Hey, welcome back. Thanks, everybody. Thanks especially to the Colgate company, who we're thrilled to have back. Especially thrilled to have back Noel Wallace, Chairman, President, and Chief Executive Officer of the company. We're going to use the entirety of our time for Q&A. Thank you, Noel, for joining us.
Pleasure.
And.
Good afternoon, everyone.
I kind of need to get back to talk to.
We'll just jump right in.
Yeah.
I'm going to start the way I've started a lot of these conversations, which is just sort of the environment that we're all finding ourselves in. Very eventful start to 2025, lots of different competing pressures, essentially, on both the consumer and really your retail partners, especially in the U.S.. Maybe we start there, just talk about your assessment of the consumer broadly and how recent dynamics have impacted your categories.
Yeah, we came into 2025 expecting to see a slowdown, obviously, a lot of inflationary pricing in 2023 and 2024, strong volume growth in the back half of 2024.
Just sort of the environment that we're all finding ourselves in.
2025.
Very.
The full expectation thing would slow down. I mean, what's changed that is, I think, a much more pensive consumer. I think you've heard it consistently throughout the week that the consumer is a bit uncertain and, as a result, being more cautionary in their purchase patterns. As a result, we're seeing slowdown in the categories. If I move around the world, I mean, obviously, the U.S., we talked about it on the call. We had, just in context for those of you who didn't hear what I explained, 12 categories down in February. We had about half those categories improve in March, half go the other way. In April, everything got a little bit better. I would say consistently, we're seeing a little bit of slight progression in the categories that we saw from the beginning of the year.
You can just see the volatility and the movements that we're seeing based on what I would consider a consumer that's very cautious on their purchasing patterns. As we go around the world, Europe is still doing okay. I have been with the Western Europe team. I was with our Europe division this past week. Overall, we're seeing, obviously, a little less pricing in the category, but we're seeing great share growth and perhaps a more muted category volume starting to come back into the categories, which is nice. Overall, I would say pretty good. Latin America, in general, pretty consistent with what I talked about on the call. Mexico has gotten a little bit better. Brazil, perhaps a little bit softer, but overall, pretty consistent, not significant moves. Asia, maybe a tale of two stories there.
India, a little bit of slowdown in the urban market, pickup in the rural market. China is still kind of moving sideways, up and down, and not really seeing more stickiness in terms of where the categories are going there. Obviously, that's a big concern in terms of predictability of where China will go, but not a big business for us, but we watch it very, very closely. Africa doing quite well, doing better than we had seen in the first quarter. Overall, some pretty good signs coming out of Africa. Did I leave anyone? The Hill's business, in a muted category, executing extraordinarily well, growing market share in every single segment in which we compete, and driving some pricing in the category as well. Overall, a mixed bag, a consumer that's cautious, but a reminder, we compete in non-discretionary categories.
As a result, we fully expect the categories to improve as we move through the back half of the year. Things just need to settle down a bit. I mean, all the noise that you're hearing in the market has created a consumer that's going to be more discretionary on their purchases.
Yeah. What about from a retailer perspective? I think most of the controversy has been around the U.S. and retail inventory levels. We've heard this week some companies that seemingly avoided destocking in the March quarter are now seeing it in the June quarter. Others have said it's better. Others have said it's continued. Where do you stand in the U.S.? Are there any other dynamics around the world to think about?
Yeah, we haven't seen a major move on trade inventory levels. Again, trade inventory levels are a function of a couple of things. I imagine they're managing their working capital very carefully based on where their input costs are coming from. As a result, they're very cautious. In categories where they feel they can squeeze a little bit back, they may do so. In categories where we're seeing consumer destocking, i.e., consumers perhaps not buying three bottles of [Distick], where they're buying one, as a result, when they see the category slow down, they'll take inventories down as a consequence of that. Overall, we haven't seen a dramatic impact on our business. That's to say that that could happen certainly in the back half of the year based on the economic and political environment that unfolds. Around the world, pretty consistent with that.
I mean, I would say internationally, I generalize, given we operate into markets around the world, that we've seen a general improvement in the retail environments around the world. We've seen constructive promotion environments. We've seen at least the buyers very focused on growth and innovation and growth and value. And we're delivering against that. So U.S., a little bit more cautious, where international, perhaps closer to what I would consider normal.
Okay. As you net it all out globally, just in terms of your scorecard from a market share perspective, you mentioned Western Europe as a point of strength, but in general, satisfaction with market share trends?
