Colgate China, but each market's going to develop differently, right? I mean, if you look at the success of Douyin in China and a TikTok Shop in Europe or TikTok Shop in the U.S. isn't gonna reach that level of scale anytime soon. How do we build to that over time? We are taking a look at the org structure and saying, "How do we create a more flexible, faster organizational structure, building in AI from a productivity standpoint and from a growth standpoint, you know, to drive faster decision-making, drive greater scale across the operation?" You know, we think the key thing is on SGPP is, yes, it will deliver productivity, but for it to truly succeed, we need a faster organizational structure that can adapt to this new ODG world. Okay. That's really helpful, John. I guess maybe rounding out, you know, the margin discussion a bit. You guided the gross margin expansion this year, but the operating environment remains pretty dynamic. You have benefits from currency. We just talked about productivity. You know, can you just remind us, you know, what's embedded from a tariff standpoint, an inflation standpoint? I ask that just in the context, you know, we've seen some pretty, you know, volatile input costs, I would say in recent weeks. Just curious whether any of these recent developments are kind of a cause for concern. Yeah. I mean, you know, look, we're obviously gonna pay attention to everything that's going on in the world right now and, you know, we're gonna run through different scenarios as you would expect. This is the same thing last year when, you know, we were dealing with tariffs as a moving target. You know, what we said on tariffs was there would be some rollover impact from tariffs that would hit this year given the timing. You know, there's one incremental tariff which is Ecuador has put tariffs on Colombia, you know, products coming from Colombia, so that's also, you know, having an incremental impact. You know, raw materials, we had stated there would be less raw material inflation this year than what we saw last year. We saw, you know, very high levels of raw material inflation. We're gonna need to see what happens with resins, et cetera. Obviously, you know, there is some risk if things stay elevated. It takes a little while for resins to flow through the P&L, as you know. We're gonna keep an eye on that and, you know, we're gonna take steps needed. You know, is there the opportunity to get incremental pricing? Are there incremental cost savings programs you can put in? You know, it's helpful that we have both FTG and SGPP in this type of environment. You know, the best way to drive operating leverage, as we said, is to drive, you know, dollar sales growth, so that's gonna be the focus. You know, we are very good at dealing with raw material volatility and, you know, it's in our business model, right? You know, Latin America deals with more raw material volatility than pretty much anywhere else in the world, and so we're gonna put the plans in place to deal with it. You know, everything's kind of a moving target right now. Great. I just wanna remind anyone, there's no questions right now, but if anyone wants to submit a question, please feel free to do so, in the few minutes we have left here. John, you know, currency, it's been a while, and I know this could change, but, it's been a while since it's been a tailwind. You know, you mentioned this, the teams have become accustomed to dealing with currency volatility. Curious how it shifts your views on investment levels. It seems like you'd have more flexibility to maybe navigate some of these near-term challenges with that being a tailwind. More specifically, how are you thinking about maybe reinvesting some of this favorability, versus letting it drop to the bottom line? We'll have to see what happens, right? We guided to a low single-digit benefit from foreign exchange. You know, if you look at the dollar, it has moved over the past week and a half from that standpoint. The dollar's moved back up. Very much a moving target. You know, we will focus on FX in terms of thinking, okay, how do we deliver against our targets? How do we deliver against our, you know, aspirational goal of delivering, again, you know, consistent compounded dollar base earnings per share growth? You know, it's difficult to bank in currency, right? We build it into the model at spot, but, you know, currency has been - 8 out of the last 10 years. The largest benefit we've seen from foreign exchange has been 1.3%. We are going to, you know, run the model with a way that gives us financial flexibility, and if currency moves, we'll adjust to that. You know, it's difficult to say, right? Because it's moving around, like with resins and everything else, it's moving around so much right now. You know, this is why we build financial flexibility into the model. If we can invest back, that's what we'd like to do. Again, it's the balance of investing back in the business versus delivering the bottom line. Okay. You know, maybe another one here. We'll see if there's any more questions, but you know, as the head of M&A, I think I need to get some thoughts on the company's strategy. You know, are you looking to build capabilities? Are you looking to gain exposure to certain categories? I guess what I'm really trying to understand is when something comes across your desk, how do you assess whether that's something you're interested in or not? Sure. Let's start with the strategy, right? Because it's important to start with the strategy, otherwise M&A can just be a chase for shiny objects. We do not build M&A into our strategy, right? Either from a qualitative standpoint or from a quantitative standpoint in terms of building it into the model. Particularly 'cause if you build it into the model from a qualitative-quantitative standpoint, that's when you end up chasing. Okay, we need to do a deal to deliver against this. Now, what we will then do is say, okay, how can M&A be additive to growth? Or really, how can it be additive to value creation, right? Because it may not be about growth. It may be about, you know, we can look at capabilities, right? We bought capacity. You know, we bought capacity in a way that lowered our gross margin in the short term, created this volatility surrounding private label, right? Which will go away at the end of the second quarter. You know, those were steps that maybe we wouldn't have done before, but we said, you know, the NPV of this deal is attractive. It allows us to accelerate growth at Hill's. You know, we're gonna buy capabilities. You look at Prime100, right? You know, it's a great brand in Australia, but it lets us learn more about a high-growth segment that potentially could be interesting. You know, I think going forward, one of the things that, you know, I would expect us to do more work, more M&A going forward now that we've reestablished our growth trajectory that we're on and say, how can we add more to the portfolio, subtract more from the portfolio to truly drive value creation? Again, I think one of the things that's been really successful about the 2025 strategy in terms of it working was we have helped. I talk about sort of a growth mindset. I think we've gotten a better value creation mindset across the organization, understanding how these decisions around M&A, around capital really drive value longer term. You know, the income statement is a blunt instrument, right? The cash flow and balance sheet really allow you to drive additional value over time. You know, Stan does a great job getting the organization focused on cash flow. Our leverage levels are, you know, attractive here where we have flexibility. Fundamentally, it's gonna be how do we drive value, and how do we ensure that if we look at something, we're the best owner of that asset, right? Anybody can buy something that grows, but how do you ensure that when we buy it, we're gonna grow it faster and drive more value than everyone else who's looking at this asset? Awesome. Well, John, why don't we leave it there? On behalf of UBS, everyone in the room, those listening online, thank you so much for taking the time to be with us today. Super helpful as always, and nothing but the best of luck moving forward. Thanks, Peter. Appreciate it as always. Thanks, everyone.