Procter & Gamble Company (PG) — Q4 2021 Earnings Call Transcript

Good morning everyone and thank you for joining us. Last evening, we announced that I will retire as CEO on November 1 and John Moeller was elected as the incoming CEO. I will remain as Executive Chair of the Board. We also announced that Shailesh Jejurikar has been elected Chief Operating Officer effective October 1, 2021, transitioning behind John Moeller. These moves have been thoughtfully planned and provide P&G with highly capable and experienced leadership going forward. I truly have full confidence and strongly support these changes. John, well, he has a distinguished track record throughout his 33-year career with P&G, including more than 12 years as CFO. More recently, John added responsibilities as Vice Chairman and then Chief Operating Officer with P&L responsibility and ownership for our enterprise markets. In my nearly six years as CEO, I've had the benefit of partnering with John and an outstanding global leadership team to integrate a comprehensive set of strategies to guide our choices and priorities. Now to go back, in 2012, John led the initial work to make productivity an integral part of P&G’s business. Our team doubled down on this strategy when we announced our second five-year $10 billion cost savings program in 2017. Today, productivity is built into our operating model and is an ongoing part of our strategy in every part of our business. We worked together for several years to focus the company's portfolio on faster growing, more profitable daily use categories, where products solve problems and performance drives consumer brand choice. The team largely completed this work with the divestiture of several fashion driven beauty categories in 2016. This strategy continues to guide our disciplined approach to managing our category and brand portfolio. At the CAGNY Conference in 2016, we first discussed the tests we were doing on a new approach to our organization design. We refined and formalized the plans and announced the new focus market and enterprise market design at our November 2018 Analyst Day. Our objective was to create a more engaged, agile and accountable organization, which is exactly what we've done. In April 2017, we first discussed our work to set a much higher bar for measuring the success of our innovation and execution across products, packaging, brand communication, retail execution and value. If there were any doubts about the importance of consistently delivering irresistible superiority, our results over the last few years should have put those to bed. And finally, in 2018, we first talked about the need to lead constructive disruption in our highly dynamic and competitive industry. We continue to drive disruption in innovation, brand building, digitization, supply chain transformation, and with our citizenship and ESG efforts. Over several years through many challenges, our organization responded brilliantly as we integrated each element of the strategy, building momentum that is evident in our results in the past three fiscal years. The team fully embraced the idea that we must be willing to change anything and everything needed to win. The only things we will not change are our purpose, values, and principles in our commitment to winning. This has been especially evident during the continuing COVID crisis where the organization has demonstrated remarkable agility to meet the needs of consumers while ensuring the safety of our employees in supporting communities around the world to deal with the impacts of this crisis. Through all of it, delivering results should delight owners and do it in a way that makes us proud to be P&G employees. Put simply, our strategies are working, our team is outstanding and I could not be more confident in the next generation of leadership that will take the reins of P&G later this year. Now let's turn it over to Andre Schulten, Chief Financial Officer, to lead us through the fiscal year 2021 fourth quarter and year-end earnings announcement.

