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TOM2.AS 2026 Q1 财报电话会议

Operator: Good day, ladies and gentlemen. Welcome to TomTom's First Quarter 2026 Results Conference Call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to your host for today's conference, Claudia Janssen, Investor Relations. You may begin. Claudia Janssen: Yes. Thank you. Good afternoon, everyone, and welcome to our conference call. In today's call, we will discuss the Q1 2026 operational highlights and financial results with Harold Goddijn and Taco Titulaer. Harold will begin with an update on strategic developments. Taco will then provide further insight into our financials. After their prepared remarks, we will open the line for your questions. As always, please note that safe harbor applies. With that, Harold, let me, for the last time, hand it over to you. Harold Goddijn: Yes. Thank you. Thank you very much, Claudia, and good afternoon, everyone. Thank you for joining us. I will start with a brief update on our strategic and operational progress, and then I'll hand over to Taco for the financials. The first quarter of 2026 execution was solid. Profitability continued to improve. Our core Location Technology business, Automotive and Enterprise, both made good progress, while revenue trends reflect the transition we expected this year. In Automotive, we see carmakers accelerating their software strategies and taking more control of the in-vehicle stack. And at the same time, the industry continues to move towards higher levels of automation. Our Lane Model Maps are becoming an important differentiator. We're building on that, working closely with OEMs to support advanced driver assistance and autonomous driving. In Enterprise, we extended both our customer base and our use cases. We strengthened our position in traffic and traffic analytics through new partnerships, including AECOM, Kapsch TrafficCom and LOCUS. These partnerships extend our real-time traffic data into infrastructure planning, traffic management, location intelligence. They also underline the value customers place on quality and depth of our data and on TomTom as a trusted partner. Overall, we are confident in our progress. The steps we are taking, advancing our maps platform and building strategic partnerships position us well for 2026 and beyond. Before I hand over, a few words on the leadership transition we announced in March. Following a structured succession process, Mike Schoofs has been appointed CEO in today's general meeting. Mike has been with TomTom for over 20 years and built our global commercial organization. He knows the company, he knows our customers, and he knows the market inside out. I'm confident he will lead the next phase of our strategy with clarity and momentum. As a co-founder, it's very satisfying to see TomTom move in this next chapter with strong leadership in place. And with that, I'll hand over to Taco for the financials. Taco Titulaer: Thank you, Harold. Let me discuss the financials and after that, we can take your questions. In the first quarter of 2026, group revenue was EUR 129 million, an 8% decrease from last year's EUR 140 million. The decline was in line with the expectations and guidance we provided with our Q4 results. Let me briefly break down our top line performance. Automotive IFRS revenue came in at EUR 76 million for the quarter. That's a 5% decrease compared with the same quarter last year. Automotive operational revenue was EUR 70 million, which is 16% lower year-on-year. The decrease in revenue related from the gradual discontinuation of certain customer programs, along with the effect of a stronger euro relative to the U.S. dollar. Enterprise revenue was EUR 38 million, down 8% year-on-year. Adjusted for currency fluctuations, Enterprise revenue showed a slight increase year-on-year. Taken together, our Location Technology segment generated EUR 114 million in revenue, which is 6% lower than Q1 last year. On a constant currency basis, Location Technology revenue increased marginally. The Consumer segment, as expected, declined versus prior year. Consumer revenue was EUR 15 million, down 21% year-on-year. Q1 2025 was EUR 19 million, reflecting the development of the portable navigation device market. Consumer now represents a smaller part of our total revenue. Gross margin improved to 90% this quarter, up from 88% in Q1 last year. The 2 percentage point increase was driven by a higher proportion of high-margin Location Technology revenue in our revenue mix. Operating expenses were EUR 103 million, a reduction of EUR 15 million compared with the same quarter last year. The decrease is mainly the result of the organizational realignment we carried out last year, which lowered our cost base, combined with the higher capitalization of our investment in Lane Model Maps. As a result of higher gross margin and lower cost, our operating result was EUR 14 million for the quarter, a sharp improvement from EUR 6 million in Q1 last year. Our operating margin was 11%, up from 4% in the same quarter last year. Finally, free cash flow for the quarter improved to a positive inflow of EUR 1 million when excluding restructuring payments compared to a EUR 3 million outflow in Q1 2025. We continued our share buyback program during the quarter. By the end of Q1, we have completed EUR 11 million of the EUR 15 million announced in December last year. We ended Q1 [indiscernible] of EUR 248 million with no debt on the balance sheet. This cash position provides us sufficient stability and flexibility. Our first quarter performance confirms that we are on track for 2026. The revenue decline we saw in Q1, as mentioned before, was anticipated, and we managed to improve our profitability despite the lower revenue. Looking ahead, we are reiterating our full year 2026 outlook. We expect group revenue of EUR 495 million to EUR 555 million in 2026, with Location Technology revenue of EUR 435 million to EUR 485 million and an operating margin around 3% for the full year. As we indicated previously, some transitional headwinds, like the phaseout of certain customer programs, will weigh on this year's top line, but this impact is temporary. Therefore, we're continuing to invest in our Lane Model Maps, which are critical for a higher level of automated driving. As a result, free cash flow for 2026 is expected to be negative. As new automotive programs ramp up and newer products gain traction, we expect higher revenues combined with our ongoing cost discipline to drive a further step-up in operating margin in the long term. And with that, we are ready to take your questions. Operator, please start the Q&A. Operator: [Operator Instructions] We will take our first question. And the question comes from the line of Marc Hesselink from ING. Marc Hesselink: Yes. Thanks, Harold, for all the conversations over the years. I would take the opportunity to also look a little bit beyond for the long term on the question. I think when I started to cover TomTom, like more than a decade ago, one of the big promises was always autonomous driving, driving the long term. I think if you're looking at the market today because of all the developments in AI, both on the side of producing the map, but also on using it and now maybe autonomous driving being much nearer than it has ever been. How do you see that next phase? Is that do you really see that we are now at the start of that next phase and we are going to see major differences for how the map is going to be used and the opportunities in the map and how important it is for autonomous driving? Just giving a little bit your long-term view on how this developed over the years and what's coming in the next few years. Harold Goddijn: Yes, Marc, thank you. Yes. So you're right, the self-driving technology has been a big promise for a very long time. And it has always until recently, I would say, failed to live up to the expectations. What we now witness is a new approach to self-driving technology, more based on AI and self-learning, which is much more promising. And at least in the laboratory, we can see sophisticated levels of self-driving technology being deployed in real cars. So I think from a technology perspective, we are closer to solving the problem than ever before. What remains are the economics and also the regulatory framework, which will follow the technology. But I think from a technology perspective, we are motoring now literally. And we see that also in the demand for our products. Carmakers are now asking for higher levels of accuracy, more dynamic data, lane level information to enable self-driving technology and to provide a powerful additional data set next to the Edge processing that's placed in the car based on sensor information. We have seen that coming back also in the orders and the -- so first of all, the interest in our products and the way we produce our products. But we've also seen it coming back in the order book. We had a big win last year with Volkswagen, as you know, which was a significant contract. And that is a product and a contract clearly aimed at higher levels of automation. To what level exactly, remains to be seen. But what we do see is higher degree of automation than we have seen before. And also that technology will enter into the mainstream sooner or later. And we've seen comparable questions and demands from other OEMs. Some of those demands have translated into contracts, but there's also a healthy pipeline in '26, '27 to go further than that. Last thing, I think, is another trend that we're witnessing, is that carmakers want to have -- seem to prefer a unified map offering that is both suitable for navigation and display and map rendering and at the same time, can power the robot of the self-driving system. And the reason for that is that the self-driving system is also looking for a way to communicate with the driver what's happening. And when you do that on the same data set, it's technically an easier problem to solve. So we see a preference developing for united -- unified map that does both the traditional navigation and route planning, traffic information as well as being the sensor for the robot, for the self-driving part of the vehicle. Marc Hesselink: Okay. That is clear. Maybe as a follow-up, I think also there, the debate has been the same for a long period of time, which is, is a map layer needed for this autonomous driving, yes or no? And I think there is still a debate, at least reading through all kinds of articles on that one. I guess there's still the redundancy element of the map. Anything which you can add in the most recent conversations with your clients why a map would be required for functioning autonomous driving in the right way? Harold Goddijn: Yes. So it's a bit of a marketing story as well, I think, from vendors who are offering self-driving technology that is "mapless." We don't know of those systems that are mapless. They don't -- they do not exist other than in the laboratory and are not battle-hardened. The -- I think one of -- the way to think about it is that it makes self-driving technology easier when you do have a map and more reliable and redundant. And the big challenge for software developers is not to fix the first 95% of accuracy. That is kind of a solved problem. The real problem is to solve for the last 5%. That is the hardest bit. And solving that last 5% is a whole lot easier if you have a reliable map underpinning your system than doing it without a map. And we see that also translated in our own interactions with customers, both OEMs, but also providers of self-driving systems that we are closely aligned with and talking to, to see how we can collectively come up with a system that is robust, reliable, but also, I have to say, affordable. One of the reasons that the old HD Map never took off is cost. And cost was a problem because we were driving those roads ourselves with mapping vans. And that's, A, expensive; and B, does not provide for regular updates and a too long cycle time. With the new technology, the new approach, we have solved for both those problems, cost as well as cycle time and freshness. So I think the market opportunity is wide open. And I think that battle will play over the next 2, 3 years, I think, for presence in that self-driving ecosystem. Marc Hesselink: Great. And then final question from my side is, leveraging that one also in the enterprise segment, because I can imagine that the point you just mentioned, cost, freshness, cycle time, eventually also very important beyond automotive. I think at the Capital Markets Day, this point was quite promising, then it leveled off a bit. But maybe now with the progress we've made over the last 2 years, is it time that this one also can see some reignited growth? Harold Goddijn: I think the product challenges on the enterprise side are slightly different. There is some overlap, but the challenges are not the same. The Lane Model Maps is -- the development of that is predominantly driven by the requirements of carmakers and systems providers of automated driving systems. But I do expect