Good day, and welcome to the Mondelez International Fourth Quarter 2020 Year-End Earnings Conference Call. Today's call is scheduled to last about one hour including remarks by Mondelez management and the question-and-answer session. I would now like to turn the call over to Mr. Shep Dunlap, Vice President, Investor Relations for Mondelez. Please go ahead, sir.

Good afternoon, and thanks for joining us. With me today are Dirk Van de Put, our Chairman and CEO; and Luca Zaramella, our CFO. Earlier today, we sent out our press release and presentation slides which are available on our website.

Thank you, Shep, and thank you everyone for joining the call today. I am pleased to share our full year and Q4 results with you. 2020 was a successful year for Mondelez International marked by strong performance even in a challenging external environment. In response to unprecedented conditions caused by COVID-19, we took decisive and swift actions to position the company for continued success in 2021 and beyond and we delivered on all of our financial commitments for the year. I am proud of our achievements and particularly grateful for the efforts of our teams, including those on our front lines who helped us to achieve these milestones. First of all, we sustained the top line momentum we have achieved since launching our strategy in 2018, delivering another year of 3% plus organic net revenue growth. This led to record market share gains as consumers chose our products and made us clear winners in our largest categories of biscuits and chocolate. Despite COVID-19, we continued executing against our strategic growth agenda and increased investment across our business, in particular, in working media and capabilities like e-commerce. We added two very exciting bolt-on acquisitions, Give & Go and Hu, which give us more exposure to fast growing snacking adjacencies. Our continued investments were supported by an effective cost mitigation program that offset many of the COVID-19-related costs and helped simplify our business. In spite of the increased investment and costs, we were able to grow operating income faster than revenue and faster than 2019 through volume leverage and cost discipline.

Thank you, Dirk, and good afternoon everyone. Our 2020 performance was strong in terms of revenue growth, share gains, profitability and free cash flow. We delivered volume-led revenue growth for the year and the quarter of plus 3.7% and plus 3.2%, respectively. Developed markets grew 4.5% for the year and 2.8% for the quarter, underpinned by strong execution and share gains. Emerging markets increased 2.3% for the year which includes a mid-single digit decline experienced during the height of COVID disruptions. For the quarter, we posted growth of 4.1%. Some additional color on Q4. In developed markets, we continued to see elevated consumption for our biscuits category in North America, albeit growth has slowed down versus first half. In Europe, we delivered strong Q4 in both chocolate and biscuits, consistent with Q3. In emerging markets, we delivered good growth across the majority of our revenue base, including double-digit growth in Eastern Europe and mid-single digit growth in AMEA emerging markets. A small group of markets continue to face economic challenges and headwinds related to higher Gum & Candy exposure. This is predominantly in Latin America, which grew just over 1% in Q4. Overall, we continue to feel good about emerging markets and their future prospects, and in general, they have recovered quite well after the lockdown impacts in Q2. Now on Slide 11 and portfolio performance. This is an important page as it shows how well the vast majority of our business is performing during the pandemic. The strength of biscuits and chocolate, meals and powdered beverages shows that we have an advantaged portfolio with a good geographical footprint and that our execution resulting in meaningful share gains has amplified growth above category rates. Biscuits grew nearly 9% for the year and 7% for the quarter. North America was a big growth driver due to elevated demand and brand investments. Europe and EMEA also delivered strong Q4 results. Oreo was a clear standout worldwide growing double-digits and mainly Local Jewels too posted high growth this year and increased penetration. Chocolate grew more than 3% for the year and 5% for the quarter. This includes nearly 2 points of headwinds from world travel retail in the full year and the negative impact of lockdowns in Q2. But overall, this is a great category to be in, and on top, our brands continue to perform very well both in DMs and EMs and continued to gain share.

Your first question is from the line of Andrew Lazar with Barclays. Please go ahead.

