Good morning, everyone, and welcome to the Kimberly-Clark First Quarter 2024 Earnings Call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Chris Jakubik. Sir, the floor is yours. Thank you. Hello, everyone. This is Chris Jakubik, Head of Investor Relations at Kimberly-Clark, and welcome to our Q&A session for our First Quarter 2024 Business Update. During our remarks today, we will make some forward-looking statements that are based on how we see things today. Actual results may differ due to risks and uncertainties, and these are discussed in our earnings release and our filings with the SEC. We will also discuss some non-GAAP financial measures today, and these non-GAAP financial measures should not be considered a replacement for and should be read together with GAAP results. You can find the GAAP to non-GAAP reconciliations within our earnings release and the supplemental materials posted at investor.kimberly-clark.com. Before we begin, I'm going to hand it to our Chairman and CEO, Mike Hsu, for a few quick opening comments. Okay. Thank you, Chris. Hey, before we get into the Q&A, I would like to start by saying thank you to all my colleagues at Kimberly-Clark who worked really diligently over the past few years to build our strong foundation and to deliver these Q1 results that provide a very good start to our next chapter of growth. Our strategy to elevate our categories with breakthrough innovation and expand our markets is working. We are effectively navigating the ever-changing external dynamics of today's new normal while driving our consumer-centric culture. We are making the company better, stronger, and faster. I'm very, very proud of our progress to date, and I'm confident that we're going to continue to leverage our core strengths to achieve our potential. We are on an exciting path and are well-positioned to deliver durable growth and sustainable shareholder returns. So with that, I'd like to open it up for your questions. Certainly. Everyone at this time, we're conducting a question-and-answer session. If you have any questions or comments, please press star one on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. Once again, if you have any questions or comments, please press star one on your phone. Your first question is coming from Bonnie Herzog from Goldman Sachs. Your line is live. Morning, Bonnie. All right. Hi, Bonnie. Good morning. Hope you're all well. First, I have a quick question on your guidance. You reported a better-than-expected Q1, so curious to hear why you didn't pass through the full Q1 beat, and then also hoping for a little more color on the better-than-expected volume growth you saw in the quarter. What were the key drivers behind this, and ultimately, how sustainable is this moving forward? And curious, was there any pull forward, for instance, or should we expect to see continued volume improvements as the year progresses? Thank you. Yeah, Bonnie, maybe I'll start. Nelson wants to talk about what we decided to pass through and our logic for that. But really, I'm encouraged with a good start. I think our organization is running very, very well in what we would call internally our new normal, right? And I think this is the first year in a few that we've had kind of a stable business despite a lot of the geopolitical things that are going on. So the underlying strength in the quarter was predicated on a couple of good fundamental factors. One, better volume, which you observed, and there was no pull forward. In fact, it was the opposite. We had a retail inventory reduction in the quarter, but kind of I think the inherent strength in the consumption kind of overcompensated for that. And so, I think that was part of when also the market shares are moving kind of in the right direction. So, I think we feel very good about the underlying volume momentum in the business. And then, on top of that, then with a stable input cost environment, the productivity that was strong in the quarter tends to drop a little bit stronger through the bottom line. And so, that's the underlying kind of driver of our strong Q1. And we feel really great about it. The team's done a great job operating. There's still a couple of wars going on in the world, as you're well aware. Argentina's been very volatile, and our teams are doing a great job there. So, we feel like we're really running well in a new normal environment. Nelson? Yeah. And just to add a few details on what happened in Q1, Bonnie. So first, obviously, very pleased with the start of the year. Q1 was particularly strong as we saw significant benefit in China from our Chinese New Year execution. And particularly in March, I mean, the trends in the business continued. China grew volumes double-digit in the quarter. And in North America, in particular, as Mike said, while the trade de stock happened as we had projected back in January - and just for perspective, total company, that was around 80 basis points of growth - still, we came in March and had a much better consumption in the month in March, which flowed through in the quarter. So that was the other bit on volume as we thought about what happened and reconciled the numbers for the quarter. Having said that, as we look at what's going to happen in the balance of the year, a couple of things. One, as Mike said, we're cautiously optimistic. A few things that we're all aware of is we still have geopolitical challenges underway, and we have begun