Perrigo Company plc (PRGO) Q4 2025 Earnings Report, Transcript and Summary

Good morning, ladies and gentlemen, and welcome to Perrigo Q4 2025 Financial Results Conference Call. [Operator Instructions] This call is being recorded on Thursday, February 26, 2026. I would now like to turn the conference over to Bradley Joseph. Please go ahead.

Good morning, and good afternoon, everyone. Welcome to Perrigo's Fourth Quarter and Full Year 2025 Earnings Conference Call. A copy of the release we issued this morning and the accompanying presentation for today's discussion are available within the Investors section of the perrigo.com website. Joining today's call are Perrigo's President and CEO, Patrick Lockwood-Taylor; and CFO, Eduardo Bezerra. I'd like to remind everyone that during this presentation, participants will make certain forward-looking statements. Please refer to the slides for information regarding these statements, which are subject to important risks and uncertainties. We will reference adjusted financial measures that are non-GAAP in nature. See the appendix for the earnings presentation for additional details and reconciliations of all non-GAAP to GAAP financial measures presented. Finally, Patrick's discussion will address only non-GAAP financial measures. Now to the agenda. We have several topics to cover today. Patrick will first walk through a market overview and summarize fourth quarter and full year 2025 results. We will then cover our continued progress on the Three-S Plan and our transition to new reporting segments, which will begin in the first quarter of 2026. Finally, to walk through our 2026 outlook, after which Eduardo will cover 2025 segment highlights, balance sheet and capital allocation, our operational enhancement program and close out with further details of our '26 outlook. And with that, I'll turn it over to Patrick.

