Transcript for:
Proctor and Gamble Quarter End Conference Call Summary

good morning and welcome to Proctor and Gamble's quarter end conference call today's event is being recorded for replay this discussion will include a number of forward-looking statements if you will refer to png's most recent 10K 10q and 8K reports you will see a discussion of factors that could cause the company's actual results to differ materially from these projections as required by regulation G Proctor and Gamble needs to make you aware that during the discussion the company will make a number of references to non-gaap and other Financial measures proor and gamble believes these measures provide investors with useful perspective on underlying business Trends and has posted on its investor relations website www.pg.com a full reconciliation of non-gaap financial measures now I will turn the call over to png's Chief Financial Officer Andre Shulton good morning everyone joining me on the call today is John Chevalier senior vice president investor relations this fiscal year John Mohler chairman president and CEO will join the midyear and year- end calls and I'll be leading the q1 and Q3 calls execution of our integrated strategy drove strong results in the July to September quarter broad based organic sales growth across categories and regions Global aggregate market share growth strong productivity savings enabling increased investment in superiority of Our Brands while also delivering very strong earnings growth these strong first quarter results put us on track to deliver toward the higher end of our fiscal year guidance ranges for organic sales growth and core earnings per share and continued strong cash productivity and cash return to share owners so moving to first quarter numbers organic sales grew 7% pricing added 7 points to sales growth and contributed one point volume rounded down to a decline of one point with overall modest volume growth outside greater China Top Line growth was broad-based across business units with each of our 10 product categories growing organic sales Home Care grew low teens personal health care was up double digits feminine care Oral Care fabric care hair care and grooming each GRS uh highest single digits baby care and Family Care were up mid singles skin and personal care grew low singles growth was also broad based across geographies with five of seven regions growing organic sales Focus markets grew 6% for the quarter organic sales in the US were up 7% and Europe Focus markets were up 15% greater China organic sales were down 6% versus prior year underlying market growth is soft and choppy as consumer confidence remains weak sk2 was down low teens in Greater China due to soft market conditions and a temporary reduction in Social retail merchandising Enterprise markets were up 133% with Latin America up 19% and Europe Enterprise markets up 15% shipment volume in the US grew 3% again this quarter and we returned to volume growth in Europe Focus markets Mexico Brazil and India some of our largest Enterprise markets continue to deliver solid volume growth these gains largely offset volume declines in the greater China asia-pacific and European Enterprise regions primarily driven by underlying Market contraction Global aggregate value share was up 40 basis points versus prior year with 32 of our top 50 category country combinations holding or growing share in the US all Outlet value share was up 50 basis points versus prior year with seven of 10 categories holding or growing value share in the quarter us volume share was up 60 basis points reflecting 3% volume growth value share in European Focus markets was up 40 basis points over the past 3 months moving to the bottom line core earnings per share were a $183 up 177% versus prior year on a currency neutral basis core EPS increased 21 % cor operating margin increased 240 basis points as 460 basis points of gross margin expansion were partially offset by increased marketing Investments wage and benefit inflation and foreign exchange impacts on sgna currency neutral cooperating margin increased 340 basis points productivity improvements were 210 basis point help to the quarter adjusted free cash flow productivity was 97% we returned $3.8 billion of cash to share owners approximately 2.3 billion in dividends and $1.5 billion in share repurchase in summary against what continues to be a challenging and volatile operating environment a very good start to the fiscal year across Top Line bottom line and cash our team continues to operate with Excellence executing the integrated strategy that has enabled strong results over the past 5 years and that is the foundation for balanced growth and value creation a portfolio of daily use products many providing cleaning health and hygiene benefits in categories where performance plays a significant role in brand Choice ongoing commitment to and investment in irresistible superiority across the five vectors of product package brand communication retail execution and value across each price tier we compete we are again raising the bar on our superiority standards to reflect the Dynamic nature of this strategy productivity Improvement in all areas of our operations to fund investments in superiority offset cost and currency challenges expand margins and deliver strong cash generation an approach of constructive