All right. Good morning, everyone, and welcome to day two of the UBS Global Consumer and Retail Conference here in New York City. My name is Peter Grom. I'm the US Beverages and Household Products Analyst here at UBS, and we are very excited to have the Estée Lauder Companies joining us this morning for our keynote. On stage with me are Fabrizio Freda, Chief Executive Officer. Good morning. Jane Hertzmark Hudetz, Executive Group President. So Fabrizio has been CEO for nearly 15 years. Yes. Under his leadership, the company has doubled its revenue, diversified geographically, and welcomed new brands into the portfolio, and expanded its channel mix, driving the prestige beauty category's growth globally. Jane is an executive group president at the Estée Lauder Companies, leading a portfolio of 10 brands, including La Mer, Tom Ford, MAC, Clinique, and others. And she's also leads the enterprise-wide strategy for skincare and haircare, has been with the company for 35 years. That's impressive. Jane and Fabrizio, we're so pleased to have you joining us today at a pivotal time for the company, where it seems like a return to sales and profit growth is on the horizon, albeit with, you know, some volatility globally impacting the broader beauty industry. In terms of format for this morning, I have a series of questions that I plan to run through with Fabrizio and Jane during the 45 minutes we have here this morning. So before we start, 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. In addition, please refer to the slide up here being presented for the Estée Lauder Company's statement regarding forward-looking information and non-GAAP disclosures. All right, so with that, why don't we get started? So, Fabrizio, maybe starting with you. There's obviously been a tremendous amount of volatility as we think about the beauty industry over the last few years, coming in and out of the pandemic, and especially over the last 12-18 months. Has your long-term view on the growth opportunity for the beauty category changed at all in the past year? And then just given the volatility in China, Asia travel retail, how strategically important will these two historic drivers be to your long-term growth going forward, and how do you really see them evolving from where we are today? Thank you. First of all, good morning, everyone. It's a pleasure to be here. And so, now, our point of view on the long-term strengths of the industry is really unchanged. I believe this has been in the last many years, by the way, you said I'm here since 15 years, leading the company. In the last 15 years, the market has been growing about 6% per year on average. So this is an extraordinary category. When I say category, I mean prestige, luxury beauty, globally, is an extraordinary category, and it's growing, very regularly, very strong, one of the best markets of the world. We don't see any sign that this, for the long term, has to change. You are right. As part of this, the China and China TR or Asia TR part of the business is a very important segment of this overall growth. It's been a very important segment in the past years. We don't see, in the long term, this segment being less important because now the size of this segment is very, very big. So the will be enough to grow single digits these markets for creating a lot of net extra sales for the entire market, just because the size is so big. So even more modern growth create a lot of extra volume, so a lot of extra profitability opportunity. So this market will remain very, very important. For the long term, you need to think also about, for example, the consumer per capita, the consumption per capita of every consumer, for example, has doubled between 2017 and 2022 in China. And by the way, the same is happening, a bit less than doubled, but a similar huge increase is happening for all the other emerging markets put together. So there is this enormous growth, the growth of the consumption per capita, which is linked to the growth of the middle class and to development of the high segment of the middle class in China and in all these other emerging markets. That trend is not changing. Now, however, if you go back to the current volatility, meaning the Covid period, the post-Covid period in China, this has been very volatile. Still today, the market is volatile, the consumer sentiment is still soft in China in this moment, and this creates volatility even by month. So there is softening in this moment in the overall consumption, but we don't believe this is going to be in the long term because this is linked to consumer sentiment. The consumer sentiment will be, in our opinion, coming back, will coming back along with the economy and the stress post-Covid evolution that will probably go away over time. So that's the current situation. In China, mainland particularly, we see also a very strong development of the online sales. Now, the online sales have reached the high level of the total sales, and there are some segments which... There is competition between the different channels. For example, Douyin is doing very well. Tmall in this moment is very soft. They were soft in the eleven eleven versus previous trends. In travel retail, there is the comeback of traffic, which is very, very encouraging, but at the same time, the conversion is volatile, depending by the period of the year. So it's all about the consumer sentiment not being completely back... but the overall trend, we believe, will improve as the consumer sentiment will improve and as the economy will improve. So your question was about the long-term expectation. I would say the long-term expectation is unchanged, despite the fact that in the short term, there is the volatility, that by the way, you are already aware of, and has been going on for some time, but we believe this will be regular, will be managed. Now, within