Nestlé S.A. (NESN) Earnings Call Transcript

Good morning, and welcome to Nestle's Third Quarter and 9 Month 2026 results. I'm David Hancock, Head of Investor Relations, and I'm joined today by Philipp Navratil, CEO; and Anna Manz, CFO. Before we get started, please take a moment to review the disclaimer on Slide 2. So let me quickly take you through our agenda. Philipp will start with some highlights of our progress made in the quarter before Anna reviews the numbers in more detail. We will then open up the lines for Q&A. With that, I'll hand over to Philipp.

Thank you, David. Good morning, everyone, and thank you for joining us. Let me start with the key messages. We delivered a strong quarter of growth. Organic growth was 4% with RIG of 2.8% and pricing of 1.1%. We are on track towards a midterm ambition. Organic growth was positive across all zones and globally managed businesses, and it was positive across all categories. Emerging markets continued to grow strongly, while we saw improving momentum in developed markets. On strategy, we keep executing. We are prioritizing incremental investment behind our growth platforms, which again delivered high single-digit growth, and the performance in the core is improving further. In September, we reached an agreement to sell our mainstream VMS business following the partnership for Waters, we announced in July. As we already announced, our operations in Russia have been placed under temporary external management. And I will pick this up in more detail. Last but not least, we are maintaining our full year guidance. It is now a year since I first stood before you as CEO of Nestle. We have made good progress in the last 4 quarters. That has come from focus, setting clear priorities and embedding them in the organization. We are starting to see improvement in the way the organization is changing and in our financial results. This gives me confidence that we are on the right path. I am pleased with our progress, but I'm not satisfied. There is much more for us to do to deliver the potential of the business. We need to continue this journey, execute relentlessly and deliver consistently. Before sharing some examples of our progress driving growth, let me briefly return to our growth model. We target sustained organic growth of 4% plus led by RIG of at least 2%. We are combining growth platforms that compound over time at a higher rate with improving performance in the core. Our growth platforms receive incremental investment funded through efficiencies. This puts more resources behind opportunities with the greatest potential to drive growth. Let me share some examples of what this looks like in practice. This slide shows 4 of our growth platforms with 1 example for each of our categories. Each is different. But the approach is consistent. Structural growth opportunities, differentiated consumer proposition, as signs or technology advantage, strong brands and execution models that can travel across markets. Let me go into more detail on 2 of them. First, emerging market pet care. This is a significant opportunity. Pet population growth in emerging markets is far outpacing developed markets, growing mid- to high single digits annually since pre-pandemic. Consumers increasingly want high-quality nutrition driving increased calorific coverage and premiumization. We are perfectly positioned to capture this opportunity. From our leading pet care business in developed markets, we already know that our propositions work. We have the product expertise and the brands. Our focus is, therefore, on investing behind awareness and building the category. And across the emerging markets, Nestle has an unparalleled distribution footprint. We are leveraging this to bring our exciting petrol propositions to more consumers in Asia and Latin America. All this is already starting to pay off. with around 10% organic growth in emerging markets, pet care so far this year, doubling from a year ago. Turning next to noodles. On the last slide, we talked about taking pet care know-how from developed to emerging markets. With Noodles, it's a bit the other way around. We have a well-established base in Zone Airway, especially India, Malaysia and Singapore. And we have lots of headroom to grow here, driving further category penetration and market share. We are also excited about opportunities beyond Asia. We have ambitious expansion plans in Europe and the Americas built on clear consumer insights. Noodles is an attractive category as consumers increasingly move between traditional meals and smaller convenient eating occasions. At the same time, consumers particularly younger consumers are looking to world cuisine for bolder flavors and more exciting meal experiences. Noodles are growing at around twice the rate of food and world cuisine is growing twice as fast again. We are capturing this opportunity through Korean and Ramon ranges, taking us from more adventurous taste experiences. This innovation is supported by culturally relevant partnerships and digital activation across channels. These propositions are already being rolled out across more than 25 markets covering all 3 zones. This is our growth platform approach in action. It's simple and repeatable. Structural opportunities with differentiated consumer propositions putting additional resources behind them to scale fast and deep across markets. This focus on simple repeatable execution discipline also applies in our core, which brings me to Milo. Milo is a billionaire brand with deep roots across Asia, Aseana and Africa, but heritage alone does not deliver growth. 2 years ago, Milo was 1 of our underperformers. So we went back to the fundamentals, product superiority, value, visibility and communication. Product priority starts with taste. And for Milo, this wasn't good enough. So we worked systematically across Milo's products to get back to winning taste preference. We also made Milo's nutritional proposition more tangible and relevant in each local market. It is based on a triple advantage, growth from milk-protein and calcium, focus from iron and zinc vitality from B vitamins. We also developed product innovations and extensions for specific nutritional and consumption needs. For example, Milo Pro ready-to-drink gives older teams permission to keep enjoying a taste they love when they outgrow the drink of their childhood. Second, value. Cocinflation placed significant pressure on costs. we protected the key price points and funded this through efficiencies. Third, visibility. We expanded distribution so that Milo is consistently visible and available wherever consumers shop. Fourth, communication. Across Nestle, we are focusing our brand investments, fewer campaigns, bigger impact. This is what we're doing at Milo. Milo's proposition has always been about encouraging a more active lifestyle through sport and physical activity. The Milo Marathon has been held in the Philippines since 1974. And we are building on that positioning. From January, Milo will be part of a 3-year partnership with the NBA across 21 countries. The ambition is to help an additional 2.5 million young people become more active over 3 years. Our approach is working from being an underperformer Milo is back to delivering double-digit growth and gaining market share with increasing household penetration and growing servings. It takes time, but it shows we can turn a core brand into a growth story. Mil is 1 example, and we have many more opportunities across Nestle. With that, let me over to Anna, who will take you through the numbers in more detail.