Very satisfied. I mean, when you go back to where we were in 2019 and really getting an inflection back on the top line of the business, that's translated into brand penetration, which is everything for us, translated into, obviously, increased market shares on the oral care business. We've seen a little bit of mixed change. Obviously, our very high shares in Latin America, or you've seen the dollar improve. Most recently, obviously not, but historically, over the last six to nine months, strength. We've seen the mixed effect a little bit in our market shares. Our volume shares and penetration continue to be very, very strong across the world.
Good. Tariffs, another big topic. Less so the, well, I guess most of this is the dynamic and the ever-changing assortment of tariffs and kind of the moving target. I guess remind us of sort of your direct, indirect exposures in terms of from an import-export perspective and then how you're managing through this volatility.
Yeah, a lot of moving parts of tariffs, I'm sure all of you well know. We were quite clear to try to get out in front of that as quickly as we could in the quarter earnings release. We announced the impact of tariffs that were implemented and announced as of April 24th. We have stayed very true to that number. We'll see where things ultimately unfold. There have been some puts and some takes to that, but we're holding to that. What's interesting is, not dissimilar to what happened during COVID, we've really taken the opportunity to continue to optimize a highly efficient global supply chain and find ways to make that supply chain more efficient. We operate on, what we call, a net corporate benefit.
We look for opportunities to move production around from one site to another based on the net corporate benefit to the company. We have built a lot more agility and flexibility. There are some longer-term implications that we will consider and be very thoughtful of once we see a real clear line of sight on where things will ultimately settle out. Right now, we are simply trying to manage some of the uncertainties and handling that, I think, quite well. Productivity, we have stepped up within both the manufacturing space as well as our funding and growth initiatives. We are looking at more efficiencies across the P&L. We are doing the best job to offset that. As you know, in our quarter update, we provided continued dollar-based earnings growth despite the tariff, despite foreign exchange, because we think we have got a good line of sight to the predictability of that.
Yep. If we kind of step out or step back, I think you talked about this at CAGNI. Your strategy has been working to deliver consistent top-line and bottom-line compound growth. That is the objective. How would you articulate the key building blocks of that strategy? I am assuming it is, but why do you feel it is so well-suited or especially well-suited for the current environment?
Yeah, I just had some discussions early this morning on really kind of reframing some of the really transformative changes we made at the company back in 2019. That was coming off a period of basically no growth on the top line. We were a $15 billion company. Market shares were stagnant or in decline. Innovation was not performing. We really had to get a growth mindset back into the organization. We put together a 25-strategic plan that gave us a clear line of sight on the opportunities that we had to drive growth. We were much more selective and choiceful on where that growth was going to come from, much more deliberate in the category composition of where that growth was going to come from. We unlocked opportunities that were very different for us in terms of our go-to-market.
Case in point on oral care would be we really were leveraging the multiple equities we had in the world versus just Colgate. We tried to make Colgate work for everything in the world. We found that in places like Europe, unlocking Elmex and Meridol were a huge growth potential. We've taken those into certain markets around the world. Hello in the U.S., a huge growth opportunity. We very much focused on the pet nutrition industry. We felt that was a business that we could truly win in based on the strength of our brand. We put advertising, significant innovation, improved our supply chain. That has unlocked a lot of top-line growth as well as operating margin. We got the organization focused on really understanding where innovation needed to go.
We uplifted our resources in innovation, focused on the core businesses, the composition of our categories where we compete, and we have very strong shares. The big part of that is core. We were not renovating the core business nearly as frequently as we needed to, more resources in R&D. While we built the gross margin back in the P&L and growth at the top line, what that afforded us was the opportunity to really build capabilities that we saw were going to be absolutely necessary for the long-term health of the company. It was all about building durable, sustainable top-line growth and capabilities that we think are going to help us grow faster in the long- term despite the volatility that we see in the world. Digital capabilities, data capabilities, AI capabilities, science and innovation capabilities.
The strength of the P&L and the flex that we had in the P&L afforded us the opportunity to build all those. As the markets start to slow, we're not having to spend additional money to catch up to those capabilities today. We have those capabilities well entrenched. We've got more to do, to be sure. The good news is we've had the ability to kind of get ahead of the curve, so to speak. As I often say internally, get back on our front foot. We were on our back foot. We needed to really think about the future rather than the quarter. That's where we built the plans against.