Thanks, Brad. Good morning, good afternoon, and thank you for joining today's call. 2025 was a year of meaningful progress for Perrigo. We continue transforming the company into a world-class consumer health leader, and the results of that work are increasingly visible in the marketplace. We are winning with consumers and customers, and that momentum is reflected in the strong market share gains and incremental business we secured with key retailers. These wins are a clear sign that our strategy is embedded and delivering. Despite a soft market environment, we delivered EPS in line with our revised guidance, a solid improvement versus the prior year. And we made strong progress on our Three-S Plan to simplify, streamline and strengthen the business even as the infant formula business continued to face structural challenges that affected both our financials and our outlook. Our outlook for 2026 reflects the realities of the current market and the work required to offset headwinds as we enter the year, which we believe are temporary. We expect the environment to improve in the second half, and we remain confident in our ability to build on our progress and position Perrigo for long-term growth and value creation. Even as the U.S. OTC market was challenged, we gained solid market share across most of the categories where we compete. Importantly, our share gains accelerated throughout the year, reversing years of decline. As consumers traded into store brands, we strengthened our partnerships with retailers, gaining over $100 million in new distribution and competitive takeaways and improved in-store execution. This is significant. This speaks to the underlying health of our business and the fact that we are winning back with both consumers and customers. We are seeing the same positive momentum in Europe. Our key brands are gaining share despite a soft market environment and our brand building, innovation and go-to-market efforts are translating into stronger marketplace performance. The share gains we are seeing across both regions reinforce that our strategy is working. We remain committed to making essential self-care accessible to everyone, leveraging more than 250 molecules and formulations across all price points and value tiers and the power of our scale, which is roughly 10x that of our nearest competitors. Turning to our financial results for the fourth quarter and full year 2025. As outlined in our press release this morning, we are providing results through 2 lenses: All-In and CORE Perrigo. All-In reflects our historical operations, while CORE Perrigo reflects our go-forward business, excluding infant formula and announced divestitures, primarily the Dermacosmetics business. To provide greater clarity into underlying performance, I will highlight results for All-In and CORE Perrigo. For the full year, despite soft market conditions that impacted consumption and net sales, we delivered strong operating income and EPS growth through operational rigor and disciplined cost management. Our All-In business grew operating income by 2% and EPS by 7%, finishing at $2.75, right in line with our revised guidance. CORE Perrigo operating income was up 7%, with core EPS up 14%. In the fourth quarter, market weakness continued to weigh on results. CORE Organic net sales declined 2% in the quarter despite strong share gains. And CORE operating income declined by $4 million or 2%, resulting in CORE EPS of $0.76, a decline of $0.02. Importantly, we made significant progress on our Three-S Plan in 2025. First, we stabilized our store brand business, evidenced by solid share and distribution gaps. We also stabilized supply in infant formula, recovering service levels above 90% even as demand recovery slowed and competition intensified. Second, we streamlined the business, focusing our portfolio through actions such as the announced sale of the Dermacosmetics business, which is expected to close in the second quarter of this year, pending final antitrust clearance and continuing to assess the role of Infant Formula and Oral Care. We also executed major efficiency initiatives, including Project Energize and supply chain reinvention, totaling $320 million in benefits, which drove improvements in operating income and EPS. This cost discipline will continue in 2026, which Eduardo will detail shortly. Third, we strengthened our portfolio and capabilities. Our key brands gained share, our innovation pipeline tripled in value versus the prior year, and we deepened retailer partnerships with next level demand generation capabilities. With our new category model now embedded and our executive team fully in place, we believe we are well positioned to drive end-to-end enterprise performance and to continue executing our Three-S Plan. Beginning with our first quarter 2026 results, we will introduce new reporting segments: Self-care, Specialty Care and Infant Formula. Oral Care, Dermacosmetics and other smaller distribution brands will be reported in Other. This new segmentation aligns with our global operating model and enhances transparency across our categories. It also provides a clear view of CORE Perrigo, business that will power our future. Now turning to our 2026 outlook, which reflects challenging market conditions and the actions necessary to combat temporary headwinds. As mentioned, we expect OTC market consumption to remain negative in the first half of 2026 as consumption so far in 2026 has further weakened in the markets we operate due in part to a soft cough and cold season compared to the prior year. So, the sales in the U.S. OTC market are down 5.1% over the last 13 weeks versus a year ago compared with a 4.3% decline in the fourth quarter and a 1.2% decline for full year 2025. Due to this slow consumption, retailers are also adjusting their inventory levels to current demand. This will be particularly noticeable in our first quarter results given this number and the scale of challenges we face. Amid these slow market conditions, however, we expect to grow share ahead of the market. Building on our 2025 momentum, 2026 performance will be driven by consumer-centric innovation, amplified demand generation with top customers, targeted and opportunistic geographic expansion for our priority brands and continued distribution gains. We also anticipate temporary but significant impact from plant under absorption stemming from lower sales volumes in 2025 for both OTC and Infant Formula. This translates into an unfavorable EPS impact to all CORE Perrigo in 2026 of approximately $0.60. For CORE Perrigo, we expect organic net sales growth in 2026 to range from negative 3.5% to positive 0.5% compared to 2025, with CORE EPS in the range of $2.25 to $2.55. We view 2026 as a transition year as we work through near-term headwinds and impacts from temporary underabsorption and market softness. We remain confident that our differentiated strategy, the stronger consumer base we built in 2025 and a more focused portfolio will position us for healthier top line growth as conditions normalize. I would also like to note that we are completing a growth algorithm for CORE Perrigo and the early indicators are encouraging across growth, cash flow and margin expansion. We look forward to sharing more on this later in the year. In closing, our focus for 2026 is clear: Grow share in our key brands and deliver our innovation pipeline, continue driving U.S. store brand demand generation in partnership with retailers, deliver operational and cost-saving programs, continue our portfolio assessment efforts and drive our category model and performance culture. We made clear progress winning with consumers and customers in 2025, and we are excited about the possibilities ahead. We believe we are very well positioned to create long-term value. And with that, I'll turn it over to Eduardo.