that, within that market situation, going back to travel retail, China and China, we are in a very, very strong position to capture this growth, as with this growth will evolve. First of all, the good news I shared already during the last call, which is we have done great progress in, great progress in the, inventory level in the market. We have confirmed that we believe that by the beginning of quarter four, so by April, we will have an alignment of our retail sales and our net sales, thanks to the fact that the inventory will be reduced to more normalized levels. That's a big change. That's a big change, which is one of the reasons why in the first six months, sorry, in the second six months of the fiscal year, so in January, June, we have forecasted the comeback to growth of the company, and this one is one of the important inflection points, is the normalization of retail versus net, thanks to the inventory working in China, overall. So that's the first thing. The second thing that is happening is that our market share in 2023 in China has been growing, and so the position of our brands is very strong, market share is growing. Now, in the last quarter two, so the last quarter of the calendar year, we grew also market share in skincare, in fragrances, and in haircare. In the quarter, the makeup was where we lost a little bit of market share. So sometimes I hear reports like the market share quarter two was not growing. That's accurate in total because of the makeup couture, by the way. By the way, makeup couture is what we are addressing with the Tom Ford brand, which is our key player there. So this will be addressed in the future. But in reality, it was growing also in skincare. And in skincare, in this moment for us, is really the key, most important thing, because the recovering our skincare trend is obviously the most impactful element in our so-called inflection points. So the position of our brand is strong. Other proof to that, you can think that our freestanding stores in the quarter, in our quarter two, in China, grew double-digit. I mean, you don't grow double-digit in a soft market, a store where it's only one brand sold, if this brand is not interesting. So frankly, we have plenty of proof in also our research, the consumer, the aspirational value of our brands are intact. Actually, in some cases, very reinforced. And Jane will speak in a moment to some of these more in detail. And last, our innovation in this market is strong today, is going to be one of the strongest we have ahead in the next year, 18 months. And so we count on this also to stabilize first and then accelerate the growth in, particularly time, as I said, starting April first, when the inventory will normalize. So, a pretty exciting inflection point for these markets. And I want to say that our long-term expectation is that, frankly, we become even better, even stronger, as the consumer center will be recovered. I would like also, maybe Jane, to add a few things on the brands. Jane is a brand leader and has many brands, and so I think she can provide perspective on this issue of what is the status of the brands and go very much in depth. Please, Jane. I'll make a couple of points. First of all, I'm delighted to be here today with all of you and with Fabrizio. In terms of China, Fabrizio said the strong position of our brands. I'm going to give you a couple of highlights. First, you know that luxury is growing and luxury skincare in the market is strong. We have a brand called La Mer that grew very strong double-digit in calendar year 2023. They cover the luxury end of the market and all of the innovations recently, lifting serum in the fall, soft cream just launching, fresh cream now, are really checking, and this brand has a very strong innovation pipeline going forward. Staying in the luxury space, our Estée Lauder flagship brand has a luxury pillar called Re-Nutriv, recently launched innovations in skincare and in makeup. Both are doing well, and there's a powerful pipeline going forward with a special focus on age reversal and longevity. In terms of luxury, Tom Ford also has double-digit growth in fragrance. Also our brands, Jo Malone, Kilian, and Frederick Malle, are very strong. As Fabrizio mentioned, Tom Ford in particular, we have an opportunity in couture makeup in the future. So that's a future opportunity, as is Balmain Beauty, which is going to be launching this fall. In addition to all of this, MAC is off to a very good start with a new innovation in China called Maximal Lipstick. And we, as you know from previous statements, we have an innovation center in Shanghai. Our desire is to become close to consumers, to create innovation and understanding of consumers there. We are also investing in local brands, and one fairly recently is one called Melt Season. It's a fragrance brand, and so that sort of wraps up some of the highlights. That's really helpful. Maybe two follow-ups. You know, maybe Fabrizio, can you maybe just- ... add some color to that, the innovation discussion. You touched on it a lot during the last earnings call. And then Jane, for you, on Clinique specifically, can you discuss why you're doubling down on the brand's authentic dermatologist heritage now, what we can expect from this renewed strategic focus? Yeah. No, I mean, the strength of our brands passed by innovation. First of all, we built a research center in Shanghai as well, that now is fully active, and this is creating a lot of a new opportunity for innovation for China, for Asia, and then the overall opportunity to bring the Asian key activation, particularly in skincare, to the rest of the world. This has started and is still feeding already our innovation pipeline, and most importantly, feeding the understanding of the local consumers and what they want. As you know, one of the new emerging competitive