Hi, Andrew. Two part question, if I could. First maybe Dirk if you could describe maybe some of the key puts and takes that you see regarding the 3% plus organic sales growth guidance for '21. I'm really just trying to get a sense for the level of visibility and maybe if there is some flex there, given how dynamic the environment remains? And then secondly with respect to Mondelez lapping some of the significant COVID costs of last year and benefiting from the initiatives and the accelerated initiatives that you've talked about. I guess would you see room for potential upside to the high-single digit constant FX EPS growth guidance, and if not just curious what the offsets might be? Thank you.

Okay, all right. Thanks, Andrew. So the 3% plus for next year. The first thing that we want to keep in mind is that it's very difficult to predict what's going to happen. While I think we delivered quite nicely on our financial commitments in 2020. Under the surface, there was a lot of puts and takes and it looks like that environment at least for the first half will continue. So it's very early in the year, we will see what happens with the vaccines and the mobility of the consumer and the at-home consumption in emerging markets. So we don't want to get ahead of ourselves. We do feel confident enough to say that this will be a third consecutive year of delivering on-algorithm, and as you might remember, that is a significantly step up from where it was before 2018. If I break it down, as Andrew asked, the tailwinds that we see is, first of all, the biscuits and chocolate categories are performing very well, and on top of that, we have broad-based significant share gains. So despite lapping that in 2020, we believe the categories will continue to perform well and that we will still continue to gain market share. The second tailwind, I would mention is that, we have very solid momentum going into '21. Our H2 growth rate was above 3% and so we see that continuing. In H2, we also invested quite heavily, that would be the third tailwind for me, with a big step up in working media, we are going to continue to do that in 2021, so that should also give us a push. And then, we can't neglect that we will be lapping a weak year in Gum & Candy, in world travel retail and some of the…

Thanks very much.

The second question. I might hand over to - thank you, Andrew. The second question, I'm going to hand over to Luca about the EPS and what we see there.

Yes. Thank you, Dirk. So maybe let me step back for a second and give you the key puts and takes on the profitability line. We count in 2021 on continued volume growth and the leverage effect that is associated with that. You remember, that in our algorithm, volume is, together with pricing, a critical component. We want to continue to be disciplined in our pricing approach and we will leverage all elements of, what we call, revenue growth management to offset what these relatively higher cost inflation than what we saw in 2020. I said quite a few times that inflation in 2021 will not be materially different than previous years, but it is moderately higher than what we saw before. And there are certain peaks around currencies, commodities, I mentioned a few times, cocoa, grains are expensive cost types and certain transportation costs and packaging. So we are good for most part of the exposure that is well covered. So I don't expect this situation to spiral out of control, but reality is, as Dirk said, there'll be top more cost pressure. On the other cost lines, we will continue to deliver productivities in line with what we have seen in the last couple of years. COVID costs will be more moderate in 2021, we called out that there will be roughly one-third of what we incurred in 2020. And most of the emerged stronger benefits will carry through 2021. The degree of freedom, so to speak, Andrew is against investment. And whether we deliver better profit, we will take that upside and we expect to invest even on top of what we had at the current level into 2021 as we really want to sustain share gains and make strides into the strategic agenda that we have. On tax and interest. I think we have been fair in terms of assumptions and hopefully that were clear. So I think high-single digit EPS is what we are going to get. I think importantly on cash flow just to round up the answer, we have to pay some taxes related to coffee transactions and what we call a $3 plus billion is actually an underlying free cash flow that is roundabout $3.5 billion. So good numbers also there that clearly rely on profitability and continued working capital management.

Your next question is from the line of Ken Goldman with JPMorgan. Please go ahead.

Thanks, everybody. I wanted to ask about the guidance about or regarding currency being a $0.10 tailwind to the bottom line this year. I just wanted to make sure I understood is that $0.10 what you're expecting to flow probably through to the bottom line, is that the maximum possible and you may reinvest some of that. I just wanted to get a better sense of how we should think about modeling that, just given your history of sort of reinvesting those additional earnings, so to speak?

