EFiled: Jul 08 2022 04:57PMEDa“'-
`Transaction ID 67805015={°/,\4,.1"|)\")
`Case No. 2020-0881-LWW0.72=on
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`Or pele
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`Exhibit 48
`Exhibit 48
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`EFiled: Jul 08 2022 04:57PM EDT
`Transaction ID 67805015
`Case No. 2020-0881-LWW
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`

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`Johnson & Johnson (JNJ) Consumer and Medical
`Devices Business Review - Brokers Conference
`Transcript
`
`seekingalpha.com/article/4174938-johnson-and-johnson-jnj-consumer-and-medical-devices-business-review-brokers-
`conference
`
`Johnson & Johnson (NYSE:JNJ)
`
`Company Conference Presentation
`
`May 00, 2018, 08:30 AM ET
`
`Executives
`
`Joseph Wolk - Vice President, Investor Relations
`
`Alex Gorsky - Chairman and Chief Executive Officer
`
`Jorge Mesquita - Executive Vice President, Worldwide Chairman, Consumer
`
`Josh Ghaim - Global Chief Technology Officer, Consumer
`
`Alison Lewis - Global Chief Marketing Officer, Consumer
`
`Sandra Peterson - Executive Vice President, Group Worldwide Chair
`
`Shlomi Nachman - Company Group Chairman, Interventional Solutions & Specialty Surgery
`
`Ciro Römer - Company Group Chairman, DePuy Synthes and Medical Devices North
`America
`
`Michael del Prado - Company Group Chairman, Ethicon
`
`Peter Shen - Global Head, R&D, Medical Devices
`
`Euan Thomson - Global Head, R&D, Medical Devices
`
`Ashley McEvoy - Company Group Chairman, Vision
`
`Xiao Yu Song - Worldwide R&D Leader, Vision
`
`Dominic Caruso - EVP and Chief Financial Officer
`
`Analysts
`
`David Lewis - Morgan Stanley
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`Joanne Wuensch - BMO Capital Markets
`
`Glenn Novarro - RBC Capital Markets
`
`Robbie Marcus - J.P. Morgan
`
`Tony Butler - Guggenheim
`
`Jayson Bedford - Raymond James
`
`Larry Biegelsen - Wells Fargo
`
`Joanne Wuensch - BMO Capital Markets
`
`Geoff Meacham - Barclays
`
`Danielle Antalffy - Leerink Partners
`
`Vamil Divan - Credit Suisse
`
`Anthony Petrone - Jefferies
`
`Alex Gorsky
`
`Well good morning everybody, it is great to see you’re here. I appreciate those of you that had
`to get through thunderstorms and weather, I head one story from David Louis right before I
`got that all the flights were cancelled out of Boston last night. So he drove in and he got here
`about 3:30 in the morning. So David, Kudos to you. We'll sure you get plenty of coffee
`throughout the day.
`
`And we tried to arrange everything and make it pretty convenient and nice except for the
`weather. That's one thing that we probably can't control, but again we really appreciate the
`effort you made to be here with us today and really welcome to the 2018 Investor Relations
`Day for both our medical device as well as our consumer segments.
`
`Now I think we've got a really exciting and interesting day planned and I'm not going to
`spend too much time up here because I don't want to steal the thunder from the people who
`are actually closest to the business and who are making things happen each and every day.
`But I'm very excited about what we and particularly with they are going to be talking about
`with you today.
`
`Now since we're here in New Brunswick, the very home of Johnson & Johnson where we
`started over 130 years ago, in fact if we get a chance, we took the original building, the
`powerhouse, and we turned it into a museum. And we've housed it now and it's got some
`wonderful stories about our heritage and of course a seminal piece of that heritage is our
`th
`credo. And this year happens to be the 75 anniversary of our credo because it was really
`institutionalized literally on the eve of the company going public by Robert Wood Johnson.
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`And what I would say is that it is absolutely relevant today as it was 75 years ago and perhaps
`even more so given the turbulent world that we live in and we're dealing with everyday. And
`it starts with our first responsibility, again very first thing to patients, consumers, to doctors,
`the nurses, mothers, and fathers, all the other customers who use our products each and
`every day.
`
`It also includes our employees, many of whom you're going to be here today, not only in this
`room but when you're outside the exhibits, the communities, yes here in New Brunswick, but
`more broadly now around the world. And of course our commitment to you, our
`shareholders, many of you are in the audience with us here today.
