Rashad Kawan: A couple from me, please. So first one, back in December when the team laid out the multiyear framework of 5% organic growth you talked about wanting to get to the upper end of that target. The increased focus that they on standing up the levels that you spoke about today, is that still the right way to think about where you’d like to end up within that 3% to 5% range in the medium term? And then my second question specifically on Q3 on nutrition and acquire volumes. A bit of a level of deterioration there particularly in Europe, of course, which you guys touched on. Is it a question of taking too much pricing in Europe and that’s impacting volumes? What can you do in the near term to rectify the dynamic and start to win back share again? And then on the market share metrics, basically, is that kind of what drove the sequential deterioration quarter-on-quarter?
Hein Schumacher: I noted roughly three, but you were breaking up here and there. So let me try to get to all three, but if I miss something, please correct us. So first of all, on the financial framework and our growth ambition of 3% to 5%, yes, that is indeed our medium-term growth ambition and we’re confirming that here to-date. Your question on Europe and one pricing, look, I don’t think that we have priced too much, certainly not. In fact, if you look at total input costs and to the extent that we have price, we have not fully recovered inflation and margins — gross margins, particularly in Europe, remain somewhat under pressure. I think if you — and that’s sort of a bridge to your third question on market shares, if you look at what’s happening.
In Europe, I believe that and I’m pointing that out in the action plan as well. It’s also a matter of making sure that we come with the right innovations that we develop the market accordingly and that we simply do a very good job there. So pricing may have played a role in consumers gravitating towards value segments, such as private label, for sure. That is playing a role. But at the same time, I don’t see the current levels of pricing to be a hindrance for us to grow in the future. Does that sort of — did I capture all three elements, Rashad, I just want to make sure.
Jemma Spalton: Our next question comes from Warren at Barclays.
Warren Ackerman: It’s Warren here at Barclays. Two from me. First one on market share. Last quarter, it was 41%. This quarter is 38%. Obviously, that’s not good enough. I guess you needed to be in the 50% and ideally close to 60% to be top quartile in staples. What I’m trying to understand is how much of that is real share loss? You mentioned not enough of the portfolio in premium spaces like peers. And how much is kind of technical in terms of SKU reductions and the fact that the share metric you use doesn’t cover some of the fast-growing parts of your portfolio like Prestige Beauty? I’m just trying to understand a little bit what’s real here and how realistic and how quickly can we get back into that at least 50%? And how do you want to measure competitiveness within Unilever.
I just want to understand what’s the key API going forward? That’s the first one on market share. The second one is — and sorry to be cynical on this. But we have heard about bigger bolder innovation for years at Unilever. It’s been a big mantra and something about getting better returns on marketing spend. I know rich slate, your head of R&D has been talking about bigger bolder innovation already for a long time, and that’s been happening. So I’m not 100% clear, what’s different? Can you perhaps be more specific about what you consider to be bigger, better, bolder and better returns that would be helpful because I guess the issue here is that your volume mix, five-year track record is kind of 1%. And as pricing rolls over to get to the kind of top end of the 3% to 5%, you do need that roll mix to start to move into the kind of 2%, 3% range.
And it sounds like bigger, bolder innovations and better returns are keys to that. I was wondering whether you can just give us a little bit more granularity and what’s behind that and how do you define that?
Hein Schumacher: Thank you, Warren, for your questions. Let me first talk a bit about competitiveness. And first of all, as you say, and the way we look at the way I look at competitiveness is. I don’t think there’s one metric that is perfect. The way I sort of look at it is a combination of three. So, business winning is the one that we have used in the past. Then there is a market share or a market-based competitiveness and then there’s turnover weighted competitiveness and market share development. So, the reality is I look at it across all three. And you’re absolutely right. When you look at business winning and we express business winning here in value is under pressure. And for sure, all our efforts are aimed at improving from here.
But then if you look at okay, what is really covered in business winning. It’s roughly 80% of our business, 20%, which is Prestige Beauty, UFS, Food Solutions and our Health & Wellbeing segment for example are not covered. And yes, they are growing quite well. If we would convert business winning value into volume, it would also look a little different. And if you look at it on a market-weighted metric, actually, you would see a much more positive picture. But for consistency reasons for now, we have used business winning as the key metric. And once again, we simply need to win from here. What we need — what we intend to do in the new year is to give you a more comprehensive picture on competitiveness, not potentially focus on this one metric per se.
But of course, we will always report out on business winning. And internally, it will remain — actually, we will prioritize business — the competitiveness as an important element of the total remuneration framework. Then if you talk about what are some of the decisions that we’ve made. Yes, we have rationalized our SKUs by roughly 20%, 21% year-to-date. So that’s quite significantly. And certainly, this has contributed to that business winning percentage. We also took some conscious decisions particularly in Europe to delist some of our parts of our portfolio given pricing and of course, given the whole inflation game. So yes, that has played a role, but I don’t want to dwell on that for too long. When it comes to innovation, look, I understand.
