Welcome to Perrigo Q2 2025 Financial Results Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Wednesday, August 6th 2025. I would now like to turn the conference over to Bradley Joseph. Please go ahead. Good morning and good afternoon everyone. Welcome to Perrigo Company's Second Quarter 2025 Earnings Conference Call. I hope you all had a chance to review our press release issued today. A copy of the release and presentation for today's discussion are available within the Investors section of the Perrigo.com website. Joining today's call are President and CEO Patrick Lockwood-Taylor and CFO Eduardo Bezerra. I'd like to remind everyone that during this presentation participants will make certain forward-looking statements. Please refer to the slides for information regarding these statements, which are subject to important risks and uncertainties. We will reference adjusted financial measures that are non-GAAP in nature. See the appendix to the earnings presentation for additional details and reconciliations of all non-GAAP to GAAP financial measures presented. Two quick items before we start. First, unless stated, all financial results discussed and presented are on a continuing operations basis. Second, organic growth excludes acquisitions, divestitures, exited products, and foreign currency fluctuations in both comparable periods. Third, Patrick's discussion will focus solely on non-GAAP results except as otherwise noted. With that, I'm pleased to turn the call over to Patrick. Thank you, Bryant. Good morning, good afternoon everyone, and thank you very much for joining today's call. I'd like to start with a quick overview of the progress that we have made against our 3S plan to stabilize, streamline, and strengthen Perrigo. We've accomplished a tremendous amount of work over the past 18 months to evolve into a more focused, agile, and scalable self-care organization. We've aligned our strategy and added top talent where needed. This work sets the foundation for our 3S plan, and we have taken significant steps in the second quarter to accelerate our progress in stabilizing our infant formula business. Net sales grew 9%, led by store brand infant formula and store brand OTC. We continue to see encouraging results as new business awards overtook previously disclosed lost businesses, and our offerings are gaining volume and unit share in the market, enabling us to outpace competition. In streamline, Project Energize and our Supply Chain Reinvention program remain on track and continue to deliver significant benefits. These accretive initiatives are enabling more investments into our innovation pipeline and our AMP for future growth. Additionally, we recently announced an agreement to sell our Derma Cosmetics business for up to EUR 327 million, with EUR 300 million in cash up front. This transaction, which is expected to close in first quarter of 2026, sharpens our strategic focus on our core portfolio, including our high growth brands, which are expected to deliver $100 million- $200 million in incremental net sales in 2027. Expected proceeds will be prioritized towards strengthening the balance sheet and accelerating our net leverage goals. To strengthen, we are scaling our category-led market activation growth model designed to unlock the full potential of our portfolio, and our upgraded brand building activities are. Beginning to deliver results. We are moving with speed and purpose with focused execution and strategic sequencing. We are advancing our 3S plan. More on this in a moment, but first let's discuss our second quarter financial highlights. Our diversified portfolio continues to provide resilience and stability in a challenging consumer environment. Perrigo organic net sales growth in the second quarter was flat compared to the prior year, including OTC brand growth of 3.6% year to date. Organic growth was also flat but up nearly 1% excluding the prior year Opill launch stocking benefit and previously disclosed loss distribution of lower margin U.S. store brand products, declining total category consumption in the U.S., and decelerating consumption in the EU, both partially impacted by soft seasonal trends in categories such as allergy, sun care, and blister care. Our top line growth, however, our store brands continue to gain share on volume and are now gaining unit share as consumers seek greater value amidst the current uncertain macro environment. Our key brands also gained share in the quarter and we're winning at the shelf. All the execution improvements we have made over the past two years are delivering solid results. Gross margin, which Eduardo will detail shortly, declined in the quarter driven in part by divested businesses. Organic operating income was flat in the quarter, reflecting isolated production variability in infant formula leading to an increase in products scrapped and to lower plant overhead absorption in OTC. These factors were partially offset by reduced AMP spend as we intentionally pulled back due to softer consumption and Project Energize benefits. Year to date, organic operating income growth was 28.3%. EPS in the quarter grew 7.5% or 12.5% organically and is up more than 50% organically year to date. Taking a closer look at our organic net sales performance