Right. You mentioned flex the P&L. You've talked a lot about your ability and your intention to do just that in the face of obstacles or, frankly, in the face of opportunities in both directions. I guess, what does that mean in practice? How do you, I guess, guard against overflexing the P&L, especially in the face of headwinds, and get yourself kind of back, maybe hopefully not all the way back, but even a little bit back towards where you were when you started the journey in 2018?
Yeah. You know what? The key headwind we faced back in 2018 and 2019 is we just were not growing the top line. As all of you well can understand, if you are not growing your top line, it is very difficult to get leverage through your P&L. The sustained growth that we have had and, in some respects, peer-leading growth in the top, particularly on the organic basis, has afforded us the opportunity to make a lot of strategic choices within the middle of our P&L. When you make those strategic choices on how you want to grow margin, where you want to invest, the categories you want to emphasize, the capabilities you want to build, that is building long-term health for your business. We are not reacting to how do we deliver a quarter, we are thinking about where do we want to be two to three years out.
We developed a 2025 plan that really helped guide the organization on very specific choices that we needed to make as an organization. You have 34,000 people working in 200 markets around the world. The biggest challenge a leader like myself has is ensuring they're aligned behind the growth opportunities that we have. They may see a local opportunity, but we need to fully exploit the leverage and the scale that we have as an organization by going after global opportunities. That is what the 2025 strategy did and helped us accelerate it. We're going to California in a couple of weeks to launch our 2030 strategy.
It is a wonderful position to be in where you're not saying, "Okay, here's a new strategy for the company." It is taking what we know we do well, what we did not do well in the 2025 plan, and now building from that in terms of the capabilities that are well on their way to hopefully unlock continued predictable growth for the company.
Are there things that you feel like you didn't do well in the 2025 strategy? What would they be? What are your early thoughts on how to course-correct?
Yeah. We put a lot of, at least some of the feedback that we've received from our employees is a lot of change. Change is never easy for an organization. I think cultures adapt and weather the change as effective as the people feel engaged in that change. We've done a great job in getting the organization to see where we want to take the company and that change has happened. There are areas where I think we can do better. Innovation is one. We've really stepped up innovation, but I wholeheartedly believe that we have a lot more to do there on getting the innovation to be more insight-based, getting the innovation to be more premium. We still consistently around the world, despite the strength of our business, underindex in the super premium side of the market.
is what is driving a lot of the category growth. We need to bring true science-based, perceivable superior products into the market. We are very focused on doing that not only from a science basis, but also from an advocacy basis in terms of how we get our partners in that space along with us, whether it be the profession or key opinion leaders.
Okay. Yeah. To go back to what I tried to ask, this question, I think I might have made it unclear. Just, you've rebuilt the middle of the P&L from an A&P perspective. I think when people hear flex the P&L and we're worried about top-line headwinds, that means protect the bottom line and flex the P&L by potentially pulling back on demand-building expense, including A&P, which I think gets people nervous in the extreme. How do you think about that? Is that a point of flex, A&P in the P&L? How do you reassure people that you won't overflex it?
We have spent a considerable amount of time obviously building the advertising line in the P&L. That has been a key driver of our top-line growth. I think there are other aspects that have really helped top-line, the choices, the strategy, obviously the execution against the fundamentals. Certainly in our business, advertising is very important. We needed to build the advertising line to build back the health of our brands. Our brands have deteriorated, particularly as we moved away from the core. I can confidently sit here and say that over the last three years, the amount of advertising we put behind the business has absolutely improved the health of our businesses. They are in a much better place than they were five years ago.
I mentioned the capabilities earlier that we had the leverage in the P&L to invest in capabilities, whether it's at the margin line or the NVO line. Those capabilities have now made us much, much smarter of how we think about our media allocation. We were having a discussion with Western Europe that despite in a certain market, they have held advertising, their ROI is up 15% on their advertising. Arguably, you get the same impressions by spending 15% less. In a market like we're operating in today, where we've seen a slowdown in certain categories, by all means, we're going to be cautionary to ensure we're driving top-line growth and return for our shareholders. Yes, advertising can be a lever in that.