Yes, I'll start and it is translation and it is based on current spot rates. So whether they stay here or they improve or they worsen, we are not going to change our stance on the investment posture. At this point in time, the $0.10 is pure upside to EPS.

I'll follow up offline on that one. And then my second question is, I was a little surprised to see the guidance for $2 billion in share repo. I know that's flexible, but you do have, I think, $3.5 billion on the balance sheet, you're expecting to generate another $3 billion. Why shouldn't we look for a little bit more aggressive buyback in 2021 and what that $2 billion implies?

Because we keep guidance consistent in terms of what we say in terms of EPS and share buybacks, you are right. We're saying that provides us great flexibility, should cash flow be better, should we decide to do something more with our coffee and might not have some acquisitions coming along, we will be flexible and we fine tune the number. I think the way you have to look at it is should the circumstances stay the same as today at least we will do $2 billion.

Your next question is from the line of Steve Powers with Deutsche Bank. Please go ahead.

So I mean - this question maybe for you, Luca, I don't know, but I guess I was looking for a little bit more of a bridge in the year-over-year moving gross margins in the quarter? And then as a follow-on what you're assuming about those moving parts into '21 because in the end, what I'm really trying to understand is, I know you don't manage the gross margin, but it seems with the inflation that is building even as you catch up on pricing versus inflation dynamics in Latin America, as you mentioned, it seems like the gross margin being up in '21 could be ambitious. So I'd love some color around that. And if you don't think you can improve gross margins, you are not planning on it, then I guess that also curious as to what the sources of G&A efficiency might be in the coming year that will enable the EPS flow through as well as the higher working media investments that you called out?

Yes. So clearly in the cost line, there was an impact due to COVID extra costs. And I think when I look at the year and I strip that out, what I can tell you is that overall gross profit and gross margins, they were pretty much in line with expectations. There is a big catch and the catch is the fact that particularly Gum & Candy suffered a decline that was around about 20%, that category is a category that is quite profitable and stripping out 20% of the volume in 2020 resulted in a sub-scale type of category with under absorption on a few P&L lines. In that regard, what I would say is, if I take out COVID and Gum & Candy, I think the level of profitability is sound. We have a couple of things that we need to bear in mind, we were afraid that we would have a subdued Christmas season which didn't happen. We had record high shares in Christmas but we spent a little bit more in making sure that the stock was rotating, that's one impact. And the second thing is, we haven't fully implemented pricing actions in quite a few places around the world as we run out of coverage particularly in Latin America, the exchange rate impact was quite material and we priced ahead of running out of coverage and we will price afterwards in an attempt to know what consumer prices are. So in structural terms, I would say that there is nothing that is concerning me at this point about gross profit. I think you will see a P&L that makes sense in 2021. The level at which we will see gross profit in 2021 will obviously depend on the level of recovery of Gum & Candy, which happens to be something that we don't fully know of and we don't fully control. But in terms of structure, I think gross profit is sound, we have announced pricing actions around the world. We have visibility to the commodity pipeline for the vast majority of it and ForEx recover. We delivered excluding COVID costs, sound productivities in 2020. We count on the same level in 2021. And by the way, when I look at the overhead line, excluding A&C, we did a terrific job in 2020 reducing overhead by almost 50 basis points and we want to continue cost pressure and keeping the costs in control. So from my side at this point, I would say, I feel overall good for 2021 GP, there might be a little bit of timing effect in Q1.

Your next question is from the line of Jason English with Goldman Sachs. Please go ahead.

Thank you for sliding me in and congratulation for successfully navigating a pretty crazy year behind us. Let's hope this year is a little less crazy. It's - thank you so much for the incremental color or all the details you've given about the underpinning assumptions here at your guidance. Based on the conversations I have with investor is I'm guessing the one area of debate that sort most hotly debated is your comment on sustained share gains next year. There is a lot of people who look at your market share performance this year and believe there is a degree of transitory benefit from the reality that you have a DSD organization versus a North America DSD against some others with warehouse allowing superior service levels, I mean the scale of your supply chain also once again allowing superior service levels and that those benefits naturally unwind and you're going to see share pressure in North America or Europe or some of these DMs where you gained so much. What do you think is - where do you think that argument is fault so or the way we get asked what gives you confidence in your ability to sustain those share gains next year?

