Financial Data and Key Metrics Changes - The company reported a decline in organic sales growth in North America of nearly 2% in Q2, contrasting with growth in EMEA, LatAm, and APAC, which were within the medium-term guidance of 4% to 6% [3][5][14] - Gross margin improved by 160 basis points, contributing to strong cash flow and organic profit growth [5][15] - A&P (Advertising and Promotion) spending increased by 6.8% to 20.8% in the first half of the year, reflecting a focus on growth drivers [16][19] Business Line Data and Key Metrics Changes - In North America, consumption grew slightly ahead of the market, with a 0.5% increase compared to a market decline of 0.5% [9][10] - Oral health and digestive health brands showed strong growth, with market share gains in brands like Tons and Benefiber [9][10] - Centrum experienced mid-single-digit growth outside the US but saw declines in the US, while Emergency brand continued to perform well [11][12] Market Data and Key Metrics Changes - The US market is facing challenges with low consumer confidence and inventory pressures, impacting overall performance [6][8][14] - EMEA and APAC regions showed positive trends, with volume growth accelerating in Q2 [47][51] - Central Europe reported high single-digit growth, while Western Europe experienced mid-single-digit growth, driven by strong performance in oral health [53][54] Company Strategy and Development Direction - The company remains committed to its medium-term guidance of 4% to 6% organic sales growth despite current challenges in the US market [49][56] - Focus on innovation and premiumization, particularly in key markets like India and Brazil, is part of the strategic plan [39][40] - The company aims to close the incidence treatment gap and expand reach to lower-income consumers while maintaining investment in A&P and R&D [16][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging consumer environment in the US, with expectations of continued inventory pressure and no significant improvement anticipated in the near term [14][22] - Confidence in the medium-term outlook remains strong, with expectations for improved performance in 2026 [49][56] - The company is actively managing its portfolio and focusing on driving market growth despite external challenges [36][41] Other Important Information - The nicotine replacement therapy (NRT) business is a significant part of the portfolio, with a complex ownership structure affecting innovation and growth [73][75] - The company expects a high single-digit growth in operating profit, supported by gross margin improvements and effective cost control [77][78] Q&A Session Summary Question: North America's performance and future growth expectations - Management noted that North America faced challenges due to a difficult consumer environment and inventory pressures, with expectations for a gradual return to growth [3][22][25] Question: A&P spending and areas of reinvestment - A&P spending increased significantly, with a focus on driving growth in key markets and improving ROI [16][19] Question: Share performance and competitive pressures - The decline in the percentage of business gaining or maintaining share was attributed to challenges with brands like Advil and Centrum, with plans in place to stabilize performance [28][30] Question: Impact of nicotine replacement therapy on growth - The NRT business had a significant impact on overall growth, with expectations for less decline in the second half of the year [76][80] Question: Channel shifts and inventory management - Management discussed the impact of channel shifts, particularly towards e-commerce, and the need for effective inventory management across channels [86][90]

Financial Data and Key Metrics Changes - For fiscal year 2024, organic net sales were $12 billion, down 2.1% due to a prolonged volume recovery in the domestic retail business [21] - Adjusted gross margin expanded by 58 basis points, and adjusted operating margin expanded by 34 basis points year-over-year [8] - Adjusted EPS for the fiscal year was $2.67, with a net leverage ratio of 3.37 times, improved from over 5.5 times [10][22] Business Line Data and Key Metrics Changes - In Q4, organic net sales declined 2.4%, driven by a volume decline of 1.8% and a 0.6% price mix reduction [23] - The Snacks business saw positive consumption trends, helping to gain market share, while Grocery and Foodservice segments experienced volume declines [24] - Refrigerated and Frozen segments showed volume increases, with Frozen single-serve meals returning to growth [12][24] Market Data and Key Metrics Changes - Approximately 65% of the portfolio held or gained volume share in Q4, marking the fourth consecutive quarter of share gains [11] - In the Snacks domain, 80% of brands held or gained volume share, indicating strong competitive performance [12] - The international business delivered strong sales growth, driven by results from Mexico and global exports [24] Company Strategy and Development Direction - The company is focused on maximizing consumer engagement through strategic investments, aiming for gradual volume improvements [18] - Continued brand building investments are planned for fiscal 2025, with expectations of stable adjusted gross margins despite ongoing inflation [19] - The company aims to achieve $1 billion in cost savings by the end of fiscal 2025, targeting a net leverage ratio of approximately 3.2 times [17][32] Management's Comments on Operating Environment and Future Outlook - The management anticipates a challenging consumer environment in fiscal 2025 but expects a transition towards a normalized operating environment [18] - The company is encouraged by steady volume improvement and market share gains from investments made during fiscal 2024 [31] - Fiscal 2025 guidance includes organic net sales growth projected to be flat to down 1.5%, with adjusted EPS expected between $2.60 and $2.65 [20][32] Other Important Information - The company repaid a $1 billion senior note in Q4 and improved free cash flow by approximately $1 billion over fiscal 2023 [30] - Capital expenditures increased by 7% to $388 million, with dividends paid amounting to $659 million in fiscal 2024 [30] - The company plans to resume minimal share repurchases in fiscal 2025 to offset dilution from equity incentive plans [32] Q&A Session Summary Question: What are the expectations for organic net sales growth in fiscal 2025? - The company expects organic net sales growth to be flat to down 1.5% compared to fiscal 2024 [32] Question: How is the company addressing inflation and cost pressures? - The company plans to achieve approximately 4% cost savings as a percentage of cost of goods sold to offset projected inflation [18][32] Question: What is the outlook for the Snacks and Frozen segments? - The Snacks segment is expected to continue its positive momentum, while Frozen is anticipated to maintain steady growth [12][24]