elements is the ability of local brands in China and in Asia in general, to continue to develop. So having a research center there and the ability to innovate with the local consumer is going to be a tremendous element of strength for the future competitiveness in this market. On top of that, our innovation is very, very strong in every single category. But in Asia, particularly important is innovation skincare. And again, Jane will speak about that more in detail in a few minutes, but there are also innovations which are about breakthrough scientific finding that will make a big difference into our innovation in the future. On top, during this period of rationalization of our business or our profitability, we have rationalized our innovation also. We say cutting the tail, so we have reduced the amount of innovation, which is small and a little bit more risky, and dramatically increase what we call the breakthrough innovation. So the innovation, which are big innovation with scientific advantage, with clear consumer desire, which enter big areas of the market where we have opportunity to further grow market share. So that's the, that's the vision and that's the activity we are doing in innovation. On top of that, the way we are supporting innovation in the market, meaning in the consumer activation of this innovation, is we are working on dramatic increases in the way we go to market, meaning the distribution choices, in the segmentation of the consumer, in the focus on the right consumer groups, but also in the way social media is being used in the various market activation. So innovation is a moment of, important breakthrough opportunity for us, and maybe I'll allow Jane to speak about some of the examples of this- Yeah ... innovation breakthrough. So you asked me about Clinique, so I'll start with Clinique. Clinique was born in 1968, and in a very, very unique position in conjunction with a dermatologist, and you know about dermatologist brands today, but this was certainly at the very beginning. The whole idea behind Clinique was that great skin could be created, and that with a formulation philosophy that was all about peak efficacy and peak safety. You may hear about derm brands today, and they might be one or the other. In Clinique, the formulation philosophy is a very unique combination between the two, and since its beginning, they've done 6 million allergy tests and studies, which is really quite extraordinary. So this is really the key moment, given the interest in derm and active derma, and being the inherent position of the brand to begin with, to truly tell the brand story. And by the way, this brand not only has what we call active derma or derm positioning products, claims, ingredients, but also has this in terms of makeup, and it's a very, very powerful brand. Today, Clinique is the number one dermatologist beauty brand in the United States, according to Circana, and holds very strong positions in makeup as well. And whether that's foundation or whether it's the very famous Black Honey that has been viral on TikTok for three years, I'm very glad I can share that with all of you. It's a very powerful brand. So what are we doing? Right now, in this spring, in a few weeks, we are going to start to double down on our communication. You might have seen that we have partnered with Mount Sinai to do allergy studies and skin studies. We were at the American Academy of Dermatology last weekend. We have not been there in many years. We had a booth. We were present. We were a very busy booth. We were there, and we'll be present for years to come. We're engaging dermatologists, derm creators, to tell our story and to tell our message. And so this will. You will start to see this very end of March, beginning of April, and it's a super exciting moment for the brand, and it's backed up by future powerful innovation. In derm brands, you know, like Clinique, we play in big spaces like moisturizers, but you also play in very specific spaces like anti-redness, pigmentation, hyperpigmentation, UV et cetera, et cetera. So you will see many categories, many exciting innovations based on not only the history of Clinique, but really what the future holds for this amazing brand. Just staying on skincare for a second, Estée Lauder has been doing some amazing, amazing scientific work. First and foremost, you might have heard of their work in age reversal and longevity. That is a super serious study in the Lauder brand and with our R&D. 15 years of research, multiple patents, engagement with Harvard, MIT, and Berkeley, and recently, an establishment of a Stanford Longevity Institute. This longevity is also actually going to be carried to Hainan next month, and the ability to go after the luxury space with this brand is just in its infancy. Recently, they launched a Ultimate Diamond Brilliance Soft Cream that is doing incredibly well, and there's a pipeline innovation around longevity that's super interesting, and honestly, has the science to back up the credibility, the credentialing, to really make a difference. They're also in the process right now of launching a new product called Supreme Night. Our company, our R&D centers, have researched and understood Night for decades. You know, the famous product, Advanced Night Repair, but now it is going into cream and there's a lot of collagen understanding and positioning of this incredible innovation. Just a couple more that I'd like to mention. One is the skinification of makeup, so this idea of skincare and makeup coming together. M·A·C launched a new foundation called Studio Radiance last fall, that's doing incredibly well, with many more to come in this space. Bobbi Brown as well, in their new soft cream foundation launch, which is doing extremely well in China, and around the world. Speaking of makeup, you know that M·A·C is the number one makeup