`
`Now as the management of this great company, I think we've got a real responsibility to keep
`you informed about our business and our goal today is we want to make sure that you
`understand not only why, but actually how all of our efforts are really centering on a few
`primary areas. One, it's about innovation and it's got to be about innovation in everything
`that we do. Yes about our products, but it's also about the way we're connecting with
`customers everything that we're doing each and every day.
`
`Next is about our execution, because we can have the best plans, the best power points, but at
`the end of the day if we're not making that come alive if we're not delivering on that we're not
`doing our job and what you'll see today is a strong emphasis and focus about making sure
`that we're delivering on all of our commitments.
`
`And finally, it's about customers, because we think that Johnson & Johnson we're uniquely
`capable of partnering with doctors, and surgeons, and patients, hospital administrators,
`trade partners, and other people in that broader healthcare ecosystem. So simply put, we're
`here to better serve their needs. And all of this of course is designed to consistently and
`constantly improve our performance.
`
`Now one of the most important reasons I think business reviews like this are critical. It's not
`only that you get to hear from me directly as I do the introduction her this morning, but also
`you get to hear from our leaders, the people who are actually in the trenches running our
`business around the world each and every day. And I've always believed that Johnson &
`Johnson, one of the most significant sources of competitive advantage that we have mainly is
`our people.
`
`And it's not only their talent, their experience, entrepreneurial spirit, but it's also their
`dedication, their purpose and mission. Now today you're going to hear from a wide variety of
`leaders who truly embody the spirit and I think what you're going to see is they've got a sense
`of urgency and innovative boldness that's going to accelerate our performance and going to
`continue to drive our performance for the next 132 years.
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`I think the other thing that you're going to notice about this group of leaders today, they are
`diverse, some have been with the company 30 years, some have been with the company three
`years. They work across sector, across region. They bring a unique perspective to the table
`and sometimes we debate it out, but always with the best interests ultimately of Johnson &
`Johnson in mind.
`
`Now in spite of the white carpet and some of the panels, another thing that I want to make
`clear today is that we're not here to have a Broadway production. We want to be fully
`transparent. We're going to share with you some of the lessons that we've learned. We're
`going to show you how we're taking that knowledge and insight that we picked up along the
`way to better meet the needs of customers and patients going forward and then ultimately
`improve our success as we look through the remainder of 2018 and beyond.
`
`So look, in this ever evolving, more dynamic competitive environment, certainly and I've seen
`in 30 years that we're working in now, we've got to be smarter, we've got to be faster, we've
`got to be more agile, more strategic and execute better than ever before. In our teams the
`leaders that you're going to be hearing from today are committed to doing just that.
`
`Now the good news is, we lead in many of the markets where we compete. In fact we've got
`27, $27 billion or more platforms across our portfolio and 15 of those are within the
`consumer and the medical device businesses which we're going to be talking about today.
`And in the areas where we need improvements we are aggressively taking action to position
`ourselves for better growth.
`
`Now the collective leadership experience of the teams presenting today, they've
`demonstrated the ability to seize opportunities and execute with excellence, but also they've
`demonstrated their ability to turn around declining businesses. And in a broad business over
`the long term you're going to need to do that from time to time and we've got those
`capabilities and that's evidenced by what we did in OTC in consumer, in our contact lens
`business just a few years ago in our healthcare. And we are very confident and committed in
`our ability to replicate the success going forward.
`
`So let me make one point absolutely clear. Our number one priority is to drive superior
`performance within each one of our business segments. And to do this we benchmark track
`and hold every one of our Johnson & Johnson leaders accountable for metrics to focus on
`things like innovation, execution, customer satisfaction, financial performance, portfolio
`management, long term sustainability, and very importantly, credo values and leadership.
`
`Now it's no secret that some of the changes that we're seeing in healthcare today they do
`reflect in essence a new normal. So as we talk about a lot among our leadership team, get
`used to it, this is the way we're going to have to function, it's constant. It never stops. It's
`global. Challenges, opportunities are happening every day with breathtaking speed. And
`we've got to ensure that we actually thrive in this environment, that it inspires us to do even
`better.
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`Now we feel after a lot of debate, discussion, that our broad-base in healthcare is a source of
`competitive advantage and also a source of true strength. By being positioned across three
`vital aspects of healthcare, pharmaceuticals, consumer and medical devices, we've got a
`unique line of sight across the entire healthcare system. And our broad-based well it's not
`just about heritage, but it's a strategic choice that's grounded in long-term performance and
`we believe an understanding of healthcare in the future.