in the quarter, firstly pain and sleep aids grew 8%, adding 1 percentage point of growth to total Perrigo driven by performance from restored supplier Solpadeine, our leading pain brand in Ireland and the U.K. Next, nutrition added nearly one point of growth reflecting continued recovery in our infant formula business. More details on that in a few moments. Lastly, upper respiratory added 0.7 points primarily from new distribution and share gains in the U.S. store brand allergy amid softer seasonality in addition to restored supply of our Physiomar brand for cough cold. Allergy related symptoms. Our OTC brands delivered organic net sales growth of 3.6% year- over- year as we continue to invest in our highest ROI assets. Jungle Formula, our leading insect repellent, grew 14% in the quarter and achieved record market share in the U.K. behind full brand activation during the summer season. Additionally, Compeed, our blistering wound care franchise brand, grew 6% and achieved record share in France, Spain, and Italy. Both these examples reflect the significant progress we have made in upgrading our brand building capabilities to deliver our 3S plan. In contrast, our digestive health category was impacted by continued lower consumption of proton pump inhibitors while the total PPI market was down. National brands accounted for most of the decline. Encouragingly, store brand volume share has steadily increased. Oral care declined due to lost distribution of lower margin product as the team continued to balance tariff impact and a competitive landscape while focused on driving profitability. As I mentioned, overall consumption trends continue to soften partially due to slower seasonality. Waning consumer confidence. As a result of lower consumption trends, our stock in trade ticked higher in certain European markets, which we are actively monitoring. Now turning to detailed progress on our 3S plan, starting with the stabilization of infant formula. As mentioned, net sales in the quarter grew 9% year- over- year, driven by performance in our store brand and contract business, which were collectively up more than 30%. However, this momentum was partially offset by a significant decline in the Good Start brand, primarily due to lost distribution. This decline was not entirely unexpected as we actively reset the brand following its relaunch under the Good Start Dr. Brown's label. This brand remains a unique offering in the market, and we have seen modest share gains in the early stages of this reset. We are making good progress reintroducing store brand SKUs, with 80% of our planned 2025 assortment now back on shelves. While store brand volume share has moderated, total market consumption has increased during the same time frame, diluting our volume share. Importantly, store brand formula consumption continues to grow. Looking to the second half of the year, we are pulling on several levers to improve store brand formula growth, such as increasing targeted promotional activity at select retailers both in store and online, increasing demand generation activities including refreshed compare-to labels, and enhanced in-store marketing for high volume SKUs, continued consumption ramp up of recently introduced SKUs, and launching the remaining 20% of our planned 2025 assortment. While recovery in this business continues, it is slightly slower than anticipated. Have more work to do. However, I remain very encouraged by our steady progression now to U.S. OTC store brand, where we are seeing very encouraging signs that our stabilization efforts are gaining traction. In the second quarter, we reached an important inflection point. New business awards outpaced lost distribution for the first time since the 2024 reset. While there's still work ahead, this progress gives us confidence in the trajectory we're. Building for the second half of the year. We're also continuing to apply our brand building capabilities to enhance the store brand portfolio, bringing differentiated value to our retail partners. This approach is deepening relationships with retailers who are focused on growing category share and delivering more value to their consumers. A great example was the allergy category where our team executed a tailored demand generation campaign at a top customer. The result was notable. Perrigo allergy product sales at that retailer are up almost 19% year to date while the category has declined by over 2%. I am increasingly encouraged by our improving competitiveness, our marketing to consumers, and our strengthening retail partnerships. In combination, these delivered a volume growth 6x faster than the total OTC market and an impressive share gain of 70 basis points for Perrigo over the last 13 weeks. Turning to streamline, we have made meaningful progress in simplifying and focusing our business. Our accretive initiatives continue to deliver meaningful benefits. Project Energize is tracking well with annual run rate gross savings now generating $159 million, an increase of $30 million during the first half of this year, and our Supply Chain Reinvention program remains on track to deliver between $150 million - $200 million in benefits this year. These actions reflect our commitment to building a stronger, more focused