Thank you, Patrick. I appreciate everyone joining us today. Before getting to the details of our financials, I want to note that our 2025 GAAP results include noncash accounting impacts, including a goodwill impairment charge of $1.3 billion. Impairment is a nuanced issue, which merits both historic acquisition costs of businesses purchased over time with the realities of the current stock price. Certain historically acquired business have not performed as initially expected when acquired. Management must now address these realities and plan for the future. This impairment does not impact our strategy, cash flows or ability to execute. In addition, looking ahead to the first quarter, we need to reallocate goodwill from our existing to our new reporting units, which Patrick highlighted. While the aggregate fair and carrying values are unchanged from December 31, 2025, the redistribution of goodwill across our new reporting units may present a different outcome with surpluses in many and shortages in a few. As a result, the company may record additional noncash goodwill impairment charges of up to $350 million in the first quarter of 2026. In contrast to impairment, which reflects historical business performance, our decision to place business under strategic review is a reaction to external events informed by growth options and priorities for Perrigo in the future. Now to our results. As highlighted, we're introducing a new concept of CORE Perrigo results or just CORE, which excludes different formula and announced divestitures, primarily the Dermacosmetics business. From this point on, my comments will focus on adjusted non-GAAP results unless otherwise noted. Turning to results to our business units, starting with CSCI. Full year CORE organic net sales decreased 0.2% as growth from new products, share gains across most of our key brands and increased supply of Pain & Sleep Aids products were more than offset by lower consumption. Fourth quarter CORE organic net sales decreased 1.4% compared to the prior year due to continued consumer softness in the OTC category, combined with a softer cough and cold season compared to last year. Full year CORE operating income grew 11.6% as savings from Project Energize and lower variable expenses more than offset unfavorable impacts from gross profit flow-through. Fourth quarter core operating income increased 10.3% due to favorable foreign currency. All-In net sales and operating income growth for both fourth quarter and full year included the impact of divestiture. Turning to CSCI. Full year CORE organic net sales decreased 3% due to lower contract manufacturing revenue, soft category consumption and the prior year Opill launch stocking benefit, partially offset by share gains. CORE organic net sales for the quarter decreased 2.4%, also driven by contract manufacturing and OTC category consumption, partially offset by share gains. All-In net sales for the quarter and full year include the declines in Infant Formula net sales of roughly 25% and 10%, respectively, as growth in store brands was more than offset by lower contract manufacturing and lower distribution of the Good Start brand. CORE operating income for the full year and fourth quarter decreased 2.4% and 6.2%, respectively, both driven by the impact from lower net sales volumes and price investments, partially offset by benefits from Project Energize savings and lower variable operating expenses. Fourth quarter All-In operating income declined $29 million, including a negative impact of $21 million from Infant Formula. Moving now to cash. Exiting 2025, we had $532 million of cash on the balance sheet and fourth quarter operating cash flow was $175 million, bringing our total for the year to $239 million. We ended 2025 with a net leverage ratio of 4x, slightly above our updated projection due to currency translation on gross debt and lower cash balances at year-end. Our capital allocation priorities remain unchanged. Business growth, reducing total debt and net leverage and returning value to shareholders through our dividend. As a reminder, we expect proceeds from Dermacosmetics to contribute to debt reduction in the second quarter. As highlighted, we start with our first quarter 2026 earnings report, we will align our segment reporting to our