Financial Data and Key Metrics Changes - The company is investing an incremental $600 million to address underinvestment in its brands, aiming to return to organic growth [7][10] - The investment represents approximately 5.5% of the company's top line, indicating a significant commitment to brand support [24] Business Line Data and Key Metrics Changes - The Taste Elevation business has shown good momentum, with 70% of its revenue now gaining market share in the US [27] - Brands like Heinz and Philadelphia Cream Cheese have already shown meaningful improvement in market share due to prior investments [25] Market Data and Key Metrics Changes - The company has seen its overall market share in the US return to levels from three years ago, indicating a recovery in competitive positioning [27] - Emerging markets, excluding Indonesia, are expected to deliver strong growth, with close to double-digit growth anticipated [28] Company Strategy and Development Direction - The decision to pause the spin-off is based on the recognition of short-term opportunities to turn the business around rather than external pressures [11][19] - The focus is on returning to organic growth and enhancing competitiveness through strategic investments in brands and capabilities [10][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenging operating environment but emphasizes the importance of investing in brands to drive growth [10][19] - The expectation is to exit 2026 with improved trends and to aim for organic growth in 2027 [35] Other Important Information - The company plans to allocate a significant portion of the $600 million investment towards price and product improvements, particularly in the North American Grocery Company [23][25] - The company is also addressing SNAP exposure, which currently accounts for about 13% of its US retail business, and plans to mitigate its impact through strategic pricing [53] Q&A Session Summary Question: Investment levels and industry environment - The CEO confirmed that the $600 million investment is primarily about correcting past underinvestment rather than solely responding to industry challenges [7][10] Question: Pause on separation strategy - The CEO explained that the pause on the spin-off was due to the discovery of significant short-term opportunities to improve the business [16][19] Question: Phasing of investment spending - The CEO indicated that spending would ramp up in the second quarter, with meaningful results expected in the latter half of the year [23][25] Question: Long-term growth algorithms - Management stated it is too early to discuss long-term growth algorithms, focusing instead on returning to organic growth by 2027 [46][47] Question: SNAP exposure and impact - Management acknowledged SNAP as a headwind but emphasized plans to address it through strategic pricing and product offerings [51][53] Question: Value pricing strategy - The CEO outlined that the company would implement promotional activities and price adjustments, with a focus on opening price points [57][58]

Financial Data and Key Metrics Changes - The company is investing an incremental $600 million to correct underinvestment in its brands, aiming to return to organic growth [6][10] - The investment represents approximately 5.5% of the company's top line, indicating a significant commitment to brand support [22] Business Line Data and Key Metrics Changes - The investment will focus heavily on the North American Grocery Company, where there are opportunities for improvement [22] - Brands like Heinz and Philadelphia Cream Cheese have shown meaningful improvement in market share over the last 13 weeks, indicating positive momentum [25] Market Data and Key Metrics Changes - The company has seen a return to market share levels comparable to three years ago across its total portfolio in the U.S. [25] - Emerging markets, excluding Indonesia, have experienced close to double-digit growth, contributing positively to overall performance [26] Company Strategy and Development Direction - The company has decided to pause its spin-off plans to focus entirely on returning to growth and optimizing its existing portfolio [10][15] - The strategy includes a significant investment in marketing, R&D, and sales capabilities to enhance brand performance and consumer engagement [66] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenging operating environment but emphasizes the focus on internal opportunities for growth [15][17] - The expectation is to see a change in market trends in the second half of the year, with a goal to exit 2026 with improved growth trajectories [33] Other Important Information - The company has a SNAP exposure of about 13% in its U.S. retail business, which is higher than the industry average, and plans to mitigate the impact of SNAP funding reductions through strategic pricing [51] - The company is committed to maintaining a net leverage of approximately three times while prioritizing investments in the business [45] Q&A Session Summary Question: How does the company view the $600 million investment in relation to the industry environment? - Management believes the investment is primarily about correcting past