disruption a willingness to change adapt and create new trends and technologies that will shape our industry for the future especially important in the volatile environment we're in finally an organization that is more empowered agile and accountable we continue to improve the execution of the integrated strategy with four Focus areas supply chain 3.0 digital Acumen environmental sustainability and the employee value equation these are not new or separate strategies they are necessary elements in continuing to build superiority reduce cost to enable investment and value creation and to further strengthen our organization our strategic choices on portfolio superiority productivity constructive disruption and organization reinforce and build on each other when executed well they grow markets which in turn grows share sales and profit we continue to believe that the best path forward to deliver sustainable top and bottom line growth is to double down on these integrated strategy starting with a commitment to deliver irresistibly Superior propositions to Consumers and Retail Partners fueled by productivity moving to guidance as I mentioned we expect the environment around us to continue to be volatile and challenging from input costs to currencies to Consumer and geopolitical Dynamics we attempt to reflect these realities in our guidance ranges based on current spot prices we estimate Commodities will be a Tailwind of around $800 million after tax in fiscal 24 this is consistent with the Outlook we provided in July however within this estimate there have been several moving Parts we've seen incremental relief on some Commodities like Pulp which have been offset by higher cost than other Commodities such as fuel foreign exchange rates have moved sharply against us and we now expect a headwind of approximately $1 billion after tax an incremental $600 million impact since our initial guidance for the year in addition to these impacts we are also facing higher inflation in wages and benefits and we expect higher year-on-year net interest expense of approximately $200 million after tax as we are just one quarter into the fiscal year we are maintaining our guidance ranges for organic sales core EPS growth cash productivity and cash return to share owners which with each solidly on track after a very strong first quarter guidance for organic sales is growth of four to 5% for the fiscal year the range includes a normalization and underlying market growth rates that is likely to occur Ur through calendar year 24 as the market laps the last waves of cost recovery pricing and as Market volumes return to growth for PNG we expect three to four points less pricing benefit in each of the next two quarters compared to our first quarter results on the bottom line our outlook for fiscal 24 core earnings per share is 6 to 9% growth versus last fiscal year we're holding the range despite the incremental $600 million after tax headwind from foreign exchange with now a 7 point EPS impact from FX this Outlook translates to 13 to 16% Corps growth on a constant currency basis we continue to forecast adjusted free cash flow productivity of 90% we expect to pay more than $9 billion in dividends and to repurchase 55 to6 billion in common stock combine the plan to return 14 to15 billion of cash to share owners the fiscal year this Outlook is based on current market growth rate estimates commodity prices and foreign exchange rates significant additional currency weakness commodity cost increases geopolitical disruptions or major production stoppages are not anticipated within the guidance ranges as you consider the Cadence of earnings for the year keep in mind that the back half of the year will see less pricing benefit as we progressively annualize prior year in increases we should also see less commodity benefit as we move through the year labor inflation continues throughout the supply chain and in our costs FX headwinds will increase versus quarter 1 also with a strong start to the year will be reinvesting to further strengthen our plans and to maintain strong momentum finally we'll be closing watching the health of the China market and the balance of regions energy costs are rising as we head into fall and winter household saving levels have reduced especially in Europe slower economic growth higher energy costs and higher interest rates for longer have an impact on consumer confidence to conclude while we expect volatile consumer and micro Dynamics to continue we remain confident in our strategy and the results that it delivers we are focused on driving growth in our categories and we are committed to delivering balanced top and bottom line growth and value creation for our share owners with that we'll be happy to take your questions if you have a question please press star followed by one on your phone if your question has been answered or you would like to withdraw your question press star followed by two your first question comes from Steve powers of Deutsche Bank please go ahead thanks good morning Andre um I guess just picking up on your comments on organic growth over the balance of the year maybe you could talk a little bit more about how you're thinking about the progression of price versus volume versus mix um over the remainder of the year and then I'm curious as to whether your approach to balancing those various