Unilever plc Q2 2026 Earnings Call

Good morning, thank you for joining us for Unilever's second quarter and half year results. In a moment, Srini will take you through the detail of the results. First, let me highlight the key elements of our performance over the first half as I see them, and how Desire at Scale is fundamental to our strong delivery. I have said consistently that volume growth is our overriding priority. It is a true measure of demand, and even more important signal of progress during times like this of heightened volatility. It is particularly encouraging, therefore, to be able to present today a strong volume-led half for Unilever. Not just a strong performance, but an accelerating one with underlying sales growth in the second quarter of 5.8%, with volume up 5.5%. This is Unilever's best quarterly volume performance since 2010.

Our underlying volume growth over the last four quarters averages 3%, a testament to the strength of our brands and our disciplined execution. These strong first half results reflect progress against our key strategic priorities, including, most notably, the performance of our power brands. Now sitting at 78% of our turnover, these brands continue to outperform, delivering underlying sales growth in the second quarter of 6.9%, with 6.8% coming from volume. A strong innovation program meant there were particularly great performances from Dove, Dirt Is Good, Comfort, Sunsilk, and Vaseline. Prioritizing these brands means focusing resources and investing competitively, which is why our Brand & Marketing Investment is concentrated on our power brands. Significantly, today's results also reflect broader trends across our HPC business, with underlying sales growth in the second quarter of 7.6%, with volume up 7.4%.

It was also a good half for our emerging market businesses, which maintained their good momentum with 8.3% growth in the second quarter, with 7.4% coming from volume. India led the way with quarter two underlying sales up 10% and volume up 5%. This was a strong broad-based performance. It reflects the evolution of our emerging market portfolio to increasingly focus on high growth segments, social first demand generation, and go-to-market transformation, alongside the benefits from corrective actions in fundamentals that we have taken over recent times in key markets. Our developed market business delivered a robust performance, with volume growth in the second quarter of 2.8%. North America continues to outperform, led by personal care, beauty, and prestige, while markets in Europe remain subdued.

In terms of profitability, we delivered 10 basis points of margin expansion and continued to invest competitively behind our brands while generating earnings growth of 2.4% in hard currency. These strong first half results are a direct consequence of bringing our mantra of Desire at Scale to life across the business. Desire at Scale is a growth operating system, shaping how we build brands, how we innovate, how we activate them in markets, and how we convert demand into sales. Whether in elevating the quality, reach, and relevance of our brands through the SASE framework, combining science, standout aesthetics, superior product experience, social proof, and contemporary execution, or through embedding the concept of a frontline sales machine by taking our activation programs and the quality of our execution to new, better levels in every market.

SASE brands and frontline machine are two sides of the same coin. At the heart of each is the focus on making our brands and our activations culturally relevant. Our progress on this was recently recognized at the annual Cannes Festival of Creativity, where we were the most awarded advertiser of any of the companies present. Our brands received 35 awards, a demonstration of Unilever's ability to rethink how we create demand in this world of infinite content and distribution through algorithms. Here are just a few examples in how we are integrating our brands in culture across some of our key markets. We created a grassroots football tournament in Brazil, where eight local teams competed for the chance to play the final in the Emirates Stadium.

Our five-part video series has over 130 million views and 180,000 hours of watch time, deepening almost cultural relevance in our second largest home care market, with double-digit fabric cleaning growth in the second quarter. Dove won six Cannes Lions for its partnership with Reddit during the launch of the Intensive Repair 10-in-1 Serum Hair Mask. Dove published and amplified customer reviews, whether positive or negative. Real consumers, real feedback, real beauty. The campaign created more than 1 billion earned impressions and helped make our product the number one hair mask in the U.S. during the campaign. Olay Liquid I.V., with its role in the Amazon Prime Video's hit series, "Off-Campus." The show is one of the most popular series this year, reaching 66 million viewers worldwide over the first 12 days of release.

Liquid I.V. is integrated into the series, with the main character becoming a Liquid I.V. brand ambassador within the show itself. These are creative executions designed to travel, earn attention, strengthen brand equity, and convert into growth. We know the bar for leadership continues to rise, and we will ensure we stay at the frontier of demand generation. Being a frontline machine means activating our brands within these big cultural moments and across the biggest cultural events. They don't come much bigger than the FIFA World Cup where Unilever Personal Care was an official sponsor. We have not approached the World Cup as a conventional corporate sponsorship or a one-off event.

We have activated 35 brands across more than 120 markets by bringing creator content, social media production, retail distribution, and local store conversion together on an unprecedented scale, involving more than 50,000 content creators with a combined audience of more than 600 million people and 180 limited edition products. We have leveraged the event to further strengthen our creator first operating model, including through the House of Fresh with in-person creator hubs in Mexico City, New York, and Miami, enabling creators to build dedicated content from live events and boost their storytelling to a wider audience. We also develop our capabilities around AI-enabled content at scale using our AI studios, and we will go on capturing the learnings and deploying them in future sports marketing events that will continue to play a key role in building demand and brand equity.

The FIFA World Cup has been a pivotal moment for Unilever, showing our ability to turn a global cultural moment into coordinated execution across creators, content, retail, and shopper conversion at a scale few companies can match. Before Srini takes you through the results in more detail, let's roll the video.

The biggest cultural event in history. 48 teams, 104 matches, more than six billion viewers globally. For Unilever, this is a global demand generation platform. A chance to activate our power brands through culture, through creators, through digital and physical content, through retail execution at unprecedented scale.

Another day of winning. Across all 104 matches, Rexona owned a high-pressure moment.

The fourth official, the substitution board, added time. A role that cannot let the game down. Result. More than 50,000 creators bringing our brands into culture every day. A combined audience of more than 600 million people. More than one billion people reached through coverage and conversation. That is how brands travel. It's a golden ticket. Football is live. We backed it with new capabilities. House of Fresh, a physical content factory for creators built in New York, Miami, and Mexico City. Designed to turn live football moments into social content in real time. The Locker Room, our 24/7 social command center, tracking the conversation, spotting what's trending, reacting fast, and scaling what works. This is demand generation built for the speed of culture. The opportunity is to convert cultural energy into commercial execution.

Smells like a home run.

That's where Perfect Store comes in. With more than 180 limited edition products available in millions of retail locations, and scaled point of sale execution across major markets. This is Desire at Scale in action. Brand power, real-time relevance, local execution, store conversion. A system built to turn cultural moments into growth. Where the world plays, our brands show up. Goal. Thank you, Fernando. Let me start with our growth.

The first half was characterized by strong, high-quality growth. Underlying sales grew 4.8%, with 4.2% from volume and 0.6% from price. Growth strengthened further in second quarter with underlying sales growth of 5.8% and volume growth of 5.5%. Importantly, growth was broad based and supported by stronger execution across the business. On a two-year basis, volume growth averaged 2.7% in the first half, providing further evidence that the improvement we are seeing is becoming more consistent and sustainable. The three HPC business groups led delivery, Beauty and Wellbeing, Personal Care, and Home Care all accelerated in the second quarter, supported by strong power brand performance, premium innovations, and improved executions, particularly in emerging markets in North America. Pricing in second quarter was 0.2% and 0.6% for the half.