Yes. I would say, there is a number of arguments. The first one is, if you look at the share gains that we incurred in the second quarter of '20. And then you look at what happened in Q3 and Q4, we - our share gains didn't fade, they remained quite strong, and so we could already have expected that sort of effect that you are describing, Jason, in Q4 of this year. The largest categories that we are in - continuing to shine and our performance in there is pretty good. It's not just our gains with our DSD system in the U.S., but we have 80% of our revenue base around the world where we are gaining and holding share plus the share gain itself is quite substantial. The share gain in '20 was much higher than in 2019 where we also had a share gain. So if I look going forward, what are we going to do to make sure that effect doesn't happen? First of all, we have investments and then are substantially going to increase into '21, our financial equation can afford it, you've talked a little bit about that we constantly reinvest whatever we would over-deliver in our bottom line, and for the time being, we are planning to continue to do that in order to push our growth up. Second, we are having some very good channels effect particularly e-commerce. We are also preparing to move very fast away from home, which will give us a boost, world travel retail and also convenience stores. So that will also give us an extra boost and we will make sure that we move faster than anybody else there. Our customer service is good and it's very good. We had our supply chain perform really well, but there is still room for improvement because it was good in the times of COVID, it was not as good compared to normal time. So we think we will still have an upside from our customer service. And then we are doing a lot of work on RGM in order to protect our key price points and retain consumers. We've gained a lot of new consumers into our brands. We were quite curious to see what was going to happen again in Q3 and Q4. We were able to retain them and we're counting to be able to do that again into next year. And then we have a very strong program probably the strongest that I've seen since I'm here in innovation and also in activation. So because of all those reasons, I feel pretty good about our opportunity to come - to continue our momentum in market share going forward.

Your next question is from the line of Dara Mohsenian with Morgan Stanley. Please go ahead.

So the clarity on market share was helpful. I was just wondering could you parse down the 2021 organic sales growth you are expecting. How much market share gains are you expecting after the strong gains we saw in 2020? Is it a similar magnitude, it sounds like maybe perhaps it's continuing but smaller? And then second just on category growth, are you expecting an acceleration in category growth overall in 2021 relative to 2020. Obviously, there were some areas like gum or chocolate and travel retail that were down, significantly there are other areas like biscuits that improved sequentially in 2020. So just sort of curious for overall category growth? How are you thinking about that growth in 2021 relative to 2020 and if you see any acceleration there overall?

Yes. Well, I would say, as it relates to organic sales growth and share gains, we are planning to continue share gains, but not to the magnitude that we've seen in 2020. We don't communicate on the magnitude, we just give the countries where we have gained or increase our market share, but we expect that the share gain will be of a lesser magnitude, I can tell you that and I think it's a reasonable assumption. As it relates to the category growth rates, in the measured channels, it was 3.1% for 2020 which was a slight decline versus 2019 where we saw a 3.6%. And then of course you have the unmeasured channels, which were declining like away from home and world travel retail. So likely if you would add those channels to it, you were probably looking at the total growth very, very minor growth and most of our outperformance of the category was driven by our market share gains in 2020. I think in '21, what we are expecting at least is some reversion to the norm with the customers going back into the unmeasured channels from the measured channels, and so as the restriction ease, so that the - that will mean that the measured channel growth will slow next year, but that the combination of the two will remain about the same, maybe slightly less. And so we don't have to count on as much share gains to get to the growth that we are talking about. I hope that's helpful.

And then just one other question on the A&C line, clearly you guys ramped up in the second half of the year after a pullback in the first half. Did - I'm wondering did you see the same efforts in terms of increased ad spend generally from competitors? How are you feeling about your share of voice in the marketplace on the ad spend front in the back half of the year and leaving 2020? Thanks.