to see some of our commodities begin to uptick. Just for perspective, in the first quarter, we've seen how pulp and the fiber complex has increased into single digits in the first quarter sequentially versus Q4. For perspective, in the full year, we now expect commodities to be the net input cost, the total basket, to be around $250 million inflationary. So we are taking that into account. That's within the range that we had provided back in January, but it's still something that we're watching. A couple of other things to keep in mind is that as we head into the back half of the year, we expect to see about a $0.08 headwind from the personal protective equipment divestiture in profit. That's built into our outlook, but that is something that is new news versus the outlook we provided back in January. The other bit to keep in mind is we will further step up investments as the year progresses. On a year-over-year basis, our advertising spend increased 50 basis points. That was largely in line with what we had in Q4. What we said at the beginning of the year is that as our innovation pipeline builds up, and that's starting in Q2, we will further step up investments as the year progresses, and we expect it to be around another 50 basis points for the balance of the year. All right. Thank you. Okay. Thanks, Bonnie. Thank you. Your next question is coming from Anna Lizzul from Bank of America. Your line is live. Hi. Good morning, and thank you for the question. Morning, Anna. I was wondering if you can comment on market share. A competitor mentioned a misstep on their part with a lack of innovation at the lower end of the pricing ladder in toilet paper, which caused some pressure there. So I was wondering if that helped you to pick up share, and if you can comment on how you're progressing in terms of market share. Also, on a weighted category basis, that would be helpful. And then as a follow-up, volumes were clearly better than expected despite some retail inventory reductions in the quarter that you had anticipated for Q1. So I was just wondering to what extent this ended up impacting the quarter, and how should we be thinking about it for the full year? Thank you. Okay. Yeah, Anna, thanks for the question. Great question. Market share, I'm very encouraged. I think we've made very, very solid progress on overall market share. I expect further improvement as the year progresses. Overall, in the quarter, we were up and even in just under 60% of our market category combinations, although I would say also flat on a weighted basis. We look at share in two ways on both metrics. Importantly, I'd say North America improving. North America was up or even in six of eight categories. We were soft in 2023, as you may recall. A lot of that was predicated on severe supply constraints that we had last year. And so I think this was maybe the second quarter that we've had in a row of unconstrained supply, and I think that kind of performance reflects our ability to ship product and kind of restore promotions. Just for reference, Kleenex in the quarter was up 400 basis points on share or more than 400 basis points on share. What drove it? Well, we did have a new social media campaign around cold, flu, and allergy season, which I think has been very, very good. But the other part is we restored merchandising, which we had been off from for several months. And so again, I think our merchandising; we still plan, we're probably still underindexed versus the overall category, but we're just kind of returning to kind of normalized merchandising behavior. So we feel good about our performance overall. And again, market share in other markets like in China, we were up 200 basis points on Huggies Diapers, had a very, very strong Chinese New Year execution. So volumes were up double-digit against a category that was still down about 10% in China. So I think overall, we're feeling very optimistic about the performance of the business and feel good about the volume delivery of the business. Just to build on Mike's point and to your question on what to expect on volumes for the balance of the year, as we said in January, I mean, 2024 should mainly reflect the pacing of our innovation pipeline and in-market programming. We still have the innovation and a lot of the programming coming into place as we go into Q2 and the second half of the year. Hence why, from an overall perspective and volume plans, we don't see any changes versus what we had planned back in January and taken into account the volume over delivery that we had in Q1. Thank you. Very helpful. Okay. Thanks, Anna. Thank you. Your next question is coming from Lauren Lieberman from Barclays. Your line is live. Morning, Lauren. Hi, Lauren. Hey. Good morning. Hey, guys. So first thing I wanted to ask about was the productivity in the release or in the prepared markets you called out, $120 million realized this quarter. I was just curious how to think about that in the context of the $3 billion in productivity and also $200 million of SG&A savings that you articulated at the Investor day. That's just my first question. Nelson will comment on this. I would say good start, and we're tracking well. Yep. And then just to give a little bit of color on the $3 billion and the $200 million, Lauren. So overall, first, it's based on the integrated margin management process that we unveiled in our investor day at the end of March. This is really giving us a new