Thanks, Philipp, and good morning. We delivered 4% organic sales growth in Q3, with a RIG of 2.8% and pricing of 1.1%. Reported sales grew 5.2%, and for the first time since I joined Nestle, I'm able to say that our sales growth benefited from a positive FX impact in the quarter. Assuming current spot rates, the currency headwind for the full year is now around 2%. Looking at our performance in a bit more detail. We delivered another good quarter of RIG led growth. And within RIG, the majority is coming from volume rather than mix, meaning that consumers are eating and drinking our products more. With now 5 quarters of better OG and RIG, we're building good growth momentum. As Philipp said, this comes from putting incremental investment against our biggest opportunities and improving execution. Progress is never linear, and Q3 RIG was particularly strong, but we're confident that we're moving towards our guidance sustainably in the medium term. Before I focus on RIG, a few comments on pricing. Pricing has been moderating through 2026, and that's mainly due to input cost dynamics. Last year, we took significant pricing in coffee and confectionery due to rising input costs. This year, we've been lapping those increases with limited further price increases as coffee and cocoa prices fell. Looking forward, there's now again some upward pressure on input costs. And through this volatility, our approach won't change. We'll take pricing to the extent we can without damaging medium-term consumer penetration. As you've seen over the last 18 months, when we take price, there can be a short-term RIG reaction as consumers adjust. But it comes back quickly where the consumer proposition is strong. Smart price pack architecture and innovation is how we build those strong consumer propositions. And of course, we'll continue driving cost savings within our own business. And this is why we're confident we can continue to deliver RIG led growth and pricing. Now let's get into RIG. Across our zones, the improvement in RIG was broad-based. We saw positive volume growth in every zone, and this reflects the strength of our execution and the resolution of the temporary impacts we saw in Q2. I'll talk more about the improving performance of coffee and pet care in the U.S. on the next slide. In Europe, the delisting issue that we had towards the end of Q2 was resolved during Q3. And although the environment remains competitive. And in Nutrition, recovery from the infant formula recall continues to progress, particularly in AOA. The strong RIG in the quarter reflects our underlying business performance. Turning to North America. We delivered good improvement in the quarter with OG accelerating to 2.6%, and RIG recovered from negative in Q2 to 1.8% in Q3. Progress was driven by 3 categories: in coffee, we took significant price increases in Starbucks and Nescafe earlier in the year, impacting RIG in Q2. Momentum has been recovering progressively through Q3, and growth also benefited from a modest improvement in coffee mate. In Pet Care, the category continues to strengthen, particularly in wet cat. We've had some lumpiness in organic growth in recent quarters, but in Q3, sell-in was in line with sellout. Looking forward to Q4, keep in mind that we're lapping a tough comp Food & Snacks delivered strong growth with an improvement in confectionery and in frozen. Our actions are driving share gains in both categories, and we've also had some benefit from the timing of customer orders. So progress across 3 of our 4 categories. The fourth is Nutrition, where in Q3, we underperformed our potential. Medical Nutrition is performing well, accelerating for the sixth consecutive quarter. Gerber is soft but stabilizing. And in adult, growth is uneven partly impacted by the phasing of innovation, and we've got work to do on the consistency of execution. Stepping back, at the edge, the U.S. consumer is increasingly challenged, but our results show that our execution is improving, and we're delivering performance despite a tough market. Next, emerging markets, which continue to drive growth. One of the things that makes Nestle special is the breadth and scale of our EM footprint across Latin America, Asia and Africa. We have 10 markets with annualized sales of at least