高露潔 (CL) 2021 Q2 法說會逐字稿

Good day, and welcome to today's Colgate-Palmolive Company's Second Quarter 2021 Earnings Conference Call. This call is being recorded and is being simulcast live at www.colgatepalmolive.com.

Now for opening remarks, I would like to turn the call over to Chief Investor Relations Officer, John Faucher. Please go ahead, John.

Thanks, Katie. Good morning, and welcome to our 2021 second quarter earnings release conference call. This is John Faucher, Chief Investor Relations Officer.

Today's conference call will include forward-looking statements. Actual results could differ materially from these statements. Please refer to the earnings press release and our most recent filings with the SEC, including our 2020 annual report on Form 10-K and subsequent SEC filings, all available on Colgate's website, for a discussion of the factors that could cause actual results to differ materially from these statements.

This conference call will also include a discussion of non-GAAP financial measures, including those identified in Tables 8 and 9 of the earnings press release. A full reconciliation to the corresponding GAAP financial measures is included in the earnings press release and is available on Colgate's website.

Joining me on the call this morning are Noel Wallace, Chairman, President and Chief Executive Officer; and Stan Sutula, Chief Financial Officer. I will provide commentary on our Q2 performance as well as our latest thoughts on 2021 guidance, before turning it over to Noel to provide his thoughts on the current operating environment, and how we will continue to deliver on our growth trajectory. We will then open it up for Q&A. (Operator Instructions)

As we report results at the halfway point of 2021, we remain pleased, but not satisfied, with our performance so far as we navigate through what can charitably be described as a complicated year. For both the second quarter and on a year-to-date basis, we delivered growth in organic sales, net sales, operating profit and net income. This is despite difficult comparisons, as we lap last year's strength in categories like liquid hand soap and dish soap. We are also dealing with the impact of COVID restrictions in several markets, economic and political uncertainty, strong competitive activity and, of course, significantly heightened raw material and logistics headwinds.

We expect that all of these factors will continue to impact our business through the second half of this year. Because of that, we remain focused on delivering impactful innovation, leveraging our revenue growth management capabilities to deliver on pricing and driving productivity up and down the income statement. All of these are crucial to deliver long-term sustainable growth that will help us as we look to deliver TSR at the high end of our peer group.

We delivered 5% organic sales growth in the second quarter, which marked our tenth consecutive quarter delivering organic sales growth, either in or above our targeted range of 3% to 5%. As we have discussed before, the key to delivering against our long-term targets is delivering balanced growth, which we did once again in the quarter by delivering both volume and pricing growth. We delivered growth in both developed markets with 3% organic sales growth in emerging markets, which delivered 7% organic sales growth. We delivered organic sales growth in every division, but North America.

Our largest category, Oral Care, delivered organic sales growth of nearly 10%, with organic sales growth across toothpaste, manual toothbrushes and electric toothbrushes and organic sales growth in every division. Innovation continues to be a vital contributor to our Oral Care business as we benefit from new products across all of our divisions. Products like CO. by Colgate, Colgate electric toothpaste and Colgate enzyme whitening toothpaste are all delivering consumer desired benefits in premiumizing our portfolio.

Pet Nutrition delivered organic sales growth of 15%. Personal Care and Home Care declined on an organic sales basis year-over-year in the quarter as expected, but net sales remain above 2019 levels. Net sales increased 9.5% in the quarter, which was our highest net sales increase in almost 10 years. Foreign exchange was a 4.5% benefit to net sales as we lapped the peak of last year's COVID-driven strength in the dollar.

After strong gross margin performance in 2020 and in Q1, our gross margin declined in the second quarter due to the rapid acceleration of raw material costs across our business and the lapping of lower promotional levels in Q2 2020. We took additional pricing in the second quarter, which will help offset raw material costs in the second half of the year, and we will continue to layer in additional pricing where possible. We expect raw material costs to remain elevated throughout 2021, but we do expect some sequential lessening of inflation as we get into the fourth quarter. Our efforts on premiumization and pricing, along with our focus on productivity, like our Funding the Growth initiative, will also help us as we look to improve our gross margin performance.

In the second quarter, our gross profit margin was 60.0%, which was down 80 basis points year-over-year on both a GAAP basis and a Base Business basis. Year-to-date, our gross margin is 60.4%, down 10 basis points. Again, that is on a GAAP and Base Business basis.