`
`And if you think about it our broad-base well that it enables us to first create and access
`growth opportunities across multiple sectors of the healthcare market all at once. It also
`positions us better to be the strategic partner of choice for technology companies and
`innovative startups for sciences, for entrepreneurs who benefit from the deep healthcare
`expertise that only Johnson & Johnson can provide across so many different sectors.
`
`Additionally, we're able to work with local governments, public health organizations, where
`we're collaborating more than ever to address the world's most pressing healthcare
`challenges. And we're doing all this while providing our customers with a broader range of
`products and solutions and the opportunity to partner with us, particularly in large
`healthcare systems on attracting patients, improving patient outcomes, and ultimately
`reducing the costs for episodes of care.
`
`And finally, we can realize significant advantages and scale that give us the ability to achieve
`more efficiencies, better effectiveness across all the sectors, that also allow us to invest in
`growth for the future. So we operate under this manner and we continue to do so in the
`future, we think it's produced significant long term results.
`
`Now it's important to recognize there are markets ebbs and flows, we're seeing that today.
`However, we've got a long term proven track record of strong shareholder returns which we
`believe is a result of managing our business for the long-term. Having that relentless drive for
`innovation, our passion around execution, strong customer focus and disciplined portfolio
`management which continually allows us to invest and drive future performance.
`
`Our capital allocation priorities, well they remain consistent and we believe that the recent
`tax reform, it actually provides us with even greater flexibility. And we regularly review and
`discuss these priorities as part of an ongoing strategic dialogue and planning with our senior
`leadership team, but also with our entire board of directors. And as you know, our first
`priority is investing in organic growth through R&D in commercial activities and driving
`operational efficiencies through other investments in our business and you're going to see
`many, many examples as we go through the discussions today.
`
`Our next priority is delivering strong dividends to our shareholders and as we recently
`announced in April, we increased our dividend by 7.1% which I'm proud to say represents the
`56th consecutive year that we've increased our dividend. And then we target value creating
`M&A and licensing deals. In fact we've executed over 20 deals and we've invested more than
`$40 billion over the last two years.
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`And this includes companies like Actelion which added the sixth therapeutic area to our
`pharmaceutical business. Medical Optics, which allows us to expand into new areas in the eye
`health care space and Vogue which we believe provides a compelling beauty growth
`opportunity. Now when you combine all these acquisitions, we think they're contributing in a
`very meaningful way to our growth.
`
`And lastly, we also consider other prudent ways to return value to shareholders such as stock
`repurchase programs. And as we've demonstrated our financial strength well it gives us the
`ability to do all of these things simultaneously.
`
`So now what I'd like to do is take just a few moments to highlight the strengths and the
`opportunities for each of our different business segments, but first I think it's important to
`emphasize what we're going to be talking about today is a 132-year-old company that we're
`very proud of, but has got a sense of urgency, is not complacent, that it's not looking back but
`moving forward as fast as the change happening around us.
`
`You just think about all the global, technological, economic, political and healthcare industry
`fronts and in fact we think of ourselves much more as 132-year-old startup, that's innovating,
`executing each and every day to win our customers and shareholders trust, your confidence
`and support. And look we're not afraid to acknowledge areas that we need to fix. We want to
`talk about them learn from them to make us better going forward and we firmly believe that
`Johnson & Johnson is strongly positioned for continued and future growth.
`
`So let me start with our pharmaceutical business. Now it's been an industry leader in just
`about all performance measures including things like R&D productivity, commercial
`capabilities. The group continues to deliver strong topline growth while also increasing
`investment to further develop our incredibly strong pipeline of innovative new medicines.
`But I'll also tell you we are far from finished and despite the current pressures from
`biosimilars and generic entrants into the market we are confident the continued growth of
`our marketed products, the expected launches from the robust pipeline, all these things
`position us to continue to grow well ahead of the market.
`
`Now we also continue to submit regulatory applications for new molecular entities and we
`expect to file for the approval of up to eight new compounds by 2021, each with more than $1
`billion of peak revenue potential. Our key components for growth include things like growing
`markets, increased patient penetration, new indications and line extensions including more
`than 10 each of which represent more than a $0.5 billion of opportunity.
`
`And finally, an exciting new entrant into the pulmonary arterial hypertension market with
`Actelion. Now we're confident that all these factors pulled together should drive above
`market growth well into the future. But today, well today we're here to talk about our medical
`device and consumer businesses. So let me highlight what you can expect from these leaders.