enterprise-wide visibility, discipline, accountability, end-to-end across the whole value chain. And really, it's about a focus on driving lower costs at a total delivered cost, which is a very different approach as what we had in the past, and we've been working on it for the last year or so. As you said, we had a strong start to the year on gross productivity. I'll reiterate, this is non-procurement-related savings, and this is the $120 million that we talked about in the release and in our prepared remarks. We also had additional savings that were delivered from the procurement side of the house, and that's embedded in our net input costs, which again, were, in net, not that much of a headwind in the first quarter because of all these efforts. As we think about the cadence and what we expect to have on the $3 billion, we're off to a good start on that number, and we would expect that to be roughly about linear over the next few years as we deliver the whole $3 billion. In terms of the $200 million of SG&A savings, as a reminder, we will go live with our new operating model on October 1st of this year. So we don't expect much of that $200 million in savings in SG&A to materialize this year. That'll really come into play more in 2025 and 2026. But again, really good start to the year in productivity and procurement-related savings. Okay. That's awesome. So just as a follow-up, on the SG&A side of things, what was interesting to see this quarter is that you saw pretty good operating leverage there because in the prepared remarks also, you'd called out a 50-basis-point increase in advertising as a percentage of sales this quarter, which implies some pretty, again, like I said, solid operating leverage on SG&A. And that's different than what we've seen, I guess, the last couple of years, frankly. So where do you stand, let's call it, on sort of reinvestments? Because one of the things that struck me in some of my follow-up conversations with people after the investor day was a lot of the things you talked about doing going forward, a lot of questions I got from people were like, "Well, why haven't they been doing it yet?" And my thought was perhaps it's been about investing to get the capabilities to be able to do these things going forward. So is that a reasonable way of thinking about it? Is that reinvestment level kind of now, I don't want to call it complete, but where it needs to be such that we should see operating leverage on SG&A ex-advertising even before you start to get that $200 million in savings in 2025 and 2026? Yeah. I mean, one, I'll start, Lauren, but one, we feel great about our investments in advertising, and I think we've made significant progress. I think we're up 200-300 basis points since I came into this role. However, I'd say we're probably still underspent relative to our peer set. And so do we need, and I think I said this in Investor Day. I don't know that we have to match them, right? But I would like to continue to increase our investment. I think you're exactly right on kind of, "Hey, well, there's two factors that kind of cause us to phase our investment." I would say if you recall back in 2018, 2019, right, I did not feel like we had all the capability we needed to spend that significantly. I think you may recall in some sessions we had or some calls, people were asking, "Why didn't you reset and invest harder?" At that point, I wasn't confident what the advertising was going to do, right? So in the last 5 years, I think we've really built what I would characterize as kind of world-class capability on the commercial fronts through the help of Alison, as you're well aware. So we've done that. We made progress. That was one factor. We were building the capability. Right now, our returns on investment on our advertising, particularly on digital, and we've migrated from not having a whole lot of digital maybe 5 or 10 years ago to almost being entirely digital, and those returns are significantly higher than we're driving now. That's one factor. The other big factor I think that people forget is we had two years of a superinflation cycle. We had more than offset more than a full year's of operating profit in that cycle. And so we were busy trying to recover margins as well. And so there was a lot going on in addition to all the geopolitical issues that I think, Lauren, you're really well aware of. So there's a lot of things going on, and so we're making steps in the right direction. We're not all the way to where we want to be, but we think we can kind of manage the business in the right way to kind of deliver both a healthy top line, a healthy bottom line while continuing to invest in our business for the long term. Okay. Great. Thanks so much. Thank you. Your next question is coming from Nik Modi from RBC Capital Markets. Your line is live. Hey. Morning, Nick. Thanks. Good morning. Good morning. Just a quick clarification if you could just provide context on the destocking in terms of where you saw it. And then the actual question is, obviously, the feedback, broadly speaking, has been the consumer's under pressure, though your results today, obviously, you seem to have outperformed a lot of that backdrop or commentary. So just, Mike, would love to get your perspective on kind of category health, consumer health, kind of what you guys are seeing. I sense part of the guide and not flowing everything through is because maybe there is some uncertainty, but