overlap in the Enterprise world. And I think given its sufficient time, it will be harder to start distinguishing between what we call SD Map or -- and a lane-level map. So those worlds will come together. There will be some overlap, but growth in the Enterprise sector will come from mostly initially from other initiatives that we are deploying. And I think we're getting on track also a little bit better on the Enterprise side, in filling that pipeline better than we have been able to do in 2025. So I think the initial signs on the Enter sides are encouraging. Marc Hesselink: Okay. Great. Thanks for all the conversations over the years. Harold Goddijn: Thank you. Thank you for covering us. It was a pleasure. Operator: [Operator Instructions] We will take our next question. And the question comes from the line of Andrew Hayman from Independent Minds. Andrew Hayman: Yes, Harold, just maybe one clarification. You just mentioned that the old HD Maps never took off because of cost. Does that mean you've changed the pricing on the lane-level maps? Harold Goddijn: No, we have not necessarily changed the pricing. But the -- I think everybody understood that scaling that Edge-level HD Map, as we did it 10 years ago, was just too expensive and prohibitive. We have seen traction on the HD Map, and we still have customers driving with that HD Map. But everybody understands that if you want to improve the freshness and more importantly, if you want to improve the coverage, and when I say coverage, it's basically beyond motorways, there you end up in an unprofitable business case very, very quickly. So it's not the unit price so much that I'm talking about, but it's more the capabilities of the product. Carmakers as well as systems providers are looking for coverage and accuracy on all roads, not just motorways. And motorways is only, what is it, 5% of the total road network, is motorways. The rest is all secondary and tertiary and local roads. And so if you want to do an accurate product on all roads, including freshness, then the old technology could never deliver that. Andrew Hayman: Okay. And then maybe if I look at the forecast for 2026, it's quite a large range for revenue overall. It's a span of EUR 60 million. And then for the Location Technology component, it's a span of EUR 50 million. What's the thought process behind that range? Is it just that there's so much uncertainty at the moment about car production levels? Taco Titulaer: Yes. It's a bit of that, of course. Currency plays a role as well. So for all the 3 revenue-generating units, there is a bell curve of expectations. We do think that the middle of both revenue ranges is the best guidance that we can give. Andrew Hayman: Okay. Okay. And then on the change in management, I mean, there's clearly considerable continuity because Mike has been with TomTom for a long time and Harold, you're moving up to the Supervisory Board. But any new CEO is going to want to make adjustments or emphasize different areas or components. Do you -- what changes do you see happening under Mike going forward? Harold Goddijn: Well, that's for Mike to talk through, and I'm sure he will do that in -- when it's his turn in 3 months from now and start to give you some of his ideas. What I want to say is this, I think we have [indiscernible]. We've gone through a major product transition over the last years that has led to a competitive product. Based on the product, there is market share to be gained. And I think we're well positioned. That needs to land, and there's all sort of things that can go wrong, obviously. But net-net, I think that is a -- that gives focus and clarity of what we need to do at least in the next 12 to 24 months. And I think that's good. But of course, the world is changing rapidly. It's not only what we see geopolitically in terms of tariffs and in terms of energy and whatnot, but it's also the impact of AI potentially going forward that will have a significant effect on how we do things, how customers are consuming upward. I think the -- our anchor product, the map, is safe, and we will use AI to optimize processes and make it cheaper to maintain it. But that anchor product is good. And AI will have -- and the way we deploy AI going forward will -- and how the world evolves around AI, will affect the company like any other company in the world. So those are the -- I think, for the moment, the 2 big axes where we need to follow progress going forward. Andrew Hayman: And then maybe on a smaller note. On enterprise, it's -- if you adjust for currency, it's growing, but it's not having the easiest time. And if we look back to you joining with OSM, the idea was that you get more detailed maps and that may open up more market opportunities or expand the potential market for your maps, maybe social, travel and food delivery. How is that going? I mean, are you making some progress, but the clients are quite small in those areas that you're getting through? And how do you see that progressing? Harold Goddijn: Well, yes, I think it's a good question, Andrew. I think -- and then 2025 was slightly disappointing in terms of order intake and traction around -- always in the Enterprise market. But I think we have turned the corner, and we see some early green shoots. I think that central promise of having a better map that's easier to maintain is valid also for the Enterprise world. And we are now pitching for contracts and opportunities that we could not win based on the old technology. So the addressable market is -- and I mean, there's tons of examples of that. So it's slightly disappointing that it's taken longer. But I think the central idea of having a better map, more detail, more freshness, more efficient to maintain is still valid. And I hope that we will see that also being translated into Enterprise growth in 2026 and beyond. Operator: We will take our next question. The next question comes from the line of Wim Gille from ABN AMRO-ODDO. Wim Gille: This is Wim from ABN ODDO. Apologies for the noise, but I'm in the train. So I hope you can hear me. First, on the rollout of the lane-level maps, you started off just in Germany. So can you give us a bit of clarity on where you are in the rollout in terms of number of countries? But also, are you still just on the motorways? Or are you basically doing all the other roads as well throughout Germany as well as the other countries that you're rolling out? The second question would be on capitalized R&D. That seems to suggest you're accelerating the investments that you're doing in the rollout. So can you give us a bit more clarity on that decision? Is that based on the demand? Or are you basically just needing to invest more to get to the same results that you were looking for? And what is the reception of clients since you introduced this concept earlier last year? Harold Goddijn: Yes, Wim. Yes, you're coming through loud and clear. So no worries on that side. Yes. So the Lane Model product, our goal is to build it completely automated. So expanding coverage is just a matter of compute and electricity, but no other practical limitations on coverage and speed of production. That's where we want to end up. That's not where we are. There is a certain level of fallout following those automated processes. And that means that manual labor and operator interaction, in some cases, is required to filter out inconsistencies to checks and so on and so forth. So -- and we are in a position now where we are producing, but we are also making investments to reduce that fallout in order to prevent manual labor and improve the speed of the process and the associated coverage. The idea is that by the end of the year, we have a fully lane-level map, both for North America and for Europe. We're producing it now for parts of Germany, whilst improving the processes, improving the factory in the pipelines, if you like. And the aim is to reduce the amount of manual labor we need to produce those maps close to zero. It will probably never get to zero, but it needs to get close to zero because that gives us speed, flexibility and efficiency but also quality. Wim Gille: And what are clients saying about the products? Harold Goddijn: So people are excited that it's possible. We are producing a product that could not be produced before. They're excited that it has been developed with a view to serve security and safety critical applications. So it's an industry strength product. That's also how the quality systems are designed to make sure that we meet those standards. So yes, both carmakers and systems providers are excited that there is a product that can play an important role, and they're looking at progress with interest. We will start doing test driving with integrated systems now or in the next couple of months or something like that where we get for the first time, real-time feedback on how the system, not the map, but the system with the map is behaving in practice and in real-life situations. So those are important milestones. Taco Titulaer: Yes. If I can add to that. Then you also had a question about CapEx. So in the cash flow statement, you see that line investment in intangible assets, that's indeed higher than what it was last year same quarter. I expect that to normalize between "below EUR 10 million" going forward. So it is more -- yes, I wouldn't call a one-off, but it's not a clear trend that it now will go up every quarter. Wim Gille: Very good. And if you are now participating in RFQs, specifically related to HD, I can suspect that most of the RFQs that you're participating in are now HD driven and no longer [indiscernible]. But how is your product [indiscernible] up against the competition? So are you still producing HD Maps in the old way? And what does it do to your competitive pricing advantage? And which parties do you actually engage in these RFQs? I can only assume that here -- is there -- and in some cases, Google. But do you also see newcomers joining in these RFQs? Harold Goddijn: Sorry, Wim, I tried to understand your question. It was not entirely clear, to be honest, the first part in particular. Yes. So in terms of market position, I think we are currently leading in specs in ambition. Of course, we need to deliver all that goodness as well. And our internal target is by the end of this year to have significant coverage on both continents. And I think that will be a leading and it is a leading product both in terms of what it does and how it is produced, which is not a minor point actually. In this case, it really matters how you produce it because it tells you something about economics, quality, repeatability and so on and so forth. And there is significant interest, I think, from industry players, in what's going on. And so we feel good about that. I think Google obviously is an important competitor, but Google has a tendency to leverage consumer-grade products for the automotive world. And this is not typically an area where they're focusing on. Wim Gille: And are you encountering any new competition in RFQ processes? Harold Goddijn: No, no, we do not. It depends how you define competition, but I think there's no one else that I know of that has an integrated approach to both navigation, self-driving, ADAS, all on one product stack. Wim Gille: And with respect to enterprise, I do have a question on kind of the conversion and basically the acceleration that you are seeing at the moment. Can you give us a bit of feeling on kind of what types of, let's say, projects you are now converting or are close to converting? Are these still the smaller projects? Are we also now looking at the bigger clients and the ones that can really move the needle? Harold Goddijn: Yes. Yes, I think I wouldn't say acceleration. I think what I've said, I've used the word green shoots, some -- both contracts but also a pipeline that is building. A couple of areas where we see good traction, insurtech, defense. There are significant opportunities opening up, intelligence, public usage of our data, both traffic planning, intelligence. Those are the sectors where we see the order book and the pipeline really filling up. And some of those opportunities are significant as well, multiple millions per annum. Wim Gille: Thank you. And that leaves me with, yes, basically one last comment. So I would like to thank you for, I think, close to 80 earnings calls that we did together. No doubts. Harold Goddijn: this sounds like an awful lot, Wim. Wim Gille: It is. Harold Goddijn: This sounds like an awful lot. But thank you very much. It's been a privilege and a pleasure. Wim Gille: likewise. Thank you. Operator: [Operator Instructions] Claudia Janssen: As there seem to be no additional questions, I want to thank you all for joining us today. And Heidi, you may now close the call. Operator: Thank you. This concludes today's presentation. Thank you for your participance. You may now disconnect.

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BRRLY 2026 Q2 财报电话会议