Thank you, David. Good morning, everyone. Joining David and me on the call today are Jon Moeller, Vice Chairman and Chief Operating Officer; and John Chevalier, Senior Vice President, Investor Relations. I'll start with an overview of company results for fiscal 2021 and fourth quarter and David will add perspective on our immediate priorities and strategic focus areas. We'll close with guidance for fiscal 2022 and then take your questions. Fiscal 2021 was another very strong year. Our focus on superiority and strong investment in the business, funded with strong productivity improvements and cost savings drove market growth, and it turns strong sales share earnings and cash results leading to balanced growth and value creation. Organic sales for the fiscal year grew more than 6%, up more than 12% on a two-year stack. Growth was broad-based across business units with each of our 10 product categories growing or holding organic sales. Home Care was up high teens, Oral Care was up double digits, Skin and Personal Care was up high single digits, Grooming, Fabric Care, Feminine Care, Hair Care, and Personal Health Care organic sales were each up mid-single digits, Family Care grew low singles, Baby Care was in line with prior year. We delivered strong results in our two largest and most profitable markets, annualizing strong base periods. Organic sales were up 8% in the U.S. and 12% in greater China for the fiscal year. Focus markets grew 7% for the year. Enterprise markets were up 5% despite significant market growth impacts from the pandemic. E-commerce sales were up 35% for the year, representing over $10 billion in sales and 14% of company total. Global aggregate market share increased 50 basis points, with 33 of our top 50 category country combinations holding or growing share for the fiscal year. All outlet value share in the U.S. improved through the year, growing from 33% over the past 12 months, to 33.5% for the past six months, to 34% over the past quarter. One of the highest absolute value shares in the last 20 years. Consumers are increasingly choosing P&G brands. We translated the strong top-line growth into strong earnings and cash results. Core earnings per share grew 11% for the year. Currency-neutral core EPS was also up 11%. Within this core, gross margin expanded 20 basis points, up 60 basis points excluding currency impacts. Core operating margin grew 80 basis points, up 130 points, excluding currency impacts. Productivity improvements helped operating margin by 250 basis points, enabling strong reinvestment in marketing programs. Advertising was 10.8% of sales, an increase of more than 40 basis points. Adjusted free cash flow productivity was 107%. We increased our dividend by 10% and returned $19 billion of value to shareholders, $8 billion in dividends and $11 billion in share repurchase. Moving on to the April to June quarter, organic sales grew 4%, with volume, pricing, and mix each contributing more than one point to top-line growth. Growth rates by market reflected the volatility in shipments and the base period. Organic sales were down 1% in the U.S. However, this is still 18% growth on a two-year stack. Recall that in the April to June quarter last year, organic sales were up 19% in the U.S., 13 points above track channel sales as we worked to restock depleted trade inventories. Organic sales in greater China were up 5%, also comping a strong base period, on a two-year stack. Greater China was up 19%. Focus markets were up 2%, and enterprise markets were up 14% in the quarter. Strong market share trends with aggregate global value share up 70 basis points. All the share in the U.S. increased 260 basis points for the quarter to 34.1%. On the bottom line, core earnings per share were $1.13, down 3% versus prior year, and down 4% on a currency-neutral basis, mainly due to gross margin pressure from higher input costs, as we had anticipated. Core gross margin decreased 260 basis points, with currency-neutral core gross margin also down 260 points. This includes a 220 basis point impact from higher commodity and freight costs, nearly $400 million in just this quarter. We also saw a sharp headwind from the mix of 210 basis points, mainly geographic mix impacts. Recall that in our fourth quarter last year, the U.S. and China accounted for more than 100% of organic sales growth. In this year’s fourth quarter, enterprise markets led the growth. Core operating margin decreased 230 basis points, while currency-neutral core operating margin declined 210 basis points. Productivity improvements helped the quarter by 320 basis points. Adjusted free cash flow in the quarter was 117%. In summary, we exceeded each of our growth targets for the year: organic sales growth, core EPS growth, free cash productivity, and cash returned to shareholders. Our team has operated with excellent discipline in a challenging and volatile environment. And with that, I'll pass it back to David.