I'd love your thoughts on that. Yeah. Thanks, Nick. Yeah. Great questions. Yeah. We did see a retail inventory reduction in the first quarter as expected, and we were given the heads-up on that, and so we planned for it. It was about an 80 basis point headwind to global and about 170 bips of North America sales. And so I'd say that the behavior is typical. I don't think it's unusual. We tend to see in that December, January timeframe, retailers trying to get a little more efficient with how much inventory they're carrying. We tend to be very, very efficient with retailers, and I think they like our logistic capability. And so we're kind of generally early adopters of all the new systems that retailers go on to kind of try to manage their inventories better. So we're kind of on top of it. It's been baked into our outlook for the full year, but I don't know that I expect a whole lot different going forward, but what we expected in Q1 did, in fact, happen. I think I said earlier our volume was a little bit stronger than we had anticipated, so more than fully offset that. So I think that was the first part. Is that clear enough on your retail inventory part, Nick? Yeah. Mike, what any specific categories you can call out? Was it FemCare? Because that's P&G called that out, but I was just trying to get category perspective on the destock. Yeah. Yeah. No, for us across the board and just to note, nothing unusual in our mind. It's typical for what we see every year. So I think that's part one. I think your question on the consumer, I guess I would characterize the consumer environment overall for us globally, but especially in North America, as resilient, still bifurcating, but part of that bifurcating is actually adding category growth as well. So the category demand overall remains very, very robust, as you could see. In North America, our categories, on average, overall, were up about 5% or mid-single digit. I think that, as you well know, we make daily essentials, and so there is low substitution in our categories. And so I think that's reflected in the overall category demand. Unfortunately, the note, Nick, is premium continues to grow very, very robustly, especially in developed markets like the U.S., like in China, U.K., South Korea, but also premium is growing and developing in emerging markets like Brazil. So we're continuing to see that demand there. That all said, clearly, I would say middle- to lower-income households look like they're becoming more stretched based on all the economic data we're seeing. So I would say the bifurcation is I see a limited trade down in a few categories, notably adult care, some in household towels. But we have a very, very detailed tracker across every category. I think we're tracking nine different dimensions, and I'd say, so we're very vigilant about monitoring that. The thing about it is the trade down is limited at this point, but we really intend to be more valuable to our consumers at every rung of the good, better, best ladder. And so what that means is I think Anna was asking about private label or value-tier quality. I mean, we're making all of our products better across the board, and that certainly, I think the growth driver for us over the long term is by making products better, premiumizing, elevating our categories. But we want to serve the value-oriented consumers well too, and we have big brands like Scott Bath, and Kleenex mainline, Depend mainline that serves those consumers well too. Excellent. Thanks, Mike. Okay. Thanks, Nick. Thank you. Your next question is coming from Chris Carey from Wells Fargo. Your line is live. Hey, Chris. Hey, Chris. Hey. Good morning. Just a couple follow-ups just on China and the U.S., right? So in China, clearly good numbers, but I also think one of your peers delivered quite good numbers as well. And I guess the question, in a way, is are we seeing the category turn in China, benefits from perhaps Chinese New Year? Are you both just gaining relative market share? Clearly, it's a strong number, so I'm just trying to understand this a bit deeper, I guess. And then secondly, on the U.S., it's really the same question on relative outperformance to category. And I know you've mentioned it a bit more, and I'm more interested in the China comment, but if you can just expand there because that stood out to me as well. Thanks. Yeah. I'll start on China. Again, if you kind of saw the investor day presentation with Katie's leadership, our China team is doing a fantastic job there, and they've grown consistently double digits over the past five years, and it's become one of our best-performing businesses in the company. I would say I think the driver of performance there's a couple of factors. Certainly, a strong Chinese New Year execution, but overall, we make a great product. I believe it's the best product in the marketplace. I think consumers are excited about the products that we offer, and then we have really, really strong digital executions that really kind of drive that relationship with consumers. And so to answer your question, I think it's more of a share pickup. The category itself, based on the data I'm seeing, was still down about 10% in the quarter, consistent with the birthrate trends and everything else we're seeing. So it's a share pickup, and I'll point out we're the market leader in China, but that's predicated we're only at a, I would say, a mid to high teens share at this