Perrigo positioned for sustainable growth. As for simplifying our portfolio, we recently announced the sale of our Derma Cosmetics business, which sharpens our strategic focus. This move allows us to concentrate resources on the categories that best align with our One Perrigo model and where we see the greatest opportunity for long term value creation. It will also accelerate our net leverage goals. Finally, on strengthen, we continue to make steady progress and are scaling our category led, locally activated growth model across the organization. This model is designed to help us bring more molecules to more consumers with. Greater speed and precision. At its core, it reflects our commitment to operating as one global organization, bringing together and scaling the best of our capabilities to serve consumers and customers more effectively. This structure not only will improve our execution, it will also create more opportunities for innovation, more impactful marketing, and a stronger foundation for sustainable growth. This isn't a new direction for us, it's a proven model that we've been building and is already delivering results. Just a few examples of this model in action. One, the Opill repeat rate of 55% reflects the team's focused efforts on education, access, and retail execution to support trial and drive consumer loyalty. With Nicorette, our leading nicotine replacement brand, we're seeing strong early results from new claims and a refreshed marketing campaign. Nicotinell is now the fastest growing smoking cessation brand over the last four weeks, expanding our reach and relevance with consumers. Next, the performance of ellaOne. This is our leading emergency contraceptive brand, driven by commercial prioritization and a new marketing campaign that launched earlier this year, has resulted in ellaOne leading category growth and gaining share. In Spain, we launched Bronchotos 8 en 1 that relieves discomfort associated with the cold. This launch is outperforming the market by 30 share points thanks to local market activations that are resonating well with local market consumers. Also, Jungle Formula has achieved market leadership in Italy for the first time, reaching a record high seasonal market share following local media activation. What's enabling the success is a clear cultural shift, one that embraces a growth mindset, is grounded in strong category strategies, and with a deep collaboration across markets to drive more meaningful execution with local consumers. These examples embody the strength of operating as one unified global organization, aligned, empowered. Focused on delivering meaningful results. In summary, despite a challenging consumer environment marked by soft seasonal trends and slower consumption, we continue to execute with discipline and focus. The executional improvements we have made over the past two years are delivering strong benefits, and our year to date results reflect the resilience of our diversified portfolio and the early benefits of our 3S plan. We have stabilized U.S. store brand and are on track to grow net sales in the second half of this year. We are stabilizing the infant formula business, but as I said, we have more. Work to do here. Efforts to streamline Perrigo are moving at pace as we sharpen our focus on the portfolio and on our operating model. We are strengthening the organization through consumer-led innovation and key brand building activities. That are beginning to deliver very strong results. As a result, we remain confident in reaffirming our full year EPS outlook. With that, I'll now turn the call over to Eduardo to walk through the final naturals. Eduardo. Thank you. Patrick, hello everyone. Looking at the second quarter financials, starting with the GAAP to non-GAAP summary, primary adjustments to our non-GAAP financial results were one, amortization expense of $57 million, two, unusual litigation of $50 million, and three, restructuring charges of $9 million, primarily related to Project Energize and Supply Chain Reinvention. Full details can be found in the non-GAAP reconciliation tables attached to today's press release. From this point forward, all financial results discussed will be on an adjusted basis unless otherwise noted. Second quarter gross profit of $403 million declined $30 million year- over- year, primarily due to an $18 million impact from divestitures and exited businesses, partially offset by favorable currency translation. Organic gross profit declined $23 million, largely due to the previously mentioned isolated production variability in infant formula. This production issue led to a scrapping of approximately $11 million of inventory. Additionally, we experienced lower plant overhead absorption in OTC and oral care. These factors more than offset benefits from our accretive initiatives, Project Energize and Supply Chain Reinvention, which continue to deliver meaningful efficiencies. Second quarter gross margin was down 250 basis points, stemming from 170 basis points from divested businesses and exited products, two, an unfavorable impact of 110 basis points from the isolated infant formula scrap I just mentioned, and three, a net unfavorable impact of 70 basis points from the rest of the business, mainly due to