Sophie Lang: Good morning, everyone, and welcome to Barry Callebaut's Half Year Results Presentation for 2025/ 2026. I'm Sophie Lang, Head of Investor Relations. And today's session will be hosted by our CEO, Hein Schumacher; and our CFO, Peter Vanneste. Our presentation today will start with Hein's initial reflections and observations then Peter will go into the half year results and the outlook. And finally, Hein will conclude with a preview of the Focus for Growth plan. Following the presentation, we'll have a Q&A session for analysts and investors. [Operator Instructions]. Before we start, take note of the disclaimer on Slide 2, and I'd also like to inform you that today's session is being recorded. And with that, I hand you over to our CEO, Hein Schumacher. Hein M. Schumacher: Thank you, Sophie, and good morning, everyone. It's my pleasure to be speaking with you as part of my first results presentation here at Barry Callebaut and I'm now approaching my first 100 days, and I wanted to start by sharing my initial observations and reflections before I hand it over to Peter to cover the results. So far, I've been in a listen and learn mode and spending a lot of time across the business to gather a broad range of perspectives from our people. And I've had the opportunity to visit a number of our factories and offices around the world and gain insights into our operations and the culture of the company. What has stood out most to me is the passion, the expertise and the resilience that defines this organization. I've also met with several of our key customers, which has sharpened my understanding of what truly matters for them and how we can support them on their growth journey. Back in February, we formed the Growth Accelerator coalition, which is a diverse group of around 30 deeply experienced colleagues, talents from around regions, functions and nationalities. And this working group from within is designed to advise, challenge and co-shape our path back to volume growth. And through a series of focus sessions, this group has developed a unified view of where we stand today, identified key bottlenecks that hold us back and is helping define a set of high-impact priority initiatives. And collecting these insights from across our organization is enabling me to shape a clear and decisive action plan that will sharpen our strategic direction and set our key priorities. Now I will come back to that later in more detail. But first, let me share some initial observations. Over the past years, the company has been navigating a very turbulent period marked by transformation, significant industry volatility as well as supply disruptions. The Barry Callebaut Next Level program was launched with all the right intentions. However, the sheer number of initiatives proved too ambitious for the organization to absorb at once and particularly against the backdrop of unprecedented industry disruption. And frankly, without sufficient course correction in priorities, this created a perfect storm. Now that said, several important steps were taken on the Next Level because the program did deliver savings of around CHF 150 million, and these enabled much-needed capability investments in core fundamentals such as digital, quality and supply processes. But at the same time, these savings were more than offset by the impact of volume declines, higher operating costs, particularly from the cocoa market and supply disruption as well as from a more competitive environment. And the combined effect was an organization that it become overstretched and quite internally focused. And with too many quality incidents, the business also began to lose market share. And as a result, we find ourselves in a position today with clear improvement areas that need to be addressed. I'm calling out 3 areas: First, our manufacturing network. We do have capacity constraints in key growth areas with site upgrades that are still work in progress. A lot has happened, but it's still work in progress. It has contributed to quality incidents with longer recovery times due to limited business continuity plans and we have made progress on the Next Level without a doubt, especially in strengthening quality foundations, but more work is to be done. And our service levels are currently below industry benchmarks. We need to improve. Second, our digital transformation. A good direction, but initiatives were decoupled from core business priorities and the scope was very broad. We moved very quickly before co-processes were sufficiently stabilized and before our data and operating systems had reached the required level of maturity. And third, our operating model and the organization. Historically, Barry Callebaut was highly decentralized and the intention of Next Level was to introduce a greater degree of centralization and standardization and that was the right direction. But in some areas, for example, in customer service, we went too far and probably too quick. In others, we ended up with a hybrid central regional model, and that has created an ambiguity in accountabilities. It added complexity to the organization and it limited regional empowerment, where essentially, the customer is where the market is, and where we need to drive local decisions. Because I believe that food is fundamentally a local business. And our region should define the what, whilst global functions should support the how with scale, expertise and obviously, consistency. And that makes the value of the corporation essentially bigger. Now importantly, while there is work to be done, as I said, we are building from a position of strength because Barry Callebaut has strong and solid foundations, and I'm confident that we can return to growth and reinvigorate ourselves as a reliable industry leader. Because we have a truly unique market position with leading relationships, strong customer relationships and a strong portfolio with benefits from our integrated end-to-end cocoa and chocolate model, very important for our group. And in turn, this gives us deep expertise across R&D, innovation, cocoa and sustainability and these are capabilities that are highly valued and appreciated by our customers around the world. And my conversations with CEOs of our largest customers have reinforced this view. And they see Barry Callebaut as an important partner and they want to grow with us. They expect us to step up and play a key role in unlocking and supporting their growth agendas. And let's not forget that we operate in a fantastic category with strong underlying fundamentals. And as a market leader, we are well positioned to capture significant long-term growth opportunities. And underpinning all of this is our people, as I said in the very beginning, people with deep commitment and passion for what we do. And that's critical to ensure that we can fully deliver on the fundamental opportunities ahead. Now bringing all of this together, clearly, we have strong foundations from our unique market position to the depth of our expertise, and that positions us to win in this industry. And at the same time, to fully deliver on the opportunity ahead, we must refocus behind a reduced set of priorities to stabilize key fundamentals as well as to step up execution. And in turn, if we do that well, it will unlock sustained profitable growth and it will reinvigorate Barry Callebaut as a reliable, innovative global leader. And that is the objective of our Focus for Growth action plan. And I will share a preview of the plan later. But before I go there, let me hand it over to Peter to walk you through the first half year results. Peter, here you go. Peter Vanneste: Thank you, Hein. Good morning, everyone. Let me walk you through the half year performance first, and I'll start with a short summary. Cocoa bean prices have decreased strongly in H1 and especially in the last few months, and this is surely positive for the recovery of the chocolate demand. On volumes, we saw a sequential quarterly improvement to minus 3.6% in the second quarter, supported by double-digit growth in Asia and continued momentum in Latin America. Recurring EBIT decreased by 4.2% and strong cocoa profitability was more than offset by the impact of lower volume, supply disruption and a highly competitive overcapacity environment. In Gourmet, margins were pressured with the context of the very rapid drop of bean prices, and I will come back to that a bit later in the presentation. Despite the decrease in EBIT, however, we grew recurring profit before tax and net profit, thanks to lower finance costs and income tax. And very importantly, despite the peak harvest and heavy cocoa buying season, we generated strong free cash flow and further deleveraged to 3.9x [ net ] debt over EBITDA. Let me get into some details now. Starting with the cocoa market. The cocoa bean prices have decreased very, very rapidly, falling by 53% in just 8 weeks in Jan and February and closing at GBP 2,057 at the end of February. And that's driven by good main crop arrivals in West Africa over the past few months, and favorable recent weather conditions that are supporting output for the mid crop. At the same level, the market is still seeing some demand softness. So global stocks have replenished to healthier levels. Overall, this means we expect a surplus this year for the second year in a row. Importantly, the structure of the cocoa futures markets has also improved significantly. We now have a carry structure meaning that the cost of buying spot cocoa today is cheaper than buying cocoa in the future. This means it is less costly for the industry to carry physical stocks and it's indicative for a more stable outlook. In the short term, given that this is demand-driven surplus, we expect bean prices to remain in the GBP 2,000 to GBP 3,000 range. That said, we continue to monitor the markets very closely as the demand recovers and thus we assess potential supplier risk linked to El Nino and potentially speculative volatility as we have seen in the past. Over the medium term, depending on supply and demand dynamics, we believe prices could move back into the GBP 3,000 to GBP 5,000 range. Lower cocoa bean prices are certainly positive for the future recovery of both the cocoa and the chocolate markets. We're seeing indications of this through our forward bookings. As you know, we contract several months in advance for our customers and in recent months, we've seen a greater willingness to book further ahead again. At the end of February, our futures booking portfolio was much, much higher than at the same time last year when cocoa bean prices were spiking. At the same time, our customers have priced through to their end consumer. As a result, consumer pricing and the rate of end consumer volume declines have started to stabilize. In the most recent quarter, Nielsen global chocolate/confectionery volumes decreased by 6.3% with plus 13.7% pricing. And importantly, we're now seeing our customers gradually shift their focus back to its category investments to stimulate growth. And I'll just quote a few examples. In North America, Ferrero launched their Go All In promotion from April 1 backed by a $100 million investment. It marks their first portfolio-wide campaign and largest marketing commitment in the company's history. Another example is Hershey is boosting media investments by double digit this year with the new quarter 1 media campaigns on Reese's and Hershey, the first launches of this nature. We're also seeing increased interest in innovation from our customers. In half year 1, we saw a significant increase in number of projects in Western Europe for ChoViva, our non-cocoa chocolate offering as well as a growing traction on Vitalcoa, our high flavanol solution, especially in AMEA. Beyond these benefits, the magnitude and the pace of the decline in the cocoa bean prices, as mentioned, just now more than 50% down in the last 8 weeks, helps, of course, the demand and the cash front but has also created some challenges on the short term as well and mainly on profitability. And there's 5 key impacts I just would like to highlight. First, in the past few months, we've seen very favorable margin environment for cocoa. In half year 1, this helped to offset some headwinds we saw in chocolate. Looking ahead, we expect this cocoa margin tailwind to normalize in the second half as market conditions have become less favorable. Second, as we just saw from the Nielsen data, demand has been down for some time. And given the high prices that have been put into the market in the past, this has resulted in some industry overcapacity, which is intensifying competition with more aggressive pricing and commercial actions. In this competitive environment, we've seen a temporary margin effect in Gourmet. The Gourmet business typically works with a 3 to 6 month price list where forecasted sales are covered and then a price list is determined. Given the unique speed now we've seen of the cocoa bean price decreases in half year 1, the result was a long position in a declining market, creating a high price list with not all players following the same approach. And this impacted our volume and profitability through the need for some short-term commercial