Thanks, Andre. As I said at the outset, our team has done some outstanding work over the last 18 months to manage through the challenges of the COVID crisis and make our business even stronger in the process. In our April earnings call last year, we said we would step forward into the challenge of COVID, not back. We said we would double down to serve consumers, and that's exactly what our team has done. As we continue to manage the crisis, we will remain focused on the three priorities that have been guiding our near-term actions and choices. First, ensuring the health and safety of our P&G colleagues around the world. Second, maximizing the availability of our products to help people and their families with their cleaning, health, and hygiene needs. And third, supporting the communities, relief agencies, and people who are on the frontlines of this global pandemic. The strategic choices that I outlined earlier are the foundation for balanced top and bottom-line growth and long-term value creation. Our portfolio of daily use products, many providing cleaning health and hygiene benefits, in categories where performance plays a significant role in brand choice. In these performance-driven categories, we've raised the bar on all aspects of superiority: product, package, brand communication, retail execution, and value. Superior offerings delivered with superior execution drive market growth. I'd like to share just a few examples. First, in our Oral Care business, superior offerings are driving market growth across forms. Last summer, we launched Oral-B iO power brush, which offers an irresistible consumer brushing experience. The value of this superior performance is evident to the consumers, even with the premium price. P&G’s global value share in the brush segment is up more than 2.5 points over the past year, and the U.S. power brush category is up nearly 14 points since the innovation launched, with iO contributing more than half of the category growth. We recently launched the next breakthrough in teeth whitening, Crest Whitening Emulsions, which create a micro-thin layer of concentrated peroxide droplets, enabling consumers to move beyond occasion-based whitening to a product that can be used up to four times per day, with no rinsing or brushing needed. This innovation is a leading contributor to our more than 20% organic sales growth of our tooth whitening business in fiscal 2021. It’s driving two-thirds of the U.S. whitening category growth. In Personal Health Care, NyQuil and DayQuil Honey launched last summer, offering a great-tasting formula while also delivering powerful relief. NyQuil Honey is the number one new item in the U.S. respiratory market, and our Vicks share is up 90 basis points over the past 12 months despite the soft market due to the very weak cough-cold season. When consumers are shopping in the category, they’re increasingly choosing Vicks. For some consumers, the environmental aspects of our product offerings are taking on increased importance in their assessment of superiority. We are offering superior performing products that are more sustainable and educating consumers on the benefits of those products with superior brand communication. I’ll switch to Fabric Care. Here, Tide and Ariel are innovating to extend their superior cleaning performance advantages, while encouraging consumers to reduce their carbon footprint. Ariel’s new campaign, “Every Degree Makes a Difference,” advocates lower washing temperatures. Up to 60% of laundry’s carbon footprint comes from heating the water in the washing machine, and lowering the wash temperature is the single most important thing we can do to reduce the environmental impact of laundry. To achieve our goals, we continue to innovate to ensure superior fabric cleaning performance in cold water and we utilize superior communication to educate the consumer on the benefits. This innovation has helped contribute to global Fabric Care’s 120 basis points of value share growth over the past 12 months. In our European Shave Care business, we’re driving superiority across all five vectors and improving sustainability along the way. We’re moving to plastic-free packaging on our razor systems, simplifying our lineup, improving on-shelf fundamentals, and improving margin for our retail partners. This innovation contributed to mid-single-digit organic sales growth in our European Grooming business in fiscal 2021, with market share up one point; good business results and good for the environment. This packaging innovation will save the equivalent of 85 million water bottles per year when it’s fully launched around the world. More importantly, and one example is the common theme of superior innovation and execution that drives market growth. Leading category growth builds business for our retail partners and mathematically builds market share for P&G. We’ve made investments to strengthen the long-term health and competitiveness of our brands, and we’ll continue to invest to extend our margin of advantage and quality of execution, improving options for consumers around the world. The strategic need for investment to contribute to strengthening the long-term health and competitiveness of our brands, the short-term need to manage through the crisis, and the ongoing need to drive balanced top and bottom-line growth, including margin expansion underscore the importance of ongoing productivity. We’re driving cost savings and cash productivity in all facets of our business. In cost of goods, we’re delivering flexible formulations that can allow us to change between ingredients to lower cost or create supply chain flexibility, while ensuring no impact on consumer preference for our brands. We’re optimizing plastic bottle designs to reduce the amount of plastics we use while also lowering costs. We’re improving the efficiency and effectiveness of our advertising investments, bringing some media planning work in-house to achieve greater cost efficiency, while also enabling us to place ads with greater precision based on more granular analytics to reduce waste and increase effectiveness. No area of cost is left untouched. We’ve given more authority and accountability to the business units to decide how to balance the need for more resources in some areas of the business with the opportunities for savings in other areas. They need to make the choices that are best for their business as they work to deliver balanced top and bottom-line growth. Our success in our highly competitive industry also requires agility that comes with the mindset of constructive disruption; a willingness to change, adapt, and create new trends and technologies that will shape our industry for the future. In the current environment, that agility and constructive disruption mindset are even more important. Our organizational structure yields a more empowered, agile, and accountable organization, with little overlap or redundancy, flowing to meet new demands and seamlessly supporting each other to deliver against our priorities around the world. These strategic choices on portfolio, superiority, productivity, constructive disruption, and organizational structure and culture are not independent strategies. They reinforce and build on each other. When executed well, they grow markets, which in turn grows share, sales, and profit. These strategies were delivering strong results before the crisis, have served us well during the crisis, and they will serve us well on the other end of this crisis. We’re confident they remain the right strategic choices as we move through and beyond the pandemic. We delivered strong results in fiscal 2021 in a very challenging environment. While we’re pleased with these results and the overall strength of our business, the external environment continues to be volatile and difficult to predict, and our eyes are wide open to the many challenges we face. We compete in product categories against highly-capable multinational and local competitors. Raw material and transport freight costs have risen sharply. Increased social unrest and economic distress in many parts of the world are putting pressure on local GDP growth, and the pandemic continues to create risk for consumers, retail partners, and supply chains. With these challenges, there are also opportunities as we emerge from the pandemic. The relevance of our categories in consumers’ lives likely remains elevated. We will serve what will likely become a forever-altered cleaning, health, and hygiene focus for consumers who use our products daily or multiple times each day. There may be a continued increased focus on home; more time at home, more meals at home with related consumption impacts. The importance of noticeably superior performance potentially grows. There is potential for increased preference for established reputable brands that solve newly-framed problems better than alternatives; potentially less experimentation; potential for a lasting shift to e-commerce, both e-tailers and omnichannel. Our experience to date makes us believe we are generally well-positioned in this environment. We’re discovering lower cost ways of working with fewer resources; today’s necessity giving rise to the productivity inventions of tomorrow. New digital tools are being brought to the forefront, providing another productivity driver on the factory floor, in our labs, and in our office environment. Our business exhibited strong momentum well before the crisis. We strengthened our position further during the crisis, and we believe P&G is well-positioned to serve the heightened needs and new behaviors of consumers and our retail and distributor partners post-crisis. We have the right strategies, we have the right portfolio, we have the right organizational structure. We have a team of 100,000 employees focused on executing to delight consumers, win with customers, and deliver balanced growth and value creation. With that, I’ll hand it back to Andre to outline our guidance for fiscal 2022.