brand and is very, very strong in influencer EMV and very, very strong in trend. And they are doing well and have very exciting new pipeline, coming down the pike. In fragrance, Tom Ford, to say the least, Jo Malone, many, many exciting things to come. As I mentioned, haute couture makeup for Tom Ford and Balmain fragrance, you know, coming down the pike. I'm grateful that I got to share that with you because I'm super passionate about our brands and the great, great things to come. Thank you. No, that's great. I mean, can you- Can I add just one other point- Sure ... on this, on this point of the brands, the innovation, is also sometimes I get asked, "What are you doing in this new consumer trend, which is the Active Derma segment of the market?" And Jane just explained- Yeah, the role of Clinique in a very clear way. And I want to add, the other brand that has a huge role in this segment for us is The Ordinary. And The Ordinary is doing extremely well in the quarter, too. Grew 2 points of market share only in U.S., is number one brand in any emerging markets where we're launching it. Is flying, is what - Definitely in this world of the new brands, is definitely one of the strongest and the fastest-growing overall. And The Ordinary is an active brand, and so our vision is that our market share in the active derma is actually increasing, is very strong, to the great success of The Ordinary, to the great work on Clinique, which is now going to be completely accelerated as of April first, as Jane explained. And there are other brands in our portfolio, smaller today, but we believe will play like, I don't know, Dr. Jart as an example, that will play a very big role in continuing taking this segment from different angles. So this is one of the innovation opportunity, acceleration opportunity. Also, I want to say, I spoke about the market share in China. I want to say also that, do not evaluate the strengths of the portfolio in the U.S., where there's been loss of market share, mainly for distribution coverage issues. But we still own the top five-- four of the top five brands in the prestige luxury, category in the United States, as per NPD. And, and The Ordinary, Clinique, The Ordinary, are the number one and the number two, and The Ordinary is by far the number one in volume, meaning in single volume purchases of the consumers. That's really strength. By the way, we also own the number one and two brand in makeup in NPD, in the U.S. Our portfolio is extraordinary, and with the kind of innovation that you heard a few examples from Jane now, combined with the ability to put more resources and better social media in improving our way to market, we expect very strong results in the future. That's great. Now, maybe shifting to markets, right? A key question that we often get is, is there another market that can mirror the outsized growth that China has seen over the last decade plus? I would imagine there's not a single market, but maybe can you just help us understand where you see the biggest opportunities? Why do you think this market or, or particular set of markets are attractive? And maybe more importantly, what is Estée Lauder doing today to capture their fair share of growth in in this market? Yeah. First of all, we, we believe that we have done this in the last years. So we have built market share in most of the emerging markets around the world. We are number 2 or number 1 company in every key emerging markets in front of us in the future. That's an important thing. The position in the emerging markets is very, very strong. Now, the emerging market, ex-China, you know, if you ask what is the single market which will be the same size as China, frankly, there is not a single market. But the sum of the emerging markets is going to be a very, very important segment of growth for the entire industry in the next 10 years. And, for example, if you combine India. India is one of the top. Vietnam, I believe, will be one of the very interesting in the future in Asia. Mexico is very strong in Latin America, Brazil also, but Mexico is even stronger in this moment. Turkey is a huge potential within the European group of emerging markets. So there are some emerging markets that have even more potential than others, but that's not the only way we look at it, and I'll come back to India in a second, but we also look at the total of emerging market. Now, emerging markets are part of our region. In our company, every emerging market is part of the region that is within the region in which the market is. But we also have an overlay, meaning there is somebody responsible of all emerging markets in the company that takes care of cross-fertilizing best practices and making sure that we learn how to get into emerging market in the best possible way. And so before dipping, maybe down in the example of India, I would like to say: What are the key drivers in emerging markets? First of all, in China, the strength of the segments is actually China is stronger in the luxury segment, meaning the more higher quality, more expensive products are the fastest growing part in China, even now, even as we speak. While in the other emerging markets, at the beginning of the journey, tends to be the entry price point of prestige, the most powerful to build market share in the in these markets. In our portfolio, brands is really well designed. In fact, in many of the emerging markets, MAC is our biggest brand, historically Clinique is doing very well. But more recently, one of the key assets is The Ordinary. The Ordinary is an extraordinary brand asset to better penetrate the emerging markets. Just as an example, we launched The Ordinary in India, and it's among the top brands in the Middle East, in many other parts. It is doing super well in every emerging market where the brand is launched. So, the second characteristic of