investments. Also, next to that, there's a more technical effect related to the shift between EBIT and profit before tax due to lowering financing costs. The opposite, if you want, of what we've seen last year. This is a reversal of the finance cost pass-through, again, as we saw last year, and we now have lower finance costs as the bean prices come down. And it also means then a lower pass-through at the EBIT level. But it is -- importantly, it is neutral at the profit before tax level. Finally, there's also a BC-specific headwind in supply disruption. We had operational incidents in North America in the St. Hya factory, resulting in some volume losses and higher operating costs. Before we move to the half year 1 figures specifically, I'd like to spend also a moment to highlight potential implications from the Middle East situation. As many, many industries, the primary impact for us is on the supply chain side. It includes shipping disruptions, increased transit times resulting from port closures or limited container availability and of course, as we all know, there's a sharp increase in energy prices. In some markets, fuel rationing has been introduced combined with higher freight and insurance costs and all of that is adding complexity and costs across our supply chain. Next to the supply side, we've also seen some regional demand effects. Within AMEA, the Middle East and North Africa cluster represents about 10% of the volume there. This cluster has a specific high gourmet exposure and is experiencing therefore, disruption to imported premium products. Clearly, HoReCa food service segments are negatively impacted by the tourism levels in those areas as well as the closure of the schools, offices, rules on working from home and so on. Beyond directly in the Middle East and North Africa, we also see an indirect impact in India, where we have an important business where LNG imports are disrupted and constraining the energy availability for food manufacturers, commercial kitchens has been impacting their operations and, therefore, also ours. Overall, this obviously remains a highly dynamic and uncertain situation that we are monitoring, obviously, as per the latest developments every day. Now let me get into the numbers in a bit more detail, starting with volume. Overall, the group saw a sequential volume improvement in the second quarter to minus 3.6%, meaning we landed the first half with a decrease of 6.9%. Looking to the left of the chart by segment, Food Manufacturers continue to be impacted by negative market dynamics with our customers adapting behaviors in the context of high prices and lower demand. And there was the supply disruption in North America that impacted this segment for us. Gourmet, while more resilient, our competitiveness was temporarily pressured by the high price list in a sharply declining bean price environment, as I just explained. Also -- and also here, there was some impact of the St. Hya closure we saw in the first quarter. Global Cocoa declined as a result, mainly of a negative market demand, especially in AMEA and secondly, also due to our choice to prioritize higher profitability segments, which did have its impact on volumes in certain areas. This business, the cocoa business saw early signs of market improvement in the second quarter with a sequential volume improvement of minus 5.2%, so significantly better than in the first quarter. Now moving to the right-hand side of the chart, to global chocolate. Globally, we've seen chocolate volumes decline by 5.1%, which is ahead of the 6.5% decline of the market as reported by Nielsen. In Western Europe, we saw a 4.2% volume decline as demand continues to be impacted by market softness. Central and Eastern Europe declined for us by 3.6%. And way better than the market as our local accounts saw solid growth, especially in Turkey. North America decreased by 12.6% impacted by a strongly declining market as well, but as well as the network supply disruption we've seen from the temporary closure in St. Hya in the first quarter. Importantly, though, North America saw recent months improvements as the business is rebuilding inventories and meeting increasing customer orders. Latin America grew by 1.5%, well ahead of the market, driven by a strong momentum in Gourmet that we've seen multiple quarters in a row now. Finally, volumes in AMEA grew by a strong 8.5% and reached double-digit growth in the second quarter, driven by strong market share gains in China, momentum with key customers in India and additional business that we secured in Australia. Moving to EBIT now. Recurring EBIT decreased in local currencies by 4.2% to CHF 316 million (sic) [ CHF 310.9 million ]. The EBIT bridge on the page shows the respective moving parts. Cocoa, first of all, the green block on the chart saw strong profitability in half year 1, given a more favorable market environment -- margin environment, sorry, and market volatility where we're able to capture the volatility and increases of the prices and the decrease of the prices that we have seen. In half year 1, this has helped to offset some of the other headwinds that we're facing in chocolate. The impact of the half year 1 volume decrease was meaningful. This is clear when we look at our EBIT per tonne as well, which increased by 3%, whereas our EBIT in absolute declined by 4%. So the impact of volume was meaningful in the first half, and this is something that we'll see turning around in the second half. Next, there was an impact of the intense competitive environment and particularly within Gourmet. As I explained earlier, our high Gourmet price list and long position in the context of this very rapid decline of bean prices required temporary commercial investments. In addition, supply disruption resulted in higher operating costs to maintain service and deliver products to our customers. Finally, we also saw the shift between EBIT and profit before tax that I explained as a result of a lower financing cost year-on-year and therefore, a lower pass-through on the EBIT level. And this effect will get bigger in the second half of the year. While our recurring EBIT decreased, it's important to note, we were able to grow the absolute profit before tax and our net profit. And to be more precise. As you can see on the left-hand side of this chart, our recurring EBIT in local currencies was CHF 14 million lower than last year. This is the minus 4%. In the middle, our profit before tax increased by CHF 2 million or plus 1.3% as a result of a CHF 16 million decrease in financing costs in local currencies driven by our actions to reduce debt and, of course, in the lower bean price environment. To the right, our net profit increased even further by CHF 42 million or by 66%, given significantly lower income tax expense compared to what we saw last year. Recurring income tax expense decreased to CHF 29.6 million versus the CHF 69.4 million we saw in half year 1 last year. This corresponds to an effective tax rate of 21.4%, which mainly resulted from a more favorable mix of profit before taxes and much lower nontax effective losses in some of the countries. Free cash. Free cash flow delivered strongly in the half year at CHF 802 million across the 6 months despite the peak buying season that we're having always this time of year. Now when we look, as always, at the moving parts behind this cash generation, we saw -- and that's the dark black bar, we saw CHF 1.5 billion positive impact from the cocoa bean price this half year. Bean prices decreased significantly in half year 1, especially in the second quarter, as I mentioned. And this has benefited us during the peak buying period, particularly in non-West African origins, which do not have the same forward contracting model as Ivory Coast and Ghana have. There was a, next to that, a CHF 472 million negative impact on operational free cash flow, as you can see in the green bar. This has all got to do with the peak buying season. Half year 1 is always operationally like that with a negative cash out for the bean buying given the timing of the cocoa harvest. This was offset, however, partly by continued operational benefits from actions on the cash cycle reduction that we explained largely already in the previous communications. We continue to do so with our efforts to diversify our origin mix, reduce forward contracting and so on. As a result, actually, our inventory was now this time of year in February, 10% lower than February last year. So that also helped to generate the cash. up to this level. And finally, there was a CHF 183 million CapEx investments, as you can see in the yellow bar in the chart. Leverage. Leverage came down to -- strongly to 3.9x, and that's significantly below the 6.5x we saw in February last year and also well below the 4.5x we saw last August despite, again, the seasonality we always have in half year 1, with an important net debt reduction of CHF 2.5 billion, enabled by the strong cash flow that I've been talking about before. So leverage landed at 3.9x. But in fact, if you would exclude cocoa bean inventories from the net debt, and I'm talking only cocoa bean inventories, so not even correcting for cocoa products or chocolate stocks, our adjusted leverage RMI would be 2.7x. This progress mostly came from a lower inventory value given significantly lower bean prices, which is about 1.3x leverage in this decrease. But also through the actions to reduce our inventory volume, as I talked about, which made up about 0.6x in this reduction of leverage. In terms of gross debt reduction, we repaid EUR 263 million term loan in September '25, so a few months ago and EUR 191 million in February on the Schuldschein. We've also reduced significantly our commercial paper and bilateral facilities over this time. Obviously, all of this has been an important contributor to the lower net year-on-year finance costs that we've seen in the first half already. And we will certainly continue to focus strongly on the deleverage in half year 2. It remains a key priority. We want to end much lower than where we are even today. So with the further actions that we're defining on the cash cycle will bear further fruit going forward. This could be and this will be partly offset to some degree because of the safety stocks that we will be watching and potentially reinforcing a bit in a few key segments. Again, back to the support we need to have on the service levels following some disruptions that we have seen over the last months. So before I conclude the half year 1 section and staying on the financing. Earlier this week, we signed a EUR 2 billion sustainability-linked borrowing base facility. The borrowing base is linked to our underlying inventory asset base and represents an important step in the diversification of our funding sources. The facility strengthens our funding flexibility, particularly in periods of prolonged higher or lower bean price environments. It increases our agility and the agility of our capital structure and our ability to actively manage financing costs more in sync with cocoa price moves. Just to share a few additional details. The facility comprises of a EUR 1.6 billion of committed financing, complemented by an uncommitted tranche of EUR 400 million which is providing additional liquidity flexibility. So moving now to the outlook of the fiscal year. We've updated our guidance, reflecting our focus on volume and deleverage while taking short-term action to protect our market share and drive growth. We have, first, raised our expectations on volume. We now expect a decrease for the group between minus 1% to minus 3%. And this implies a return to positive growth overall in the second half. We've also raised our guidance on leverage. We now expect net debt over EBITDA below 3x using a working mean price assumption of GBP 3,000, so with the continued tight focus on this and further progress despite our updated profit assumptions. At the same time, we have lowered our outlook on EBIT. We now expect a mid-teens decrease on a recurring basis in local currencies. And this reflects short-term actions to protect market share and prioritize growth in the context of the rapidly declined cocoa bean prices. Important to note that a significant reduction in financing costs in half year 2 is an important factor in the reduced EBIT guidance. We expect to recover more than half of the absolute decrease in EBIT at the profit before tax level. Clearly, this outlook is subject to potential impact from the ongoing disruption in the Middle East that I commented on a little bit earlier. Now before I hand back to Hein, I want to take a moment to explain the half year 2 moving parts on EBIT. Our return to positive volume growth will be a clear tailwind for half year 2, of course. However, this will be offset by a number of factors. One is short-term actions in global chocolate. We are prioritizing restoring Gourmet share following this unique and temporary long position impact that I talked about. We're also taking some temporary customer-centric interventions to restore service levels, and Hein will