Lower price in quarter two was largely due to timing and some deliberate choices. For example, in Home Care, we continued to lap the corrective pricing actions in Brazil. In Personal Care, we deliberately elevated promotional support behind FIFA World Cup activations. These actions enabled us to drive quality volume growth. As commodity related pricing lands in the market and we normalize promotional spends post FIFA, we expect pricing to lead growth during the second half of the year. Our power brands continue to demonstrate the strength of the strategy and the quality of execution behind it. In the first half, power brands grew at 6%, with 5.4% coming from volume. Momentum strengthened further in the second quarter with growth of 6.9% and volume of 6.8%. On a two-year basis, power brand volume growth averaged 3.5%, underlying the consistency of their outperformance.

In the second quarter, 15 of our 30 power brands grew in double digits. Dove, Vaseline, K18, Hourglass, and Comfort were particularly supported by innovation, premiumization, and stronger execution. Non-power brands returned to positive growth in the second quarter. We continue to optimize our tail brands and related investments while strongly supporting local jewels. Beauty and Wellbeing delivered a high quality first half with underlying sales growth of 5.9%, including 4.5% from volume. Performance accelerated in the second quarter, with growth increasing to 8.1% and volume growth to 6.9%. Growth was broad based across categories and geographies, with emerging markets maintaining strong momentum and developed markets improving. Hair care led performance with 9% underlying sales growth in the first half. Dove, Sunsilk, and K18 all delivered double digit growth supported by innovation and premiumization.

K18 continued to benefit from its biotechnology-led innovations while Dove was supported by premium innovations, including the Fiber Repair range. Skincare grew low single digit, led by volume. Vaseline continued to deliver double digit growth, supported by premium innovations across Gluta-Hya and Pro Derma. We are also seeing the benefit of strong cultural relevance, including K-pop star Jennie being appointed as global brand ambassador. In the second quarter, our prestige beauty portfolio accelerated further with Paula's Choice, Hourglass, and Tatcha all delivering double digit growth. Overall skin growth was partially offset by the softer delivery of local brands in Asia, Pacific, and Africa. Wellbeing grew low single digit in the first half with an improved second quarter. Liquid I.V. grew high single digit in the first half, supported by stronger activation, international expansion, and the timing of shipments for Amazon Prime Day.

We continue to focus on innovations and activations to drive market development. The category opportunity and the unit economics remain very attractive. OLLY delivered double digit growth, driven by distribution gains, growth in the digital channels, and emerging markets performance. Beauty and Wellbeing underlying operating profit increased by 1% to EUR 1.3 billion. Underlying operating margin increased by 10 basis points to 19.5% as improved overhead efficiency more than offset gross margin headwinds and the increased investment behind power brands and premium innovations. Personal Care delivered strong first half with underlying sales growth of 4.8%, including 4.1% from volume. Growth strengthened in the second quarter, with USG increasing to 5.9% and UVG of 6.8%. This reflected a broad-based momentum across deodorants and skin cleansing. Deodorants grew across both developed and emerging markets. In the U.S., we regained market leadership with sustained high growth in Dove.

In Latin America, Rexona supported a strong return to growth in Brazil following the actions taken to improve format mix and reset the shelf space. Skin cleansing grew mid-single digit, led by volume. Dove delivered high single digit growth, supported by premium innovations, while Lux grew mid-single digit behind fragrance-led innovation in China. Growth in the U.S. and emerging markets was partially offset by a flat performance in Europe. The FIFA program amplified the Personal Care momentum in the second quarter. It brought together media, creators, customers, and in-store execution behind brands including Rexona and Dove. It supported strong volume growth and helped us build new capabilities in creator-led content, AI-enabled asset creation, and stronger Perfect Store execution.

The activation also had some impact on price in the quarter, reflecting higher promotional support alongside strong prior year comparators. We expect pricing to build in the second half as higher commodity costs are reflected in the market. Underlying operating profit increased by 4.8% to EUR 1.5 billion, while underlying operating margin improved by 10 basis points to 22.2% as productivity and overhead efficiencies offset gross margin pressure. Home Care delivered an outstanding first half and was our fastest growing business group. Underlying sales grew 7.6%, with almost all of the growth coming from volume. Growth accelerated further in the second quarter to 9.1%, with volume growth of 8.6%. Performance was broad based across categories, brands, and markets, with share gains across the three Home Care categories. These gains reflected stronger execution, investment behind our power brands, and improved competitiveness in key markets.

Fabric cleaning led the performance with strong growth delivery in India, Brazil, and Indonesia. India delivered its strongest Home Care growth in three years, supported by innovations and continued share gains. Brazil delivered high single digit growth as the corrective actions taken last year helped restore competitiveness. Fabric enhancers maintained strong momentum, led by Comfort and supported by premium formats and fragrance-led innovation. Home and hygiene also performed well, with Cif delivering double digit growth and Domestos growing in high single digit. Home Care remains our business group with the highest exposure to commodity inflation and emerging markets footprint. In the first half, we have executed our playbook well with calibrated pricing combined with formulation flexibility and channel appropriate pack price offerings. In half two, we expect the growth profile to shift more towards pricing.

Underlying operating margin increased by 30 basis points to 15.8%, reflecting strong overhead discipline and productivity delivery despite commodity and currency headwinds. Underlying operating profit increased by 3.2% to EUR 0.9 billion. Foods grew 1.2% in the first half, driven by volume. Growth slowed in the second quarter to 0.2% as continued strength in the emerging markets was offset by weaker performance in North America and Europe. Condiments grew low single digit, led by volume with good performance from Hellmann's in emerging markets. In U.S., condiments performance was below our expectations, arising from increased competition in the faster-growing premium segments such as avocado oil mayonnaise. This issue is well understood, and we have targeted innovation and execution plans in place to strengthen our competitiveness and improve the performance during the second half. Emerging markets remained resilient, with strong performances from Hellmann's across Brazil and Asia Pacific Africa.

Cooking aids was flat, Knorr grew low single digit, with good performance across emerging markets offset by category softness in developed markets. Unilever Food Solutions also continued to grow, supported by good momentum in China and in the U.S., alongside strong performances across Middle East, Latin America, and Southeast Asia. Underlying operating profit was EUR 1.5 billion, down 4.3%. Underlying operating margin was unchanged at 23.3%, as lower gross margin from commodity inflation and increased investments in the value propositions were offset by overheads efficiencies and continued cost discipline. Turning to the regions, emerging markets continued to be a strong growth engine with strong volume-led growth in the first half. In North America, we continued our volume outperformance while Europe was subdued. Asia Pacific Africa delivered 7.3% underlying sales growth with 6.1% from volume. In the second quarter, India led the performance with growth accelerating to 10%.