CHF 1 billion, and we're seeing good growth across our entire footprint. Turning to the zones, and I'll be brief, as I've already covered a lot of the moving parts. Within AMS, I've talked about North America. Latin America delivered another strong quarter, broad-based across markets and categories. Momentum in AOA continued India delivered 20% OG, and we had double-digit growth in Middle East and North Africa, Japan, Malaysia and Singapore. In Greater China, the headline growth reflects underlying progress and also the base effect of the inventory adjustments last year. The market environment remains challenging. And in Europe, growth has been moderating this year, largely driven by tougher comps. With consumer caution and pricing pressure across the zone, we're focused on providing attractive value propositions to our consumers through innovation and this is driving improved market share. Turning to the globally managed businesses. Nespresso delivered solid performance against the strong prior year comp. Growth has moderated as we lapped last year's pricing, along with some market softness in the U.S., where we continue to gain share. Encouraging the capsule volumes are positive as we drive recruitment and consumption. And finally, Nestle Waters. Water has delivered exceptional regular growth in the quarter across all of our markets. Performance benefited from a hot summer in Europe and continued strong demand for our international brands. Moving to our categories. Coffee continues to perform well. with the slowing growth rate, largely a function of the prior year comps. Nescafe continues to drive RIG pretty much everywhere as we provide the right product experience and price point for every need in every market. To give you an example, in Mexico, our offering spans from the entry-level Nescafe Classico through Taster's Choice and up to Nescafe reserver. That, coupled with our actions on price pack architecture means we're relevant to all consumers, whatever their budget, allowing us to gain share. I've already talked about pet care in North America, but the category strength is really a global story. OG and RIG were mid-single digit or better in Europe, LatAm and AOA as well as North America. The nutrition story for the group is also similar to what I described for North America. Medical strong, infant improving and Kids and or family and adult uneven. We view Nutrition as 1 of our biggest areas of opportunity. The integration of Nestle Nutrition and Nestle Health Science clarifies our brands and strengthens our global leadership positions. We now need to step up execution. And finally, Food & Snacks delivered strong growth, and this was primarily driven by our largest brands, including Maggi, KitKat and Milo. Turning to Russia. Following the presidential decree issued in September, our business in Russia has been placed under temporary external management. And as a result, we'll stop consolidating it into our financials effective end of September. There's no impact to OG RIG and pricing as Russia has been excluded from organic growth since 2022. But the deconsolidation does impact reported sales, UTAP and free cash flow starting in Q4 this year. In addition, the net assets of the business have also been derecognized. In total, this is expected to negatively impact group net debt by approximately CHF 900 million for the full year 2026. The situation remains fluid, and we'll continue to provide updates as appropriate. Turning to 2026 guidance. We continue to expect organic growth in the range of 3% to 4%, with RIG accelerating versus 2025, and eTap margin improving versus last year. Our underlying TOP margin expectations are unchanged from July. The deconsolidation of Russia will have a limited impact on the full year, so we still expect second half margin to be broadly similar to the first. This margin guidance excludes any tariff refund benefits in the second half. And finally, no change on free cash flow, which we expect to be above GBP 9 billion for the full year. So to conclude, we're strengthening how we work, prioritizing our investment and getting more consistent on execution. The strong Q3 results are evidence of our progress and with much more still to do. And with that, I'll hand over to David to start the Q&A.