overhead absorption, which was partially offset by accretive initiatives and favorable store brand mix. Looking at the gross margin on a sequential basis, we were expecting a decline of approximately 250 basis points related to lower plant overhead absorption. Said differently, our first half gross margin of 39.5% is in line with our plan, and we remain on track to deliver full year gross margin of approximately 40% in line with our 2025 outlook. I'll speak to operating income and earnings per share in a few minutes. Moving to year to date, organic net sales were flat as we lap the prior year. Opill is taking benefits from its late first quarter 2024 launch in addition to the impact from previously disclosed lost distribution in U.S. store brands. These factors more than offset growth of +0.7% in the rest of the business. Year to date, gross profits of $831 million increased $3 million year- over -year, including a $32 million impact from divestitures and exited products. Organic gross profit increased $30 million or 3.8% primarily due to business recovery of infant formula. Year to date, organic gross and operating margins meaningfully expanded, up 150 and 300 basis points, respectively. Margin expansion was driven by infant formula in addition to benefits from accretive initiatives, which were partially offset by lower plant overhead absorption and OTC volumes. Turning to net sales performance by segment, starting with CSCI, reported net sales were up +0.7%. Organic net sales growth of 2.7% was led by supply recovery of key products, growth in our highly profitable products including Jungle Formula and Compeed, and share gains in ellaOne that Patrick just mentioned. In CSCA, net sales declined 1.9% as growth in the nutrition business, healthy lifestyle, and upper respiratory categories were more than offset by lower net sales in digestive health and oral care. As Patrick highlighted, we have now lapped the prior year distribution losses in store brand OTC and realized net new business growth in the quarter, which we expect to benefit growth in the second half of the year. Second quarter operating income of $135 million decreased $4 million, including a $9 million impact from divested businesses and exited products. Organic operating income was flat year- over- year as lower advertising and promotion spend in reaction to softer seasonal demands combined with our accretive initiatives offset the higher scrapping of infant formula and lower plant overhead absorption I just discussed. Year to date, operating income of $282 million increased $50 million, including a $50 million impact from divested businesses and exited products. Organic operating income grew 28.3%, driven by infant formula and our accretive initiatives. Second quarter earnings per share of $0.57 increased 7.5% or 12.5% organically versus the prior year, driven primarily by lower interest expense. Year to date, earnings per share of $1.17 grew 41% or 53.3% organically, driven by infant formula recovery, accretive initiatives, and lower interest expense. Turning now to the balance sheet, second quarter operating cash flow was $76 million, bringing year to date operating cash flow to $111 million. As a reminder, first quarter operating cash outflow included the rebuild of infant formula inventories and a securities litigation settlement. Year to date, we invested $45 million in capital expenditures and returned $80 million to shareholders through dividends. Cash on the balance sheet at the end of the second quarter was $454 million. We remain on track to deliver our 2025 operating cash flow conversion target of approximately 100% to adjusted net income. Net leverage to adjusted EBITDA is 3.9x over the trailing 12 months, on our way to achieving our target of approximately 3.5x by year end. To build on Patrick's comments regarding the announced sale of our Derma Cosmetics business, the proposed sale multiple reflects a premium of approximately 20% - 30% to Perrigo's current enterprise value to adjusted EBITDA multiple. While the transaction sharpens our strategic focus, it is also value enhancing for shareholders. As noted, we anticipate the transaction closing in the first quarter of 2026 with expected proceeds prioritized to strengthening our balance sheet and advancing our net leverage goals. While we are operating in markets with challenging short-term consumption trends, our business model of hundreds of OTC molecules across multiple price points has propelled share gains across our store brand and key brands. These gains have insulated our performance this year. Recovery in our infant formula business is progressing, however it is lower than initially anticipated with net sales now projected to be below prior year levels. Given this update and prudence from ongoing softness in OTC market consumption trends, reported and organic net sales growth are expected towards the lower end of the year of our previously communicated ranges. Despite this top line adjustment, expectations for operating income growth remained largely unchanged as the infant formula scrap issue is not expected to repeat. Plant absorption is expected to cease as a headwind in the second half as our production volumes improve and operating expenses come down. As a