Delivery was balanced between volume and price. We had double-digit growth in beauty and wellbeing and home care, with haircare and home care both reaching record share levels. China grew mid-single digit, led by beauty and wellbeing, with all the business groups contributing. Our growing presence in the faster-growing digital and e-commerce channels supported the improvement despite a soft market. Indonesia grew 7%. Performance was broad based across business groups and led by double-digit growth in home care and beauty and wellbeing. This was also supported by a sharper focus on high growth segments, social first demand generation, and the ongoing transformation of our go-to-market model. Africa also grew mid-single digit, led by volume. Latin America delivered 7.6% growth with 5.7% volume, accelerating in the second quarter to 8.9% growth and 8.8% volume.

Brazil returned to strong volume-led growth as the corrective actions taken last year restored competitiveness, led by fabric cleaning and improving momentum in deodorants. Looking ahead, Brazil tax reforms are expected to bring lower prices from the start of next year, which may lead to some temporary retail stock reductions in the fourth quarter. In the second quarter, Argentina delivered high single-digit volume growth, while Mexico delivered mid-single digit volume growth led by personal care. North America grew 2.7% with 3.2% from volume and continued to outperform the market. Growth strengthened in the second quarter to 3.6% with 4.4% volume led by deodorants, skin cleansing, and our prestige beauty brands. Europe declined by 0.9% in the first half in softer market environment with the shortfall concentrated in foods. Beauty and wellbeing and personal care grew while home care continued to gain share. Turning now to turnover. First half turnover was EUR 25.6 billion, up 0.5% on last year.

This reflected strong operational delivery. Underlying sales growth was 4.8%, including 4.2% from volume. Acquisitions net of disposals added a further 0.7%. The acquisition contribution was led by Dr. Squatch, Minimalist, and Wild, and with one month of Grüns following the completion in June. These businesses are all aligned to our strategy of increasing exposure to premium and higher growth spaces. The disposal impact reflected the continued reshaping of the portfolio as we concentrate investments behind fewer, bigger and more scalable brands. Currency reduced our first half turnover by 4.9%. Importantly, that impact eased materially to 2.4% in the quarter as the movements in the U.S. dollar and in most of the emerging market currencies became less adverse.

Based on the July spot rates, we expect the full year impact to be around 3%, implying a meaningfully lower headwind in the second half. Underlying operating margins increased by 10 basis points to 20.3% in a materially tougher cost environment, while we maintained competitive investments behind our brands. Our gross margins improved sequentially relative to second half of 2025. However, on a year-over-year basis, gross margins declined by 70 basis points given inflation headwinds arising from Middle East conflict and a calibrated approach to pricing. We responded decisively in the areas which are within our control through productivity, sourcing flexibility, reformulation, pricing architecture, and tighter cross-functional execution across procurement, supply chain, R&D, and the business groups. For the second half, we expect gross margins to remain at similar levels to the first half on an absolute basis, despite higher inflationary impact.

We will see benefits of higher pricing landing in the P&L. Brand and Marketing Investments remained competitive at 16.1% of turnover with incremental investment focused on our power brands. Overheads improved by approximately 70 basis points, reflecting the completion of our EUR 800 million productivity program ahead of the schedule, together with the continued simplification and cost discipline. Underlying operating profit was EUR 5.2 billion, up 0.9% versus the prior year, with strong operational performance offset by currency headwinds. Underlying earnings per share increased 2.4% to EUR 1.61. Operational performance contributed more than 7 percentage points of growth, reflecting strong volume-led sales growth, modest margin improvement, and continued productivity delivery. Finance costs increased as a result of higher cost of debt, although they remain well controlled at 2.5% of average net debt. We continue to expect the full-year finance cost to remain below 3%.

Excluding the currency impact, tax was a modest positive contributor. The underlying effective tax rate increased slightly from 26%, from 25.6% in the prior year, reflecting fewer benefits from tax settlements and other one-off items. Our full-year expectation remains around 26%. Share buybacks contributed 0.7 percentage points to the EPS growth, following the completion of the EUR 1.5 billion program in June. Minorities and other items added 1.3 percentage points. Currency reduced the underlying EPS growth by around 6 percentage points in the first half. We expect this headwind to moderate in the second half, consistent with improving currency impact on turnover and profits. Overall, this is a strong earnings performance delivered despite a significant currency headwind while we continue to maintain competitive investments behind our brands. Free cash flow was EUR 1.5 billion, an increase of EUR 0.5 billion versus the prior year.

Improvement was driven primarily by operating profit and a strong working capital performance. Capital allocation remains disciplined and unchanged. We increased the second quarter dividend by 3% and completed the EUR 1.5 billion share buyback program in June. As announced alongside the Foods transaction, we expect operational performance and transaction proceeds to support the EUR 6 billion of share buybacks between 2026 and 2029. This reflects the strength of our cash generation and a disciplined approach of returning surplus capital to shareholders. On portfolio development, we completed the acquisition of Grüns in June. Grüns is a fast-growing U.S. super green supplements brand. It's highly complementary to our existing wellbeing portfolio and increases our exposure to premium, high growth, and digitally led consumer spaces. Turning to the outlook. Based on the momentum we have built in the first half, we have upgraded our full-year outlook.

We expect underlying sales growth to be within our multi-year range of 4%-6%, with around 3% UVG for the full year. Inflationary pressures are expected to continue in half two with heightened volatility. We are confident of managing this while maintaining supply resilience. As we land pricing, we do expect some volume sensitivities. For the second half, we expect growth of 4%-5%, led by pricing. As shared earlier, currency in half two is expected to improve versus first half of 2026. We continue to expect a modest improvement in Underlying Operating Margin versus 2025. While the external environment remains uncertain, we enter the second half with stronger fundamentals, improved pricing, disciplined cost management, and healthy brand investments. Taken together, this gives us the confidence in delivering another year of competitive growth, modest margin improvement, and strong cash generation. With that, back to you, Fernando.

Thank you, Srini. Let me sum up after what has been a very successful first half of the year. We have been consistent in our conviction that to truly succeed in this fast-changing environment, you have to simultaneously perform and transform. Our delivery in the second quarter and in the first half as a whole is further evidence that we are doing that. The transformation of our portfolio remains on track with the acquisition of Grüns in June and our progress on combining Foods with McCormick. At the same time, we have delivered a strong volume-led first half with broad-based strengths. Our strategy built on Desire at Scale is working. We are creating marketing and sales machines with brands that are embedded in culture and with innovation driving the outperformance of our power brands.

This give us confidence in our full-year delivery, including volume growth of around 3% for the year, with growth in the second half led by pricing. Thank you for listening, and with that, Srini and I will now take your questions.