Thank you, Anna. We'll now move to the Q&A session. [Operator Instructions] The first question comes from Guillaume Delmas from UBS.

Philipp. Two questions for me, please. The first 1 on Food & Snacks and then on emerging markets. So food and snacks, I mean, RIG particularly strong in the quarter, it seems a broad-based improvement across 3 zones. You also -- and I did mention some favorable seasonal order phasing. So my question is, can you maybe help us unpack this strong RIG performance, I mean, particularly on a product category basis or whether there were some one-offs flattering a bit this performance. And looking ahead, what would you see as a sustainable run rate for Food & Snacks RIG? I mean, should we use to mid-single-digit RIG? Or should we expect a rapid return to a more low single digit, 0% to 2% range for this business? And then my second question is on emerging markets. I mean you were facing tougher comps in the quarter and yet RIG barely decelerated, so still well over 4%, whether we include China or not. And so my question here is, what is driving this particularly strong RIG for now to maybe a bit more consecutive quarters. Is it down to category volume growth? Is it some changes in consumer behavior or it's mostly done to your broad-based market share gains. So any color on that would be helpful. And also, I don't know if you've got some early thoughts on what Nino could do impact the consumer environment in some of these geographies?

Thanks, Guillaume. Look, I'll start with your emerging market question. I'll give you a bit of a comment on Food & Snacks. I'll pass that over to Anna to talk you through the specifics. Look, on emerging markets, indeed, the performance was strong driven by RIG and pricing and also market share gains, which is really good to see. And if you look at our emerging markets, what really comes to life there is our execution muscle that we have. So really, you have that at its best in terms of how the teams there execute our strategy. That's across Asia and Latin America and Africa as well. It's all about driving innovation and renovation at speed also hitting the right price point and protecting those RIGht price points, strong distribution muscle. So we're really available everywhere where people shop. And also, I have highlighted that in my remarks in terms of growth platforms. We have a few growth platforms to go across emerging markets, like soluble coffee, like pet food, et cetera. that are driving strong growth also receiving additional investments from our efficiency programs, while also performing well on the core. One example was the 1 that I called out on Milo, you also have others under Maggi doing really well. So really pleased with what emerging markets are delivering today. Then just on Food & Snacks, and I'll give you, as I said, some general comments on food and snacks. We saw some good performance in terms of share across our frozen business in the U.S. was good to see. Also there innovation executing the business better. Generally, a good performance across confectionery and consistent strength again across emerging markets here. India is a call out on both Maggi and KitKat. And as you see, this is driven by our billionaire brands that again receive focused investment there, Maggi, KitKat but also Milo are performing really well in the food and snacks category. And I'll pass it over to Anna to give a bit more specifics on your forward-looking questions. I'll come back on a comment on line afterwards.

Yes. So your question is, should you extrapolate 5.5% RIG. And 5.5% RIG is obviously a strong performance in the quarter, and I wouldn't extrapolate that. And it is helped by some seasonal order timing. So Christmas orders coming a little bit early and that type of thing. But it's not material enough of a tailwind to call out at a group level. And actually, what we saw across the board was fundamental strength and share gain. And I would -- while you're looking at the one-off in Food and Snacks, I'd also say to you, we've had some phasing of orders the other way that have hurt us a little bit in Nutrition in the quarter. So when you step back and look at it all as a whole, I would say it's a wash.

Yes. And then very quickly on your question on your third question on El Nino. Look generally what we have been working on since many years. And you saw also an update on our sustainability strategy and objectives on our website is working across our supply chain to may be more resilient. And obviously, Allina will have some effect. It's early to say what exactly it will look like, and we're relying on resilient supply chains and making sure we protect costs as much as we can working with farmers across our most important commodities across the globe. .

Next questions come from Celine Pannuti at JPMorgan.