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`First, with our Consumer segment, it is very important to Johnson & Johnson, in addition to
`its strong reputational value, it's this business that provides us with the capabilities to gain a
`deep understanding of consumer and patient insights particularly as these audiences become
`much more active in their decisions impacting their overall healthcare and treatment
`regimens.
`
`We see rapid transformations happening all around the world due to demographic, socio-
`economic and technology shifts and this has resulted in a growing global consumer class that
`are interested in things like natural health, beauty products and services that more and more
`incorporate concepts of total health and wellbeing. And look, they want all this and they want
`it on their own terms, and they want it on a touch of a button or screen, and the rising income
`in emerging markets, well it’s also fueling the demand for health products.
`
`And this rapidly changing landscape in the consumer market, we believe creates significant
`opportunity for a company like Johnson & Johnson. And I'm confident in our strategies to
`move quickly, address new market needs, work with customers from the individual consumer
`to the large box retailers, as well as the e-commerce channels and everything in-between.
`
`Now in today's presentations, you're going to hear about the strong plans that we have to
`have sustainable above market growth in 2018 and beyond from many of our dynamic and
`science based iconic brands and franchises. Now many of which you know and love and I
`hope that you use every day, you look even better, feel better from Johnson's Baby to
`Listerine to OGX to Neutrogena, you'll see the right outside, but look when you see what
`we're doing you will have a much better understanding of how we're leveraging consumer
`insights, preferences to design, tailor and deliver ultimately superior products.
`
`And you’re going to hear a lot about today is how we're doing that with the revitalization of
`baby care and our oral care franchises. We're going to be implementing an omnichannel
`approach to ensure that these products are available whenever and wherever consumers are
`shopping. And we believe that the top line growth I just referenced will be met with even
`greater bottom line growth as we continue to improve our productivity and margins.
`
`So let’s now transition to medical devices and we've got powerful opportunities for growth
`across orthopedics, surgery, interventional solutions and our vision business. And if we
`reflect on it for just a moment more than a century ago Johnson & Johnson pioneered the
`concept of sterile surgery and over the decades we've led the way with many significant steps
`forward.
`
`It's estimated that almost 90% of people living today in developing countries don't have
`access to safe and affordable surgery and millions of lives have been lost over the last several
`years from conditions needing surgical care, well that just wasn't available where they live.
`And I can't emphasize enough the enormity of the opportunity in surgery and medical
`devices to deliver better outcomes and ultimately help people live healthier lives.
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`Now we're committed to closing this gap through our solutions and our innovations. In
`medical devices, we have businesses displaying great strain, businesses such as vision,
`electrophysiology, bio surgery, endocutters, hips, trauma, but we also fully recognize that our
`progress has not been uniform across the entire portfolio.
`
`There are areas where we must and we will improve such as our weaknesses in knees and our
`spine businesses. Now we've taken strategic actions to refine our portfolio through our 20
`plus acquisitions, the pending divestitures of certain businesses and a thoughtful deployment
`of resources, but we've also increased investments in critical capabilities, technologies and
`solutions frankly that our customers are more and more demanding.
`
`Additionally, we're improving our cadence of innovation with 15 to 20 major product
`launches planned for 2018. Also our robust pipeline includes a truly differentiated
`orthopedics robotic solution in Orthotaxy as well as our Verb Surgical platform where we are
`creating the next generation and frontier of digital surgery. And we're simplifying our
`operations, developing new commercial models with a focus on execution to meet the needs
`of customers and patients when, where, and how they want their needs to be met.
`
`Now another important factor is technology is profoundly transforming this space and we are
`actively assessing, developing and implementing technology and strategies across all of our
`platforms. We believe these drivers will deliver sustainable above market growth across the
`entire breadth of our medical device businesses starting today and we are committed to
`delivering across the portfolio in 2020.
`
`So in closing, first and foremost I want to thank you for being here today and investing your
`time in Johnson & Johnson. And you know we are certainly proud of our historical
`performance, but I'll be very clear we have an even stronger sense of urgency and excitement
`about our future. Your trust and confidence in us is something that we never take for granted
`and recognize that we need to earn it each and every day through innovation, execution,
`customer focus and last but never the least, near and long-term performance.
`
`And you've got our absolute commitment that we'll hold ourselves accountable and execute
`on the strategic plans that you're going to hear about today fulfill all of our credo
`responsibilities where we always keep the customer and patients at the center of everything
`we do and ultimately profoundly change the trajectory of Health for Humanity.
