David Adlington: Thanks. David Adlington, JPMorgan. Three questions, please. So firstly, just on your midterm revenue guide changing from four to six to more than five. Just wondered explicitly how your pricing assumptions have changed from 15 months ago, how — very explicitly how they change from being silly a headwind to maybe a slight tailwind. Secondly, just in terms of the inventory uplift. Just wondered how that’s going to flow through to gross margins through this year and how we should be thinking about gross margin developing through the year? And then thirdly, just in terms of technical one, on the FX margin headwind, 100 basis points. That was 75 basis points back in Q3. I would expect that to get better rather than worse. Just wondering what happened on the FX side.
Deepak Nath: Do you want to take those, Anne-Francoise?
Anne-Francoise Nesmes: So on the FX, as you know, we fix 12 months. So there’s always a quarter that rolls forward. So that’s the main change in terms of the assumption. In terms of the inventory uplift, the impact on gross margin is the impact of inflation. There’s actually to impact its inflation. So if you see that our inventory is now higher cost effectively in your standard cost and your cost of goods as you sell the stock is higher cost. So that puts that what we talk about. And that’s why inflation phase through a P&L at a different rate than what you see may happen in the external environment because you’ve built inventory at a higher cost and that will flow through the P&L over time. I think it also reflects that as we look to reduce inventory, a lot of the efforts is around better supply and demand alignment, is also better discipline in our factories, and it’s about better managing the capacity.
That’s why the network optimization, the productivity, LEAN in operations is super important to mitigate that and to offset the pressure that we would see otherwise in the cost of goods line. And the pricing you want me to? So as we said earlier, price in the long term is not the driver of the revenue growth. The driver of the revenue growth is about better commercial execution and the new products, the innovation. In ’23, in the short term, there is a price lever as we continue to look for the offset of inflation. It’s not the lever in the midterm outlook. However, it’s important to say, we won’t rest on our laurels. Part of the 12-point plan as a pricing component it’s about strategic pricing. How do we launch new products, how do we make sure our contracts compliances improved, et cetera?
But the lever of growth in the midterm is really about gaining market share, launching our products and continuing to capitalize on the growth drivers we’ve set in place in the last few years.
David Adlington: Maybe just come back on the gross margin point. I mean, in terms of the direction of travel for gross margin in ’23, how should we be thinking about that impact in terms of the inventory uplift?
Anne-Francoise Nesmes: So you’ll continue to see pressure on the gross margin, which is why we say in particular the network optimization, the off savings flow in ’24 and ’25 in particular. So that’s the element of the plan with the savings deliver later in the period.
Deepak Nath: Question on the phone.
Operator: Thank you. Our first phone question is from the line of Veronika Dubajova of Citi. Veronika, please go ahead.