For the second quarter, pricing was 90 basis points favorable to gross margin, less than in the first quarter as we lap lower promotional spending in the year ago period when many of our markets reacted to COVID restrictions by pulling back on promotional activity. Raw materials were a 370 basis point headwind as we continue to see significant pressure from resins, fats and oils and agriculture-related costs and many other materials. This includes a slightly favorable transactional impact from foreign exchange.

Productivity was a 200 basis point benefit. Our SG&A was up 100 basis points as a percent of sales for the second quarter on both a GAAP and Base Business basis. This was primarily driven by an increase in logistics costs and also by a 30 basis point increase in advertising to sales. Excluding advertising and logistics, our SG&A ratio declined year-over-year as our net sales growth and savings programs drove leverage on our overheads.

For the second quarter, on a GAAP basis, our operating profit was up 5.5% year-over-year, while it was up 2.5% on a Base Business basis. Our EPS was up 12% on a GAAP basis and up 8% on a Base Business basis. Our free cash flow was down year-over-year in the quarter as we continued to lap very strong working capital performance in the year ago period. As we discussed previously, our capital expenditures are also up year-over-year as we invest behind growth, productivity and our sustainability strategy.

A few comments on divisional performance. North America net sales declined 4% in the second quarter, with organic sales down 4.5% and a modest benefit from foreign exchange. Volumes were down 8.5% in the quarter, driven by Home Care and Personal Care, which saw strong growth in the year ago period driven by COVID-related demand. Pricing across Home Care and Personal Care was positive as we work to offset higher raw material costs. Oral Care organic sales grew mid-single digits, driven by innovation and pricing. I mentioned CO. by Colgate before, which is helping us further expand into the beauty and direct-to-consumer channels.

We are pleased with the initial performance of the Colgate teeth manual toothbrush. It comes with an aluminum handle. And by using our replaceable heads, consumer can use 80% less plastic compared to similarly-sized Colgate toothbrushes. We're also excited about our Tom's of Maine relaunch, which is bringing new graphics and advertising to a historic natural segment brand.

Our logistics issues that we discussed on the first quarter call continued to negatively impact our promotional timing, but service levels have improved and we expect our promotional cadence will normalize as we go through the third quarter.

Latin America net sales were up 12.5%, with 8.5% organic sales growth and a 400 basis point benefit from foreign exchange. All 3 categories delivered organic sales growth in the quarter, with Oral Care organic sales growth in the high teens. Brazil and Mexico both grew organic and net sales double digits in the quarter. Our strong innovation performance was led by core innovation behind Colgate Total Reinforced Gums in Mexico, which apparently sounds much better in Spanish and Portuguese than English and several charcoal variants in Brazil.

Volume was plus 2.5% in the quarter, despite a sizable negative impact due to political unrest in Colombia, our third largest market in Latin America. We believe this disruption, which negatively impacted our distribution network for some time, is largely behind us, but political disruption will remain a risk, not just in Colombia, but in several markets.

Pricing was up 6% despite lapping lower promotional spending in Q2 2020 as well as some incremental pricing in the year ago period as we look to offset foreign exchange. Europe net sales grew 15% in the quarter. Organic sales grew 5%, driven by mid-teens growth in Oral Care, offset by declines in Personal and Home Care as we lapped COVID-related demand in the year ago period. Volume grew 7% in the quarter, offset by a 2% decline in pricing as we lapped lower promotions in the year ago period as store traffic declined in Q2 2020 due to COVID restrictions.

I mentioned Colgate electric toothpaste before, and we're very excited about this truly differentiated product. We designed it with more of a beauty aesthetic, including skincare-inspired ingredients, a unique clear recyclable bottle and LiquiGlide technology that allows the paste to leave the bottle, leaving no messy tube or cap. This product began rolling out across the division in Q2, with further launches this quarter.

We delivered 7.5% net sales and 1% organic sales growth in Asia Pacific this quarter with organic growth in Oral Care partially offset by a decline in Home Care. Volume growth of 3.5% was partly offset by negative pricing as we cycled lower promotional levels than a year ago period, given COVID-related lockdowns across the region, with the biggest impact coming on our South Pacific business. We have additional pricing planned in the second half across the division to offset raw material cost inflation.