So my first question is on pricing and the balance of pricing and volume. So mentioned that pricing, you faced a tough comp, but as well, I think there was some competitive environment in some developed markets. So could you give us a bit of a steer on path of pricing as we look into the remainder of the year? I mean is there a further step up in comp? Or are we expecting an inspection as you look to raise price on what I believe is inflation inflecting? And maybe if you look into the balance of volume and pricing into 2, what is your expectation of being able to maintain RIG momentum in the face of what could be effectively pricing, not just from your perspective, but as well, I think in emerging markets, you will have or if any developed market, pricing across category. So just try to understand a bit how you see that shipping up into '27. And then on North America, we see that your RIG has progress but as well a total organic growth. What do you think is a sustainable RIG performance in the North American market, given the portfolio you have? Obviously, now we've seen a big acceleration in cat on the back of your supply chain improving. But I mean to which extent that this is a bit of a one-off and then there will be some form of normalization. So if you could help us understand whether 1.5% in North America is a sustainable number given the portfolio you have.

Thanks, Celine. I'll pass those to Anna to give you more color on those. .

Great. So let me start with pricing and maybe start with pricing in Q3. So the way to think about pricing in Q3 is we had a lot of input cost inflation last year, took a lot of price. And that input cost inflation in 2026 has actually turned into deflation on coffee and cocoa. So we haven't been taking very much in rental price in 2026. And so what you've seen as we've moved through the year is that we have the benefit of the rollover pricing from 2025, helping the beginning of '26, and that benefit has decreased as we've gone through the year. So this isn't about us taking prices down. For the most part, it's about us just seeing the less year-on-year pricing. The most competitive area of our portfolio is Europe, where you've got the buying groups, which makes it the toughest pricing environment and I would say within that confectionery is the one area where there is some price pressure. But for the most part, really, what you're seeing on pricing is the expected roll off of last year. if you look forward to Q4, there's 2 factors impacting pricing in Q4. One is that further roll-off of prior year pricing which obviously is a negative will reduce pricing. And then in the emerging markets, you're seeing us starting to take some more price which is a positive on pricing in the context of the inflation we're seeing in input costs. Maybe just to step back, though, a bit, how do we think about pricing? And this is maybe a bit your 2027 question. We take price to the extent that we can, whilst at the same time, ensuring that we maintain that consumer penetration. And that's kind of the guiding principle that we use. And the way we think about it, it's not that we think about, let's take price on coffee. We're thinking about in Germany, what pricing can we take on Maggi Recipe solutions versus Maggi soups or in Mexico, where are we around that consumer proposition for sachets of Nescafe Classico vis-a-vis a 300-gram pack of tastes choice. Really specific to the market environment that we're in. And there are always opportunities for us to take price, where we've got that proposition RIGht. And you've seen that us do that over the last 18 months. We've had a lot of practice at really getting the consumer proposition RIGht through a combination of price pack architecture, innovation into the RIGht price points. So you'll see us do more of that. So as we look forward to 2027, it is an inflationary environment. It's slightly we'll see more pricing and while there may be a short-term consumer reaction because their occasion is in the quarter that you take the price, we're confident that over the medium term that we can sustain both RIG and price. And your other question, North America, sorry. Yes, RIG has progressed nicely as we've seen a normalization in pet care, and we are seeing some nice share gain and improvement in the U.S. So fundamentally, all the things that you heard Philipp described around our improving execution are supporting performance in the U.S. despite a challenging market. I'm not going to give you specific guidance on RIG. I would just call out that as we move into Q4, of course, we've got a tougher comp with respect to pet care because we had the preprice increase buy-in and some inventory requirement associated with bringing on new plants online in Q4 a year ago, which just gives us a slightly tougher comp. But other than that, the actions that we're taking are improving our momentum.

The next question come from David Hayes at Jefferies.

Two for me. So one on Pet Food. One on next year's margin, I can be a bit cheeky. So just on the pet food side. So just on the pet food side, just to follow up, I guess. So just to confirm, selling sellout across the division basically equate to each other just to confirm that. And then within that performance, that inflection we've seen, can you just talk a little bit more about the dog trends in the last few months, what's going on in that category? Or is that changing? And then on the cat capacity, can you just talk about whether this is more about mix in some ways than volume? Is it more about innovation, flexibility at the capacity rather than you just couldn't be orders. It seems the sense I'm getting is that it's more around that and whether you can talk to that. And then the cheeky margin question for next year, I suspect you'll say too early to say, but given the headwinds you talked about 20, 30 bps and given the input costs versus pricing dynamics margins still up next year, you think with confidence question mark.