Good morning. Many thanks for joining the call. If you would like to ask a question, please press star one on your keypad. If you no longer wish to ask a question, press star two to exit the queue. When it is your turn to ask a question, your name will be called out. Finally, please keep your questions to a maximum of two.

Good morning, everybody. Thank you so much for joining the call. Our first question comes from Celine at JPMorgan. Go ahead, Celine. Yes, thank you very much.

Good morning, everyone. My first question, obviously a very strong volume-led performance this morning. I wanted to understand, first of all, if you can talk about sell in, sell out, if you've seen any difference. More importantly, I would like to understand the resilience of the performance. You seem to imply that you have gained probably market share. How resilient you think the performance is going to be when you raise prices? You are giving us a guidance for the second half, which is reassuring, but can you talk about your confidence and the visibility you may have that the volume will effectively sustain at what probably is going to be 1.5%+, 2% level in the second half of the year? My second question is for the full year. You now raised the guidance on volume to 3% versus 2% prior.

Can you talk about how the market you are facing in terms of market growth has developed? It seems that actually that the emerging markets are doing very well. How confident are you about the emerging market performance, and if you could as well, talk about where you gain market share specifically that brought you to 3% for the full year. Thank you. Thank you, Celine.

Well, we are really pleased with the first half performance. A strong volume growth, a strong support behind our brands, disciplined management of our overheads and expansion of operating margin in a context of significant cost volatility and the return of commodity inflation. This has been the best quarter in terms of volume growth in more than 15 years, 4.2% at company level, Power Brands at six, Dove, our largest brand, at nine, with a strong acceleration in emerging markets while U.S. continue outperforming what is a relatively soft market there. It's not a strong quarter in isolation. We have delivered 2.7% underlying volume growth across the last 10 quarters, and we have accelerated in the last year to 3.1%. We believe this is a result of stronger brands.

60% of our revenue is now increasing what we call Unmissable Brand Superiority scores, the metrics of brand equity. We continue investing strongly behind our innovation. We believe the performance is resilient, it's broad based. Of course, emerging markets is a highlight. We have a portfolio that is diversified in terms of geographies, categories, segments, price points, and this give us resilience against the volatility. India, that is, as you know, our second largest market, has accelerated strongly. We have achieved record market share in both laundry and hair that are our two biggest categories there. In the case of laundry, we are growing more than 5% above the average of the market. China is getting slowly better. We grew mid-single digit there. Good acceleration in food service, but also our beauty business really doing very well.

In Indonesia, we are happy with the improvement in fundamentals that we have seen there. We are operating there with probably the lowest level of stores that we have had in history. All the other South Asian, Southeast Asian regions, Vietnam, Philippines, also South Asia, Pakistan, and Bangladesh showing good growth. We have a strong contribution from LATAM. I have mentioned this previously. I have never seen 2 bad consecutive years in LATAM. The business is coming back strongly. We grew laundry double-digit, deodorants is coming back. The FIFA activation in LATAM has been excellent. Our beauty business and food business continuing strong there. We see resilience. We see the turnover-weighted market volume growth at around 1.5%, the growth at which Unilever is exposed.

If you look at our volume growth really significantly above that means that we are gaining share in many of the categories. We have some issues, particularly condiments in U.S. That has been a red flag for us. We have been losing some share there, particularly in the premium segment, but we are addressing that in the short term. We are confident the markets remain relatively soft at, as mentioned, 1.5% volume growth, but our performance has been consistent. This is not a strong quarter in isolation.

Thank you. Our next question comes from Nicola at Bank of America. Go ahead, Nicola. Hi there.

Good morning. I have 2 questions, please. The first one is on destocking from retailers in the U.S. You haven't mentioned that at all, and we hear many of your peers talk about it. Maybe could you tell us why you think that happens to your peers and not to you? Would be quite useful to understand. The second question is on your oral care business, where performance is probably a bit weaker than the rest of the business. I haven't heard you talk a lot about your oral care business overall in recent quarters. We can see from some of your peers there's huge growth in the category potentially. If I look at your performance over the last few years, you seem to be a donor of share overall. Do you think there's enough focus from the organization on this business? Thank you. Thank you, Nicola.

Regarding the stocking in the U.S., we have seen something, but it's not material at company level really. We have seen a bit more destocking in foods than in HPC. Really, we didn't want to call it out because it's not material, and these kind of things can go one way or the other. We have not seen significant difference between selling and sell out. There is a bit of destocking, particularly in foods, but it's, as I mentioned, not really material. I feel your second question is about oral care, if I'm not wrong. We have been growing low single digits in oral care in the first half. We are not happy with the performance in that category.

We came from a couple of years that really we are very, very strong, particularly in Pepsodent and Close-Up, particularly in Asia where our business is concentrated. This year we have been a bit of softening, a significant increase in competition there. There are plans there to really increase performance in the second half.

Thank you. Our next question comes from Warren at Barclays. Go ahead, Warren. Yeah, good morning, Fernando, good morning, Jemma.

Warren here at Barclays. I've got two questions in the housekeeping. The housekeeping, Fernando, is there any update on where we are at on the McCormick deal? Anything to say on timings or any other comments about savings would be great. My two questions are, firstly, on the U.S., can you maybe dive a little bit deeper into what's happening Category by category, it looks like Liquid I.V. is re-accelerating, but U.S. hair is also accelerating, of course, doing well. I often hear it's mainly Liquid I.V., but it does look quite broad-based. Love to hear your view, subcategory and your outlook, for the U.S. business specifically, how our share is trending and how you're feeling about the U.S. consumer. The second one is on margins for Srini.

Can you talk a little bit about the H2 moving parts, Srini? I heard you saying the absolute gross margin would be the same in H2. What do you expect for B&MI and overheads in H2? Any updated view on NMI, given the Middle East conflict? Thank you. Thank you, Warren.

I will take the U.S. question. Srini will talk about margins and the McCormick progress that is really good. In the U.S., as you know, we have delivered 4% volume growth in North America in the last three years. We delivered 3.2% during the first half of 2026, despite some softening in well-being. I believe that our performance in the U.S., that has been a very consistent one, reflects the profound transformation we have done to our portfolio, and the huge focus that we have put in strengthening relations with our key retailers, showing them our ability to grow market. During the first half, the growth was broad-based. We have a strong growth in deodorants, in skin cleansing, in hair, and in prestige. Particularly in prestige, we deliver close to 12% growth in the first half.

In hair care, more than 8%, with hair care at global level more than 9%. It has been a strong performance, of course, the FIFA event, the World Cup, has some impact in our deodorants and skin cleansing performance. I would like to highlight also in against of deodorants, we have regained market leadership in U.S. after two years. As you remember, we have some issues in the premium segment in the last couple of years. We have been sorting out that, and we are very pleased with regaining market leadership in that very important category in the biggest market globally. Liquid I.V. returned to double-digit growth in quarter 2 after lapping a very strong comparator in the first quarter. There were some benefits from shipment phasing, given that Amazon Prime Day this year materialized in quarter 2, and last year was in quarter 3.