underinvestment rather than solely responding to industry challenges [6][10] Question: What led to the decision to pause the spin-off? - The decision was based on the discovery of significant short-term opportunities to improve the business, which required full attention and resources [15][17] Question: How will the $600 million investment be phased and allocated? - The investment will ramp up in the second quarter, with expectations for meaningful results in the latter half of the year, focusing on price, product, and packaging improvements [22][24] Question: What is the company's strategy regarding SNAP exposure? - The company plans to address SNAP-related challenges by offering competitive opening price points and smaller pack sizes to attract budget-conscious consumers [51] Question: How does the company plan to improve consumer engagement and retailer relationships? - The company aims to enhance its commercial capabilities and invest in technology to better connect with consumers and stand out to retailers [66]

Financial Data and Key Metrics Changes - The company is pleased with the momentum in emerging markets and has seen sequential improvements in developed markets, although not fully recovered [12] - The guidance for 2026 is cautious due to short-term pressures, particularly in the U.S. biscuit category, which is expected to remain subdued in the first half of the year [12][13] - The company anticipates a significant impact of $500 million in the first quarter due to inventory accounting adjustments [21] Business Line Data and Key Metrics Changes - The chocolate category has shown resilience despite price volatility, with successful execution of the chocolate strategy through pricing and revenue growth management [5][7] - In North America, the biscuit category has seen a volume decline of 4% in the last three months and 3% for the year 2025, indicating a challenging operating environment [26] - The company plans to invest more in brand awareness and improve frequency and quantity of purchases in North America, focusing on successful products like Perfect Bar and Tate's Premium Biscuit [27][28] Market Data and Key Metrics Changes - Emerging markets are expected to continue growing, with high single-digit growth anticipated, while developed markets may decline in the low to mid-single digits [36] - The company is adjusting pricing strategies in Europe, expecting stability in the chocolate category after significant price increases in 2025 [12][13] - The North American market is characterized by low consumer confidence and a shift towards value-seeking behavior, affecting overall snacking categories [25][26] Company Strategy and Development Direction - The company aims to increase investments behind its brands to drive volume growth and improve profitability, particularly in the chocolate segment [8][54] - There is a focus on innovation and new product activations, with plans to enhance the chocolate strategy further during the CAGNY Conference [10] - The company is diversifying its cocoa supply sources to mitigate risks associated with reliance on traditional cocoa-growing regions [68][69] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the recent decline in cocoa prices, which may lead to competitive reactions and necessitate flexibility in guidance for 2026 [9][13] - The company expects to see improved margins in the chocolate business by 2027, driven by better cocoa pricing and strategic investments [9][54] - Management is optimistic about returning to pre-2025 profitability levels in the European chocolate division, with plans for selective price investments if necessary [59][60] Other Important Information - The company is investing in cocoa-growing regions outside of West Africa to balance supply and reduce long-term risks [68][69] - There is an expectation of a significant uplift in chocolate margins in 2027, with a focus on reinvesting part of the gains back into the business [54] Q&A Session Summary Question: What is the company's outlook on cocoa pricing and its impact on guidance? - Management indicated that recent cocoa dynamics might require adjustments and flexibility in guidance, with a focus on winning with consumers and in the marketplace [13][14] Question: How does the company plan to address cost phasing and pricing in 2026? - The company plans to maintain flat pricing in chocolate while managing costs, with a significant impact expected in the first quarter due to inventory adjustments [20][21] Question: What is the strategy for North America given the current market conditions? - Management highlighted the need to adapt to consumer behavior, focusing on value-seeking strategies and increasing market share through targeted investments [25][27] Question: How does the company view the impact of GLP-1 medications on its business? - Management believes that the adoption rate of GLP-1 medications will not significantly impact overall business volumes in the short term [65][66] Question: What are the company's plans for investments in cocoa-growing regions? - The company is diversifying its cocoa supply sources to reduce risks and is investing in regions like Ecuador and Brazil to enhance output [68][69]