commercial operating model. To aid comparability, we will recast selected historical financial results based on the new reporting segment, which we expect to furnish on an 8-K in April. This reporting segment change will have no impact on the company's historical consolidated financial position, results of operations or cash flows. Given the external dynamics we project in 2026, we will remain disciplined in managing our costs. We're implementing a new 2-year operational enhancement program to further improve productivity, streamline operations and enhance competitiveness. We're focused on evolving our structure to improve agility, accelerate decision-making and better leverage technology. As part of these efforts, we expect a global workforce reduction of approximately 7%, and we will also target operational cost reductions, mainly in our supply chain and distribution network. These efforts are expected to deliver annualized pretax savings of $80 million to $100 million with approximately 80% of the savings expected in 2026. Total cost to achieve these savings are expected to be approximately $80 million to $90 million. Now a bit more color on our 2026 outlook. We expect CORE Perrigo organic net sales growth of minus 3.5% to plus 0.5% year-over-year. CORE gross margin is expected between 39% and 40%, with CORE operating margin expected between 15% and 16%. Still within CORE, we expect higher costs from temporary OTC plans under absorption to dissipate over the next 12 months with the pace of returning to normalized levels depending on timing and levels of sales and production volumes. These cost pressures in addition to higher advertising promotion and the reset of variable incentive plans will be mostly offset through 2 levers: first, the benefits from our new operational enhancement program and in addition, targeted savings primarily procurement efficiencies driven in part by lower expected production volumes, along with the deferral of certain projects that are nonessential to our 2026 strategic objectives. Turning to our All-In outlook, which includes Infant Formula and assumes we divest the Dermacosmetics business during the second quarter of the year, we expect All-In net sales growth of minus 5.5% to minus 1.5%. Gross margin of 36.5% to 37.5%, operating margin between 12.5% and 13.5% and EPS in the range of $2 to $2.30. Finally, on operating cash flow. As we advance our Three-S Plan, we're taking on temporary cash costs to drive productivity, streamline operations and improve our risk profile, balanced with our commitment to reducing net leverage. For 2026, we expect operating cash flow conversion to remain in the mid-60 percentage range and net leverage to end the year roughly in line with or slightly better than 2025. As we are providing outlooks for All-In and CORE Perrigo for ease of comparison, we've included 2025 actuals for both in the appendix of this presentation. Let me quickly walk through our 2026 EPS bridge. Removing Infant Formula in divestitures yields a 2025 CORE baseline of $2.52. From there, other absorption, investments in advertising promotion and incentives normalization are largely offset by base business performance and cost savings actions. These, combined with the year-over-year net effect from interest, taxes and share count and FX result in our CORE EPS range of $2.25 to $2.55. The All-In EPS range of $2 to $2.30 reflects the expected impact from Infant Formula and divestiture. CORE EPS phasing is approximately 30% to 35% in the first half and 65% to 70% in the second half, which is modestly above our typical pattern. This reflects the expected timing of net sales, including impact from the current soft cough and cold season versus the prior year, the evolution of our savings program and impact from underabsorption. In closing, we remain disciplined, realistic and focused on the elements we control. The strategic actions underway as part of our Three-S Plan are strengthening our foundation for long-term value creation, and we're confident that CORE Perrigo can deliver steady growth, resilient margins and consistent cash generation. The steps we're talking now will continue strengthening our Consumer Health business to deliver for our consumers, customers and shareholders. Now I will turn the call back to Brad. Brad?