drivers differs at all between your focus markets particularly the US um and the Enterprise markets where you're experiencing more of the the currency headwinds thank you morning Steve um we as we said in the prepared remarks we expect the Market to return to um a lower more sustainable growth rate more in line with historical growth at around 4% um that will have a stronger contribution on the volume side we would expect that to be around 2% 1 to 2% of pricing uh and maybe a point of mix impact um that will occur over the next few quarters and as always PNG is intending to grow ahead of the market um so really our expectation for the year is to be slightly ahead of the market in terms of volume um and slightly ahead in terms of of price we continue to believe that we can price with strong Innovation and we gained even more confidence uh over the past two years that our strategy of pricing with Innovation to drive superiority and create value for the consumer is working um and so we fully expect to return to that pattern and again pricing has been a core component of our growth uh for 18 out of the last 19 years so we expect that to continue specifically um I think the pricing will start to lap in Quarter Two um so you will see probably the price contribution drop to by three to four points in Quarter Two uh and that was expected um and we then sequentially expect volumes to pick up and offset part of that um but do expect a lower overall market growth rate for the balance of the Year to your second part of the question Enterprise markets versus Focus markets I think the only differential would be foreign exchange um and will continue to price for foreign exchange we've done that very successfully across the world uh turkey is a major example where we've been able to price for the significant devaluation of the Turkish L but we are able to grow share grow sales grow profit uh we'll continue that model um outside of that we're continue to do and drive the same uh business model we're driving in uh Focus markets innovate Drive superiority Price grow markets and thereby grow sales profit and share next question comes from D missan of Morgan Stanley please go ahead hey good morning guys so just to follow up on that um can you characterize what you're seeing competitively in terms of the pricing environment obviously it'll be different by geography and product category but in general what type of behavior are you seeing from your competitors and any thoughts around retailer push back as Commodities have turned favorable year over year and just then in terms of volume growth it sounds like we should expect a return to volume growth just what you think your level of visibility is around that and how much comfort you have um in ultimately returning to volume growth as pricing drops at off thanks morning therea um when you look at the total Market uh it's very consistent um with previous periods you still see average market growth of around 6 to 7% um and you see still the pricing component being a significant driver volumes are stabilizing at a global level um minus a point to Flat depending on the geography you look at the only exception being greater China um so the price component and the price roll over is consistent period over period um so no differentiation there from a competitive standpoint at least not that we see it promotion continues to be um promotion levels and other indicator continue to be below pre-co levels in the US for example volume sold on deal is now at about 29% overall promotion levels still index 80 versus preco in Europe we also see promotion still down and actually sequentially decreasing now it's a different Dynamic by market obviously but when we aggregate up it looks like over the past few quarters promotion activity is actually still decreasing and that makes sense if you look at the relatively um little or small help to commodity costs we see about 800 million after tax help uh offset by about a billion do of uh foreign exchange and recall we're coming from two years which combined have an impact of $7 billion of headwinds so I think everybody is still uh recovering uh so the current pricing Dynamic makes sense we have not experienced retailer push back uh Beyond normal discussions on how to maximize value for their Shoppers uh and for consumers overall and again our model of driving uh Innovation and therefore superiority and sales while we price uh and create value for retailers and Shoppers seems to be resonating on the volume side we feel very good about where we are in the trajectory of volume growth uh again excluding uh China we already seeing volume growth of 20 basis points sequential Improvement in uh uh versus the prior quarter quar qus which we would have expected and again that's in the context of 7% pricing still flowing into the market uh we expect volumes will continue to grow uh us strong uh as we said Europe strong Latin America and India strong so we continue to see uh us progressing on that trajectory great thanks the next question comes from Rob utstein of evercore isi please go ahead great um I want to drill in on China a little bit um number one kind of in the short term uh How is how's the business there progressing any visibility uh or Improvement there uh and you know when when do you think that may turn positive and then a little bit longer term