`
`So before I turn the stage over, just a couple more logistics. You're going to have a chance to
`hear from each of our sectors on their own, we're going to do multiple panels where you'll get
`a chance to engage directly with the leaders responsible for those particular business, so and
`by the way we've used the survey information that you provided from past meetings to try to
`improve our performance.
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`As I told you feedback is a gift along the way and very importantly myself Dominic and Joe
`will be here throughout the day as you probably remember from previous meetings from time
`to time we may chime in as we go along, but we will also Dominic and I and Joe will be up
`here for a panel at the end of the day. So if there are questions that have not been answered
`that are specific to the particular businesses, but are perhaps more at a corporate level or
`regarding some of our strategies we'll be here, but also during the breaks in between if there's
`any questions you have we are here for you and we want to make sure you walk away today as
`I mentioned earlier with a very clear understanding and excitement for our future.
`
`So with that, it's now my turn to hand it over to the consumer team to walk you through our
`consumer business in detail. Thank you very much everybody.
`
`Operator
`
`Ladies and gentlemen please welcome Executive Vice President, Worldwide Chairman,
`Johnson & Johnson Consumer, Jorge Mesquita.
`
`Jorge Mesquita
`
`So, good morning. It's great to be back here with you to talk about our global consumer
`business. I hope you saw in the video we just shared with you how proud we are of our long-
`standing tradition of game changing transformational innovation. Our business has been
`built by innovation that truly invented new categories or reset the standards for the
`categories in which we play, and that will always be at the core of our success and something
`that we're committed to continue to drive as we go forward.
`
`Now the key messages, I want to get across to you today is that we are well positioned to
`drive above market, sustain top line growth, starting in 2018 and beyond that we'll do so by
`embracing the new omnichannel where consumers are shopping in, whether it's in brick-
`and-mortar stores or online and e-commerce which represents a massive opportunity for us.
`That we did we have a powerful innovation pipeline one of the strongest in our history and
`we will reinvent in particular the baby care and the oral care categories. And then we are
`committed to continue to improve our operating margin even as we invest in the business to
`sustain our top line growth.
`
`Now as way of background, we play in six broad categories. OTC and beauty being the largest
`of each, baby care and oral care and we also play selectively in wound care and in women's
`health. OTC and beauty each represent a little over 30% of our turnover, so combined there
`are more than 60% of our sales. But we have strong leadership positions in baby care and
`oral care as well.
`
`We have a large global footprint and more than 50% of our turnover is outside of North
`America and we have very strong operations in Europe, Middle East and Africa and in Asia
`Pacific. We play in large and attractive categories that are very profitable. Combined that
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`represents over $500 billion in turnover. And these categories are growing faster on average
`than the broader FMCG industry. And if you look at consumer trends, they're both well to
`ensure these categories will continue to enjoy above FMCG growth as we go forward.
`
`We see consumers taking a much more educated and proactive stance in caring for their
`health which bodes well for our OTC business. Consumers want to pursue beauty through
`health, a beauty that comes from wellbeing and wellness which again paves the way for
`brands like NEUTROGENA and AVEENO. We're seeing an aging population trend across
`both the developed and the developing world and with it comes a number of healthcare
`issues we can address.
`
`Unfortunately we're seeing a sedentary lifestyle trend across the entire world now migrating
`also to the developing world and with it come a series of obesity and healthcare issues that
`again we are well positioned to address. And every year 135 million new babies are born and
`we're here to meet their needs as well. So we're well positioned and we're playing in
`attractive, profitable, and fast growing categories.
`
`Now about our performance, we had a great run between 2014 and 2016. We grew about
`3.5% ahead of the market and we gained market share in that period and we made significant
`improvement in our profitability. We grew operating profit 20% annually in that timeframe.
`In fact we doubled our operating income from $1 billion to $2 billion in that timeframe and
`significantly expanded our before tax margin.
`
`However, last year we hit a speed bump. Our top line growth slowed down and we grew very
`modestly and this reflected a couple of major factors. One, we saw a temporary slowdown in
`the categories in which we compete in that timeframe and we also saw inventory reductions
`across our customers both in developing and developed markets and that led to the
`slowdown in our top line.
`
`We were able to hold our market share and we improved our margin modestly in 2018. In
`addition to these results, we're very pleased with the fact that the six acquisitions we made in
`2016 collectively we're ahead of plan both in terms of top line and bottom line performance.