Thanks, Eduardo. Operator, will you please open the line for questions.

[Operator Instructions] And your first question comes from the line of Keith Devas with Jefferies.

A lot to get through, so I'll try to keep it brief. But maybe just going to your outlook for 2026. I think you mentioned some of the pressures in the first half in terms of cough/cold and overall consumption as well, and you're expecting kind of second half improvement. So maybe just some more color or context on what's driving that second half improvement? And then maybe longer term what's needed for the categories, particularly in OTC, both in the U.S. and abroad to get it back to stable and then hopefully growth?

Keith, thank you for the question. As you can imagine, we put a significant amount of analysis on this as have a lot of our competitors. There are several components to answering this. First thing is what's causing the decline. We see the great majority of that as being transitory in nature. There has been household -- long-term household reduction in certain subcategories, but they are a small part of our overall business. So what do I mean by transitory, we saw some trade down. We saw consumers trading down into smaller units. We saw rollbacks from national brands. And the biggest effect is we didn't see price increases to the scale that we've historically seen. That temporarily took a lot of value out of the market. And we need to think of that as about 90% of the calls. We start to catch up with those effects in the latter part of quarter 2 and increasingly through the second half. So what the effect of that is it just normalizes. Unless you see additional value erosion versus that base, then by definition, it stabilizes. That is the effect that we see and increasingly in the second half. To get more down to the specifics of what's building our confidence: one, we expect to continue growing share; two, we expect store brand OTC to continue growing share. Second, about 60% of the value of our innovation is in the second half of this year, about 65% of our opportunistic geographic expansion is in the second half of this year. Our competitive takeaway, this is our distribution gains, more than half is in the second half. And then this work you've heard us describing this demand generation, which is driving key retailers' store brand category and their share of it and our share of that, almost 2/3 of that lands in the second half of this year as well. So as we combine all of those factors, that leads us to a more favorable second half outlook.

Got it. That's very helpful. Maybe just as a follow-up, just an update on kind of the liquidity and the leverage position. You're doing a new restructuring program. There's some cash charges there. And just in terms of the overall outlook for the business units, it sounds like it's a little bit pressured at least in the first half. So just as you think about the guide and keeping net leverage flat year-over-year, just if you think that gives you enough flex to reinvest in the business appropriately to try to get some of the changes that you're hoping for? And then just your other commitments in terms of the dividend and kind of putting it all together, how you feel in terms of update on liquidity and leverage would be helpful.

Thank you, Keith. Our capital allocation priorities remain unchanged, right? So we will continue to invest in the business, right, through investing in innovation as well as technology to continue to accelerate and in connection with our announced new enhancement program. We continue to focus on reducing leverage, right? So we expect the closure of the Dermacosmetics sale in early second quarter. And we're going to use those proceeds, as we mentioned before, to reduce our debt, right? And also continue to return value to our shareholders through dividends, right? So we held our dividend and we continue to assess that as we always have done. I think the important thing is we see 2026 as a transitory year, right? So it's very important to highlight, we see significant impact on under absorption that we talked a little bit on the call about $0.60, and we expect a significant portion of that to be recovered into 2027. And also these operational enhancement programs, they should sustain over time. So despite we see, let's say, from a free cash flow standpoint, a challenging year, we expect that to be a transitory and that things should improve as we look into 2027.

And your next question comes from the line of Chris Schott with JPMorgan.

This is Ethan on for Chris. Maybe just to start off, a lot of helpful color on the OTC business today. Just wanted to get some color on how you're thinking about the recovery of margins there and if that will start to be recovered kind of through the second half of this year or if that's more 2027 plus?

Well, thank you for the question. So a couple of comments there, right? So we're seeing an under-absorption impacting our margins in 2026, right? So -- and that's one of the key reasons why we're pushing for the operational enhancement program, right, that we're implementing this year. We believe though that's transitory in nature. And that mainly reflects the impact of softening that happened in the second half of last year. So despite our significant share gain that we have in the OTC store brand business in the U.S. as well as in our key brands in international, we still carried a strong inventory. And of course, the cost of that inventory has increased, and we see that transitory impact into 2026. But as I mentioned, this should be transitory in nature as we see the market normalize more in the second half of the year and into 2027, that should dissipate and we should see an improvement in our margins on OTC going forward.

Super helpful. And maybe just one other question from me is looking to the Infant Formula business, how are you thinking about the path to kind of normalizing operations and margins going forward and the different actions you can take? And more broadly on the strategic review, just how are you thinking about the different options available, what any kind of sale might look like? And if that isn't available, what other actions you could take there?

Okay. Yes. So this formula review remains ongoing, right? So we're working with the advisers to assess all available options, right? So how do we -- can we optimize our operations, any potential partnerships and/or potential divestments, right? So it's too early to comment on much progress on that side because that -- there's a lot to be completed at this time, and we're going to provide more details in the coming calls as it progress.