emerging markets is that the distribution in emerging markets has been very gradual over the years, because when you had to build brick-and-mortar distribution in a market where luxury infrastructure has to be built before you could get there, this was taking time. The history of India as a luxury market is frankly been of a very gradual development of infrastructure. But the arrival of online and what I call the model that they use in China, meaning that online, very fast, can cover all the cities, even the cities which are not ready for luxury infrastructure, and the consumers for every city and the middle class for every city can access the sale of this product. The arrival of online has completely changed the dynamic. Now, the ability to penetrate, to grow emerging markets for our industry has changed. In Estée Lauder Companies, we do use the online penetration as a way to accelerate. So we have the right brand portfolio for emerging markets, we have the right distribution model for emerging markets, and emerging markets overall are a big growth engine for the industry in the future, so we are very well positioned. Now, down to the example of India. What we've done so far is build the market share and the brand portfolio needed to have scale in the most important emerging markets, so we can grow in the future, double digit, all these segments. Take India as an example. We have a very high market share of prestige and luxury in India. We are the market leader, clearly, and we have a very strong position with our key brands. MAC is very strong. The Ordinary, recently launched, is already number one, and we have a great partner in Nykaa online, which is covering more than 50% of the market there, online market there, and it's covering every single city. We have invested in a local brand, in a minority investment. The brand is Forest Essentials, which is one of the biggest brand in skincare, ayurvedic in the market. This combination of high market share, great penetration online, great alliance with local partners, the ability to have also market share of the local brands done by minority investment with the right to buy in the future model, and all of these position us extraordinarily well. Personally, I believe India will be one of the markets which is the most interesting over the next 10 years in terms of development, in terms of opportunity, and we are very well positioned on it. That's great. Maybe kind of going back to the world we're in today, and you mentioned this before, Fabrizio, inflection point, you mentioned it on the last earnings call. What drives the confidence that we're at this point of inflection? Now, thank you for this question. I think that, first of all, what is the inflection? So the inflection, as we defined it in our last call, is the fact that we, in this second semester of this fiscal year, meaning January, June, we are going back to growth, and we are going back to growth in sales. We are going to go back to growth in profit, and we are projecting and estimating a profitability increase versus last year, but also versus the first quarter. So it's an inflection point of profitability recovery. It's an inflection point because we go back to growth our sales. It's an inflection point because our understanding of the external environment, our ability to understand the details, for example, of inventory levels in the various parts, is dramatically increased. Thanks to what we have done. So the external, first of all, the inflection is the comeback to growth and profit growth. There are four inflection points I would like to discuss. One is externality. We have a better understanding of the market and the level of inventories than we had in the past, and this has been an important improvement, that this visibility guides our action more strategically in everything we do. Second, is an inflection in terms of growth, because as I said, we are growing, and we demonstrated why. We have great solid brands, as Jane has explained so well. We have a great innovation program. We have the great focus on the issues we need to address, starting with the important issues of realigning in net retail in TR Asia, and that is happening. Obviously, the growth will be stronger as of April first because of that, that we explained. But overall, this is a big inflection point for inventory, for alignment on net retail. It is an important inflection point also for, as you will see, the continued acceleration of progress in our distribution model in the United States, where we will continue to align our distribution to the consumers' new habits, as we go. And then it is an inflection point in the profit recovery. Obviously, these very difficult last 12, 18 months have had a big impact on our profitability. We wanted to recover it fast, so you heard us speak about the profit recovery plan. Now we have added the restructuring program to that, and we have added a huge organizational focus on this. So there is an inflection point in the profit recovery plan, and then we want to... By the way, we have communicated that we have a program that will deliver $1.1 billion-$1.4 billion net extra profitability between 2025 and 2026. Then is the inflection point of the energy of the team to deliver to this profitability recovery plan around the world. And when I say the team, I don't speak only the team in New York here, and the senior management. I really speak the team in every region, in everything. We have created a model where we are controlling the execution of all these points, visibility, externally, growth, and, and, profit recovery plan. They are in the agenda of every single person inside of the company, and we have hired an external consultant, which is helping us to create the visibility to make sure that all the saving and activity hit the bottom line as planned. And, maybe, Jane, you