As David said, we will undoubtedly experience more volatility as we move through the crisis. Our quarterly results will be heavily influenced by top-line volatility embedded in base period results, along with the realities of current year cost pressures and continued effects of the global pandemic. Input costs have risen sharply. Current spot prices for materials such as resins, chemicals, and other ingredients are up anywhere from 30% to 200% versus April 2020. Most of the material cost increases occurred in this calendar year and will disproportionately affect the first half of fiscal 2022. Based on current spot prices, we estimate a $1.8 billion after-tax commodity cost headwind in fiscal 2022. Freight costs have also increased substantially due to several factors affecting the supply of drivers and the demand for drivers, and truck and diesel fuel prices are up 35% so far in the calendar. We currently expect freight and transportation costs to be an incremental $100 million after-tax headwind in fiscal 2022. We will offset a portion of these higher costs with price increases, but there is a lag between the time when costs begin to rise and when pricing is implemented to provide an offset. As discussed last quarter, our Baby Care, Feminine Care, and Adult Incontinence businesses have announced increases in the U.S. that will go into effect in mid-September. Earlier this year, we executed a significant product upgrade on our Japan liquid Ariel detergent, coupled with a 35% price increase. In U.S. Fabric Care, we recently announced that this price increase on Tide Simply, Cheer, and Era liquid detergents will take effect in September. In U.S. Home Care, we’ve announced double-digit price increases across all product forms of the Swiffer brand, effective mid-September. We have announced price increases in many Central Eastern European markets to offset a portion of recent currency impacts. In Latin America, we’ve taken a cumulative high-single-digit price increase across our business over the past 12 months. We are analyzing input costs and foreign exchange rate impacts on other categories and markets, and we are assessing the need for additional pricing moves. When opportunities allow, we will couple price increases with new product innovations, adding value for consumers along the way. We believe this is a temporary bottom-line rough patch to grow through, not a reason to reduce investment in the business and not a reason to redesign a strategy that has been working well before and during the COVID crisis. Our guidance ranges for fiscal 2022 incorporate these dynamics. We expect organic sales growth in the range of 2% to 4%. The high end of this range assumes global markets continue growing at about 3% or so and P&G continues to grow at or above market levels. The low end of this range assumes deterioration in global markets to 2% or lower with P&G growth at or above underlying markets. This range also reflects the strong organic sales growth, more than 8%, that we delivered in the first half of fiscal 2021. Given this base period dynamic, we expect organic sales growth to be stronger in the back half of fiscal 2022 versus the front half. On the bottom line, we expect core earnings per share growth in the range of 3% to 6%. This outlook includes headwinds of approximately $1.9 billion after-tax from commodity cost and freight, as I mentioned earlier, with a modest offset, overall, of $100 million after-tax from foreign exchange rate benefits. The combined impact of materials, freight, and FX is approximately a $0.70 per share headwind to EPS or a 12% point headwind to EPS growth in fiscal 2022. Considering the costs challenge is weighted heavily towards the front half of the year, our earnings growth is expected to be much stronger in the back half of fiscal 2022. We are targeting adjusted free cash flow productivity of 90% starting the year. We expect to pay over $8 billion in dividends and to repurchase between $7 billion and $9 billion of common stock; combined, we plan to return $15 billion to $17 billion of cash to shareholders this fiscal year. This outlook is based on current market growth rate estimates, commodity prices, and foreign exchange rates. Significant currency weakness, commodity cost increases, additional geopolitical disruption, and major production stoppages or store closures are not anticipated within this guidance range. Now back to David for closing comments.