point. And so we feel very good about our positions, but it's a fragmented category, and so there's a lot of opportunity for us to drive further share growth in the market. Importantly, I think for us, we're also picking up on our mainstream business. And part of the strategy, when I say, "Hey, we want to be great at every tier or every rung of the good, better, best ladder," we want to accelerate innovation at the top end and then cascade that quickly through our line. And so we're doing that, and I think we're seeing that in the results in China, for sure, and similarly in the US. If I could, just one follow-up would be, clearly, pulps are on the move. It's a bit more on the front end of the curve than in the back half of year 2025, but this is going to be perhaps the first moment to really kind of show the ability to work through this cycle. Just any thoughts on the moves that you're seeing and the types of actions that you might defer to if these moves prove durable and even accelerate between pricing, productivity, and whether you see any potential kind of margin issues on the horizon or if this feels very much manageable at this point? Thanks. Well, I'm going to start with Nelson could disagree with me if you want, Nelson, but I would say manageable at this point because here's I said, "Hey, new normal." I think this is what I characterize as a more normal year for a CPG for the first time in the last three or four years for us, which is, "Hey, a stable input cost environment." It's still not deflationary. At some point, one would hope that it becomes deflationary, but I'd say, "Hey, it's slightly inflationary but relatively stable." That's different than the past three or four years for us. And so I think for us, we have very good productivity plans, and so if the input costs remain stable, we can operate very, very well in a stable cost environment and let that productivity drop through. So that's one part. And then the other part of the normal is I think there's been a lot of volatility in demand with COVID and everything else over the past few years. I think we're starting to see demand stabilize. And so with those two factors, I think we can operate well. We're very cognizant, and Nelson, we'll talk about it, that there are some demand signals around different environmental changes, but we're well aware of that, and we think we have that accounted for in our current call. But Nelson. Sure. So just to build on what Mike was saying, Chris, so a few things. I'll start with we've built significant capabilities over the last five years in order for us to be able to maneuver through the ups and downs. Obviously, if we have a shock like what we saw two, three years ago, that's a different situation that we'd have to maneuver through. But as Mike said and as we've said back in January, we see the situation as manageable. To reiterate, I mean, when we talked in January, we talked about $200-$250 million of net input costs all in. That included currency, other costs, as well as commodities, which we still see deflationary for the full year for us. Now, on that range, we're now staring at the high end of that range, which, again, we see as manageable, as Mike said. A couple of things to keep in the back of your mind as you look at the numbers. Core commodities like bulk, resin-based materials, energy, in dollar terms, while they're a little bit more unfavorable today versus what we were seeing back in January because we're seeing some upticks, still for the full year, they would remain a tailwind. We continue to see distribution, logistics, and labor costs as inflationary for the year. And then, obviously, for non-U.S. operations, currency will be a headwind in costs because they're buying pulp and many of the inputs that they use to manufacture the products in hard currency. So on a net basis, that's how we get there. The thing, though, also keep in mind is that we expect the phasing of our input cost inflation to be more muted in the first half of the year, and this follows the trend that we saw in Q3 and Q4 of 2023 that would carry over pretty much through Q2. And we'll see an uptick of this as we go into the back half of the year, but again, it's all factored into our outlook, and the only difference is really we're more at the high end than the range that we had given before. Yeah. Oh, yeah. Chris, just to calibrate you, I think, Nelson, when we're looking at $200 million of inflationary impact, just to calibrate you, in 2021 and 2022, we took on $1.6 billion and $1.7 billion, respectively. So I would say that's kind of why we feel like it's one reason why we feel like it's more manageable. The scale is totally different. And then the other thing is, as Nelson points out, we've changed how we manage the business in some ways to try to become a little more predictable, and we have better tools than we had maybe five years ago, and so. Totally. And just to build on Mike's point on the tools, as a reminder, I mean, we have a very strong pipeline of productivity initiatives. We're looking out 3 years, and I've been chatting about this for the last few quarters. That pipeline remains strong. You would have seen that non-procurement-related productivity was very strong getting out of the year, and the team is very confident in our ability to continue to deliver not just in this year but in the following 2, 3 years, which builds on our ability to deliver on the $3 billion commitment