want to add a few words- Yeah How you feel about that? Super enthusiastic. And this is, as Fabrizio said, permeates not only the senior executives, but throughout the company, the support of Fabrizio, the support of this incredible plan. We are gonna be faster to market. We're gonna be closer to our consumer. We're gonna get our understanding faster. As I say, our best days are truly ahead of us. And being a brand person, I am so personally excited because some of this savings will be funneled back into supporting our brands, advertising our brands, making our brands known to more consumers around the world. So I just wanted to express that, on behalf of the team. I think that's pretty clear. I want to build on the profit recovery plan, the $1.1 billion-$1.4 billion over the next couple of years. It, it's very impressive. Can you maybe just talk about the main projects of this plan, how they're going to impact gross margin, operating margin? And how do you think simplifying the organization will allow you to drive stronger revenue growth? Yeah. First of all, the profit recovery plan is super well structured, and I want to first say that we have organized it in a way where part of my team is focused exclusively on the profit recovery plan. The large majority of the team is delivering the business, so they don't get distracted by the profit recovery plan. So we have separated, and some of us, obviously, including the two of us, but some of us do both, and we are managing both from the top. But down in the organization, there is clear separation, so we deliver and manage the future changes at the same time. The profit recovery plan has four pillars. In each one of these pillars, there is a group of senior leaders which are- Yep ... responsible of the pillar, and there is people in the organization which are delivering the action needed. The pillars are, the first one is in the area, if you want, valorization, in the area of mix. For example, we have decided in certain markets, namely China, for example, that we need to push more the high-end, so brand like La Mer- Yeah ... like Tom Ford, innovation in the high-end part, because that's what is winning in this moment in the market and in other parts of the world as well. So there is an element of mix. This is just an example. There are at least ten points of mix, which are fundamental mix by category, by subcategory, by brand, by region, by consumer segment. There is an entire mix strategy for maximization of the putting the growth where there is the maximum growth levels in every part, and put the innovation machine serving the growth segments even more precisely. Then there is a project of the value maximization. The... We, we do pricing, we do price, but there's been too much discounts in this period of volatility during COVID. We have all the plans to reabsorb these discounts correctly without impacting on volume, and doing this with the correct focus and organization across the team. This is one pillar, which is creating more value for every—for every sales we do, and by the way, there is a big opportunity there. And then the third is what we call operational excellence, which is all the team is taking care of, maximizing the use of our factories with the right capacity utilization by category in any area. In other words, reducing the excess, improving the demand management, the accuracy of the demand management, reducing the excess or reducing the obsolete budgets for the future, reduce the waste in the process, improve all the indirect procurement activity we are doing across the company. There is a mega project on this, and the key P&L element that is impacted by this, there are many, but the key will be gross margin. This is obviously an area which is completely focused on the gross margin increase. And then there is the other pillar that we call leverage, which is the restructuring of the right sizing the parts of the organization that was, given the lower sales that we had in the last 18 months, that was too big, to not sized correctly versus the size of the company at this point in time. Right sizing, but also reallocating resources in the biggest part of growth, in the biggest opportunity, and rationalizing every part of our organization and the cost of our organization, but also leveraging the capability that we created in the last years, that need to be leveraged better. Example, we created cybersecurity capability, sustainability capability, a resource centers in Shanghai, a factory in Japan. All these capability are fundamental. For example, the factory in Japan will decrease the length of the supply chain for Asia, which is super important priority, because when you can order three months before, it's very different when you need to guess what will happen nine months before, particularly in a highly volatile world. So those are all improvements which are structural, and they will create better savings, but also, in the long term, better operational excellence. That's why that part is called operational excellence in the company in the future. So, this is the that, that, those are the four pillars, and then over this pillar, there is an overall PMO, project management, group, that manage with me and with my- Mm-hmm ... senior leaders, the overall of the project, because there are a lot of interactions between the different pillars. That we make sure we capture every single— Sorry, not interaction, interdependence as well, among the pillars that we capture- Mm-hmm ... completely via this process. And then the important thing is that we have done a lot of work to use this opportunity of the profit recovery plan to also redesign the parts of our organization that can be improved, particularly in the area of agility of resource allocation on the biggest opportunities, and in the area of speed to market. So the ability of organization