`So we accomplished a lot in 2017 but it clearly wasn't our best year, but it was a very valuable
`year for us because we learned a great deal.
`
`And what we learned is that the pace of change in the consumer industry is accelerating. In
`fact we learned that our industry is being disrupted. What we're seeing is that the competitive
`advantages upon which the FMCG industry has been built are not as relevant today as they
`once were. So for example, it used to be that large companies like J&J are at a competitive
`advantage in terms of attracting the best talent. But what we're seeing today is that for
`students joining the workforce, joining a smaller company a startup enterprise, that is more
`entrepreneurial has certain appeal to them.
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`It used to be that building nurturing brands was something expensive that only large
`companies like ours could do, but the reality is that it's relatively affordable now for you to
`build the brand online and to create an active community of loyal users very efficiently. It
`used to be that manufacturing assets, large plants was a moat, a barrier for entry. But again
`you see today across the world that small companies, new entrants can access excellent
`contract manufacturing in just about every region. Retailer relationships are very important
`and we're very proud of them, but if you are a newcomer to this industry you can sell directly
`to your consumers online efficiently.
`
`Innovation as I said has been and will continue to be an important source of differentiation,
`but these small entrants that join our industry can do so as well by outsourcing some of those
`elements of innovation. And then lastly, financial firepower, a great strength of Johnson &
`Johnson is not an impediment for a new entrant to come to this industry. Given this
`relatively low interest rate environment, abundant VC Capital even crowd financing. It's
`relatively easy to raise the money you need to start a new business.
`
`So what we're seeing as a result of all this is that there's a digital disruption that is changing
`the face of the consumer industry, lowering the barriers for entry and paving the way to do
`this new class of star entrepreneurial entrants. And at the heart of this digital disruption is a
`new consumer centric paradigm that is challenging the traditional value of scale as we have
`defined it and is forcing a disruption in the retail and media landscape.
`
`And what we're seeing is the emergence of a new how do win playbook which is characterized
`via asset light infrastructure and the creation of highly personalized on demand consumers
`experiences which is what consumers want today and owning that consumer relationship and
`its related ecosystem has now become the greatest source of competitive advantage.
`
`So the question is what are the strengths of these new entrants? What is that they do
`uniquely well? We think we have that figured out because among other things we have the
`privilege of have acquired a great company a startup in its own right that for many years has
`been winning against large established players in the hair care space, Vogue the makers of
`OGX. And what we see in that unit is they are single mindedly focused on breakthrough,
`game changing innovation by staying externally focused and very close to their consumers,
`their shoppers, their customers and overall trends.
`
`They focus on building digital first, purpose led brands, very important for young millennial
`consumers. They capitalize on the rise of emerging markets and emerging channels. They see
`where the shopper evolution goes, they see changes in consumer shopping behavior and they
`position themselves to intercept that for their advantage.
`
`They're very lean, they're very cost efficient, hyper efficient and they move very fast. Speed is
`an important source of competitive advantage. So now as a result of this change we are
`competing in two worlds, we have to compete against the large multinational companies that
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`have been our traditional peer set for many years, but we also have to compete against these
`start-ups. So Alex said, we have to become a giant startup.
`
`We have to play to our strengths of skill and science based superiority and differentiation,
`but we have to become more nimble, we have to become more entrepreneurial. In order to
`compete in these two worlds, we have a strong strategy that has been guiding us for the last
`few years. We have 12 mega brands. When I met with you two years ago they represented
`60% of our sales, they're now representing 70% of our sales and we're focused on continue to
`driving disproportionate growth with these mega brands.
`
`We play in these large categories that I described before six broad categories and we have a
`very clear set of how to win choices around game changing, brand building capabilities,
`transformational innovation, a systemic approach to driving P&L improvements and
`productivity, a transformational commercial strategy enroute to market and building a
`world-class organization.
`
`In addition, we have very clear where to play geographical choices designed to in sum
`maximize our overall global competitiveness and value creation. But in addition to this, we
`have identified five principles we need to embrace as we execute those strategies in order to
`compete against this new landscape.
`
`The first principle is to broaden the scope of our innovation model. It's not enough to have
`great product and packaging innovation. We have to innovate to create a digital eco system
`around those products, something these small entrants do very well, an ecosystem that
`creates loyalty and opportunity iterate and engage with our consumers. And it's not enough
`to have big game changing global platforms. We have to h