of overall gross productivity in the next 5 years or so. So that's built into how we're looking into costs and inflation for the next few quarters. Thank you very much. Very helpful. Okay. Thanks, Chris. Thank you. Your next question is coming from Steve Powers from Deutsche Bank. Your line is live. Good morning. Good morning. Thank you. Hey, 2 questions, if I could. The first one builds on the conversation just having with Chris around commodities and managing it through the cycle. I guess I'm curious as to the steps you've taken to better maneuver through input cost cycles and essentially better protect this year. Does that include different ways of sourcing and contracting and hedging that, in effect, pushes out the cost curve as we would typically know it for Kimberly-Clark? I guess what I'm thinking about is that in the past, if we saw reinflation like we have year to date, we'd be thinking about that kind of flowing through and impacting the latter third, latter quarter of the current fiscal year, kind of a 6-month, maybe 6- to 9-month lag. It sounds now like you've got better visibility, and I'm wondering on how much of that has just pushed out that reinflation into 2025. Hey, maybe I'll say a couple of things. One, Steve, is I think the analyst community and the investor committee, I think, made very clear to me when I came into this role that one of the issues they had with KMB is the earnings volatility. I've been very cognizant of that fact. We've, over the past five years, kind of worked pretty hard to kind of reduce some of the underlying volatility in our business. Nelson, with an outside perspective, has really worked hard to bring some different kinds of tools into our thinking, and so we've been applying that over the last couple of years, and so we feel very good about that. Certainly, there is inherent volatility in our business, certainly in pulp. One would think at some point with the super cycle of inflation that we have on pulp, it's still elevated, and at some point, it needs to come back down. History would say it's going to come back down further. That said, I think we've built the right tools, and Nelson, you may comment about what we're doing there. Sure thing. And just to build, I mean, the integrated margin management approach, Steve, that we've been working on for the last year or so really addresses part of this volatility. It is end-to-end, as we chatted on March 27th, and it looks at all the elements that drive total delivered cost as well as margins. And it starts with we've been building muscle around revenue growth management, and that's very important. Price pack architectures, what kind of price packs do we have for the different channels, and how do we tackle that, including promo activity, etc., which is very important across all the geographies we work in. Secondly are the tools that Mike was talking about on how do we handle costs. We don't reveal what are the contract structures that we have in place or the hedging activities, but we obviously have gotten into much more proactive risk management to be able to have visibility into costs and give us time to react. And what do we react with? We react with productivity initiatives and elements of revenue growth management. That's a big difference on how we were approaching it five years ago, and we've been building that muscle over time, and that then drives into this visibility into the productivity element, which right now, we've split it, and we're being very clear of this is the productivity within the four walls. That's the $120 million that we talked about, and then we have productivity in procurement, which is embedded in our net input costs. That clearly gives accountability across the supply chain on how to drive lower total delivered costs or at least manage through the margins. So yes, I'd say it's muscle we've been building over the last five years, as Mike said, and obviously, we're not going to be immune to moves in commodities, but the visibility we have today, the ability to react, is different than what we had in the past. Yep. Okay. That's very helpful. This answer to the next question may be short. If you've already addressed it, you can tell me to just go read the transcript afterwards. I joined late. I apologize. But in the. We were never going to read that road, Steve. In the prepared remarks, you mentioned plans to exit some private label businesses. I know those plans are still kind of under construction, but you did maybe mention of it with some impacts in 2025. If there's anything further you can say on that today, that'd be great. Thank you. Okay. Just to be clear, Steve, that question was not asked, so it was a great question. All right. Hey, just on that, yeah, I did want to flag that we are strategically, let me just tell you, we're focusing on differentiating our brands with proprietary science-based innovation. That was kind of the big theme that we shared with you all at our Investor Day. Just to give you some context, today or last year, private label production represented about 4% of our global sales, and so what we announced today will likely cut that in half by the end of 2025. The thing I'll say is, and it takes two parties to make a decision, so I won't get into any specifics, but I would say our end, as you think about what we say as science is our competitive advantage. The investments we're making in our new personal care core technology