to follow trends. Yep. There is a lot of work going on- Yeah ... in, first of all, creating new trends that we need to address, following the trends that are being created by the consumers around the world, and react to competitive moves much faster. Maybe, Jane, you want to add a few things on those? Yeah. No, just that, the world, we're global brands, but we need to connect with local consumers, and the world has become very trend-driven and very local. And so what Fabrizio is saying is that we're working on improving our processes, our speed, our connection, our local consumer understanding, our connection to our teams, to make this whole trend, action, process, innovation happen much, much faster. And so this will allow us to be super local with our consumer and really understand them, even better. And so I'm very involved in that project, along with others. I'm also involved in the evolution of our marketing organization, our creative organization, global, regional, local, back, so that we have faster connections and can do an even more effective job. Great. So few minutes left here. So final question from me. Fabrizio, what can you share about the organization's capacity and appetite to do the hard work that you've outlined just, just now, while also capturing the growth opportunities you've highlighted? Part of it... First of all, it's a great question, and part of it, I already shared, meaning the way we organize ourselves is part of the answer. So there are people focused on delivering, people focused on the profit recovery plan and the transformation part, and many of us orchestrating both of it. And then we have an external consultant that PMOs all of this in a way that we are sure that this work is well coordinated and goes to the bottom line, correct. So we have organized that well. The second important element is motivation and drive. Yep. I can tell you that there is a- We're driven! We are really driven. To be clear, our organization... When I say the organization, sometimes I see that people think of New York, and obviously, we have a big group and a lot of the senior leadership is here, but we have outstanding teams. You know, we are leaving for China on Saturday. Yep. We have an extraordinary team there, which do an amazing work, they, and the same in every key affiliate or country of the world. These teams and everyone else really want to win. I mean, this is a high-performing organization- Oh. - for 15 years. Yeah. You said it's double the sales, but also now we are 10 times the capitalization that we were, and we are in a tough moment. We were bigger than that. Obviously, we want to go back there one day, but, but we, we are a winning organization, and these people are really not liking the last 18 months. So there is an enormous- Yep positive energy of we are back. We are coming back. The inflection point concept is not only my way to explain the key moment we are changing to all of you and externally. Frankly, it's also an internal concept. It is an internal concept of an organization which is a high-performing organization that wants to go back to win. So there is that spirit in the team. Now, obviously, there are some tensions, some areas of dissatisfaction, but the pervading spirit is let's go back being the high-performing organization that we are. That positive energy Yeah is pervading everything we do, everywhere in the world. And the senior management team is very much united, meaning the profit recovery plan, the so-called profit recovery plan, is something that brings people to work together- Yes -much more than everyday- True -activation. Very true. And so this has been an opportunity to go back together again in everyday activities and realign on what we have to do. And then the last thing I want to say, and I would like Jane to add a few things on how she feels about that- Yeah But the last thing I want to say is there is commitment. Yeah. You know, I got from most of the people the right level of commitment to do that together. I am very committed to do this work together. In every single region, the leaders of the region are very committed to do this work. So there is organization design to do this correctly. There is an element of motivation to go back being a high-performing organization that we deserve to be. And third, there is an element of personal commitment in every individual in this team. So that's the way we feel. And Jane, any- Yeah personal point of view? It's for sure in our, in our bloodstream, to be competitive, to win, to fight, to do what's right for the company, to support Fabrizio. But it is in us, and even in tough moments, there's always winning brands, countries, markets. And so the only point I wanted to add is that we're also gonna leverage our strengths because we have many, many strengths, and we're building on those strengths to create the future of the company. Each market, each situation, and I do believe at this moment, this program has united us in a new and very exciting way to deliver the business, but really evolve the company so we can be even better. And so there's great passion. Yes, we are leaving on Saturday for China, but it's really throughout the organization. I will just say on behalf of the markets, when you travel to a market in this company, there is an absolute competitive desire to win: to win in social, to win the consumer, to win the hearts and minds. So, that is, that is what I will say, but we're all on board and super excited. Sounds good. I'm ready to run through a wall at this point, right? You can come with me. Okay, well, why don't we wrap it there? Peter, you want to join us? Yes. Sure, absolutely. Fabrizio, Jane, thank you so much for joining us, and we wish you nothing but the best of luck moving forward. Thank you. Thank you very much. Thank you very much. Thank you. Thank you so much.