result, we are also reaffirming our outlook for gross and operating margins for the full year. These same second half drivers give us the confidence to reaffirm the rest of our 2025 outlook including our EPS target range of $2.90 - $3.10 per share, equating to strong double-digit growth. As for phasing, top line is expected to be heavily weighted to the fourth quarter due primarily to timing of benefits from already secured new business in U.S. store brand OTC and later than prior year selling activities for the cough cold season in the European Union. Operating expenses are expected to be higher in the third quarter versus fourth quarter as we amplify advertising and promotion investments to support our winter brands and work to gain share in infant formula. Before I wrap up, just a few quick comments on tariffs based on our latest assessments. Excluding any potential impact from pharmaceutical tariffs that may cover ingredients used in the manufacturing of OTC products, we estimate a gross increase to global cost of goods sold in the fourth quarter of approximately $10 million - $20 million and approximately $50 million- $60 million on a full year basis, equating to approximately 2% of our global COGS. These estimated impacts are much lower than our first quarter update. As previously highlighted, we plan to offset these impacts through a combination of strategic pricing actions and sourcing to our U.S.-based manufacturing facilities and other supply chain actions. In summary, we are executing well in a challenging consumer environment and believe we have an edge in the marketplace with our unique offerings across the value spectrum. We continue to gain share in many categories and brands and we remain confident in our ability to deliver strong double-digit EPS growth for the full year. Thank you for your time today and I now turn back the call to Brett. Thanks, Eduardo. Operator, can we please open the line for questions? Thank you, ladies and gentlemen. We will now begin the question and answer session. To ask a question, you may press star followed by the number one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing. In any case, to withdraw your question, please press star followed by the number two. With that, our first question comes from the line of Keith Devas with Jefferies. Please go ahead. Great. Good morning. Thank you. Maybe just starting with what you're seeing on the infant formula side, any context you can add, maybe just from what you're hearing from retailers as well as how competitors are responding. I think on the last call you mentioned competitors had also been engaging in promo activity and some pricing. How have your second half expectations changed and how should we expect kind of the recovery to play out for the balance of the year? Good morning, Keith. I'll take the first part of that. Question and then for the more detailed financials, hand over to Eduardo. The market is, I would describe, quite fluid, quite volatile. Brands are promoting quite heavily to gain shareholders. We've seen a number of new products. Being launched, and I would say that our placement at the shelf is not optimal at certain retailers. There's also probably opportunity in some of our packaging claims as well. Store brand infant formula volume, it does. Continue to grow, but as I mentioned, new volume has entered the category, and that has dampened our share growth versus our expectations a few months ago. I'm confident we're putting into place the. Right steps to grow value share above our historical norms, and we really expect to continue to ramp up in the second half. We still have 20% of our SKUs that we were launching this year to be placed in the market, but we are stepping up our demand activation activities, our new mom targeting programs, etc., so slower than expected but largely on track in a market that's really been more dynamic than we've seen probably previously. Yeah. Hey Keith, good morning. Eduardo here. A couple of comments there. First, starting with the second quarter, right? We're seeing, you know, we saw an important increase in our revenue, about 9%. That's mainly driven by store brands. We're seeing, you know, not unexpected good start, having a low pickup, a slower pickup versus we originally expected because of the relaunch of the brand that we had at the beginning of the year, under the Good Start, Dr. Brown. Right. The new SKUs, the 80% that we launched this second quarter, are starting to pick up. They're all on shelf across the major retailers and it's a matter of pickup velocity. We're putting all the actions in terms of promotion to make sure we achieve our expectation in the second half. In light of some of the softness that we saw in the second quarter, we're more prudent and instead of seeing 25% growth versus last year, we're more expecting to see a 25% increase in the second half versus the first half of the year. That's what we're positioning right now. I think key is that just to make sure we don't lose sight on the big picture. As we look into our performance in the first half of the year, we're able to grow earnings per share by $0.34 as compared to last year. When you look into our midpoint of the range between $2.90- $3.10 and as you compare to what we