“Your assumption should be that, that level of cocoa keeps until for the full 2025 at this level -- at this point in time, that's our assumption.”

In context

“s. David Palmer: Thank you. Operator: We'll move next to Tom Palmer with Citi. Thomas Palmer: Hi. Thanks for the question. I wanted to ask a little more on the expected cadence of both earnings and COGS inflation. And specifically on COGS inflation, it looks like 4Q24, we saw a bigger step-up. Will we then, I guess, thinking through 1Q to 3Q see a more normal rate and then inflation starts to ease based on current futures? And then, just given kind of the outsized earnings pressure in 1Q, might you then the main offset be 4Q? I just want to make sure we're kind of thinking through those moving pieces between cost and pricing over the course of the year. Luca Zaramella: Yeah. So, the pressure that you saw on profitability in Q4, it is the fact that cocoa was fairly high into our P&L in Q4. Your assumption should be that, that level of cocoa keeps until for the full 2025 at this level -- at this point in time, that's our assumption. So, I think you should assume that, that level of cocoa is equally spread throughout the remaining quarters of 2025. Now, the differential in terms of gating for profitability of 2025 is that we will have more pricing coming into the P&L. So, the elevated inflation is going to keep on hitting Q1, Q2, Q3. Obviously, Q4 will be different, because there is already elevated level of cocoa in the baseline. The difference is you're going to see sequential price improvement throughout the year, particularly as of Q2, Q3 and Q4, and that will provide benefits to the profitability of the company. Thomas Palmer: All right. Thanks for that. And just on the elasticity, you mentioned so far, that elasticity was 0.4. Just any color on what's embedded in guidance at this point? Thanks. Luca Zaramella: T”