We continue seeing solid market growth in the powder hydration market. We are back to competitive share gains in Amazon, in Walmart, in the grocery channel, when it comes to powder hydration. We have some issues in the club channel, that is around 30% of our revenue, where we have lost some space to private label. I believe that the disappointing element of our performance in quarter 2 has been in foods, in which our condiment business has suffered some share losses, particularly due to the development of the mayonnaise premium segment around alternative oil formulations, particularly avocado oil ones, and also some poor return of our promotional program during the quarter. There is a clear action plan now in place, including the launch of Hellmann's avocado line. It is hitting the markets now. We are gaining significant points of distributions in the U.S. in foods.

This is already materialized in some key retailers. We are investing in new price architecture, particularly in the squeeze format that has been under a bit of pressure. We see the quarter two performance in foods U.S. a bit of an outlier, in what has been a consistent outperformance in the sector, but we are very confident in the corrective actions that we have put in place, and we expect the second half to be better. In summary, very good performance in hair, deodorants, skin cleansing, prestige, improving in well-being, even if we expect some pressure in the short term. In foods, a disappointing performance in quarter two, but we see that as an outlier and we expect the second half to be better. Srini? Yeah. Hi, Warren. On the McCormick side, we continue to make good progress.

As we had said, more than 100 people are actually working from either side towards separation and integration. You've already seen that last week announced that the secondary listing is going to be based in U.K. You would have also seen the leadership announcements, which is actually important for us because we have four members from a Unilever side who are going to be on the top table of the combined company, both from the point of view of running the P&L, also from key functional areas, with again, a strong anchor really being in Netherlands. Obviously, there are some good milestones coming up in terms of SEC filings, carve-out accounts, all of that is actually progressing on track.

We are also pleased that we're making good progress when it comes to some of the tax related discussions and regulatory. Whatever has worked so far is broadly on track, and therefore that gives us the confidence to say that we are on course really getting this merger finalized. Coming to commodity and pricing and margins, I think good to start by anchoring as to what we said at the end of first quarter. At that stage, we had indicated that the commodity inflation for the year was likely to be in the range of about EUR 750 million-EUR 900 million. This was about EUR 350-EUR 500 above our planning assumptions. At that stage, we'd also said that the pricing in half two is likely to be higher than half one, and Forex better in half two. As we sit here today, the outlook remains broadly unchanged.

In the first half, we had an inflation impact of about EUR 300 million, which has landed into the P&L. Also looking ahead, we expect about EUR 550 million impact. This is a total inflation on a like-for-like basis, which includes commodities, controlled costs, all elements to it. We expect about EUR 550 in second half, which means that the full year outcome is approximately EUR 850. As you would appreciate, there's been a lot of movement in some of the commodities in the last few days. Therefore, the ranges that we are working with is that somewhere could be between EUR 800-EUR 900, but the center point really being EUR 850. Important to again highlight here that a lot of the inflation is concentrated in home care, and 70% emanates from our emerging markets.

You know the basket that we talk about, it's crude, it's veg oils, palm, SBO, packaging materials and parts of LAB and also parts of energy costs. Our approach has been always balanced and disciplined. In half 1, we also had some benefit of the covers. We have taken calibrated pricing, leveraging pack price architecture, formulation flexibility, productivity programs, and tight cost control. India is also a good example with large home care footprint, where you start to see that there's been a good balance between price and volume in the half. From a logical perspective, the pricing at 0.6% was slightly lower. Fernando already touched upon some of the elements, and the press release also gives some more color to it. Important if I come back to gross margins, therefore how does it all add up?

Important to highlight that on a sequential basis, our gross margins have actually improved. While on a year-on-year basis, they are lower, but if you were to actually compare half 2 of last year to half 1 of this year, we have made a step up. It's also important to highlight that we did benefit from volume leverage because that again, is a source of gross margin for us. However, we had adverse mix. We had adverse mix because of higher contribution from home care. While home care makes it up on its own margin at a UOM percentage basis, but at a gross margin level, obviously there are differentials will exist between the categories. It's also important to highlight that in half 1, the highest inflation impact was in home care. Pricing was calibrated and therefore the gross margin strike also came from home care. Pricing is now landing. It started to land in quarter 2, and you'll see more of that landing in second half.

Along with that, we will pull all the drivers in the value chain and therefore the combination of what we had spoken about earlier gives us the confidence to say that we'll have gross margins at similar levels of first half, which is give or take the 46.8% levels. Our commitment to investing behind brands remains unchanged, and we've said this multiple times that the days of under-investing in the business are over for us. The normative levels that we've called out on Brand & Marketing Investment is 15%-16%. In the half, it had it slightly higher at about 16.1%. That's also led from innovations and FIFA activations. On overheads, you see that it's been a fundamental shift in philosophy. We have seen big step up in terms of productivity.

We completely landed the productivity program in the first half, and we'll continue to maintain the discipline. The combination of managing pricing, volumes, mix, healthy levels of investments actually gives us the confidence to really guide for a modest margin expansion for the full year.

Many thanks. The next question comes from Olivier at Goldman Sachs. Go ahead, Olivier. Hi, good morning, Fernando, Srini, and Jemma.

Just two question, please. First, in the U.S., Dove and Vaseline are both growing very strongly. You mentioned the premium innovation. I was just wondering how much room do you think you have to further premiumize those two brands, which historically have been operating in the mainstream segments? Secondly, you mentioned the press release, I think some tax reform in Brazil, which could affect Q4. First of all, thanks for flagging this ahead. Could you tell us if it will affect a specific category and what the magnitude of it? Is it a bit like GST in India, and could it affect Q3 actually? Thank you. Cool. Srini will take on the tax question in Brazil, Olivier, and let me talk a bit about Dove and Vaseline in the U.S.

Globally, I feel Dove, Vaseline, some of our most important brands growing double digit and other, Dove 9% and Vaseline growing double digit. Dove in the U.S., very strong performance, is 40% of our personal care revenue. It's really growing very strongly in the U.S. Vaseline, a strong performance in U.S. but also in emerging markets, with very solid performance in skin care. These are two of our most important brands really with an stellar performance. Two of the 15 power brands that grew double digit in the second quarter of the year. The growth is broad-based across our portfolio. In terms of premiumization, there is a limit. We believe that Dove probably has a limit in the kind of EUR 20 territory.

Something similar for Vaseline, probably a bit lower in the U.S. We will not take the brands to places where we believe that the brands don't have the authority to play. We continue seeing premiumization opportunities in the key categories in which the two brands compete. Tax? See, the Brazil tax reform it's really something which is reshaping the tax system and not changing what I would believe is the fundamental economics of the market. What is the key change? Brazil is actually moving from about five existing taxes to a dual VAT system. It starts in 2027 when we enter the first one where the federal taxes become common under something called CBS, which removes some of the elements such as called PIS/COFINS and the likes. The reform is also designed around the principle of revenue neutrality.