Thanks, David. I'll answer Pet, and I'll give the margin question to Anna. Look, in PET, we have seen good growth across Ateca and also therapeutics. And in -- specifically in the U.S., but also in Europe. And dog is improving slightly. What you write on you called it out, we have built new capacity, fresh capacity to have more availability of cat food, wet cat food. And what that does, it allows us to obviously innovate into the space, and that's what we have done and also, if necessary, drive promotions. And hence, you have seen in the third quarter a normalization in terms of sell-in and sell-out. In fact, we're driving the category growth now as we're gaining share in the cat space. And that is due to our capacity actually not only to innovate and promote better but also service our customers and hence our consumers better in that space. And then again, underlying the trends in cat are very favorable. Cat adoption is still up. While dog remains flattish but it's slightly improving, as I said, going forward. So we're looking forward for some good momentum in pet across the globe and then an additional opportunity in emerging markets, as I called out in my remarks earlier. And on your margin question, I'll pass that one to Anna. Thank you, David.

Sure. So on margin, you'll be unsurprised when I say it's too early to guide, but I can give you a bit of a sense of the moving parts perhaps. So you're RIGht, Russia will be a slight headwind next year. because you'll have 3 quarters of that impact. And obviously, we're in a substantially more inflationary environment than we were. That said, you'll see us continue to drive cost savings hard. Obviously, we will be pricing. And we've got the benefit of the volume that we're driving, giving us leverage. And we get a side benefit also because we won't have the infant formula recall challenge. So in short, a number of moving parts. We'll give you more in fab on what that means for our margin as a whole. But we're focused on rebuilding our margins whilst at the same time, making sure that we maintain that consumer penetration that I was just talking about.

The next questions come from Warren Ackerman at Barclays.

Yes. It's Warren Ackerman here from Barclays. Could we maybe firstly go back to the core versus the high-growth platforms, Philipp. You obviously gave some examples on the high-growth platforms. Could you maybe update us on how you're thinking about the core performance. I think it sounds like it's slightly improving. Is there any metrics you can give us, maybe are you able to split the RIG and price between the core and the high-growth platforms? And are you confident that the kind of skewing of investments into the high-growth platforms is not leaving any vulnerabilities on the core? Just be interested to sort of understand progress what's not working, what's ahead? What's behind trend? Anything on market shares when the core would be useful. And then secondly, I guess the other category we haven't spoken much about is nutrition in detail. Can you maybe kind of update us where we are on infant nutrition? It sounds like it's still quite challenging in places. Is it kind of a bit behind your expectations? And how should we think about the recovery? Has there been any kind of impairments because of the sterilize recall at the beginning of the year? So yes, that would be great.

Yes. Thanks, Warren. Look, in terms of high-growth platforms and the core. So we still see really strength across our growth platforms. So this is working really investing behind those growth platforms where we have higher structural growth but then also higher capabilities to deliver against our strategy and really, really execute with Brilliance. So that is still working. So that growth remains strong, and we said we want to have that growth mid-single digit, and that is still intact in Q3. So doing strong. And you saw us 2 examples that I called out in the remarks before, but then there's others that are still doing good. So this is working. And as you know, those additional investments that we put behind the growth platforms, those are coming out of our efficiency programs. So they're not coming out of the core sort of core is well funded. And actually, the same brands that are spanning across the growth platforms are also relevant for the core. So if you look at Maggi, for example, Maggi noodles, that is a growth platform, but then Maggi has a large business in the core as well. The core has improved as well, so improved further. When I say there is more work to be done, there's more work to be done to bring the core up to losing speed of the company, but we're going into the RIGht direction. And if you look at the playbook, and I pointed that out when I talked about Milo before the playbook is the same playbook. We focus the investment more. We drive innovation. We drive the RIGht price points, and we just execute brilliantly. And then that will bring the core into the RIGht direction as well. More work to be done, but going into the RIGht direction in terms of growth which is both RIG-led and organic growth or pricing-led as well. So strategy in action, and we're executing this better, and you saw that reflected in the results in Q3. Look, in terms of nutrition, in terms of infant formula. So we see infant formula sequentially improving. We see good improvement in AOA, where we get back to almost precrisis level, driven by higher investments, innovation and just bringing consumers back to the franchise of infant formula. So good progress across AOA and it's more complicated and more difficult and a bit slower in Europe, where we now see a pickup of our Stage 1 formulas which is good news. That means the brand is still intact. But obviously, we have lost the cohort, and we still see some gaps in Stage 2 formulas, which obviously we will have to work through that time and those consumers that we have not picked up during the recall. So a little bit slower in Europe, but really good traction in AOA as this is sequentially improving on infant formula.