talk about it a bit more later, but action is needed to stabilize supply after a number of incidents that we've seen. Customer centricity is our #1 focus going forward, and we're taking action to reclassify lines, increase spend on staffing, maintenance and quality. Second, as already discussed, cocoa profitability is expected to now normalize in half year 2 following an exceptional half year 1. Third, we are taking further actions to reduce finance costs. This means significantly lower year-on-year pass-through in finance cost at the EBIT level, while neutral on profit before tax. And finally, we have the uncertain and volatile situation in Middle East, which is bringing additional cost and supply chain disruption depending on how it will evolve further. Finally, the uncertain and volatile situation in the Middle East brings additional costs and supply chain disruption. And I will now hand over to Hein to share more on our Focus for Growth. Hein M. Schumacher: Thank you, Peter. Now let's talk about Focus for Growth. And this has been shaped, as I said before, by the insights and learnings from our growth accelerator coalition that I mentioned earlier. And at this stage, me being in the company now for 2 months plus, the plan is directional as we continue to refine and deepen our assessment of the actions as well as the opportunities ahead of us. And I'm looking forward to sharing the full detailed update with all of you in early June. And in the meantime, I wanted to be transparent and therefore, share the direction that we are heading in. Now before we go into details, let me start with why focus is so critical for Barry Callebaut. Because what really struck me when I started engaging with the team on our business portfolio is actually how concentrated we are. As you can see here on the chart, a few examples. So if we look at our top 7, top 7 markets represent 56% of our total volume. And of course, if you would extend that to 10 markets, the concentration increases even further. Similarly, with customers, our top 7 global customers are approximately 1/3 of our volume. In our Gourmet branded business, our top 7 brands or top 7 propositions generate 85% of our volume. And on the sourcing side, 90% of our cocoa is sourced from our 7 origin countries. And finally, although we operate around 30 specialty categories around the world, the top 7 represent approximately 90% of the growth opportunities that we see today. So as we focus on stabilizing the fundamentals, which we talked about and focusing our resources behind reduced priorities, getting these top 7 really right already moves the needle meaningfully. And this is why focus sits at the heart of our growth agenda for the future. Now turning to our Focus for Growth action plan. We do see that compelling need to increase focus across 3 areas. First one is commercially. So concentrating on a defined set of distinct growth opportunities and prioritizing key markets and segments where we see the greatest potential. Second, operationally by restoring fundamentals. I talked about that, and particularly in the areas that matter most for our customers in terms of reliability, quality and service. Customer centricity is absolutely vital. Third is organizationally by prioritizing a reduced number of the most impactful initiatives and restoring that customer-centric winning culture and by driving focus, restoring fundamentals and putting the customer firmly at the center of what we do, our objective is to reinvigorate the company and return to sustained profitable growth, and market share gains and, therefore, unlock strong financial performance going forward. Now let me share some details on each. I'm starting with commercial focus. And we are defining a clear and distinct set of growth opportunities where we will intentionally concentrate our resources and our attention. And this starts with markets. And as we discussed earlier, our top markets truly move the needle, not only in terms of volume but also in profitability. Let me start with the U.S., our largest market, representing approximately 17% of our revenue and ensuring the right level of focus and execution in such markets is critical to deliver growth. But also other markets stand out with clear growth potential, for example, Brazil, where we have a meaningful presence, Indonesia, India, Peter talked about that, and China, where we're experiencing strong growth right now. And it is therefore clear that our resources need to over proportionately support these priority markets, a distinct set. And importantly, this focus must be actionable, value-added defining a set of focus markets within AMEA rather than spreading our attention across that vast region thinly. The same logic applies with Gourmet & Specialties, where we need to concentrate on the right segments and opportunities, and I will come back to that in some detail in the next chart. In cocoa, in itself, we see clear opportunities to unlock growth by increasing our focus on high value-added powders, whilst ensuring that we have the right growth capacity, of course, in place. So across all of these areas, a key enabler will be strong innovation platforms. Not many, but a few strong platforms that will allow us to lead in the market and that we can leverage across the portfolio to drive growth, greater level of differentiation versus our competitors and of course, to support our customers around the world. Now let me talk about Gourmet, such an important segment for our profitable growth, and we are reintroducing here a clear brand hierarchy and customer propositions. Callebaut, Masters of Taste, that will continue to be our group commercial identity. And then we have a clear brand tiering after that to serve the different customer needs with a greater impact. And as you can see here on the top of the pyramid, we anchor the portfolio around our super premium global brands, led by the Callebaut Signature Collection and Cacao Barry. Now Callebaut brings over a century of Belgian craftsmanship and unrivaled bean to bar expertise and Cacao Barry brings 2 centuries of Cocoa Origins mastery and French pastry heritage, important brands on top of the pyramid at a higher price level, strong quality focus. Now beneath that, our core Gourmet portfolio is firmly positioned in that premium segment with the Callebaut core section. And here, the focus is on delivering consistent quality, reliability and strong performance for professional customers in their day-to-day operations. Complementing these, we continue to develop strong regional propositions. Typically, one per region, such as Sicao, Chocovic or Van Houten in Asia, for example, ensuring that local relevance. And across all these tiers, our brands are supported by end-to-end services from the chocolate academies that we have around the world to innovation and technical expertise. These help our customers to succeed. And the objective is simple and clear, a more focused Gourmet portfolio with clearly differentiated propositions and price tiers that enable to serve our customers better, and it will allow us to allocate resources more effectively and drive the profitable growth in this important segment. Now let's turn to specialties. Our plan here is to be a bit more selective, focused on a defined number of margin-accretive specialty categories that we believe we can integrate in the company, and the core of the company and by doing that, scale them first regionally and then globally. And while the final list is currently being defined, we already see clear and compelling opportunities in a number of areas, such as filled and baked inclusions, which you find in products like ice cream, where we have a very strong presence in that segment. But also both chocolate decorations, including toppings for bakery applications and fillings and coatings, for example, solutions with reduced sugar functionality. And once this prioritization is finalized, the intent is to bring these selected specialties much closer to the core on the regional responsibility including, therefore, a tighter system integration. At this moment, they're not that fully integrated in our operating system. And that means we will invest behind them to ensure there is sufficient growth capacity, clear ownership, P&L ownership within the region and stronger category management. And we believe that this more focused approach will allow us to scale what really works. It will simplify the specialty portfolio, and it will concentrate resources where we see the strongest combination of growth, margin expansion and, of course, customer relevance. Now moving to operational focus, where the clear goal is to restore some of the fundamentals. And Peter talked about the disruptions. Our #1 priority is to restore service levels and on-time in full performance that we are now measuring consistently every day, every week, every month. I'm absolutely determined to get us there and to improve on that particular KPI. And as I mentioned earlier, a combination of transformation complexity, industry disruption that we've had and many operational incidents, this has taken our focus a bit away from the basics. And as a result, service levels have been below industry standards. Now that's something that I'm keen to turn around for the company. We have to get this right. Now beyond service, we also need to ensure that our network, our factory network is fit for purpose, both for the portfolio that we operate today, but also where our customers will go tomorrow. And at the factory level, we see currently mismatches between line utilization, so specific line utilization and the overall capacity available in our network. So in the short term, that means we will make targeted and tactical adjustments to unlock available capacity. On the midterm and the long term, we will invest selectively behind those growth capacities that I talked about -- we talked about the focus areas, for example, ensuring that we deploy there for our capital towards the right opportunities. And finally, restoring the fundamentals also means strengthening the core processes and enablers of the organization, very much the intention of Next Level, and we will build on that. We do need better data visibility, more effective end-to-end decision-making on a number of processes. And therefore, the priority for us is to focus on the core process as the company first, get them really right, such as the overall demand and supply planning processes, customer service processes and, of course, the quality and the usability of our data. We made strong progress, but now we need to finish it behind those few big priorities. Going into more detail, there are a few areas where we need to focus operationally. So North America, as I said already, this region contains our largest market in the U.S., and we need to get it right. And as Peter has described, we've seen broad supply disruption across the network, and that resulted in longer lead times for our customers and capacity constraints in several high-demand product categories. Network investments under Next Level were there, but some of them were postponed given the macro backdrop. Now there's an immediate need to stabilize the network and rapidly improve service levels, focusing over the coming months on increasing staffing and adapting shift patterns at relevant sites as well as targeted initiatives to stabilize critical facilities, particularly across maintenance, quality, infrastructure and planning processes. In parallel, we are reclassifying and redeploying existing product lines across the network to better utilize the available overall capacity. We are developing a midterm plan to future-proof the network in order to sustainably support future growth. On emerging markets, here, our focus will be on a select number of key growth markets, large markets, though, but where we have a meaningful presence already and where we intend to invest to support evolving customer needs. Think of countries like Indonesia and Brazil. On this, we will update you in much more detail in June. Service and OTIF, on time in full, we are taking targeted actions not only in North America but also in Europe to immediately improve reliability and to step up our safety stocks in selected categories. Peter talked about that. This will stabilize our key business processes and in turn, it will improve customer service in the months to come. And then finally, core processes. I talked about digital efforts before. We need to focus our digital efforts and investments behind those core processes, such as planning as well as customer service, driving better data visibility and transparency, and this will, therefore, strengthen these processes and, therefore, increase service levels for our customers. Now turning finally to organizational focus. Our objective is to reestablish that winning culture with customers at the heart of everything that we do, while refocusing the organization, as I said, on a set of impactful initiatives that truly matter. And a key priority here is to increase the empowerment and accountability of our