Over a period of time, there should not be a fundamental change to the economics of the business. What could this mean? This could mean really some movements in the lines of the P&L. Higher VAT rates will mean that there will be reduced or reported revenue realizations. We will get the benefit of taxes, input taxes, which earlier were not vatable. You can start to take credit of it, which basically reduces the cost. As a consequence of this in 2027, reported revenue will be lower, costs will be lower, which means that there will be an adverse impact on USD. There will be a positive impact on margins, while the overall profitability of the business will remain unchanged.

Again, this is subject to the final tax rates being notified by the Brazilian regulatory authorities, which is expected to happen in the next few months. The point that we are highlighting from a quarter four, while all of this change will happen effective 1st January, this could actually potentially lead to some market disruptions in quarter four. We don't expect anything from a quarter three point of view. Why is that likely to happen? It's really going to come from how customers are going to view this change in transition. Classically, over big tax reform agenda items, given that regulation sometimes tends to be nebulous, our customers do reduce some of the stocking pattern.

There is also some lack of clarity or visibility as regards the stock which will be sitting with the customers, while when they sell it will go at higher VAT, whether they will get some of the input credits or not. There are a few of these moving parts, because of which we expect there could be some bit of de-stocking in quarter four. We have factored some of that into our full year guide, we will get better clarity on this as the regulation emerges. Only the last point, because it's important to recognize that this is not like a GST kind of reform in India, where the overall incidence of the taxes came down, and which gave more money into the hands of the consumers. This is more a revenue neutral mechanism by the government to simplify.

We expect the unit economics and broadly to remain unchanged. The last part, there is likely to be impact on the HPC side of the business. Foods is relatively not impacted by these changes given the tax structures.

Our next question comes from David Hayes at Jefferies. Go ahead, David. Thanks, Jemma.

Good morning, all. Two for me. Just firstly on LatAm still, pricing was obviously flat in the quarter despite the hyperinflations or contributions in the region. Clearly some sort of price reset going on there, which I know you called out was going on since the beginning of the year. The question is that done now? Should we expect pricing to step up quite notably in the second half? Where you have reset prices, have you seen competition following down or is that something you're now watching as you go into the second half? Secondly, just in terms of the second half volumes, I'm trying to get a gauge really between third and fourth quarter. I guess if I play back to your point, volumes are running at about 3% over a long period of time.

If we took the average of the second quarter and the third quarter, relatively flat volumes in the third quarter to average three, is that the sort of thing we should be thinking in terms of the pre-buy, the benefit of the World Cup, et cetera, on volumes in the second quarter? Thank you. Thank you, David.

Well, let me start with the second question. We don't see any significant difference between sell-in and sell-out. Of course, that means that there is no pre-buying. Why would we allow retailers to pre-buy at a lower price? That doesn't make a lot of sense. Basically, you should really not consider that there is any significant one-off in the results we have had. What is important is we are not carried away by a quarterly result. We look at long-term trends. The relevant long-term trends of this business is that we have grown 2.7% UVG across the last 10 quarters and 3% in the last year. We will not give guidance in the quarter three and quarter four, but Srini can give more color on the split of that. On Latin America, our performance in Latin America is really accelerating.

We deliver close to 9% growth in the second quarter, and this took the first half to close to 8% growth with 6% in volume. LatAm is one of our Unilever strongest business. As I mentioned before, we have never had two weak years in a row. We have corrected some of the own goals that we scored last year, and we are very pleased with the turnaround performance that we have had in the first half. We are seeing the impact of the decisive actions that we have taken in both laundry and deodorants to restore competitiveness, particularly in Brazil, and we continue keeping good momentum in beauty and foods. In laundry in particular, we delivered double digit volume growth in Brazil, and there are two main reasons for that.

A very successful introduction of our Wonder Wash innovation in the liquid segment, the one that in U.K. you see as Persil, in the case of Brazil, and Omo. Also the impact of the pricing correction actions that we took in the first half of last year to restore competitiveness in the powder segment. This is already lapping, we expect a real acceleration of pricing in laundry in the second half. In deos, that is another very important category for Unilever in Brazil, we are seeing month after month a recovery of the aerosol format that is crucial to boost market growth. The action that we have put in place in the category, rebalancing our investment, increasing the one in aerosol relative to the one in contact applicator formats is working. Of course, we also benefit from what has been an excellent activation around the World Cup.

We expect deos to gain further momentum in Latin America and being a solid contributor to growth in the second half of the year. Performance in the rest of Latin America is strong. Argentina grew volumes mid-single digit, despite what is a tough market there. Mexico also improved. In other important markets like Chile and Central America, particularly our beauty and personal care business has a lot of momentum. Second half, anything else, Srini?

Just a couple of elements just to get it out of the way. On a couple of times that's come on the first half performance, I think Fernando has made it very clear that most of it has really got to do with the underlying momentum rather than one-off factors. Having said that, Fernando also mentioned briefly in his comments that we did have a bit of a phasing benefit from an Amazon Prime event. We just thought we'll quantify it. It's circa between EUR 25 million to EUR 30 million, which at a group level will mean about 20 basis points for the quarter. That's really something which is a phase in, which has come in. Ideally, it would have been prior year would have happened in quarter 3, now it's come into quarter 2. Coming back to the questions related to volumes.

We've always said, listen, always anchor our business in terms of when you think about multiple years, two years, CAGR, MAT trends, that's more reflective of let's say the underlying strength of the business. If you see in that context, Fernando has explained that even in half 1 we are 2.7. If you look at a running rate, it's three. What changes in half 2? Obviously, we start with the base, which is higher. In half 1 of last year, we had about 1% volume, which turns up to 2% in half 2. That's an important element to note. Second element is that we'll also have pricing, which is going to start landing. It's already started in quarter 2. We should expect some bit of volume sensitivities, and I think it's healthy. That's really the way we manage the business on its totality of volume-price competitiveness.

I think that's the second element. Third, it's also important to understand that some of the vectors of growth or some of the geographies of growth will change. Fernando, if you actually see quarter 3, you will start to see a very strong base we had in U.S. and Indonesia. Equally, you'll start to see that some of the base that we have in India and Brazil will be actually soft. Multiple moving parts. Rather than get into a very specific quarter 2, quarter 3 elements to it, the best way to really start thinking about our business is on a running basis two-year CAGR. Therefore, the volume guide that we have given to the full year at 3%, I think is more reflective of the performance.

If you'd just to highlight again, the diversification of our portfolio, particularly in HPC in terms of geographic category segments, price points give us resilience. We see that as a significant competitive advantage and give us a lot of confidence to really deliver the numbers that we have given in the upgraded guidance.