need to deliver in the second half, it's just a 3% increase in earnings per share. I know that gross margin and some of the infant formula, it's a big question on people's mind. I want to make sure we put that in the right context that we just need to deliver 3% ahead of what delivered last year. There are some important points that I wanted to highlight today. First, all the contracts that we won on OTC store brand give us a significant advantage versus the first half of the year. Second, the infant formula growth that I just mentioned, those two key points give us the confidence that we're going to be able to deliver our EPS target there. We're seeing consumer softening, but given also the gains that we had in OTC store brand volume share, this puts us in a confident position that we're going to be able to deliver our range. The only adjustment there is mainly on the top line given some of the softness that we talked about in the first half. Of the year and some prudent approach on how we expect consumer trend to happen in the second half of the year. I want to make sure. I know infant formula always causes some questions, but it's important that we put in the broad context that if we're able to deliver 3% higher, you know, EPS versus what we delivered last year in a much stronger context that we were last year, we can deliver our EPS for the year. Great, that's very helpful. I think you touched on a lot of points that I was going to get to in the follow up. Maybe just confirming, you know, some of the building blocks you laid out in the second half to get the guidance. I think originally you called for 60% of the EPS to come in the second half. It looks like a little bit more now. Maybe just talk about the visibility that you have in some of the building blocks you called out earlier to get there, you know, despite the top line coming in a little, you know, at the low end of the range. Anything you can add in just terms of. Let me. Thank you. I just want to address a point you said that we don't agree with. The EPS requirement for the second half is exactly in line with our guidance. It is not an increased burden in the second half. It's being executed per our financial plan and our financial guidance. To go into a bit more detail on the other part of your question, Eduardo. Yeah. On organic sales, right, second half versus first half, it's high single digits that we expect. We don't expect significant contribution from CSCI because CSCI last year had a strong position and because also we have the divestments that are lapping significantly in the middle of this year, we do not expect significant change there. The majority of that growth comes from CSCA and 75% of the growth is coming from OTC, right. It's all about the new context, the wins versus losses, which remember was a negative impact in the first half of this year and it's going to be a positive in the second half. You need to consider in total it is a significant amount of growth in the top line we expect to see in the second half. Cough cold season assumptions as well, remember last year we had a very late start so we are assuming that we should see a pickup there and all the demand generation activities that Patrick highlighted and focus on the velocity and all the partnerships like the example he gave on allergy and we're looking to similar ones in other parts of the OTC business give us the confidence we're going to be able to deliver on that. The remaining 25% comes from nutrition. Again, it's basically those four points that Patrick mentioned, it's the 20% of the remaining SKU, it's the ramp up of the 80%, it's all the demand generation activities that we're doing and making sure that we have the promotion of what they need. When I look into gross margin, in the first half we delivered 39.5%. One thing that I don't know if it was exactly clear in my comments, but we planned that we would see a second quarter impact because of lower volume absorption coming from the last quarter of last year because of the deferral of those currencies we knew that was going to impact. We're exactly on plan. To be honest, we believe we are a little bit ahead of our plan. That gives us more confidence to deliver on the second half of the year. In terms of operating profit, the key driver of that is really the gross profit and we expect some lower operating expenses to take place in the second half of the year. Remember when we highlighted during the Investor Day and the first quarter that we would do significant investment in the first half of the year to make sure that we would support our brands and we did a significant portion of that. We didn't go more aggressive there because of the softening that we saw in some markets and certain categories like allergy, the skincare season that was very late in northern Europe as well this year. All those components made us a little bit adjust that. That's why you see a little bit more amp investments in the third quarter. At the end of the day, as Patrick highlighted, we're going to be 60% towards the second half versus 40% in the first half that we delivered. Against our plans, we are pretty in line to that. Great. Thanks for all the color. Pass it on. Thanks, Keith. Your next question comes from the line