We will decide that lever based on the effectiveness that we have in the market and the return on the investment that we're seeing based on the category growth aspects that we have. My sense is we have other aspects. The other one I would talk about, lever in the P&L, is the margin. Our business has great gross margins. We have done a really good job in getting the gross profit back to peer-leading levels. The Hill's margin and operating margins have come back to really, really strong levels. Having high margins is great in fast-growing categories. It is even better when the categories have slowed because you are generating still good operating dollar leverage in the P&L. We feel good about where we are on the constructs of the P&L. We will see where things unfold.
The strength of the equities and the investment that we put in, that is the single most important thing to take pricing in the market. If you want to take pricing, your business has to be strong. The investment that we put behind both the Colgate side of the business and the Hill's business would indicate that.
Okay. You've also put a lot of money and effort behind commercial capabilities. Some of that surrounds A&P, as we talked about. You've also talked a lot about investments in data analytics and AI as an enabler of the business, whether an enabler of revenue growth management or enabler of across a lot of your execution. How would you describe that journey? How advanced do you feel like you are relative to competition? How much more opportunity or need do you see, I guess, on the technology front?
Yeah. One of the more significant changes we made going into the 2025 strategy is we made our IT organization part of the growth strategy. They were a cost center before. We're obviously at the forefront of SAP. We've got great tech stacks across the company and enterprise systems to use via our partnership with SAP. We weren't using technology as a growth facilitator for the organization. What we've done is we've evolved them into an important part of the growth pillars of our organization by ensuring that we're developing tech stacks that make our people smarter and faster at the decisions they make. SAP, we're going to S/4. That will be one system around the world.
We're now going to structure all of our data around the world so we can now use AI on top of that data architecture that we have that's going to unlock significant learning and much faster execution. We've invested in capabilities, digital capabilities internally with our media partners. We've gone to programmatic buying across the board. We've really moved the organization digitally as assessed by external partners on how we're doing. We've moved up to, I would say, in the top tier, more work to do. We're certainly making great advancements. We're moving to much personalized marketing back to the ROI nature of how we think about our media spending. AI now is just a truly exciting aspect for us. We've talked about it back in CAGNI. We've been investing in it for a couple of years. We think we're very much at the forefront of this.
The biggest excitement for me is making our people more effective. Yes, everyone wants to see where is the cost savings, where's the cost savings and efficiency. The real efficiency to be gained in the short- term is making our people a lot smarter and faster at what they do, letting our people build their own agents to manage their work and do it more effectively. The creativity that we're seeing coming from our organization in this space is daunting. I mean, they're finding much better ways to run their businesses, to get insights out of their businesses quicker and make decisions. I think that's personally the biggest unlock we're going to see in the next year. No question we'll find business cases to drive productivity in the R&D space, which we're working on, with digital twins in the manufacturing space, which we'll work on.
A lot of excitement there. The power of making someone a lot more effective in their day-to-day is going to be, I think, the most exciting piece to watch.
How pervasive is that across the organization, across the thousands of people who work for Colgate? Is it early innings, or are you at the point where you feel like you've amassed skill?
We made a big strategic bet two years ago on this. We have trained every single one of our S&C employees in the company on AI. We now have 3,000 people in the company that we would consider subject matter experts on AI. They are building use cases for the organization to share best practices across 3,000-4,000 people around the world. This is where the real unlock is, that we got ahead of it early back to building flexibility in the P&L. We are not having to play catch-up. We played catch-up in the digital transformation back in 2019. We were behind. We realized that we were going to have to bring outside expertise in to really help catapult us into a better position. That was a lot of work, but we got there. AI would be we have learned from that.
We got ahead of it very, very quickly. We're very thoughtful on where we think we're going to get the best return on our investment. A lot of shiny objects out there, but we're very pragmatic on how we want to think about the spend.
Okay. If we move back to the business and the current environment, and we just kind of move kind of beyond 2 Q and into the second half, your outlook is predicated on improvement in the back half relative to the first half. How much of that improvement is to come from category improvement? How much of that is to come from drivers that you are in control of? And do you feel on track?
Yeah. Listen, the updated guidance we provided, certainly if you run the math, there's some improvement there. Is it significant improvement? No, it's not in the categories. The categories do not have to significantly improve in order for us to achieve that. They need to at least modestly improve versus where they were in a very disruptive first quarter. We feel good about, particularly given our global footprint and the fact that the international business seems to be a little bit more vibrant than we're seeing, particularly in the U.S. market. That combined with strong market share, strong innovation, great RGM, we feel pretty good that we're going to be able to get a combination of volume and pricing acceleration as we move through the back half of the year. My feeling is where I sit today, we've got a pretty good line of sight of that.