Thank you. The next question comes from Jeff Stent at BNP. Go ahead, Jeff. Good morning.

Just one question. I think you said earlier there was no significant one-offs in the results yet, this is with FIFA, the biggest activation program in the history of the company. I'm going to try to just tease that out, and I'm wondering if you could maybe give us a sense of what you think the FIFA activation added in terms of growth. I'm just kind of thinking forward to next year, when at some point we're going to talk about cycling all of this. Any color or any quantification you could give on the FIFA activation in aggregate would be great. Thank you. Thank you, Jeff.

We are very pleased with the FIFA World Cup execution. We have activated more 35 brands across 120 markets. More than 50,000 creators doing content for Unilever brands simultaneously. We believe that this is a proof of what Unilever is creating in terms of a new social first model of reach and engagement for our brands at a scale that I personally believe very few companies can match. On top of that, we have had extraordinary execution in store, across practically all the geographies of Unilever in unprecedented magnitude. This should have some impact in our sell-out. Of course, the FIFA World Cup finished on the 19th of July. We don't have yet the results to really validate what has happened there. Even if some indication, for example, regaining market leadership in deodorants U.S. gives a sense that this has been working.

Of course, we don't do an event like FIFA for a two months impact. We do this to increase the awareness and differentiation of our brands through the immersion of these brands in a massive cultural event like the World Cup. We believe that there will be a residual effect of this activity in terms of the strengthening of our brands. As I mentioned before, we have close to 60% of our revenue strengthening brand equity, what we call our Unmissable Brand Superiority. We believe that we will see as a result of FIFA activation, particularly in our personal care business, a significant uplift in the image of our brands, and this should result in an improvement in competitiveness in the long run.

Maybe just to add color to two points on this. When you really look at the two year CAGR and the three year CAGR, it actually then starts to reflect the momentum of our business in personal care, whether you see it from a deodorants point of view or when you see skin cleansing. That's also reflected in our gaining back leadership in the U.S. and deodorants, and skin cleansing, Fernando has already spoken about the performance of Dove and how it's really strengthened. The other angle to also say is, when you really look at the first half of the performance, what we've really called off as a true one-off is really the Amazon Prime effect.

Given our supply resilience, given the fact that we have the financial strength from a balance sheet, given that we have the formulation flexibility R&D, it is quite possible that we have gained at the expense of some of the regionals and the locals in home care notably, in different parts of the world. That's actually genuine demand and supply dynamics enabled by what I would really call is a very resilient and agile supply chain. That's where it also helps us because when you start gaining consumers in an era like this, we tend to really with market development and the way we really run our business, hold on to some of the consumers. It's important to really distinguish between what is really a phasing impact versus fundamentally servicing a demand requirement, which actually then starts to enable us to grow well and grow competitively.

Thank you. Our next question comes from Jeremy at HSBC. Go ahead, Jeremy. Okay. Hi there.

Thanks for taking the questions. A couple from me. First one is, would you be able to give us a bit more color on the volume performance, in particular, if you took the different divisions, how you distinguish between the kind of absolute sort of units and tonnage, and the mix that you're getting across the different divisions? Then secondly, perhaps you could elaborate on the point about some of the local competition, the extent to which they were supply constrained. Is that something you see persisting over the balance of the year, or do you think that some of those constraints are now kind of lifting, and some of those peers are now coming back into the market a little bit more? Thanks. Let me take on the local competition, and Srini will give more color in the volume mix split.

We have a very resilient supply chain. Our absolute priority has been supply security, given the developments in the Middle East, and we have done that in the first half. Probably this has promoted some kind of competitive advantage versus local players that have suffered in terms of customer service, particularly in Asia. We have now visibility in terms of security supply for the next four to six months, particularly in the category that is more affected. That is laundry powder. There has been some kind of advantages that we have benefiting. Consumers that you take, the propensity of them to stay in great brands like the one we have, we believe that there is a high probability of that. Volume and mix? From an external perspective, Jeremy, you're conscious that we call it as UVG.

For UVG for us been always been a combination of volumes and mix. It's our intention never to really split the two. That's how we have really reported the results. If I were to reflect half one performance, obviously we've had volume growth which have been ahead of mix. Normally, we get a UVG benefit, which is more than volumes, but just given the strong performance from home care across the markets, personal care, and across various segments, in this half, if I were to really give a qualitative comment, it would be that our volume growths have been ahead of our UVG. That's also the mix comment that I made. Volumes in UVG have been fairly strong and consistent across the HPC categories.

It reflects in terms of both of the growths or the volume-led growths over 7%. Obviously, our volumes have been lower in foods, and I think that's also fairly visible, and is really notably coming from a U.S. performance, which Fernando has clearly explained as to what is really driving it. Putting a geography angle to it, volume growths have continued to be very strong in emerging markets. Volume growths have also remained quite strong and above market when it comes to North America. The only other place where they have been tepid, again, the reasons explained, has been Europe.

Thank you. Our next question comes from Guillaume at UBS.

Go ahead, Guillaume. Thank you very much, Jemma, and good morning, Fernando and Srini.

First question for me is on price elasticity. Because it seems that when you push promo activities, price corrective measures, it does really pay off, and we got some very strong evidence of that in the second quarter. Looking at your guidance for the second half, it does suggest volumes could very quickly normalize as you raise prices. My question is, are elasticities increasing at the moment in your categories? Maybe with a more price conscious, less brand loyal consumer, or are you simply being a bit conservative when it comes to your guidance for volume growth development in the back half? I guess related to that, as you further premiumize your portfolio, should we see declining elasticities, basically in your business?

My second question, very quickly, if you could unpack your performance in skincare, because the business grew low single digits, I think in the first half, despite Vaseline being very strong, continued momentum, acceleration in prestige. Wondering what is weighing on your growth in skincare at the moment, and do you anticipate you'll be able to address this drag in the coming quarters? Thank you very much. Thank you, Guillaume.

Let me start by skincare and then I go into pricing and elasticity. We have very strong performance in Vaseline skincare. We have very strong performance in prestige skincare, the likes of Tatcha or Paula's Choice improving. The issues in skincare for us is some decline in some of our legacy brands, particularly Glow & Lovely in India and Pond's in Southeast Asia. We are working very hard to build a new portfolio of brands that are more future fit. This is what we are doing with our prestige portfolio and with Vaseline skincare. There is very clear that there are some brands that in a market is premiumizing very fast, like the Asian market, brands like Glow & Lovely and Pond's have some deficiencies that we need to fix. In terms of pricing. Well, in previous earnings calls, we have been very clear that we were going to manage the business in the context of a very volatile environment, focusing on volume growth, price competitiveness, and discipline management of every single line of the P&L.

This is what we have done. Managing costs through formulation flexibility, promotion optimization, tighter management of overheads, and being cautious on pricing until having more clarity in terms of supply security and commodity cost environment. Pricing has been a bit soft in the first half at 0.6%. This is a result of the levered actions that we have taken like India laundry liquids and Brazil powder relative price correction last year. Some increased promotional activity in PC around FIFA activation.