of Susan Anderson with Canaccord Genuity. Please go ahead. Hi, good morning. Thanks for taking my questions. You talked about taking strategic pricing. I guess maybe if you could talk a little bit more about what that will look like. Will it be across both the branded and private label OTC, and then I guess if private label, I'm just curious the conversations you're having with retailers around potential pricing. I guess are they open to kind of increase prices there? Thanks. That's me. Hi, Susan. Good morning. Eduardo here. Your question is mainly related to the impact on Paris, right? As we mentioned, for this year, we expect a small impact between $10 million - $20 million, mainly in the fourth quarter of the year. We're having very good discussions on both OTC and oral care, and the impact is evenly split amongst those two. Some categories are very clear and customers are accepting that. Sometimes the challenge is on the volumes and the business, but so far we're pretty well on track on our expectations to fully offset those impacts not only this year, but also next year. Remember, about two thirds of that is going to come from pricing actions, and the remaining are related to supply chain, either insourcing or other actions that we're taking. Okay, great. I was just curious, on the private label side, are you seeing any accelerated pace of kind of consumers trading down to private label at all, or is it kind of pretty consistent with what we have seen in the past? I think it's fair to say we have seen an acceleration. Store brand OTC is gaining share. We're gaining share of store brand OTC. We're seeing volume and now units accelerating as well. The important point here is typically 70% - 80% of consumers, once they do move into store brands, stay with store brands. They think of that as an annuity. Going forward, they get exactly the same, obviously, medical benefit for significantly better value. We are seeing it. We are seeing a partnering with retailers to continue to invest and grow household penetration of store brand OTC. I think the allergy program that I referenced in my comments is a very good illustration. We have multiple similar efforts now being developed for execution in cough cold and into 2026. We talked at the last call about this demand generation effort. I committed to give some commentary on that. We will see about $20 million of revenue that we're seeking to target, which will help us maintain sales in light of some category contraction and a multiple of that going into 2026. That all needs to be part of our financial stewardship, of course, as we look to deliver margin and EPS expansion. We put a lot of effort into this incremental demand generation. I'm pleased with what I'm seeing. It's new work for Perrigo. It's new work for a lot of our retailers, but it's having a meaningful consumer impact and we will continue to expand that. Okay, great. Maybe just to follow up. On the previous question on just kind of like the back half, but more focused on the top line, I guess. I'm just curious on this, I guess, the step change in growth. To the back half. I don't know if you can kind of parcel out by order of magnitude the change. Is the biggest change in growth coming from infant formula, the private label OTC gains, or maybe if you could just expand on that a little bit. Thanks. Let me give some real top. Line, Eduardo, with a bit more detail. It's a fair question. You'll see about 9% approximately increase in second half versus first half. The international business relatively flat. Very encouragingly, we're starting to see a step change in performance in the U.S., which has taken a lot of work and planning. Order of magnitude about 15% increase in the second half versus half one for the Americas business. To answer your question, about 75% of that actually coming from OTC. We've talked about net wins and losses in store brand contracts. In excess of. $75 million from there. The cough cold season was particularly weak last year. You'll see tens of millions improvement on that. I just talked about demand generation accelerating store brand OTC velocity, that's north of $30 million, and then about 25% coming from the nutrition infant formula business as we see consumption ramp up in U.S. use and demand generation activity kicking in as well. It is fairly broad. It's mainly centered in the U.S. business, which has been a key focus for us in terms of improving performance. That's starting to land in the P&L now. Okay, great, that's very helpful. Maybe just one last question on Opill. I guess any changes in your longer term expectation? I think you had previously said $100 million over the long term now that you, I think it's been kind of under your belt for about a year now. I guess any change there, any learnings from the brand just in terms of how to manage it going forward? Also, do you plan to continue to increase the marketing there to increase awareness? Thanks. Thank you. Increasingly pleased with the performance of Opill or double consumption this year. We're seeing repeat rates now of about 55% which is exceptional. There is growing awareness, growing trial, repeat, as I say, extremely high. We will continue to invest to build awareness. What we've learned is there are