Things are very volatile in the world right now, as everyone knows. We will watch it very carefully. We are pretty confident.
Are there any key advertising campaigns or key innovations that are especially important in achieving that outcome?
Yeah. We've taken a major global relaunch of Colgate Total back to the premiumization. We've taken significant pricing on that business. Early days as market shares are holding or growing in general across the board. We are very excited about that. The Hill's business has launched an entirely new equity campaign in 80 countries around the world. The early signs on that are outstanding. We've got a great innovation pipeline coming behind that. Across some of our fabric care and personal care businesses, the Sanex business in Europe, we've got some great relaunches on that business that are doing very, very well. Overall, innovation doing well. The single biggest opportunity we have is still mixed opportunity in driving premiumization. We will be very focused on leveraging our portfolio systematically around the world in that regard.
Maybe you mentioned strength in Europe. Your business has exhibited strength in Europe. It's seemingly exhibiting strength in Europe for longer than some other companies. To what do you attribute the success? How sustainable do you see it? Are there learnings that you can take from Europe to other markets?
Yeah. First, we've got a great team. Ann Sofia is here who runs our Western Europe organization and doing some terrific work with her team. Across the board, it's a consistent deployment of a strategy. I come back and I realize this sounds somewhat elementary to some of you. If you're not consistently utilizing the resources you have on the ground against the key growth choices that you've made, you'll get inefficiency and disparity in terms of execution. We know what we're trying to accomplish. We know the premium opportunities we have in the categories. We're consistently going after those. The pricing that we've been able to achieve in Europe versus a decade of negative pricing clearly indicates what's possible. We have really stepped up our innovation and renovation strategies to get more pricing in the category.
That is not only helping category growth for our retailers, but helping obviously our market share growths, our healthcare market shares at a record level. I talked about flexing the portfolio a lot more in Europe, our Elmex and Meridol brands driving significant growth, Colgate brands growing as well. When you have the two working in combination, you can do a lot of special things with the trade to drive more category health longer term. We feel the pricing mechanisms and discipline that we have in place, but it is all anchored against a consistent strategy that we are trying to execute around the world.
Okay. At CAGNI, Prabha highlighted India as a key market opportunity, which obviously is operated by an independent company in India. Just how do you frame the outlook there for your business, both near term and long- term? Where does India rank in terms of the growth drivers of the company over the next in the 2020-2030 strategy that you're putting together?
Yeah. Depending on what you read, India will produce probably the biggest contribution to the middle-class society in the world over the next decade. And middle- class is everything to our businesses. That drives premiumization. That drives penetration in the categories. That drives per capita consumption. So we long- term, we're very bold on India. We've got a fantastic business there. Obviously, we've seen some slowdown in the urban markets as of late. The rural market seems to be performing well. You've obviously met Prabha. We have an outstanding team on the ground that's very digitally forward, thinking about where the future is going in that market in terms of both our distribution mechanisms as well as our marketing mechanisms. We think executing very, very well. We've seen a little bit of slowdown, as I mentioned, in the urban. Long- term, a huge middle-class opportunity,
we're well positioned to go after that. I think we have got some very clear strategies in place on the ground to deliver on that. We are going to see it is going to move up and down for sure, sideways. Long- term, how we think about that business, it is a top priority for us.
Okay. You talked kind of implicitly, we talked a lot about oral care. You mentioned a couple of times Hill's favorably. Maybe kind of focus there. How would you assess current momentum in Hill's? The pet category more broadly has slowed. Hill's has, to my eye, kept pace ahead of that category. It is facing similar dynamics. Your summation of Hill's performance today, and maybe an update as to where you are in the migration away from private label in that business.
Yeah. My overall assessment is excellent. I mean, the business is performing tremendously well. Up and down the P&L, you see all the KPIs moving in the right direction. I think most importantly is the brand health is as strong as we've ever seen it. I think that's a reflection of the advertising investment, our continued strong participation with the veterinary community, and partnering with them on driving positive nutritional outcomes for pet owners. That partnership is obviously elevating the brand and its resonance with consumers. The segments, why the category has slowed, in the first quarter, Hill's grew in every single segment that we compete, grew market share. I don't think there's another major global player out there that did that. Again, science still is highly relevant to the category.
