Graeme Pitkethly: Morning, Jeff. I mean, I guess the answer is that if 3% to 5% still covers it, albeit as the upper end, then it’s still relevant guidance for us to give at this stage whilst we get the momentum moving, et cetera. I do want to reiterate a point that I think I made earlier. Really, there’s a big factor here about consistency of delivery, where I think the new organization and what Hein said around culture and performance focus, remuneration, et cetera. All of that helps in delivering that consistency. It’s a much better way of running Unilever through the lens of the five business groups with end-to-end accountability, consistency of investment behind strategy, that’s what’s going to deliver the consistency. That’s a key factor in that value creation algorithm and also quality of growth, you’ve heard our call out on the volume component, which we do need to step up.
I agree with Warren’s sentiments earlier. It’s been hard over the last three or four years perhaps to look at the underlying performance relatively of companies in the sector, our footprint during COVID and then the inflation, et cetera, has kind of made things relatively opaque. But you hear our confidence around stepping up the consistency of our growth, stepping up the level of growth and stepping up the quality of growth. And I think they are the things that at least in the midterm, we’ll secure that step-up of returns.
Jemma Spalton: Our next question comes from Karel at Kepler. Please go ahead, Karel.
Karel Zoetea: Yes. Two questions. The first one is on your European footprint and supply chain. We had quite some volume losses for a while now. Does this leave room for some optimization? And also, how do you look at the European brand footprint as I still see many local just dealers and probably brands with a modest gross margin, particularly in the food and ice cream franchise. The second question is on the innovation agenda. R&D already sits within the categories for a while. So how can the disconnect and a focus on smaller things and related to that, if you want to deliver innovations more on scale, how does the fragmentation of your revenue base across countries and categories come into play?
Hein Schumacher: Yes, obviously, good questions on Europe and with the volume pressure that we’ve had I think your question is mainly around do we see optimization opportunity on smaller brands. Look, I think at this point in time, as we talked about, our focus has to be on executing our top 30 brands very well. And that sort of bridges a bit to your second question as well. Those top 30 brands constitute more than 70% of our total turnover. And at this point in time, they probably wouldn’t get that disproportionate investment in BMI as well as in R&D. That’s something that we’re actually changing fast, and that’s where I see opportunity. Now that doesn’t mean that were on a path to quickly divest or sell or whatsoever, all the remaining brands, but we need to make sure that these engines are working, and as we actually show today, the top 30 brands are growing ahead of the Company average, roughly 7.5% versus 5.8% for the Company of 5.2% for the Company overall.
So I’m very confident that, that is the right thing to do, and it will lead to a better execution of everything that we do. Do we see optimization opportunities in the portfolio in Europe, particularly on the food brands in the future? Yes. I mean the situation is dynamic. So, we will continue to look for opportunities to optimize the portfolio around the edges, but I don’t want to comment on that further today. At this moment, I feel that we once again, that we need to grow what we have and that we simply need to run our operations a little better in that respect.
Jemma Spalton: Our next question comes from Celine at JPM. Celine, please go ahead.
Celine Pannuti: The first one is on your growth rate of 3% to 5%. You said we wanted to improve the quantum or through the credit it, but there was no specific volume targets of volume ambitions. So I’m a bit surprised by this because we have had in the past, Unilever strategy where volume was really the center of the strategy, both in terms of top line market share gain. And so can you elaborate on that? And specifically, I thought that was interesting, the point you made on premiumization driving mix and driving gross margin at the same time, do you think that the portfolio of Unilever and its brand, and I’m thinking as well given 60% of the footprint in emerging markets, is the right portfolio right now to drive that premiumization at scale.
My second question is on next year. And if I look at the balance of potential of easing cost inflation and how that fits to the P&L. We are looking at cost deflation. Some of that has already been evident in some of your emerging markets where yourself and competitors have all other prices. If I look at next year, model, I could have a huge gross margin expansion next year. But obviously, it will depend on how much reinvestment will be made in terms of pricing or promotion. Can you take talk about that, how we should look at this equilibrium for ’24 period?
Hein Schumacher: I noted that three questions. One is around the composition of our medium-term 3% to 5% between sales and volume, question around innovation and premiumization, and the third one on the 2024 financial framework. I’ll take the one on innovation. And Graeme will take the one on the growth target and the 2024 financial framework. So, on innovation and premiumization, and I think this builds a bit on the question of Karel. Yes, we have around 450 brands or so, but don’t forget that once again, 30 top brands constitute 70% of the total turnover and are growing faster. So that’s number one. Secondly, I talked about big innovation and technology platforms. And I called out three or so they do fuel essentially almost all of the portfolio.
So we’re not I would say, diluting our R&D efforts too much, at least that’s not in the plan. In fact, we’re trying to bring that somewhat more together. And if you think about brands, so for example, Dirt is Good. We call it Dirt is Good, but it could be Persil in one country. It could be OMO in another country. It could be Surf in another country. But these different brands originate technology-wise and innovation-wise, obviously, from a very coherent innovation strategy that is enabled by the new organization. So I think that about fragmentation. And I think we have a pretty strong handle on that one. Then on premiumization, just a quick one, actually, we see premiumization across the emerging market world. That is an important theme, and we clearly want to participate in that.