very particular cohorts that this brand appeals to, and we're much more targeted now in our media and our communication and our trial programs against those four cohorts, and it's working well. I think the team is getting increasingly good at the brand building necessary with those cohorts. We're at a point where we believe. We can now start to roll out an O brand architecture. We have two or three active projects now in our innovation master plan to continue to build out a comprehensive women's health brand under the O brand across critical life stages, lifestyles, and key need states. Encouraging. We continue to grow the brand. It was slower than initially anticipated or forecasted in bases, but I'm pleased with how it's developing. What it does show is we can successfully manage a switch. We're able to launch a new category and create new brands. Great. Thanks so much for all the details. Good luck the rest of the year. Thank you, Susan. Our last question comes from the line of Chris Schott with JPMorgan. Please go ahead. Hi, this is Ethan on for Chris Chat. Thanks for taking our questions. Just starting off on infant formula. Was curious if you could give any color on what led to the increased product scrap. From here, what's your level of confidence that this has been addressed and won't continue to weigh on margins going forward? I have one follow up after. Thank you. Thank you, Ethan. As you know, we implemented comprehensive, quality-assured manufacturing. This was an isolated production issue. The product was out of spec. Our quality systems instantly picked up on that. We made the prudent decision to scrap. Nothing was released into market. We have done a full CAPA on that, adjusted some of our processes as you would expect in a continuous improvement manufacturing environment. We are very pleased with the continued levels of quality assurance that we're achieving. To answer the question, it was one off, it was caught. We took the prudent step to scrap and I do see it as isolated and, most importantly, reaffirmation of the quality manufacturing we now have in place. Thank you, that's very helpful. With the updated expectations on the infant formula ramp for the second half of the year, what does that imply for the share you're targeting to exit the year at? Does that cause you to rethink your long term guidance at all? Thank you. I'll take that, then Eduardo, add any color. I think it's fair to say that. It has been a slower ramp up than we expected. We've stepped up some of our activity in terms of demand generation, looking at some of our packaging claims as I mentioned, and there's no doubt we need to put more effort against rebuilding point of market entry. We still have the same share ambition. It will take longer. In terms of store brand volume share, capacity requirements, etc., that's okay. The bigger question for us, frankly, is there's a lot of variability in terms of local branded share. What that is going to be on a going basis? Given the continued importation primarily of European organic products, what share of the market are they going to take on a long-term basis? Will the U.S. Administration continue to allow importation of foreign product? Given emphasis on made in America and the quality standards we already have in our formulations as local manufacturers, that has some variability to it, and we need to continue to try to triangulate that capacity assumption, and that has implications for capital, etc. In terms of the primary part of our business, store brand infant formula, no change to a long-term outlook, and we continue to work through the dynamism that we're seeing on this foreign importation as a matter of priority. Thank you. We have no further questions at this time. I would like to turn it back to Patrick Lockwood-Taylor for closing remarks. Thank you very much. As we continue to execute our 3S plan, stabilize, streamline and strengthen, we. Are seeing tangible progress across key areas of the business. New wins in our store brand business. Have overtaken prior year losses. We've upgraded our brand building capabilities, and those are delivering the results we want. We're scaling our commercial operating growth model. Driven by strategic category and brand management with enhanced local commercial execution, this is accelerating and it's proving its effectiveness as I hope we've given you some proof points on today. Despite a dynamic and difficult consumer environment, Perrigo's diversified portfolio of hundreds of molecules. Across all price points remains a source. Of resilience, enabling us to grow share in our most strategic categories and outperform the market very significantly. Looking ahead, we're reaffirming our fiscal year 2025 outlook. Strong operating income growth expected in the high single digit range and EPS growth. Expected in the mid to double digit range, even as net sales are expected towards the lower end of our guidance. Remain very focused on driving growth, deleveraging. Our balance sheet and improving free cash flow to net sales, all of which position Perrigo for long term value creation. Many thanks for joining us today. Thank you, presenters, and this concludes today's conference call. Thank you all for joining. You may now disconnect.