that resides in our diapers, in our feminine care pads, in our adult care, also to get to natural forest-free, all that development, that's all going to take some pretty chunky capital. And so we are making significant technology and capacity investments, and so we really want to be more choiceful as we go forward about where we spend that capital. And so that's really kind of underlying some of that decision-making. These decisions are going to enable us to focus our tech investment on what we see as our greater strategic priorities. And I might note our exposure to private label could decrease further over time. Just to add further color on what we would expect from a bottom-line standpoint, Steve, it should be consistent with what you're seeing in the top line. And then, obviously, we're working through supply chain transition, repurposing, and related cost opportunities within the context of our whole network optimization initiative, which is one of our three strategies in the supply chain strategy that we unveiled at Investor Day. We will have more to say as we go into 2025 guidance period. Okay. That's good color. Thank you both. Okay. Thanks, Steve. If we could take maybe one more question, that'd be great. Certainly. Your next question is coming from Javier Escalante from Evercore. Your line is live. Javier. Hey. How are you? Hey, Javier. Hello, man. Yeah. Good morning, everyone. I do have kind of a quick clarification to Lauren's questions first because it's in the context of guidance versus what is incremental in terms of the restructuring and whether it seems as if, to me, from the outside, it's kind of coming through earlier. So basically, the $120 million in savings that you flag, are they part of the $3 billion that you spoke of a month ago or not? And then we can address the other piece if you don't mind. Yeah. The short answer, Javier, is yes. It is part. We said that our new chapter started in Q1 of this year, and that's part of the five years commitment to deliver that. The $120 is part of that, and then there's an element of procurement savings that we're not disclosing today. We are committed to disclosing the entire savings, including procurement, annually so that you get a perspective of how we're tracking against the $3 billion that we committed to. So congratulations on the very early start because I also see that the new organization is starting in October. I thought that it would be something of 2025. So if that all true, right, if savings are coming through earlier, why is it that the guidance and this is the other thing that I get from your transcript, prepare remarks, is that revenue realization faster. So you have faster revenue realizations from Forex, right? You have faster savings coming from and they are sizable, right, $3 billion, coming from the restructuring. So I understand that you want to be conservative, but if we take you literally, the numbers for the balance of the year need to come down. Is that what you want in terms of consensus to look like? Very simple. Well, I'll just start. Javier, I'd say, hey, we're still early in the year, and we feel really good about our start. We feel very confident in our performance this year. But that said, as Nelson pointed out in his remarks and in our prepared remarks, there's still a lot of uncertainty out in the world right now, both in terms of the geopolitical situation and the effects that could have on global demand, but also, as you've heard just on the last few questions, on the input cost environment. And so I probably would say, yeah, we're taking a prudent approach to making our call, but certainly encouraged by our start to the year and would love to drive to a very strong result this year. But Nelson? Yeah. And just to build on Mike's points, Javier, I mean, a couple of things. We're focused, obviously, on margin trajectory over time, and margins will move quarter to quarter, and they have to do with country and category mix, timing of our innovation pipeline, as well as changes in absolute productivity delivery. Productivity delivery is not linear. I mean, the timing of when projects come online and how quickly we can realize the benefits, we have an estimate, but again, you got to get them through. We have a full outlook for the year, and that's embedded there, and we're very encouraged by how the whole year started, but we have a lot of activities still coming our way, including a very strong innovation pipeline for which we're going to be putting back money into the business. We're going to be stepping up investments at least 50 basis points for the balance of the year. If we see opportunities to invest more in the business and more in our transformation to accelerate it, we will. We're taking all of that into account and also taking into consideration the sale of our PPE business, which we've built into the forecast, which is about a headwind of $0.08 for the balance of the second half of the year. Well, I would take it that it's a conservative guidance. Thank you very much. Okay? Thank you, Javier. Thanks, Javier. Great. Well, thank you, everyone, for joining us today. For those of you who have follow-up questions, Aishwarya and myself will certainly be available for follow-ups. Thanks again, and we look forward to seeing you going forward. Thank you. Everyone, this concludes today's event. You may disconnect at this time and have a wonderful day. Thank you for your participation.