or kind of strategically uh we we are hearing from some of the other companies we talked to uh that the Chinese market may not be as a profitable and attractive as perhaps they they may have thought a number of years ago and that and that perhaps the nature of competition is changing in China uh again um so love to get your thoughts on both China in the short term and the long term thank you thanks Rob morning I think we said all along that we don't expect the China recovery to be uh quick extensive or linear and I think that's playing out um The Business Health in China is really all driven by market dynamics right now um so total Market volume continues to be down it has been down over the past few quarters between 7 and 9% uh value is down around around 5% over the past few quarters and that's the market I'm describing so we're operating within a market that is still Contracting uh postco reopening that said we do believe that China continues to be an attractive place for us to do business we've been there for 30 years we have a very strong organization on the ground R&D capability supply chain capability and Commercial capability the Chinese consumer is a demanding consumer um the Chinese retail environment is a demanding retail environment and that generally plays to our strength so we believe that a we can play a uh a value creating role in China and we expect the Chinese Market to return to Mid single digit growth here uh over the coming periods if you just look at the consumer structures uh middle- inome consumers we have about 450 million we estimate in China today that will grow um probably north of 700 million over the next five years so there is a class of consumers that we believe are attractive uh for our businesses and therefore we believe that um our business in China can create significant value over the next few years and will continue to remain invested the next question comes from Lauren liberman of farlay please go ahead great thanks good morning um you'd mentioned the return to volume growth in European focused markets um which is great to see and obviously market shares have generally held up well but we started to see um some pickup in private label share Trends across Europe um you mentioned the European consumer being under pressure so just kind of curious maybe some more broad thoughts there on Europe on market share trends that you're seeing more Real Time versus um you know what's kind of already transpired in in the reported results more the go forward look on um European shares and um and volume Trends thanks yep morning Lauren thank you look the European let me um let me Focus here on the Western European side because I think that's where your question is is is relevant um yeah look we've seen 15% organic sales growth in Europe Focus markets which is uh incredibly strong uh combination of 2% volume growth and strong price mix um we have uh 40 basis points of share growth across the same geographies um which is very encouraging the market is returning to volume growth um and um that generally are positive signs yes private label shares in Europe are growing um they continue to grow at about an 80 basis points clip uh month over month um but that uh still enables us to grow share in the in the same geographies and I think that share growth is enabled by a strong portfolio uh across different brand tiers across different cash outlays um the fact that we are present in all relevant channels across Europe and that allows us to effectively compete even as consumers look at you know the private label versus branded value equation um the balance seems to be still in our favor the next question comes from Brian Spain of Bank of America please go ahead thanks operator uh good morning Andre um I I guess I have have two two connected questions one is if we look at the first quarter and even your commentary about you know guidance you know maybe higher end of the ranges I know you've talked a lot you've talked a bit about some of the risks uh in the market but just like what's been better so far this year um is is one question so just you know uh that and then related to that also you talked about uh reinvestment so if you can just give us some sense of uh kind of the sizing that that reinvestment and maybe where those dollars are going morning Brian if you look at the first quarter I think the we are in encouraged by the combination of factors here on the uh consumption side again volume return to volume growth outside of China we expected China to be choppy as we said all along but even with China down we've been able to grow 7% and that certainly has been encouraging to us um and the the depth and breadth of that growth both across value and volume outside of China is really encouraging us and giving us confidence that the model will continue to drive results that point to the upper end of the guidance ranges on the reinvestment side we will continue to look for opportunities to invest when the return of that investment is attractive it won't be driven by availability of funds it will be driven by ability to create an attractive return our first priority as you can imagine in this current environment is to invest in ideas that drive market growth um so investing in in um products investing in Innovation that is driving new jobs to be done investing in media spending that is