Volume growth was led by India, despite the impact of COVID-related disruption in May in Thailand, driven by naturals innovation in the Colgate Vedshakti and Colgate Panjaved lines as we lap COVID-related disruptions in the year ago period. Our volume in China declined on growth on the Colgate business, which was more than offset by weakness in sales for our Hawley & Hazel joint venture, which is primarily related to inventory reductions in our distributor network.

Africa/Eurasia continued its strong performance trend in the third quarter with net sales growth of 15.5%, as we delivered strong organic sales growth throughout the division once again. Volume grew 9.5% in the quarter, while pricing was up 3.5%. Foreign exchange was a 2.5% benefit in the quarter. Oral Care delivered high teens organic sales growth, and we are relaunching several of our naturals businesses with new packaging and flavors.

Hill's strong growth continued in the second quarter, with 18% net sales growth and 15% organic sales growth. Both developed and emerging markets delivered 10% volume growth as our increased investment around the globe is driving this highly differentiated brand. In particular, we are seeing good results from our Hill's master brand campaign to end pet obesity as well as our new campaign for Hill's pet essentials, our vet distributed wellness product in Europe.

And now for guidance. We still expect organic sales growth to be within our 3% to 5% long-term target range. There is no meaningful change in our category expectations at this point. The categories that benefited from COVID-related demand are behaving in line with our expectations with sales below 2020 levels, but ahead of 2019 levels. Please note that given widespread COVID outbreaks in many of our markets, we could still see an impact from government actions to stem the spread of COVID and other disruptions related to COVID, and this is not in our guidance.

Using current spot rates, we expect foreign exchange to be a low single-digit benefit for the year, although slightly less favorable than when we gave guidance in April. All in, we still expect net sales to be up 4% to 7%.

We have reduced our gross margin guidance for the year, and we now expect gross margin to be down year-over-year for the full year on both a GAAP and Base Business basis, given the additional cost inflation we have seen. We expect the gross margin percentage to improve sequentially in the second half, which would leave us down modestly for the year.

As I mentioned above, we are taking many steps to mitigate the impact of these costs, including additional pricing, optimizing trade spending, accelerating FTG were available and many others. Advertising is still expected to be up on both the dollar and a percent of sales basis. Logistics will continue to be a headwind as costs also have risen faster than anticipated, particularly in the U.S. We still expect these costs to moderate somewhat as we go through the balance of the year. Our tax rate is now expected to be between 23% and 24% for the year on both a GAAP and Base Business basis.

On a GAAP basis, we still expect earnings per share growth in the low to mid-single digits, but most likely towards the lower end of that range. On a Base Business basis, we continue to expect earnings per share growth in the mid- to high single digits. Again, we would expect to land at the lower end of that range.

And with that, I'll turn it over to Noel.

Thanks, John, and good morning, everyone. I hope you're all safe and well this morning. So the overriding message I want to leave with you today is that our strategy to reaccelerate profitable growth by focusing on our core adjacencies all over the world, new channels and markets is really working. As we like to say, nothing moves in a straight line, but we now have 10 straight quarters of organic sales growth at or above our long-term target range.

Year-to-date, we're at the high end of the range despite difficult comparisons and continued volatility in the business. We're making good progress on our journey, but we still have more work to do.

And as I look back at my comments to you over the past 18 months that we've been dealing with the implications of COVID, the one consistent theme that we keep coming back to, managing through this crisis with an eye on the future. This is still the appropriate theme, although obviously, some of the elements have changed. The prevalence of the vaccine in many developed markets gives us a sense of guarded optimism, but we've highlighted that many emerging markets, which represent almost half of our revenues, the availability of the vaccine remains very low, case rates are high and governments continue to put in restrictions to help stop the spread of the virus. We remain hopeful that we will get to a post-COVID sooner rather than later, but we're not there yet.

We will continue to manage to the retail and supply chain disruptions, changes in consumer behavior and government actions to stem the spread of the virus, all while doing our best to protect the health and safety of our employees, which remains our #1 priority.

But there are changing headwinds as well. Last year, we were faced with adverse foreign exchange movements, heightened consumer and customer demand, supply chain volatility and uncertainty for our customers about changing business models and retail environments. This year, we're faced with unprecedented cost increases for raw materials like resin, fats and oils and many others. Logistic networks are taxed, whether it's the trucking and warehousing here in the U.S. or ocean freight coming from Asia to the rest of the world. And we're seeing some political disruption in markets like Colombia and Myanmar.