commercial regions because these regions are the closest to our customers and our markets, and they should clearly drive what needs to be done to win locally. And of course, supported by global functions. They provide the how. They provide the scale, the expertise and the consistency behind those core processes that I talked about. By doing that, we need to be, therefore, more disciplined on prioritization because the organization, as I said, has been overloaded by a significant number of initiatives during a time of also intense industry disruption. And that, in itself, dilutes the focus and the execution capacity. So by intentionally reducing the number of priorities on the table, we will free up time, energy and resources. And this will allow us to focus on what truly matters. That's what we're going to do in the next couple of months. Before closing, let me briefly highlight some of the initial steps that we have already taken as we start to put the Focus for Growth strategy into action. We've reduced the executive leadership team. I had a team of 20, we've reduced it to 12 members. This creates a smaller, more agile and more importantly, a more commercially focused leadership team in the company, which will enhance the speed of decision-making that we need. We also removed the global transformation office related to Next Level, and we significantly reduced our consultancy spend for the months to come. And this reflects a shift away from a separate transformation office towards a more integrated business ownership and execution. And as such, we have fully integrated the remaining Next Level initiatives into our global functions as well as into our regions. And that has stopped a stand-alone program tracking savings, for example, and therefore, we're now much more focused on the bottom line delivery and therefore, the net impact of these changes. We've also strengthened our global customer account alignment, and the global 7 accounts that I've talked about before are now reporting directly to me. And this is designed to reinforce regional execution actually, but also to accelerate the deployment of global innovation where it matters most for our customers. Now these are early but important steps. Obviously, there's more to come, but the momentum in the company has started. So that concludes my preview of Focus for Growth and we're not reinventing our strategy, as you've seen. What is different is the level of focus, the level of energy and depth supported by clear choices and strong resource prioritization. So to summarize, our priorities are clear: drive focus and discipline and put the customer back at the center of everything that we do. And I'm confident that our unparalleled industry leadership that we have and our truly unique business model will provide that strong foundation to sharpen that customer focus and return to profitable growth. I'm looking forward to coming back to you in early June with a more detailed plan and to share our financial ambitions in parallel. And in the meantime, this concludes today's results presentation, and we are delighted to now take your questions. And with that, I will hand over to the operator to open the Q&A. Operator: [Operator Instructions] Our first question comes from Alex Sloane from Barclays. Alexander Sloane: I'll have 2, please. I guess, overall, you previously guided to double-digit PBT growth in fiscal '26 based on today's guidance. Is it fair to assume you're now expecting PBT in constant FX to decline at sort of mid-single-digit rate for this year? And I guess if that's the case, within that potential 15%-plus downgrade, how much do you see as '26 specific or transitional versus perhaps more structural and put another way, how much of that do you think investors should reasonably expect to sort of bounce back in fiscal '27 would be the first one. And I guess the second one, somewhat related, but in terms of the commercial investments that you've talked about to restore competitiveness in Gourmet, can I just say, does this purely relate to price gaps or -- in Gourmet? Are you also potentially suffering from some of the service level issues highlighted at the beginning of the presentation? Hein M. Schumacher: Thank you, Alex. For the first question on the -- on PBT and this year's guidance, I'll let Peter answer. I'll come back to some of the points on structural as well as take your second question on Gourmet. So Peter, first on PBT. Peter Vanneste: Yes. So Alex, thanks for the question. We will have a significant reduction of finance costs over the year, up to CHF 60 million, so CHF 50 million to CHF 60 million versus last year, which means that a very significant part of the gap that we see on EBIT will be offset towards the PBT level. So profit before tax will be down for the fiscal year, but to a lesser extent than EBIT because of that recovery on the finance cost. Hein M. Schumacher: And Alex, I think a few remarks on the structural nature of the guidance for this year. Look, there are a few things that I would call pretty temporary. These are, for example, the gourmet positions that you talked about. The other one is supply disruptions that we have seen as well as the volume declines that we've seen in the first half. I expect those to -- over time, of course, to come back. Some of that will go faster than others. But more structurally, and Peter talked about that, our finance cost with a lower bean price, overall, the finance cost are not as high as in the EBIT definition, but they will come back and they will be neutralized on a PBT and on a net profit level. So some aspects are structural and some are temporary, but I wouldn't call it overall a rebasing of the company. I think your second question on Gourmet. Yes. So we had long positions out there and -- in Gourmet, which is partially a price listed business. We are seeking to retain market share. Obviously, we're going to drive volume. I think that's super important for us. We have, of course, fixed cost, but also we want to retain our customers after having had some years of disruption. So we're very keen to put the customer right -- front and center for everything that we do. So that's something that we're investing in. But if you look at Gourmet, yes, there have been disruptions also for Gourmet. Some of that in the North American part, but some of that in Europe, obviously, from somewhat longer time ago, but we're still sort of rebuilding capacity, and we're still rebuilding customer service. So this is something that we're now going to do on an accelerated pace. All the key factories are under hypercare. We've added some resources to make sure that we can deliver. We're also pushing some tactical investments through the sites because the customers have evolved their portfolio needs. We were a bit behind. We're stepping that -- we're really stepping that up and going fast after that. And therefore, I'm quite confident that in the second half of the year, overall, as a company, we are going to return to growth, and that will then sequentially improve the volume picture by quarter including Gourmet, which of course, is an important profit segment for us. Next question, please. Operator: Our next question comes from Jörn Iffert from UBS. Joern Iffert: The first one would be, please, on the reinvestment needs to restore customer service levels. For how long do you think it will last that this is more pronounced? And do you think despite these reinvestments, there could be operating leverage benefits for EBIT in fiscal year '27? So just to get a feeling for the time line here? And the second question, please, a technical one. Into the core segment, I assume it is, in particular, the spread, not the combined ratio, which was beneficial in the first half, I mean, what do you expect as a more normalized profitability on the current cocoa bean versus butter and powder spread going forward from here? Hein M. Schumacher: Thanks, Jörn. I'll take the first question. Peter, you can take -- if you would take the second one, that will be good. On the -- yes, on the investments, look, as I said, there's a few different types of investment here. And so the first one as I said, it's around evolved customer needs of what they need in their portfolio. And I think whilst we have an overall capacity that is sort of sufficient given, of course, the volume reductions that we have and the existing capacity that we had, on a line basis, the capacity wasn't always keeping pace with the changes of what customers really wanted. And therefore, we're doing a number of tactical investments predominantly in North America to keep pace and to satisfy the evolving customer needs. Some of that is in compound production. Some of that is in inclusion, for example, we need to step it up there. And so that's part number one. And that's partially CapEx. But of course, with all -- with quite a number of changes that we're doing and these are happening literally to date, that was in North America in the last couple of days and witnessing firsthand of what we're doing to step up that customer service and change portfolio. So that's number one. And that, of course, comes with some extra cost. The second one, given the disruptions that we had, we absolutely want to make sure that food quality and food safety is paramount. So yes, we are investing a bit extra also in manual operations to secure that. We've had incidents over the last couple of years. We simply cannot repeat that. The reputation of the company is essentially what safeguards the value of the company. So I'm very, very keen to focus on that as well. And then thirdly, as I talked about, investments when it comes to the long positions that we -- and we already mentioned that a few times, the long positions that we've had on cocoa and the impact on price listed business. So we're making here the right trade-offs, but we want to stick with our customers and we prioritize volume and we prioritize market share now and that's the third area of investment that we're making. Yes, I mean those are the main ones. But clearly, again, customer centricity and stepping up our efforts to evolve our capacity to that -- to the exact needs of the customer, that for me is really a priority now. And that's pretty short term. But I think in the midterm, that means that we will -- we need to continue to evolve our network, our supply chain through changing needs. And I think we can do that. And obviously, more to come on that in June. Peter? Peter Vanneste: Thanks for your question on cocoa. We've seen a strong EBIT growth on cocoa in the half year 1 year-on-year in local currencies. And very much linked to the fact that we're able to profit in cocoa and benefit from a more favorable margin environment and also the market volatility considering the speed of the market movements we've seen some time ago already with higher butter, higher powder prices, and we were able to capture that. We expect this to normalize in half year 2 going forward because the butter ratios have continued to drop in line with the terminal market evolution. Butter is now below powder and trading at a discount actually to CBE, which means that some of those benefits that we've seen linked to that volatility and the whole market that we captured in half year 1 and to some extent, a bit as well in half year 2 last year is at least, for the short term, not coming back. And then, of course, we'll see how the market evolves further to be more specific about that. Operator: Our next question comes from Ed Hockin from JPMorgan. Edward Hockin: Thank you, Hein, for your preview on your Focus for Growth strategy that I look forward to learning more in June. But on the Focus for Growth strategy, what I wanted to clarify a little bit following on from the last question, is on some of these initiatives you've outlined on capacity investments on focus and scaling of innovations, whether these are a refocus of existing resource or whether these are incremental investments? And within that, how we're thinking about the cash flow? Should we be, therefore, presuming that CapEx is higher for longer? And of your higher safety stocks in H2 that you mentioned, should we also expect that this is something longer lasting. So will you be holding inventory levels as a norm going forward? Or is this specifically an H2 comment? And then my second question, please, is on your volumes outlook for H2 and the return to volume growth. The industry, as you noted, is currently tracking minus 6.5% volumes. So to return to volume growth in the second half of the year, can you try and help me to bridge that? Is it that the industry volumes, you should expect some improvement in the second half of the year? And how significant contribution should the actions you're taking in gourmet have? Is it some reversal of shrink inflations or some reversal of the temporary in-sourcing that you've seen in previous years. Just if you could help me bridge that gap between the current industry volumes and improved picture for your volumes in the second half? Hein M. Schumacher: Thank you, Ed. And let me take