driving household penetration investing in communication to the consumer that drives usage uh in the right way to drive better de light for the consumer um will be key a couple of examples um ninjamas in bad weathers was a sleepy category we entered a couple of years ago um categories growing 7% we were able to to drive 60% of that growth which is six times our fair share those are great examples where we can continue to invest Drive growth for the business Drive growth for our retailers and create value for shareholders we continue to see opportunities in media uh as we get sharper and sharper on our targeting across media around the world and our capabilities are scaled the ROI gets better so we'll continue to drive up um reach we continue to drive up frequency um and again that is a core driver for us to drive household penetration Drive trial uh which will turn into loyalty and and and repeat the last bucket I will give you is investing in Supply uh resilience and productivity um our supply chain resilience we see as a core competitive Advantage um for our Retail Partners and for ourselves so we'll continue to ensure that our cap capacity to demand ratio is where we want it to be and investing in productivity We Believe has a high payout and is critical for us to continue the investment in superiority which is part of the business model so those are the headlines um but be reassured we'll do it on a very disciplined uh basis with return on investment as the top priority next question comes from Andrea toera of JP Morgan please go ahead thank you good morning um Andrea your comments about volume um I would um like to drill down a little bit you mentioned um China um I believe you is still looking to a mid single digit growth and obviously I understand how uh the chess of the market and you had sk2 down in the low team so I'm assuming for that to happen you're um expecting sk2 to gradually improve or lap easier comps as we go through the balance of the year and then when you mention like doing the math when you said pricing as we decompose your guidance right the 4 to5 organic total company you mentioned uh expect sequential um 3 to 4% decline in the in the um in in the benefit of pricing right so it was a good 7% so you would be implying to us 3 to 4% the next two quarters so with that being said in I you know in the next two quarter some sort of uh Improvement in in in volume right or or at least some sort of inflection so I was trying to figure that out in the context of what you said about China and when you said about total company basically what it regresses to regresses to an improvement in in China is that what we should be thinking so first part morning Andrea first part of your question um we uh obviously want to see sk2 return to growth um but the volume impact of sk2 is relatively limited um because the the volume to organic sales ratio obviously is is um is very uh very high unit sales um so China We Believe will return to mid- single digit growth when exactly that's going to happen is really hard to predict and I would say like we have delivered 7% organic sales growth in the first quarter with China down um I think we'll continue to uh operate and not counting on China recovery as the core uh Catalyst to uh growth for the coming Quarters on your uh sequential question on volume you're right as we said uh the pricing contribution to organic sales growth will decrease three to four points over the coming quarters and we expect volume to progress sequentially the exact trajectory of that progression I think is questionable um and and I won't make a prediction here but I'll tell you um that the progress we're seeing from - 6 to minus 3 to Flat to uh to minus one to now flat is pointing in that right direction so we see we're on the right path uh and we will uh continue to invest to drive h of penetration and create that volume growth in our business the next question comes from Olivia Tong of Raymond James please go ahead great thank you good morning um Andre you talked about the changes in FX and how you've been able to absorb that into the uh fiscal viewer Outlook um can you discuss what's embedding your outlook in terms of the consumer the economy you know obviously um increasing risk or concerns uh around trade Downs lower volumes and macros in general so um if you could talk about that and then also your ability and quite frankly your agility to switch between spending that is either net to sales versus operating expense in light of um um you know potentially volatile conditions thank you yeah thanks Olivia moring look the consumer uh continues to be remarkably resilient um as we've said in the US um the consumption levels are actually stable our volume share and our value share are growing um and that's true in Europe and in most parts of the world and I um interpret that as our portfolio doing exactly the job that it's supposed to do um and building a portfolio that is grounded in superiority in daily use categories that are non-discretionary I think is serving us extremely well we're able to add value bring value to the consumer um and we are doing that in every tier not just in a premium tier but in the mid tier and in value tiers across the world which allows us to serve the consumer even as their um spending preferences might change now we haven't seen a significant change in