And just to comment on some of the numeric bits. So no impairment. So nothing there on nutrition. And on core and growth. So we're maintaining our momentum on the growth platforms versus where we were in H1 with core with a slight improvement.

Yes. And then just quickly, Warren, I misspoke that. The growth platform is up mid-single digit. It's high single digit, just to have that RIGht.

The next questions come from Callum Elliott at Bernstein.

You've spoken quite a bit over the positive quarters about execution across your 4 pillars of the value proposition. We've had quite a few companies across stables talk about this kind of execution, superiority focus through turnarounds over the past 10, 15 years or so. But it strikes me that most of your peers want to track significantly more than just 4 kind of vectors. I think 1 of your big European peers talks, for example, about '23 metrics that they're systematically tracking? So my question is, is good execution at Nestle really as simple as your 4 pillars? Or are you maybe just simplifying this in your communication for our benefits and hope you can maybe bring to life these pillars a little bit for us in terms of how you're using them in practice? And then my follow-up is related. You gave, obviously, Philipp, the example this morning of Milo. I think Anna gave the example at half year about Felix in terms of the execution around these pillars. What I'd like to understand is where are you in the journey of sort of more systematically tracking these vectors across the business as a whole and executing this strategy more broadly?

Yes. Thanks for the question. So look, obviously, this -- when we talk about the 4 uses or the 4 metrics that we look at, it's a simplification. There's obviously much more behind it. But if you look at -- when we talk about taste preference, obviously, there's lots behind that in gaining taste preference while also improving the ingredients we put in our products. So obviously, we do extensive testing across the portfolio, and that is a work that is not a global work. It's done country by country, category by category, our products against competitors' product, and we track that across growth platforms, but also the core. And we just want to make sure that out of 100 consumers that taste any product of Nestle, at least 60 prefer our product versus any competitor product. And that means that then this is an investment case because if we then invest behind those products, consumers will come back for more if the taste obviously delights them. So we track that across the portfolio. extensively. Also when -- or the second pillar when we talk about value, and Anna talked a little bit about this, this obviously has to do with pricing that has to do with the whole value proposition that we bring to consumers. So it includes how does packaging look, what is the brand metric behind it. So how strong is our brand? What is the pricing, what is the elasticity. So there's plenty of metrics behind the value equation that we also track. Also same on distribution when we say we want to have our products everywhere where people shop. Obviously, this includes numerican weighted distribution, but also includes how do we service our customers and how do our products look like on shelf, online and offline. So here again, it's a simplification when you say it's important to be visible and distributed. There is also plenty of metrics behind that we have the data, and we use to actually measure execution. And the same on communication. When we say we want to invest better and stronger and be a reference when it comes to marketing. Also there, we measure extensively our return on investment on media investment but also more and more retailer media investment, and this is also tracked extensively by the teams. So I don't know if we have '23 metrics. The important is that it comes together in stronger execution and we probably have more than '23 metrics there. What's important is that we see share gains coming through, we see volume growth coming through. And this is ultimately to show that, that actually works. And again, and we have mentioned that before, when we have all of those 4 pillars of taste, value, distribution visibility and communication going well, we gain share in the business. And this is true for growth platforms, but also the core and that leads to your second question on Milo. So when I talk about Milo, you see it's the same execution playbook that we have across growth platforms and the core and that done well drives results to the RIGht direction. So we track this. It's automatized and our teams have the metrics and they know exactly what needs to be improved if something needs to be improved.