Thanks, Andre. Our business exhibited strong momentum well before the COVID crisis. We strengthened our position further during the crisis, and we believe P&G is well-positioned to grow through and beyond the crisis. We will manage what is likely to be a volatile near term, consistent with the strategy we’ve outlined many times and against the immediate priorities of ensuring employee health and safety, maximizing availability of our products to serve cleaning health and hygiene needs and helping society overcome the COVID challenges that still exists in many parts of the world. We’ll continue to step forward toward our opportunities, not back. We remain committed to our strategies and fully invest in our business. We remain committed to driving productivity improvements to fund investment and to maintain balanced top and bottom-line growth over the long term. We’re doing this in our interest, in society’s interest, and in the interest of our long-term shareholders. Now, we’d be happy to take your questions.

Great. Thank you. Good morning, everyone. I wanted to talk a little bit about marketing both in terms of the efficiencies you've been realizing over the last several years and sort of thought process on the amount of spending necessary kind of going forward. So, and also relevant to the succession plans announced last night. So, you've delivered $2 billion in media spending efficiencies over five years, right? And then marketing reinvestment this quarter was way stronger than we had expected. I think it was up 170 basis points on top of a 270-basis point investment last year. So, one, how much has really left to go for on that efficiency side of the equation? Two, as you think about incremental reinvestment, there's so much funding in the base from the past two years. How are you thinking about that for fiscal 2022? And then finally, I've been asked a few times over email, just CFO becoming a CEO, should the marketers be worried? I'd love to hear everyone's perspective. Thank you.

Okay. Let me start with the last part first. And then Andre can hit some of the marketing spending numbers. But first, no, marketers should not be worried. Marketers should feel wonderful, and that we've got a senior leadership that is maintaining a high degree of consistency. And you all know Jon very, very well. He has supported these investments in media, to the extent they grow the market and grow market share and are helping drive awareness and trial of superior products and brands. That's a good thing. It's about creating value, not reducing or increasing one element of cost. And Jon has been very engaged with me and the leadership team in these decisions. The other thing about our organization structure, we leave it to the sector CEOs and the enterprise leaders to decide how much to invest in their businesses. This is not a decision we make at the headquarters. It's a decision made by each one of the business leaders, and we hold them accountable to create the top and bottom-line growth and cash generation for their business. And I think the results over the last three years speak for themselves. And so, they actually should feel very good, as do I, that the leadership of the company and the organization structure is working very well. And one comment on the marketing spending efficiency, then Andre can add some additional comments. We have increased meaningfully the investment in marketing. But we have also increased the rate of meaningful innovation that grows the market. So, one of the key parts is you have to help consumers understand what the product is, how to use it, and then help drive awareness and trial. And these investments have done that. It's evidenced, again, in the top line growth; you recall very well. If you go back four or five years ago, our average growth was about 2%. We moved up to the past four years; the past five years, we've averaged 4%. In the last three years, 6%. And we've got the strongest share growth we've seen in many years, which tells me the combination of the superiority strategy and the brand execution by our people is really working. And we'll continue to invest behind both brands that are winning and invest to make sure we get the trial. And Andre, any comments on the specific numbers?

Look, I think we've increased our ad spending year-over-year in fiscal 2021 versus 2020 by $850 million. And as David said, superior communication is a core element of our superiority framework and we've not reached the point of diminishing return on those investments. So, we'll continue to invest at around that level in percent of sales. We also do believe that there are significant productivity improvements still within the media spend. When you think about the shift into digital media, improved targeting capability with first-party audiences or third-party audiences and the ability to sharpen our focus, even on TV audiences with our own data. So, there continues to be significant leverage in terms of direct media spend efficiencies that we can create to improve the quantity of reach and quality of reach. In the indirect space, we are also striving to continue to improve production costs and agency structures. So you'll see us continue to work in that direction mostly to reinvest in superiority and superior communication.