So 18 months into the COVID, many of the challenges are the same. Some have changed, but our approach remains. We will manage through the crisis with an eye on the future. And so far, we feel we've done a pretty good job, but we know the markets look forward at our potential, not backwards at our achievements. We know that to deliver top-tier TSR, we need to balance organic sales growth, both volume and pricing, all 4 of our categories and across all of our divisions. We've talked to you a lot about our changes and strategy that will enable us to continue delivering this balanced growth.

First is our focus on breakthrough and transformational innovation. John discussed many of these in his commentary, and this improved innovation is a direct result of the changes that Pat and I discussed during our CAGNY presentation. Our emphasis on faster-growing channels and markets continues to pay off through growth in e-commerce, direct-to-consumer, discounters, club stores and pharmacies. We're taking formerly regional brands like Tom's of Maine, Hello, elmex and meridol and launching them in select markets and channels to take the advantage of their strong brand equities and ongoing consumer trends. We're supporting these efforts with increased focus on our digital media and emerging data and analytical capabilities.

But we have to deliver gross margin expansion to fund our brand investment. While we know -- while we now expect gross margin to be down modestly for 2021, it comes on the heels of strong gross margin expansion in 2020 and in the face of unprecedented increases in raw material prices. We will continue to leverage our robust revenue growth management program and drive productivity so we can return to gross margin expansion. We have made progress in our journey to improve our mix, but we have further upside potential on this given the benefits we provide to consumers and the fact that our brands under index in pricing relative to the category across many geographies.

We're working to accelerate our productivity programs like Funding the Growth wherever possible to try and create additional offsets. All this should help us in our drive to return to gross margin expansion. And while the raw material inflation is obviously negatively impacting our gross margin performance this year, we're optimistic that this raw material inflation could drive an improvement in emerging market fundamentals. Again, we need to first get through the difficulties surrounding COVID. But on the back of our continued rebound in emerging market organic sales growth, particularly in Latin America, we have some optimism that we could see some additional GDP growth and, therefore, higher category growth on the back end of this movement in commodities. We have seen some of the emerging market currency stabilized for the first time in what seems like several years and are optimistic this may be a first step.

And since our last call, we have released our 2025 sustainability strategy. This comprehensive plan highlights the actions we're taking around climate, plastics, sourcing, diversity, equity and inclusion and all other areas that are vital to the future, not only of our company but our communities and our planet.

And with that, I'll open it up to your questions.

(Operator Instructions) We'll take our first question from Peter Grom with UBS.

So I just wanted to ask around Latin America in the quarter. I know it's not all the same category and country exposure, but the readthrough from a lot of other companies that have reported thus far was that the region was really strong, like most seeing better performance sequentially. So I know you mentioned Colombia.

So is there any way to quantify how much of a headwind you think the disruptions there caused in the quarter? And then maybe just more broadly, can you provide an update on your performance versus the category in the region? And how you're thinking about growth in the back half of the year, just kind of on the heels of your positive GDP commentary there, Noel?

Sure. Thanks, Peter. Overall, we're really, really happy with Latin America. You mentioned that, obviously, we saw significant headwinds from the Colombia disruption, which, in many respects, took almost a month of sales out of that specific country. And despite that, we obviously still delivered very strong top line growth.

If you look at our 2 key markets, Mexico and Brazil, both delivering double-digit growth in the quarter, you've seen now Brazil delivered 4 consecutive quarters of double-digit growth. So obviously, the market seems to be returning despite the fact that we're definitely not out of the woods relative to COVID. But we think as vaccinations improve, particularly in those markets, that will continue to help categories.

Categories are up on the year, which is good, despite the fact that we still see limited mobility. We still see some disruptions in particularly the down trade around how retail environments are behaving. But overall, the categories are up, which is good. We had strong innovation in the quarter. We had some good innovation on our core business, Colgate Total, which John mentioned, which is driving good share growth. We've resisted a little bit of the transactional couponing and deep discounting in some of those markets. So overall, we've lost a little bit of promotional share, but our baseline shares look good. And the innovation process -- plans we have in place for the back half are strong as well.

Likewise, on pricing, we've always been a strong driver of pricing in those markets. We continue to, obviously, see a lot of headwinds on commodity prices, particularly on towel prices coming out of Brazil. And we're ramping up for obviously a strong back half relative to how we see pricing evolving and obviously continuing to drive the volume in the quarter.