I don't know, if Luca wants to say something about our investments, but as it relates to competition, I can quickly comment on that. Yes, they are also increasing their spend, so I would say that our share of voice has remained about the same. And everybody has done a little bit the same, I would say, didn't spend that much in Q2 and came back in H2. So I don't see any major differences there, but I cannot predict what's going to happen in the beginning of the year, I just know what we are about to do. So maybe Luca you want to talk a little bit about our overall investments.

Yes. So in terms of investments, Dirk, you are right, we stepped it up particularly in the second half, but I think you've seen the material we called out that working media is growing 17%. We plan to keep the same level of increases in 2021. So we are building on a continuous investment in working media which importantly comes together with improved ROI, which means high quality media we are putting behind our brands. We are investing more in digital, which in general terms commands a little bit more ROI than other regular channels. And third, again the essence of diverting nonworking media into working media improves the overall spending ROI. So there is a compounded effect between increasing investment and having a better return on what we spend. And again, I think we said it well, when we look at market and share in Q4 we didn't slow down overall for the company, and what that means, is that, yes, we had clear advantages in terms of supply chain at the beginning of the crisis, but as the situation normalized for us and for other competitors, people continued to favor our franchises to others. And I think one of the drivers is clearly the fact that we have invested more, that we have more meaningful innovation and that we are activating effectively at point of sales.

Your next question is from the line of Bryan Spillane with Bank of America. Please go ahead.

Couple of quick ones from me. First, Luca, I don't know if I missed it or not, but did you give guidance for '21 on capital spending?

No, I didn't, but I think it is 3.5%. That's the number you have to have in mind.

And then again second one just with regard to kind of modeling out revenues for 2021, in 2020 emerging or developed markets grew faster than developing and emerging markets. I mean in particular you grew over 8% in North America. So we're kind of thinking about contribution and that balance in '21, would we expect that to flip, are you expecting emerging - developing and emerging to grow faster than developed? And then second, North America, given how strong that comp is, is that something that actually grow off of in '21?

We usually don't provide segment guidance and I would like to stay away from that, but I think the - what you are saying makes sense. Now I think you have to bear in mind that within developed market, Europe wasn't stellar in Q2, that Europe has world travel retail in it that got a material impact. So I expect Europe to grow. I think in the case of North America, obviously, we are lapping a 13%, 11% I believe respectively in Q1 and Q2 so that would be the toughest comparison. But then in the second part of the year, numbers are easier and hopefully as gum comes back, we will have a positive impact. We are putting together and we have put together actually quite good plans for the three acquisition platforms that we acquired in the last few years. And so I think there is more to come from North America in developed markets, but I wouldn't draw the conclusion that it is all bundled together because North America grew double-digit in the first half. In emerging markets, again, I'm really happy about what I'm seeing. China grew nicely in Q4, almost double-digit, it was just shy of double-digit. India grew more than 10% so did Russia. Brazil grew high-single digits so I'm positive about the evolution of developing markets overall. Clearly, there are some of them particularly in Latin America that are impacted by Gum & Candy. But again as we start lapping Q2 numbers, that should be better. I think as you step back and you look at 3.1% category growth in 2020, we have always said categories will grow 3% or so. I think you should expect the same type of category growth with all the puts and takes, clearly, biscuit being a little bit lower but Gum & Candy being much more positive, you should expect category growth in the neighborhood of 3% and on top of that towards shares.

Your next question is from the line of John Baumgartner with Wells Fargo. Please go ahead.

Luca, two part for me. First off, reinvestment has been a big theme behind the top line improvement over the past two years and again here in 2021. And I'm wondering if you could speak to what's driving the higher return on spending for media investment. How much do you attribute to just straight cost improvements from agency consolidations and then how much from other aspects, whether it's better quality programming from the local first or even better in-store activation that better leverages that media spend?

Yes, maybe I'll let Dirk take this one. I mean I have a point of view, but I think Dirk is the expert here. So yeah, Dirk.