first go at it, and Peter, please add where you see fit. So I mean, first of all, this is not about incremental resources. I talked very much in focus for growth around galvanizing and rallying our people, and that is people's component, but also indeed capital expenditure as well as cost behind less initiatives. We're choosing essentially 6 to 8 initiatives in the company right now to focus our resources on. We've been looking at many, many process improvements as a company over the last couple of years, ranging from HR processes to supply chain processes to essentially covering absolutely everything. What I'm really keen now is to focus our resources behind those processes that touch the customer first, and that is planning, so demand planning, supply planning, and making sure that we link up with our customer seamlessly and that we optimize our planning processes. So that means also digital efforts behind that. So that's the number one. Number two, customer service. Over the last year, customer service has been pretty much standardized and, in some cases, has been moved from a decentralized model to a more centralized global shared services model for customer service. That was a decision taken. It didn't always go well. So we absolutely have to nail it now and be there for the customer and make sure that, that customer service process runs extraordinarily well. So this is not about incrementalism. No, it's about everything that we were doing under the Next Level program, it's to choose those things that are meaningful and impactful and putting our people behind those. So that's very much the mantra. Not an extra. We're not going to expand on that. When it comes to capital expenditure, also for this year, we're not increasing the guidance. We have redirected some of the capital expenditure spend through the tactical investments that I talked about. And on the medium term, whether that's going to lead to a higher level, I'm going to come back to in June. However, we are very, very committed to deleveraging the company, as Peter has talked about. So that will remain an important priority. We will live within our means, but at the same time, I want to make sure that we spend the CapEx behind tangible, thought through, thorough growth initiatives, in a select number of markets, in our most meaningful segments. Gourmet, I talked to a few specialty categories, for example, and then, of course, in customer processes related to our Food Manufacturing segment. So more focused, clear and not incremental. So that, I think, hopefully answers your first question. When it comes to the volume picture in the second half, a few comments. Obviously, with lower bean prices, what we're seeing is that customers ordering for longer, that's clear, and that's helping the volume picture for us. We also see that customers, and we said that in the presentation, customers themselves are going for growth. And we've seen a number of initiatives from Hershey's, for example. We've seen initiatives from Nestle. And I think that's really important. We are seeing an enhanced growth picture in some of our key markets. In ice cream, for example, in North America, we're seeing overall an increased demand picture. And again, I think the lower bean prices helped. At the same time, and I think this is very important for us, when I talk about our efforts to restore growth, we believe that, in the very recent months, we are growing a bit ahead of the market with a reinvigorated focus on growth. And if we keep the pace, we make those necessary investments, we restore our processes and our credibility and stability, I'm actually very convinced that we will continue to do that in the very near future. So that's going to help us. So with less disruptions, we should see some growth. There's one important caveat, and that's, of course, the situation in the Middle East. At this moment, I mean, that's the latest one this morning. We believe that in the next week or so, business activity in the Middle East will resume somewhat, but obviously, it's very, very volatile. So that's something that we need to manage. So that's more on a high-level basis. I don't know, Peter, if you want to make some further comment on what we have been doing? Peter Vanneste: I'm risking to repeat a lot of what you said. So no. Hein M. Schumacher: Okay. Operator: Our next question comes from Jon Cox from Kepler Cheuvreux. Jon Cox: I have 2 questions really. One, just on what's happened in the last couple of years and what you're doing now to sort of maybe unwind some of that, maybe it went too far. I think under the first program, you laid off about 20% of your workforce and did a couple of factory closures and that sort of stuff. Just wondering, should we assume that maybe you're going to unwind the staff by about 10%, so maybe going back a little bit, or halfway from what you've done? As an add on that, do you think there's anything more needs to be done in terms of the factory network? Or is it more, as you mentioned, it's all about quality issues and maybe some lines are not working as well as you want to? So that's the first question. The second question, more on the top line outlook. I'm quite surprised that we're not really seeing volumes recover given the fact that cocoa prices have declined. I know there's a lag and so on and so on. But in terms of -- I'd imagine the whole industry is short chocolate in various places. Are you worried that maybe structurally, the chocolate market has changed in the last few years, maybe with GLP-1s and we see various data points suggesting that maybe chocolate demand volume growth won't come back to that on average 1% or 2% we've seen historically, maybe it's going to be closer to flat going forward. Any thoughts on that sort of long-term chocolate market outlook? Hein M. Schumacher: Thanks, Jon. I mean, first of all, on the Next Level program, as I said, in the plan on the Focus for Growth plan, look, I think that the Next Level program, again, the intentions to standardize more in the company, to reduce our cost by progressing our network into fewer, bigger sites into doing more with digital, intentionally definitely the right program. But what I'm saying is, therefore, we will build on that. And I have no intention to unwind necessarily what was going on. But I feel that efforts in the company were quite diluted. We have lost a lot of people. We have had quite some incidents and disruptions, and we have let customers down and customer service. So hey, I'm just very keen now to restore that confidence, go back behind a number of core priorities. So that means that we're not going to unwind, but we're going to phase and pace it. We'll go deeper, we're going to finish a number of initiatives, and we're going to do it well, but always with the customer in mind. So yes, we will continue to evolve our network, and that may end up in less factories. But before you close a factory, you need to make absolutely sure that the volumes that you provide to a customer from that factory are then, of course, transferred to another place, and you can help the customer to succeed. So I'm very keen to progress, but again, in a thoughtful manner. There's no point in adding necessarily resources. As I said, we are making some selective investments now in the supply chain, particularly in North America as well as in quality assurance. But overall, I do not foresee that we're sort of adding cost on a structural basis. That is definitely not the intention. And I don't want to talk about unwinding. I want to talk about focus, and I want to talk about fewer, bigger and better. with a strong focus on operations discipline and customer centricity. I think when you talk about volumes, actually, we are pointing towards a volume recovery in the second half. So of course, progressively, quarter 2 was a little bit better than quarter 1, in terms of volume, still negative. But going forward, as you sort of follow the algorithm, we're guiding to minus 1% to minus 3%. And that means mathematically that we're going to have to see a positive territory in half 2. Now where does that come from? And I talked about that lower bean prices? Yes, from our end, a better competitive position, strong focus and of course, with the caveat that I already talked about in the Middle East. But overall, we are actually seeing good signs of restored volumes. So in that sense, certainly on the midterm, we're looking more positively. On GLP-1, I think yes, I mean, several of our customers have also talked about that. And I just wanted to highlight that quality chocolate, the more premium style chocolate, we believe that's actually benefiting in some cases. We're seeing that also in interest for our Gourmet products. So I think, yes, look, there will be some impact, but at this point, it will not be significant for the company. Peter Vanneste: And maybe just to add, there's some reassurance, of course, from the past on the market rebounding. I mean the market pricing has been significant, of course, this time, but also a few years ago on the back of COVID, there was a 20% pricing up in the market, and you could see the chocolate category bounce up well after that. And maybe last, as you said yourself, I mean, there is this lag, right? We had ourselves for the first time now a quarter in Q2 where our pricing was negative year-on-year. So we had our peak pricing, plus 70% a year ago. We had still plus 25% pricing from us to our customers in quarter 1. Quarter 2 was the first quarter where it started to come down. So there is this lag that the market needs to cycle through before it starts hitting the consumer. Hein M. Schumacher: I think, Peter, there's also -- and I think that on your question or the question before, I want to come back on one point, which are inventory levels. We've obviously seen inventories coming down, and that's partially bean price, but also operationally, our inventories are showing a healthy development. What I do believe towards year-end, again, tactically and particularly on what I call the runners in our portfolio, Gourmet products that are pretty standard, we are increasing the inventory levels somewhat to make sure that we have a very positive start into the new year. I believe by the end of last year, the inventory levels were very, very low, and it hampered us a bit in satisfying customer needs. And again, with the positive signs that we are seeing in the market, we believe there is room, again, tactically and in a few areas to increase the safety stocks a bit to safeguard service. Again, a major priority for us going forward. Operator: Our next question comes from David Roux from Morgan Stanley. David Roux: I just want to come back to Alex's question on the guidance. Can you perhaps quantify how much of the cut in the PBT guidance was attributed to the investments in Gourmet, Middle East conflict and then other factors? And then my second question is on Global Chocolate. On the Food Manufacturer client cohort specifically, do you see any need or any risk here that you need to invest in pricing here? I appreciate there's a mechanical cost-plus model with this cohort of customer. But I mean, how robust are these agreements? And then just my follow-up question on Global Chocolate is, where do you see manufacturer inventory levels at the moment? Hein M. Schumacher: Peter, you take the first. I'll come back on the Food Manufacturing. Peter Vanneste: Yes. So David, the first question on the moving parts on EBIT and then PBT overall versus the guidance that we now put into the market. Overall, as we said, still for the full year, there's a positive on cocoa considering the high and the strong benefit that we took on volatility and the increases of the market in the past, normalizing half year 2, as I mentioned. Now if we look at then where the delta comes from in terms of the negative impact, you could basically argue that about 70% or 2/3 is triggered by this very rapidly declining bean price, which had an impact on, first of all, our financing costs, that pass-through had reversed basically on the EBIT line. Secondly, the impact that we've seen on Gourmet, where our long position and high price list forced us to do some commercial investments to secure the volumes that we have. So 2/3 is really coming from that rapid decline of the bean price. The remaining part, basically, there's 2 components. One is volume that over the year will still be slightly negative. And secondly, some of the increased costs that we are taking to manage through the supply disruption, making sure that we can deliver our customers despite some of those disruptions that we've seen. So this is basically the different blocks that you should be considering within our guidance. Hein M. Schumacher: When it comes to the Food Manufacturing segment, you're right. I mean, most of our contracts, they follow the price of cocoa. So I'm not overly -- from everything that I'm seeing margin-wise and so forth, I don't see major volatility in that. I feel pretty confident about the segment going into the second half. And we will move with customers