In the case of foods, taking a bit longer in the negotiation with European retailers, due to the need of calibrating the impact of the Middle East conflict in cost. In terms of elasticity, let me say first that, we have now around 90% of our revenue in the relative pricing that we want to stay. That was not the case three or two years ago, in which that level was in the territory of 50%-60%. Today, we have 90% of our revenue in the relative pricing versus competition that we want our brands to be. The other 10% is evenly split between areas in which we are a bit above strategic pricing and areas where we are slightly below strategic pricing. Regarding elasticity, at this stage it's difficult to predict elasticity in the future when you have had so much cumulative inflation since COVID.

The reaction we have seen in our pricing corrections in places like India laundry liquids or laundry powders in Brazil has been strong. The same in some particular corrections that we have done in Home Care. It's true that elasticity seems to be significant when we adjust the pricing to where it should be in terms of a strategic price index. Going forward, our portfolio is premiumizing. We tend to see lower elasticity in the most premium areas of our portfolio. Regarding second half, I don't want to really, at this stage, comment a lot. We have taken a cautious approach here ensuring that, in our guidance, we consider a logical volume slow down when we put pricing up. Remember also that our sequential inflation in second half will be in the territory of EUR 500 million or so.

This gives you an idea of what is the kind of pricing that we need to keep our margin sequentially improving as we have done in the first half versus the second half next year. You will do your math, I will not do it for you, but you can model that easily.

Thank you. Our next question comes from Tom Sykes at Deutsche Bank. Go ahead, Tom. Morning. Thank you.

Firstly on India, is there at all a risk that margins need to be adjusted downwards a bit in order to stimulate longer term higher growth in India? Are you at all in emerging markets seeing competition from Chinese producers? Chinese exports of beauty and personal care, very strong. Is that something at all across your emerging markets you're seeing? Finally, on gross margin and the A&P, have you got any benefit on search costs from the switch to LLMs, and is that something that is likely to continue, but we see that in higher trade spend rather than coming through the A&P line, please?

Thank you, Tom. Let me start by the LLM. I mentioned this in our previous earnings call. I feel the development of search in LLM play in favor of big brands. We are now activating LLM rankings in more than 20 markets for more than 20 brands. This is something which we are putting a lot of focus to ensure that we are at the forefront of how people discover brands in the future. Not significant changes in the cost of media at this stage, but this is something that is changing very fast. I cannot predict the future in terms of that. Let me cover also in emerging markets, Chinese exports, we have not seen significant Chinese exports in Home Care. We have seen the development of some Chinese players where some new channels emerge, like TikTok Shop, particularly in Southeast Asia.

In skincare, we have seen a couple of brands really making some inroads in Southeast Asian markets like Indonesia. Particularly in face care, not in other segments of our portfolio. India? The India model is really one which is related to growth, volume, premiumization, and through that really driving the profit expansion.

Even if you really look at the guide which comes from Hindustan Unilever Limited, they've said that they want to keep the EBITDA margins at the current level, and that's the right approach. Classically, if you see, India benefits from really having a portfolio which straddles the pyramid, whether it's across the price points, benefit segments, channels, and therefore, that gives them the levers to manage this. Fundamentally coming back, it's not a question of not being price competitive. It's really a question of getting the right volume mix premiumization. Through that, really generating the profits and investing back into the business.

From our perspective, we ideally want to see India as a high single-digit growth market, and if we can have bottom line grow slightly ahead of top line, I think that it's really a virtuous circle which then serves the business in India as well as the group very well.

Yeah. Let me highlight again, we will invest in India to protect the leadership position we have. We really believe that the next decade is the decade of India. We enjoy a privileged position there, and we believe that it will be a key contributor to the growth story of Unilever.

Thank you. Our final question comes from Ed Lewis at Rothschild. Go ahead, Ed. Thanks. Morning, everyone.

Couple ones from me. Just, Fernando, on the One Unilever Markets, you've been pretty positive about the change there. Just sort of as we look at this quarter, just to understand how much having that structure in place now has helped you navigate the volatile environment. Just Also related to that, just looking at the sales channels, how much is that a function of improved performance we're seeing? Are you much more relevant now, sort of in the right channel from where you were before? Is that really what we're seeing in places like Asia and especially China in the beauty business, with the improvement you're seeing there?

Thank you, Ed. Well, very solid performance in One Unilever markets. Once again, we are running a very clear strategy in these markets, simplifying our portfolio, driving very strongly beauty and personal care, particularly that based in our Deos portfolio. Solidifying what are strong laundry position and divesting the ones in which we believe that there is not a sustainable position in the future, as we have done recently with Colombia and Ecuador. The business has been running with a lot of discipline, with a strong overhead discipline. This is a part of the business that was dilutive to our profitability, and it has became last year accretive. We are very happy with the development of One Unilever markets, and we continue seeing presence in these markets with a much more focused portfolio than in the past, a key contributor to the growth story of Unilever in the future.

In terms of channel exposure, of course, there is a significant change in our portfolio with the growth of wellbeing, with the growth of prestige, with the premiumization that we have achieved also in our core. This give us much more exposure to premium channels like online. We have had mid-teens growth in e-commerce last year in the most important market of U.S., and we continue delivering in line with that. There is always some issues that you have to sort out. As I mentioned before, we have some issues in the club channel in U.S., particularly in the wellbeing. Overall, we see that our portfolio is giving us a good exposure. There is growth in every single channel. One of the key drivers of the growth that we are seeing in India is our improvement in general trade now.

This is a channel that was not growing for us, that now is growing the mid to high single digit. That basically shows that if you hunt for the growth, you will find the growth in different channels, in different segments of the market. I believe that's the last question, Jemma. With that, let me close with a couple of thoughts. We have delivered a strong volume-led first half and an accelerating one with the best volume quarter at Unilever in over 15 years. Importantly, this performance is not a one-off. It reflects, as I mentioned before, good sustained performance with an average 3% volume growth over the last four quarters, or if you go longer, 2.7% over the last 10 quarters. As we move into the second half, the price growth will accelerate.

We will keep managing the business with discipline, protecting the competitiveness of both our pricing and our brand investment, and emphasizing the drivers of demands with the higher return niche market. This is what we call Desire at Scale working in practice. Alongside a strong performance, we continue to transform our portfolio with the combination of Foods and McCormick progressing well, and we are really on track to make Unilever a focused pure-play HPC company. The strengths of this first half give us the confidence in our upgraded outlook. We will deliver USG of 4%-6% for the year, with around 3% in volume. Second half growth of 4%-5%, led by pricing, and a modest improvement in Underlying Operating Margin versus the 20% that we delivered last year. With that, thank you for your time. Thank you very much. Bye-bye.