And your next question comes from the line of Susan Anderson with Canaccord Genuity.

I was curious, just looking at the CORE sales categories, I guess, which categories are you seeing kind of with the most negative growth that's driving that guide towards the lower end for this year? And I guess, what categories are doing better than those?

Susan, thank you for that. So off the top of my head, I don't have the data in front of me, but the more preventative categories are typically doing better. So VMS, some of the subcategories of digestive wellness. The categories doing poorer on a very short-term basis, as you know, are cough/cold, and particular subsegments of pain, mainly pill dosing is where we're seeing systemic household decline. That's a small part of our business, but other parts of pain, in particular, topical creams are actually performing very well. Allergy, interestingly, also performing well in the early part of this year. As we try to map out the recovery of each of those subsegments, we see growth strengthening in some of those prevention categories. Allergy and cough/cold, obviously seasonally dependent, but of quite weak seasons, we see quite favorable -- we expect average season, which it follows is better than '25. We don't see anything that's going to change pain pill household penetration data, but that is a very small effect for us over the next 3 years.

Okay. Great. That's really helpful. And then maybe just a follow-up on the capital allocation question. I guess, are you guys comfortable with the dividend level where it's at? Is that still a priority? And then I guess, with the plans for deleveraging with the Derma proceeds, I guess, what are your long-term leverage goals as well?

I'll take and then Eduardo because this is an important question that both of us should respond to. So our capital allocation priorities are clear, and they are unchanged. We invest in the business, reduce leverage and return value to shareholders through dividends. We held our dividend, as you know, but we will continue to assess our capital allocation priorities according to what's best for the business and what delivers the best sustainable shareholder return.

Yes. And just on top of that, in terms of leverage, right, so for '26, as we highlighted, we expect that to be in line or slightly better than 2025. So that's mainly because of the onetime impacts that we're seeing in the business impacting our adjusted EBITDA. And so as we look into -- as we previously expected to be below 3x in 2027, but because these transitory effects in the marketplace, we're now anticipating to achieve that level over the next 2 to 3 years as the new organizational enhancement program completes, our strategic reviews on both Infant Formula and Oral Care advance and consumption recovers over time. So more precise, timing will depend on all these factors, Susan.

Okay. Great. And then maybe if I could just add one more on the infant nutrition business. I think it's dilutive to earnings now. I guess, did it ever get back to positive earnings? And then did it turn negative? And I guess if you guys end up keeping it, what will it take to kind of get that back to accretive to earnings?

Well, as I mentioned, we continue to assess the strategic review, right? So we're working on all the available options. And of course, we're going to look into which is the one that optimize not only the P&L, but also the cash flow as well. This is an important thing that we have been commenting that over several years, Infant Formula has consumed cash and so we're looking at that comprehensive of what's going to be the best option for shareholders on both aspects, right? So because at the end of the day, we need to be committed to improve our cash flow generation going forward.

Yes. Just to add a bit more sort of commercial perspective on that. We expect to continue growing share. I know the data that you see is total market, including VIC. We obviously look -- excluding VIC because we don't participate in that. Within that analysis, we see good store brand growth. We are confident as retailers reset their shelves later on this year, that will be favorable for us as we have innovation and launching that targets some of the foreign brands that we're seeing in the U.S. that will be positive for us. So we actually expect low to mid-single-digit revenue growth on Infant Formula this year. That allows us to clear this lower margin inventory, which has been a big factor for us in our EPS guidance. In doing, that starts to restore to '24, '25 levels gross profit. So that's how this model will play through this year from a commercial standpoint. Now to Eduardo's point, there is no doubt we need to look at plant optimization, set capacity in line with long-term volume and optimize cost and cash accordingly. Those are material margin and cash flow expansion opportunities for us should we go that route.

And your last question comes from Daniel Biolsi with Hedgeye.