So overall, I think we're pleased, despite the fact that Colombia was a significant headwind to the quarter. Bear in mind, if you look at the overall Latin America, that region continues to perform exceptionally well on balance, 10-6 in the fourth quarter, 9-5 in the first and 8.5 now. So again, I think despite the headwinds, good consistent growth.

We'll take our next question from Rob Ottenstein with Evercore.

Noel, I'm wondering if you could go around the world and talk a little bit about your actual pricing power. I think we all understand less promos and that was an effect on the reported pricing in Europe and Asia. Obviously, there's mix effects. But if we kind of clear through all that, can you talk about actual headline pricing that you got in the quarter or that you expect to get later in the year? And to what extent you're able to do that given disposable income in the various markets and competitive activity?

Sure, Rob. Thank you. So let me start macro. Obviously, if you look at developing markets versus developed, developing have obviously moved pricing a little faster than the developed world. And when I say developed, I'm referring to Europe and the U.S. We've seen good pricing movements in Latin America, good pricing movements in Africa, and we've seen the competition, likewise, in those regions follow.

Similarly, in Asia, John mentioned in the upfront comments that we took some pricing, obviously, in the first quarter. We were lapping promotions from the second quarter last year, although we have pricing planned quite aggressively in the back half across the Asia region.

If you take the developed world, U.S. has been a little slow in terms of the market. I think everyone is focusing on promotions and couponings to drive pricing. We haven't seen a lot of list price changes in North America yet. And I would say that particularly holds true for Europe as well.

Our strategy continues to be, as we've outlined, very disciplined approach to revenue growth management. We're taking list pricing where we see the opportunity. We're optimizing our promotional spend. We're looking at price pack architecture. We're looking at all the levers within -- in revenue growth managers to drive pricing overall.

The other point is, as you've heard, we're very focused on premium innovation. We continue to under-indexes I've mentioned, and that's a real opportunity for us to drive overall gross margin percent in dollars as we look at the back half of the year.

So I think the headline is pricing is going to have to come up in the back half. Everyone is faced with the same challenges. And we anticipate that as we move into the back half, we'll see a little bit better environment around developed markets and continue to focus on our revenue growth management discipline across the world to do that with.

We'll take our next question from Kaumil Gajrawala with Crédit Suisse.

A couple of questions on local competition. It wasn't really that long ago, we were talking about market share gains from local competition in a very -- in a variety of your kind of major markets. Can you maybe talk about how that's evolved through the pandemic? What position we're in -- you're in now, particularly maybe as it relates to pricing couponing, promo right at a time where it's necessary to push some pricing through the market because of inflation?

Sure. Kaumil, thanks for the question. We talked about, I think, throughout 2020 and perhaps touch on it a bit in the first quarter, the strength of our brands and the efficacy of our brands has certainly brought consumers back into the mainstream, so to speak. I mean a lot of the local brands, relative to the credibility they had in the market, which was questionable, we saw consumers returning to big brands and certainly trusted brands in the market. And that was very prevalent in market -- in categories like Personal Care, like Home Care, like Pet Nutrition as well as Oral Care, quite frankly. And so that certainly has benefited us in terms of how we've seen the categories evolve.

And I think that will continue, particularly given the overarching issues around COVID around the world, consumers are still looking for big, trusted, efficacious brands, and we expect that to continue as we move through the balance of the year.

Kaumil, it's John. If I could add something to that. What I would say is, if you look at the success of the local brands over the last 5 or 6 years, it's been a lot on differentiated benefits, Naturals, the way Naturals is expressed in a number of different markets, different type of packaging, different media strategies and mostly at premium prices.

So I think as you look at our innovation strategy that Noel talked about and you look at the type of innovation we're putting out, whether it's Elixir in Europe or whether it's the Naturals relaunch in Africa/Eurasia, we have the ability to compete more effectively with some of these local brands, and we can drive that premiumization at the same time.

We'll take our next question from Andrea Teixeira with JPMorgan.

It's actually Kojo Achiampong on for Andrea. So just at a high level, can you maybe talk a little bit more about some of the specific actions that you plan to take to help reverse some of those share losses, particularly in the U.S. really in the core toothpaste and distribution categories?