um in their preference yet if anything consumers that are choosing PNG products continue to trade up within our portfolio um but you can see our ability to grow in markets even when we see private label shares expand um and so we don't expect a significant change in that um in that profile and we believe we are well set up to grow even if the consumer feels a bit more of a pinch here going into the fall or or winter season the main uh intervention for us continues to be investing in Innovation and continue to invest in media support to communicate the strength and the value that Our Brands can uh provide um we we don't see a significant need to drive price promotion uh our Focus if we promote if we look for install support is really to drive regimen so we view it as a strategic tool to drive either trial or habit formation I.E regimen uh steps added to the laundry regime or the Hair Care regime for example because that drives incremental consumption it drives growth for our Retail Partners and for us uh in many cases our Innovation is strong enough to get inore support um and that's really what we're after when the when the product in and of itself generates enough traffic and consumption so retailers want to support it that's the golden grade we after the next question comes from Chris Cary of Wells Fargo security please go ahead hi good morning I was I was wondering if you could expand on two categories which have been important for volume growth and and seemingly you know should be important ahead uh just first on laundry uh we've seen an improvement a re acceleration and Trend can you just expand on what's driving that and and the durability and then second in personal healthc care I believe that was an important uh driver of volume growth in the quarter uh can you just expand on what exactly was driving that in the quarter and you know if you think those Trends are also sustainable go forward so I'm just trying to you know get a sense of some of the volume durability that we saw in the quarter go forward specifically in the context of you know potentially um some volatility out of China likely to persist thanks so much yeah thanks Chris good morning the laundry business is is very encouraging results around the world are are are very strong let me focus on the US market um because that's the it's the biggest Market uh and you have the highest visibility too but if you look at the Trends they are very encouraging we are now growing uh value and volume share in uh in US fabricare um value share um uh has been flat over the past 3 months volume share has been up 1.6 points so we continue to push the laundry business forward um we have record high fabric enhancer shares um and we have record high laundry consumption in the US most importantly I think is the fact that we're driving 70% of the category growth in laundry and we're driving 100% of the category growth in Fe enhancers and it's really driven by strong Innovation strong superiority and uh doubling down on consumer relevant communication and instore support so I fully believe that this will only accelerate uh and to your question yes it is sustainable because it's just in line with a business model phc is is is doing extremely well around the world um and obviously the seasonality here plays a key role going into the season we see see strong results um which is part of um the strength and volumes that you see and the last part I leave you with is we've invested significantly and continue to invest in strengthening our supply capability in uh personal health care which will be needed to support that strong growth going forward um but feel good about both businesses and yes I think the trajectory is absolutely sustainable the next question comes from philipo Alor of City please go ahead hey good morning Andre um just a question on gross margin clearly very strong performance in the quarter big inflection in terms of the E incase um you seem like to have pretty good visibility in the the first half at least on the commodity front can you give us a sense of how you thinking the second half will play out especially as pricing contribution comes down thank you morning filipo yeah when we talked about the Cadence of earnings I think it's important to understand the drivers of the gross margin expansion we saw in quarter 1 um and we expect some normalization of growth margin we were certainly benefiting from a high price contribution in quarter 1 and as we said that price contribution will ease over the coming quarters um the biggest part of the commodity help about 33% of the 800 million after tax commodity help has materialized in quarter 1 so that's a positive to growth margin um relative to the balance of the year and the foreign exchange rate headwinds uh will accelerate um over the coming quarters um on the other hand we will accelerate and continue to drive strong productivity um we will continue to drive uh trade up and in Innovation um and we continue to drive uh every other element of productivity not only growth margin but across the p&l and the balance sheet but I I I want you to take away that the growth margin expansion in quarter 1 is very strong but we have headwinds going into the balance of the year the next question comes from Peter Gro of UBS please go ahead thanks operator and good morning Andre I hope you're doing well so I