Just following up on the last question. How much working capital like on average or whatever you can share is associated with the Infant Formula business?

Well, so it's significant because of the inventory levels that we have built in the prior year, expecting a significant share gain in the second half of the year, given the dynamics that we have explored and shared in the past, both further government intervention and also continued import products coming into the country significantly, that has impacted our ability to recover the share the way we had planned and shared in Investor Day last year, right? So that led to higher inventories, right, so at the end of 2025. And as Patrick mentioned, this low to mid-single-digit net sales plan should help deplete that inventory this year, right? So -- and that should bring working capital to more normalized levels versus what we faced in the past.

Okay. And then I'm encouraged by the gross margins close to flat, excluding the Infant Formula business. And you mentioned in the prepared comments that there was a price investment in CSCI. What did you see? Like what kind of response did you see from those price investments in CSCI?

Yes. I mean this is an annual effect. We compete across a broad range of molecules. There is capacity available either in the U.S. or from low-cost overseas manufacturers. And just as frankly, because of supplier substitution, that squeezes margin. That has just been a reality in some of our molecules 20 years, okay? And that is just an annual cost of participation. We have a systemic program now that addresses that, which is productivity, mix, innovation, expanding into more profitable adjacencies and of course, driving more volume into our plants. Every point of utilization is worth about $10 million for us. We have got much better at master planning those activities just recognizing that cost of commoditization. That allows us to hold or improve gross profit year-on-year, but it is an important element of where we play, okay? I think historically, we've probably undervalued that and that has introduced risk into our P&L. But I feel we have much more visibility and control of that going forward. As we also drive the salience of our branded business by focusing more on brand, by focusing more on branded growth and share growth, that obviously also has a very positive impact on not just GP but OI margin as well. Obviously, branded tends to be higher. So really, it's being much better at managing the gross profit profile of our store brand business whilst driving the salience of our branded business. That allows us to protect and enhance both OI and GP.

And that concludes our question-and-answer session. I would like to hand it back to Patrick Lockwood-Taylor for closing remarks.

Yes. Thank you very much, and thank you for joining us today and for those good questions. This is a tough market environment, and we have to lead what we control and manage with excellence, what we can't control. We're fixing the fundamentals of this business, and we believe we're positioning the business for quality growth, growing share now consistently after many years of decline. We're expanding category size in partnership with our key retailers. Store brand OTC in the U.S. is growing share, and we're growing share of that growing category. We're improving our financial structure. OI margin has expanded by 230 basis points over the past 2.5 years. Our net leverage is down from 5.5 to 4, and we will continue to deleverage. Our operations are more effective, more consistent and more compliant. We have 30-plus inspections in '25 with no critical or major observations and no recalls. We lead in quality assurance. Our leadership team and our senior management is in place. They're experienced, world-class, they're performance-driven and they're cost competitive. We now have in place an expandable growth model that will drive TSR. We have a differentiated and clear purpose. We exist to provide essential everyday self-care for everyone. We streamlined our portfolio, playing in the markets and increasingly in categories where we have the right to win and is an attractive size of profit. These categories reinforce and are driven by the core strengths of this company. We have more molecules. We cover more price points. Ultimately, that allows us to reach more consumers. We're developing even deeper and more strategic customer partnerships. We win through scaled, high-quality regionalized supply chains. We have extensive regulatory interface, and that allows us to shape the regulatory environment for these categories going forward. We're now set to go after geographic and category opportunities where we can operationalize these strengths in order to drive advantage. Recall, we only serve 10% of the world consumers today. This provides us with a tremendous growth runway. We've divested businesses where we can't leverage our growth model, e.g. Dermacosmetics, rare diseases, et cetera. In conclusion, we increasingly believe in our model and the path forward. 2027 is shaping up as a meaningful growth year. Again, thanks for joining us.

Thank you. And ladies and gentlemen, this now concludes today's conference call. Thank you all for joining. You may now disconnect.