Sure. Obviously, the North America performance was below our expectations. We had a lot of factors driving that. Obviously, the impact of logistics challenges that we alluded to in the first quarter, we continue to have some case fill issues in the second quarter, which obviously had an impact on our promotional ability to put promotions in the market and obviously, therefore, share. We're working those behind us. And as we move into the back half, those will be ideally gone. So we expect some of that to come back.

We pushed a lot of the premiumization. That market has become highly competitive. We saw increased activity in promotion and couponing in the second quarter. We have adjusted our plans for the back half of the year, and our guidance reflects those plans for North America.

In -- likewise, in the dish business, we saw similar promotional activity. We've adjusted our promotional plans for the back half. So by and large, we saw obviously some logistics challenge, some competitive activity. Obviously, some of the comparisons that we had last year dealing with elevated categories kind of obviously softening the dish liquid and the liquid hand soap category in the second quarter, but we anticipate as we move through the back half, things will settle down and we have strong innovation and promotion plans to rebuild the North America shares.

We'll take our next question from Chris Carey with Wells Fargo Securities.

I had a question specifically on China. I'm conscious the margins were better in APAC than the rest of the world, but also on a pullback in marketing spending with China declining, can you just provide any additional perspective on what you're seeing in that market? And maybe by category and the rationale behind the marketing? And how you see that going forward?

Sure. So as John alluded to in his comments, we did see some weakness in the China business from our Hawley & Hazel partner. That was specifically driven by -- that's a business that's heavily driven downtrade. We have very strong distribution in CDE cities. And as we've seen e-commerce continue to grow, our distributor network has been cautious on managing inventories as we've seen the brick-and-mortar categories fundamentally flat, not growing so far in the first half of the year.

As e-commerce will potentially continue to accelerate and those inventories get drawn down, we expect that will sort its way through in the back half of the year. Importantly, I think we're seeing terrific growth on our e-commerce business, as we've talked about over the last couple of quarters. In fact, our Colgate franchise and our Darlie franchise were 2 of the 3 fastest-growing brands in e-commerce retail environment in the quarter and obviously up significantly versus where we were in the first quarter from a share standpoint, which is really nice to see. That's driven behind a lot of good premium innovation that we've had in the quarter.

The Miracle Repair continues to do well. We've launched a series of premium enzyme toothpaste as well. So that continues to perform well. And the advertising is there in the back half to continue to grow that business as we go out the year. So we're comfortable with where we are from an advertising standpoint. Obviously, the comps versus a quarter last year where we had drawn down a bit of our advertising, we saw a little bit of elevation in Asia in the second quarter, but good plans in the back half to continue to drive share.

We'll take our next question from Mark Astrachan with Stifel.

This is actually Chris Armes on for Mark. Just wanted to talk a little bit about Hill's growth, obviously, very good. Maybe on the growth, if you could parse out how much is share gains versus just elevated category growth? Can you kind of talk also about growth by geography and then also the growth from kind of new -- from expansion to new markets versus existing markets?

Sure, Chris. Yes, overall, listen, Hill's had another fantastic quarter, a 15% comping. Obviously, a really strong quarter last year, where we did double-digit growth as well. So we're hitting on all cylinders on that business.

Growth is across the world. We had all of our regions up, with exception of Japan. Market share is up across the board, typically where we're gaining market shares, namely in the U.S., which is our largest market, as you know. We saw good share growth across most retail environments, both on the Base Business, the Science Diet's businesses as well as the Prescription Diet business. That's behind a continued focus on the strategy, which is the core renovation, premium innovation, new channels, in this case, continue to grow online as well as farm and feed and obviously continuing to see an increase in the Prescription Diet business, which has more and more pet owners returned to their vets, we see the benefit of that coming through as well.

So across the board, very strong growth. And we continue to obviously invest for growth in that business, and that continues to be the strategy moving into the back half of this year.

That will conclude our question-and-answer session. At this time, I would like to turn the call back over to our speakers for any additional or closing remarks.

Noel, thank you. Obviously, an extremely volatile quarter. But again, I think we're continuing to execute our strategy, as we've talked about for the last couple of years. Some real opportunities ahead and some challenges that we'll face as we have in the past.

And so I simply want to extend my thanks to all the Colgate people listening for their incredible resilience during these difficult times and look forward to a good back half of the company. Thank you.

That will conclude today's call. We appreciate your participation.