Yes. Well, first of all, we have been shifting around in our A&C budget. What we've done is we have increased our working media and the balance was, to my opinion, a little bit off. So the net effect in media has been significant, as Luca was commenting in last year, and we have continuing that effect in '21. On top of that, we are increasing our overall budget and so we have increased the percentage of A&C of net revenue in '20 and we're going to do the same in '21. The third driver of our increased ROI is a bigger switch to digital. So we are now well above - 50% of our investment is in digital and we know that we can drive a much better effect and much better targeting of our consumers. And then the last effect, I would say, for our increase in ROI is the fact that we've done a lot of work on our brands, worked on purpose, we worked on communication, we have done a number of things that really have had a big effect, call it, Oreo, Cadbury, Milk, really some big strides, for instance, to mention the Lady Gaga Oreo that's going to hit stores today. I think that's generating a lot of buzz and we've done many of these things. There is some effect, but it's minor, well minor is maybe a big word, it is not the biggest driver on agency rationalization, if I can say it, and some margin negotiation. So there is some of that in there, but that is not - certainly not the biggest driver of what we've done.

Thanks Dirk. I'll look for the Lady Gaga. I appreciate that. And then secondly, just a follow-up there. Going back to FX, we've seen FX headwinds for a number of years now and I'm curious, to the extent that those may now reverse in your favor for translation yes, but also maybe even driving some trickle down benefits operationally where maybe you'll leave some of them to take pricing in foreign markets. To what extent do you think the market doesn't fully appreciate the potential benefits from that on EPS or even volume growth in your stock valuation?

Yeah. Thank you, John, for the question. Clearly, we leave it to the stock market to determine the fair value of Mondelez. But let me provide some perspective. The pickup of $0.10 in EPS due to translation clearly adds to be great progress we have made as a company I believe over the last three years. And it is fair to say that while the valuation has improved in the last three years, we still stand behind in terms of peer average and best in class. And so that gap hopefully over time will close. When I consider the brands that we have, the geographic portfolio, the category exposure, our track record over the last three years, I would say, that we are well positioned and I would assume that over time that should be reflected in our valuation and the same conclusion quite frankly is with some of the parts. So I think when I step back and I look at the quality of EPS, the $0.10 of EPS that we're adding at current spot rate, I think there should be upside, but obviously I leave it to the market to decide. I think you had also a point about transaction ForEx, what we call transaction ForEx, and that clearly transaction ForEx is a benefit for all the businesses we have around the world. But remember, we are covered entities embedded into the guidance we gave. So hopefully, I addressed a couple of points you were asking.

Your next question comes from the line of Chris Growe with Stifel. Please go ahead.

I just wanted to ask you, if I could and I have just been following on the discussion you've had around costs and pricing. I guess just from a high level, do you expect pricing to offset inflation for the year, you did talk about pricing kind of catching up with costs? And then just to think about would pricing as it's been typical represent roughly half of your organic revenue growth for the year, would that be a reasonable assumption for the year?

Yeah. Maybe there would be a little bit more - a slightly more component of pricing, given the fact that, as we said, there is a timing effect in Q4 that should be fully recuperated into 2021, but I don't think it is going to be a major one, I think the 50-50 split is still something that is plausible, maybe in Q1, it will be a little bit less. I think to your question about are you offsetting all your costs. I think the number one qualifier should be with or without COVID. And without COVID and the fact that COVID is subsiding, we would be fully expecting the cost inflation over time as we enter the year and as we get close to the end of 2021, I expect the run rate of gross profit to be at the same level as we would have been without COVID, so that has always been the intention. Over time, we want to be price disciplined, we will price our inflation and we believe that is one of the building blocks of us being able to invest more in the company.

Okay, thank you for that color. And then I just had a quick follow on. You've talked about implementing a pretty meaningful SKU reduction program. And I just want to get a sense and maybe perhaps this fits in with that answer, but does that provide - is that occurring as you expected and is that a of volume weight for the year, but you're seeing a much better mix improvement, I just want to get a sense of where we stand on the SKU reduction program?