wanted to ask specifically on on Latin America you know 19% growth in the quarter very strong and you may have alluded to this but are you already seeing a return to volume growth in the region and then just thinking through the performance in the quarter can you maybe just unpack what you're seeing in terms of broader category performance versus how much of this growth is is a function of of share gains thanks War Peter um look the Latin America business is on fire and I think it is on fire because we've chosen uh maybe opposite to the market to double down on superiority when when we saw the need to price for foreign exchange and commodity uh impacts in Latin America the team made the choice to double down on Innovation and price for the Innovation and to offset fore an exchange rate inflation and commod ities and that clearly has played out well we are seeing uh growth in our categories and we are seeing share growth in Latin America the growth is both on the volume side and on the value side in the biggest markets in Brazil Mexico for example I think the biggest headwind um that we have to acknowledge is Argentina um where it's very difficult to make progress at this point in time given the level of inflation um some restra constraints in terms of ability to price um so outside of Argentina I can only paint a very positive picture of the Latin America uh growth construction and again it's grounded in the superiority of Our Brands um and I feel very strong about the sustainability of that model the next question comes from Mark asrian of people please go ahead thanks and and morning everyone um two sort of unrelated follow-ups one just on China and given your your commentary about the the middle class I think everybody's obviously aware that there's just a growing middle class and that they'll ultimately consume more but but any sort of changes in in in your view about how quickly the the middle class premiumize purchases you know obviously sk2 maybe you know sort of a one off but but any changes there in terms of how quickly you think that they can go for more premium priced products does that potentially change how the Proctor thinks about its product positioning or portfolio positioning in the market and then on the gross margin versus uh marketing spend sort of decision tree if if gross margin moderates how do we think about the the incremental reinvestment or or marketing investment from an F standpoint go through the year would that inversely kind of move with with gross margin or I should say would it would move with gross margin meaning less gross margin expansion less less reinvestment thank you yeah morning Mark look I really don't have any more insights on on the China recovery timing um you see the volatility in the market that will directly correlate with consumer confidence income levels and therefore recovery timing I think we're hoping uh for faster but we're prep prepared for longer uh would be my uh answer here on the growth margin versus marketing spending side we're when I say we're Roi driven I really mean we're Roi driven um so there's no direct correlation between availability of funds and investment levels if we continue to see strong response to the marketing spent increases that we deliver in quarter one I think there's a strong incentive for us to continue that level of investment um I also expect that our growth margin um growth margin expansion and our overall growth contribution availability will continue to enable us to drive strong Innovation uh and drive strong support of those Innovations that's part of the business model that's why uh again it has to be a combination of driving very strong productivity to reinvest in superiority to grow markets and we have to keep that cycle spinning the next question comes from Edward Lewis of Redburn Atlantic please go ahead yes uh thanks very much um another strong quarter in the US uh seeing both volume and value growth um just looking back at 2020 uh when we were dealing with obviously a lot of coid headwinds uh you were talking about growing about four to 6% as a sustainable rate of growth in the US um in light of all that's gone on in the past few years and seeing where we are in the US the with the consumer you still comfortable with that range over the longer term look I won't give you guidance on a market bym market basis I I think the what is proving out is that the business model we're driving in the US is is very successful if we are successful in continuing to drive market growth uh that will continue to drive sales ahead of that market growth for us uh while being sustainable because we create business instead of taking business from somebody else if that model is successful which I believe it will I feel very strongly about the growth prospects of the US and again we're doubling down in every dimension of superiority we're doubling down in every dimension of Market execution so my overall confidence in the US market capability and growth trajectory is very high operator are there any more questions there are no further questions at this time okay thank you very much for joining us today again very strong first water on the year and we'll look forward to speaking with you if you have any questions John and I will be available all day um so please feel free to call or email thank you very much that concludes today's