Our prescription diet business, which is obviously providing therapeutic benefit to pet owners in terms of sick pets, is driving a lot of that growth. That is wonderful for the brand and the equity long- term. The supply chain acquisitions that we made, that has unlocked a significant amount of inefficiency. You've seen obviously the operating leverage and margins improve dramatically in that P&L. While the category has slowed, Hill's is still low brand awareness and low brand penetration. We still think there's a lot of growth. The segments that we're focused on and the emerging segments in the market, we under index in all of them. We see real growth opportunities there. The innovation pipeline is terrific. Big market is the U.S. We will remain very focused on that market. Obviously, international continues to afford us nice growth opportunities in time.
We're going to be selective. That brand has a very regimented approach to how it goes to market. It's not a traditional mass market brand. We sell in very select distribution channels. We build the brand from the profession up, similar to what we do with Elmex here in Europe. That model has worked very effectively in driving premiumization, pricing, and loyalty to the brand.
Right. Leaning and playing offense. Where are you exactly in the migration away from private label capacity, which the plan is to convert to Hill's? How do you frame the margin unlock that follows?
We're kind of reaching the tail end of it. We talked about a slightly more significant impact in the second quarter than we had in the first quarter. I would anticipate by the beginning of the fourth quarter, we will be fully out of private label. We make basically no margin on private label. While it's absorbing some overheads, we have found ways to potentially mitigate that overhead absorption in other areas. We will have an accretive aspect of the margin and using that manufacturing capacity to build obviously much more profitable growth. The biggest unlock, I think, is the network optimization in our supply chain. Where we were limited in 2023 and 2024 due to supply chain constraints, while there's a short-term impact obviously on your top line, the longer-term impact is you're not able to put the portfolio assortment into the trade.
You are not able to provide innovation on a very consistent basis. That is behind us now. That supply chain is unlocking real efficiencies, thinking about how to continue to optimize productivity as it moves through there, while also bringing a lot more innovation and funding the growth into the business. I think I mentioned we could not run any of our funding the growth projects in 2023 and into the first part of 2024 because we were at capacity. When you are running at 90% utilization, you just have no time to shut those lines down to do anything. Now we are able to be much more thoughtful of how we think about the long-term aspects of the category.
Got it. Earlier this year, you announced the acquisition of a fresh pet food business out of Australia, essentially, as I understand, more of as an experiment, a learning vehicle. Granted, it's only been a few months. How has your thinking evolved, if at all, around that business? What are your plans and aspirations for it?
Yeah. Great brand, Prime 100. No secret that we've been looking to enter the fresh segment for quite some time. We've obviously seen a lot of interesting trends. The barrier to entry for us was we had to find a brand that represented the same criteria that we have for Hill's, which is premium, which is significant nutritional value to the vet, and a value that they see in the product itself, and obviously a nutritional value to the pet owner. Prime 100 fit all of those. Growing business, profitable business, obviously very strong underpinning from their profession in Australia, and an incredibly great quality in terms of recipe and manufacturing. That is going to be a great learning for us in Australia. That is our plan, to stay focused on that. We'll see where it goes.
The business is performing very well in Australia, above our expectations. We feel very good about it. It is a learning. It is going to take some time. It is a different category with a different go-to-market. Ultimately, we will see how we think about that longer term. Right now, we are focused on Australia.
Okay. I mean, in general, despite kind of a difficult environment around you, it seems like the business is firing on many of the right cylinders. I won't say all because I know you could do better. Has that changed your appetite for M&A, kind of building on the Prime 100 example to bolster capabilities? Has your thinking at all changed in terms of what role M&A plays with regard to portfolio reshaping?
Yeah. Listen, I'll be totally honest with you. M&A is really hard, very, very hard. I think what's nice about our current business environment is that our 2030 strategy is not contingent on any M&A. It's completely organic growth within the business and the opportunity spaces that we see. By definition, we're not chasing M&A to fill a gap. If we see strategic M&A that complements just like Prime 100, that's a beautiful thing. That we can drive efficiency and learning into our own business that we think long- term is right, assuming the valuations are right. I think valuations certainly have come a little bit more in check with where they were historically. We don't need a major M&A investment in order to change the trajectory of our company. That being said, if we see some strategic bolt-ons, we would certainly consider that.
Okay. Last week, you announced a series of leadership changes. I think they're scheduled to take effect in a couple of weeks, really essentially creating two COO positions and a Chief Growth Officer among some other shifts. Maybe summarize the change. I guess, what drove the change and how will the new structure better serve the company?