Okay. Yes, the short answer to that is, yes. We are on track and it's really part of a broader simplification program in order to drive both top line and bottom line. So it's a reduction of SKUs, reduction of the number of innovation initiatives, we are doing bigger innovation initiatives and then also a strategic review of our brands. We are aiming for 25% reduction in every region, there is no SKU to one category or another. And so in the sense that what we have stopped manufacturing so we don't make any more - we've already achieved a double-digit reduction in '20, I need to take into account for instance that in Europe those changes can only be done in the first quarter of the New Year so they are going to do their SKU reductions right now. And we also have to do reduction right now because we are protecting our shelf space and try to minimize waste. And so we will - going forward once we reach the level we were aiming for - to keep the lower SKU count and we're going to apply a very strict one-in one-out approach to new products. We - important to mention is probably that we are not expecting any negative top line effect since this 25% only represent 2%, 3% and keeping our shelf space we should be fine. And going forward, there is a number of benefits as it relates to less complexity in manufacturing, for instance, better customer service, reduction of our inventories. And so we - and also more sales we - which seems to have more space for our top selling SKU. So it's going to support the delivery over the long-term algorithm. It won't be transformative from a margin perspective to our opinion though. It will help, it will improve, but it's not that you will see a massively improved gross margin.

And your final question comes from the line of Rob Dickerson with Jefferies. Please go ahead.

Thanks so much for fitting me in. Dirk, I guess this is a broader question kind of just in terms of portfolio position going forward, obviously you continue to do very well with the brands that you have, but at the same time we've seen some new innovation with gluten-free cookie, gluten-free Oreo recently and then obviously the full acquisition of Hu, you continue to call out that well-being, sustainability is obviously a focus. One could argue that kind of over time even if your core brands to do well, but there's still a lot of opportunity in distribution opportunity kind of more in that kind of well-being side. So just kind of, maybe if you could just spend a little time just providing some color kind of how you think about that internally, how do you leverage your capabilities in R&D survey work, what have you to kind of always make sure that you are on trend going forward with the brands you have, but now also with the new brands and then maybe if you could kind of tie-in then how you will also be thinking about go forward acquisition opportunities kind of, of course of the core or still kind of maybe a little bit broader on the well-being side? And that's it. Thanks.

Okay. It links in a little bit with that question about SKU. So the way we look at it is if we launch new SKUs or new sub-brands or new brands or by brands, they need to have a certain level of sales right now and they need to have the potential to grow to a certain level. So as you do that analysis, there is certainly an amount of health and wellness in that mix, but it certainly wouldn't be, to be honest at this stage, the majority of what we do. Every year, it's more, but we are trying to very carefully manage the balance between more indulgence and more health and wellness to - over time in order to keep our mixed growth rate, if I can call it like that, because what you have is that health and wellness is growing faster but it's smaller. And so if you look at mixed growth rate, we need to do both and at the moment we need to do a lot more of indulgence. As it relates to how we are thinking about it from an innovation, R&D and an acquisition perspective, clearly, we want to continue to increase our exposure to health and wellness. And particularly if we think about the next 10 years, let's say, I do expect that that mix shift between indulgence and health and wellness will continue to balance more and more versus health and wellness, we will accompany that mix and so we need to launch more and acquire more in that sense. The big areas that we are looking at internally with our R&D team and also externally is, one is an example of Oreo gluten-free, has to see with the ingredients, the nutritional composition, what can we improve, how can…

And there are no more questions at this time.

I think that's the end. Yes, sorry go ahead.

And there are no more questions at this time. I would like to turn the call back to management for closing remarks.

I was jumping the gun here. Well, thank you very much for your time, your interest in the company. We feel good where we've ended 2020. We feel good about 2021. We have momentum. We feel we are coming from a position of strength. And so we hope to be able to provide you some good news as we go through the year. Thank you.

Thank you, everyone.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect your lines.