Great. Thanks. And good morning. And congrats to you both this morning, Jon and David. It feels like the business is being passed off with great momentum. So again, congrats to you both. I guess my question, I think, it's probably a question for Andre mostly. Andre, I think you said that China was up 5% in the quarter. I don't know if you provided a U.S. growth rate in the quarter. But if you have one that would be great. And I'm thinking the question really is that, as you said, both those businesses had very difficult comps in the year-ago quarter. Those difficult comparisons continue in the first half of 2022. So just in terms of the makeup of growth first half, second half geographically, is there anything to call out there? Do you feel like the U.S. can stay positive in the first half? Does anything to call it in terms of the context of growth via geography? Thank you.

Yes, very good. So, U.S. quarter four growth was a minus 1%. If you look on the two-year stack basis, that's 18%. Last year's quarter four was 19% growth, and the strong growth in last year's quarter was mainly driven about 13 points, I believe, by restocking retail inventories after strong consumption. So, in comparison, minus one on a 19% base. The U.S. consumption I think we believe at this point in time, we'll return to normal levels. Most importantly, we see our shares at record levels in the U.S. Our brands are continuing to strive. We're gaining share across categories. Our retail partnerships are strong and we have very strong innovation programs hitting in the U.S. So, we remain confident, but I think you're rightfully cautious in terms of base period effects, especially in the first half. On the China side, we expect the market to continue to grow mid-singles. Our mantra is to grow ahead of that. And I would tell you the same thing I told you for the U.S. We feel good about the strength of our brands. In China, we feel good about our go-to-market capabilities and we'll continue to invest in innovation and supporting those innovations in the market. Same comment considering base period is going to be prudent for China and the entire focus markets environment.

Hey guys. So just taking a step back now that we've got a full quarter in the books where you've cycled a period where COVID was unfortunately with us, and the leadership change going forward. I was just hoping you could review maybe some of the more enduring consumer changes that you see post-COVID, again from a consumer perspective and how you think P&G is positioned relative to those changes. And then, regarding the CEO change down the road, any sort of tweaks in strategy here or areas of just increased emphasis either in that post-COVID environment or with the change in leadership. Thanks.

A couple of comments about the consumer changes that we think are enduring, and then certainly Andre and Jon can jump in with some comments as well. We do believe that the health, cleaning, and hygiene brands will continue to play an increased role. There's some statistics that I saw a while back that pre-pandemic about 5% of people worked from home, and then post-pandemic, the estimated number is around 20%. I don't know what the number will be, but certainly there's a significant number of people that will be at home more than they were pre-pandemic. That bodes well for us. I believe the strength of our brands and actually the shift toward trusted brands will likely last a good while we’ve had meaningful increases in household penetration on some of our brands as there was a stock-up and then people got exposed to the superior performance. I think that will have a lingering positive impact. So, you've got both more people at home, not to take the U.S. especially, more occasions at home. You've got a shift toward trusted brands and the role that health, cleaning, and hygiene play will anniversary some tough comps, but with the health of the brands and the share of momentum. And that gives me a lot of confidence going forward. The U.S. and Europe, I call it our biggest focus markets are having some of the strongest share progress they've had in every one of those categories. And absolute share is higher than they were pre-pandemic with the exception of family care that had a supply issue for the first part and just couldn't supply because the increased demand and their growing share in the fourth quarter. So, we've got good momentum, and consumers continue to vote for trusted, superior performing brands. And I think those consumer habit changes will likely last.

What I'd say, maybe I think our portfolio positions us well. There were many categories that did not benefit from COVID tailwinds in our portfolio. When you think about adult incontinence, deodorants, shave care, some of the tooth whitening that we see coming back, Personal Health Care had a very low cough-cold season with everyone wearing masks, and our professional business certainly that serves hotels and restaurants did not do well. So, as mobility increases, those businesses pick up, and we see that as a positive going forward, obviously. Geographically, many of the markets we operate in, specifically the enterprise markets, never did see a benefit in terms of consumption from COVID as consumers and retailers were impacted by the crisis. So hopefully as these markets work through the pandemic, that will also provide a tailwind from a geographic standpoint.

And relative to the question on strategic changes as we go forward, we will always be responsive to consumers and customers whose needs will continue to evolve over time. I don't foresee that leading to any major change in the strategies that the team has been executing with excellence. But again, we will continue to be very attentive to and responsive to consumer and customer needs.

Great. Thanks.