Yeah. What's been, I think, so characteristic of our company is our ability to attract and develop talent within the organization. This was an excellent opportunity to bring in a very proven leader from the outside who's demonstrated in an arguably very challenging category, food, to drive growth and new thinking into the business. Bringing Shane into the business is a great add-on. Historically, if I went back 10 years ago, we have not been successful bringing people in from the outside. In the last six years, we've brought in probably close to 200 people from the outside. This fresh thinking has really been well accepted within our organization. People recognize that there are a lot of great ways to drive growth in the business and drive productivity. We can learn from the outside. That speaks to the humility of our organization.
Shane's going to bring in great thinking. The Americas combination is great, in my view, because, one, they're inextricably linked from a supply chain standpoint. Two, there's a huge Hispanic influence in the U.S. where we have very, very strong businesses. Being able to leverage Latin America more effectively in that regard, we think will unlock possibilities. Latin America has great resources in the space of innovation, digital, and online. Those resources can be shared. Best practice is transferred a lot more expediently across the organization. We think there's going to be a lot more efficiency there. Panos focused on another part of the business, particularly Asia, where we see a significant amount of growth, much more of his time in that area. He's a well-versed Colgate person who knows particularly developing markets extremely well.
It's going to give us a lot more focus on that. Bringing John in, John Haslam was our president of the Hill's business, a great strategic mind. He has seen omnichannel develop at a much more rapid pace in the pet nutrition business than in the classic Colgate business. That's the future of CPG, in my view, is how do you interrupt the very disruptive consumer journey today with an omnichannel strategy and dealing with retailers who want to be omnichannel. We've done that the best with Hill's. Bringing his strategic mind into the Chief Growth Officer will allow us to continue to elevate the capabilities. Stan, our CFO, 20 years out of IBM, he's as tech-savvy as they come. Getting him to focus on obviously using our IT infrastructure to really drive growth and unlock it will be exciting.
We have Prabha for at least through October. What's exciting is now we have a senior executive leader really focused on some transformative things that I believe are going to be necessary for our 2030 strategy and accelerating those specific areas with a single-minded focus on getting to execution and deliverability across the P&L.
Great. Stan's a great example of someone who came from the outside and thrived.
Yeah, exactly.
If I'm not mistaken, you can correct me if I am. It looks like the management of skincare will move to Panos. Assuming there's no resegmentation that comes with this org change, does that mean that skincare moves back under the European segment, or have we figured that out yet?
No. You know, the skincare business is so spread around the world that we want to ensure that we get great execution. We brought in someone from the outside about two years ago to really rethink the strategy. Where do we want to play that we can play in and be effective in? That strategy is well in place now. Panos is going to go out and execute that strategy. He does that extraordinarily well in getting his face- time on the sales fundamentals required to open up new doors and distribution, getting promo improved. That's the kind of stuff that we need to do. We've got a great pipeline of new products. And we've got a great strategy that we can execute. That business has obviously been severely disrupted by the China business, particularly with Filorga.
Our U.S. business, which is where we will predominantly focus, continues to operate quite well.
Okay. From a segmenting purpose, reporting perspective, no change.
Today, we're at no change.
Okay.
Today, no change.
In the one or two minutes we have left, I guess, just how would you sum up? How would you, yeah, how would you sum up? I guess, what would you tell investors they should keep most top of mind as they think about Colgate as an investment opportunity over the next several years?
Yeah. The history of our company has been on durability and predictability. I think we've spent a lot of time internally in the organization getting the culture to understand the importance of a growth mindset and the accountability that comes with that and getting the organization to understand that, yes, that great organic growth needs to translate to dollar-based earnings growth for our shareholders. We've spent a lot of time getting them to understand the mechanisms of what does that and why we need to get the balance of pricing and volume, the premiumization in the categories, and why we're focused on making very deliberate choices on our investments around the world. We've got a great balance sheet. Our return on capital is best in class in the industry.
We will continue to obviously leverage our capital very, very carefully in the context of thinking about our shareholders in that regard. Overall, it's making sure that the income statement works. We're driving great innovation to drive the top line and brand penetration, which is happening. You're leveraging our balance sheet as we see necessary.
Perfect. Right on time. Thank you, Noel. Thank you, everybody. Thank you, Colgate.
Thanks everyone.