and of course, based on the contracts that we have. So when I talked about the major impact from the long position, that is more related to price-listed businesses. When it comes to global stock levels, as I said, I think there are some -- we see customers buying a bit longer. I can't comment on exact stock levels. I'm not long enough here to give a really educated answer on that. But it's a fact that at this point, with the current bean prices, there is room for some increases globally. That's all I can say at the moment, unless, Peter, you would have further comments? Operator: Our next question comes from Tom Sykes from Deutsche Bank. Tom Sykes: Firstly, just on the capacity expansion that you're putting into North America and your comments to the earlier question around longer-term demand. I mean, if you're investing into compounds, which is the majority, I believe, of your Food Manufacturing business, are you not just signaling that there is a permanent reduction in cocoa demand even if it's not chocolate demand and that's coming from compound growth rather than cocoa content, if you like? And then just on Gourmet, where would your gross profit per unit be standing versus 12 months ago? And are you saying that you're going to be cutting that even more? Because if you do have this shift towards more compounds and we're in a sort of excess capacity, I suppose, are we not just going to see a rebasing of Gourmet pricing? And indeed, is it still going down? Hein M. Schumacher: Thanks, Tom. I mean, first of all, in investing in North America, as I said, I think the network overall probably didn't keep sort of the pace with evolving customer needs. So I think it's more that we were a bit behind. And we are very, very keen to fill in some of the blanks. We have very good relationships with many customers. Obviously, in North America, we are the market leader. But I want to make sure that for particular needs, and indeed, there could be compound production, that they don't go to alternative suppliers. So what we're doing is we fill in tactical needs, and I believe that, that will strengthen our position with customers significantly. At this point, with the bean price where it is now, we don't see compound necessarily growing faster than chocolate. We're seeing some movements that chocolate is actually back, and we're seeing some customers going back to chocolate. And again, with the current bean price, I believe that is overall probably even beneficial for them. We're sort of at that inflection point. So no, I don't think that compound will continue to always gain. I think what is more important for companies like us is that we're agile and that we can fill in the blanks of the portfolio that customers need. And they will have a need for compound for particular parts of what -- in their portfolio, and they have a need for chocolate. And of course, there is the volatility of the bean price. So I think what is important for us, given our role in the industry, is that we are agile, that we have the ability to supply what is needed. And that is exactly what we're going to do in North America with a number of shorter-term investments. So that's, I would say, for the next 4 to 5 months or so. I want to come back in June, as I said, with a more midterm picture for North America as well as coping with growth in a select number of large emerging markets, and I'm talking mainly Brazil, Indonesia, for example. India, we have ample capacity that can continue to grow. I mean we've done that double digit, and I feel that going to happen, that's going to go -- that will happen going forward. But I want to choose a few of the bigger markets where we have an emerging presence where I think we can succeed, but where we have some bottlenecks that we need to resolve. So I hope that answers the first question on investments. On Gourmet profit, I wasn't exactly sure on the precise question. But I would say there's no rebasing on profitability as such. As I said, there were long positions out there, and then you need to determine what you do, what is your priority. And we feel that retaining customers is driving growth, whilst at some point these positions will unwind and we will be returning to normalized profitability on Gourmet. That's at least what I'm seeing going forward. But in the meantime, we want to make sure that we keep the customer connection that we can compete in our geographies. And that's what we're doing. Peter Vanneste: And maybe just one addition because I think I might have understood in your message that for compound production, we need an entirely new setup of factories, which is not the case, right? We can produce from our existing factories. There's a few interventions you need to do in terms of tanks. But overall, I mean, we can convert our lines. So it's not that if any move happens to compound, that is an entirely new network that we need. Operator: Our next question comes from Antoine Prevot from Bank of America. Antoine Prevot: I have 2 questions, please. First, on coatings. So within Global Chocolate, I mean, could you quantify the volume growth of coating versus true chocolates and especially considering that now CBE is more expensive than cocoa butter, are you seeing maybe some pressure there overall, especially as a pretty big buffer on volume for the past couple of years? And second, on Gourmet, so could you quantify a bit how much of your chocolate profit comes from the Gourmet side? I mean, it's about 20% of your volume, but I would suspect it's much higher on the profit. And considering the reinvestments and like the price change you're doing into like H2, how quickly do you expect a situation to improve there on volume? Hein M. Schumacher: Thank you, Antoine. So I think Peter takes the second question on the composition of the profit, if I got it right. I think on your first question, overall on compounds, by the way, we call it cacao coatings, we saw flat growth in the first half, but with a double-digit growth for particular super compound products. Don't forget that I'm talking about investments in compounds. And yes, we need to follow the customer, but we are the leader actually globally in cacao coatings. And we have quite a few R&D projects with many of our customers on the way to continue to compete in that well. So if I sort of take a step back, as a company, what we are offering, we're offering the chocolate solution, we're offering the cacao coatings, but also non-cocoa solutions. And in that sense, we are partnering with Planet A Foods. We're working on what we call ChoViva, which is a non-cocoa product, which also has its own cost structure, and we will continue to invest in those type of alternatives. So we're very keen to provide the whole portfolio. Now again, flat growth in the first half with particular double-digit growth in a subsegment what we call super compound products. Peter Vanneste: Yes. And on Gourmet, Antoine, yes, it's about 20% of our volumes and it's over-proportional in terms of our profit split. We're not really disclosing a lot of details on it. But as you mentioned, it's a lot more accretive than the FM business. Volume-wise, 20%, despite the challenges, it's still performing relatively better than the FM business as we speak. And also in H2, I mean, we will invest, as we said, some of that long position, but it doesn't mean that we'll be cutting even more. We expect actually positive evolution in our business in chocolate, both on the FM and the Gourmet side going forward in the second half. Yes, I think that's where we are on the Gourmet side and everything else I think we said before, as it is linked to the very steep decline of the bean price, we do expect this to be a temporary phenomenon. Operator: Our next question comes from Samantha Darbyshire from Goldman Sachs. Samantha Darbyshire: My first question is just around the end markets. It would be really helpful to get some context from you around how you're expecting them to progress from here. You've got pretty good visibility on the order book, it seems. How much of this is kind of because your customers are innovating, having to bring out new products to kind of support that volume growth? And how much of it is that you think that consumers are adjusting to the price levels of chocolate products right now? And kind of along those lines, are you starting to see any appetite from your customers to reduce prices or increase promotions, increase pack sizes to get the volume coming back in the market? And if there's any regional context as well, that would be super helpful. And then just switching to, just thinking about your service levels, can you perhaps contextualize where they are versus history? I know that it's been quite volatile. There's been a lot of disruption. But if we think about where Barry Callebaut used to be, say, 5 years ago, how significantly below that are we? I know that the company is below industry levels. But any kind of indication of the delta would be really helpful. Hein M. Schumacher: Thanks, Sam, for the questions. So first, I would like to talk a bit about the market and our customers and what consumers are doing. Let me just make a few points here. And some of it will be repetitive, I hope you don't mind. But obviously, there are lower bean prices and we're seeing a flattening as well of the futures curve. So there are some early signs, as I said, of market stabilization for our customers. So customers are therefore also willing to book further in advance. As I call it, these are longer positions, and there is some room for higher inventories overall. I think we're seeing that customers are pricing through to some extent. Obviously, that's a customer decision. I don't want to go too deep on that. But I'm very encouraged by what I'm seeing with some of our large customers in particularly North America. Ferrero, and we said it in the presentation, they launched their go all-in promotion lasting from April to July, and that's backed up by significant investments. They've made a very public statement about that $100 million investment. Hershey also making significant media investments in this year with a very big launch around Reese's and Hershey. It's the first launch for them since a number of years that is sort of at this magnitude. So we're seeing restored confidence. Obviously, the margin profile will help given the lower bean prices. So these are, I think, very positive signs for recovery going forward. We're also seeing, therefore, some increased innovation interest from our CPG customers. And as I said, that we do across the whole portfolio. We're seeing -- particularly in Western Europe, we're seeing interest in the non-cocoa solutions for ChoViva, the brand that I talked about before, but also the high flavanol opportunity, the high flavanol innovation in AMEA, and this is gaining really good traction in Japan as well as in China. So if I sort of summarize lower bean prices, so therefore, customers going a bit long. Secondly, a very specific big initiative from some of our large customers that will help the market. And third, we're seeing if we are focusing our efforts behind scalable innovation platforms, we believe that particularly on a regional basis, we're seeing increased interest. So I would say, these are very positive signs. And therefore, we believe that the second half, we can return to a growth picture. On customer service levels, yes, I look back to a number of years ago. And particularly in the last 1.5 years or so, we have been below our historical averages. I don't want to call out one customer service level, because you need to drill down a little bit. And customer service can, for example, become low if your portfolio is not exactly the customer needs. So can you deliver against an unconstrained demand? That's a question. And in many cases, we haven't been able to do so, and that's why we're making these investments. The second one is, due to disruptions, do you need to cancel contracts or cancel deliveries that the customer has asked for. So in some of our key segments, we've seen customer service levels even somewhat below 80%. They are now improving fast. And again, that's where we're laser-focused on to get them to the highest possible level now. And I think that's something that we do progressively well. So without calling particularly percentages too much, I would say we weren't at the level that we were a number of years ago due to disruptions, due to many process changes, due to the whole transformation impact. We're now going back to fewer initiatives, restoring customer service on those areas where we really need it and preparing for a midterm picture. And obviously, I'd like to come back to you in June on what that looks like. I think that concludes the overall -- if I'm not wrong, this was the last question? Operator: Correct. We currently have no further questions. Hein M. Schumacher: Thank you, everyone, for spending time with us this morning. We are looking forward to come back to you in June with a full update on the Focus for Growth program and to have more interactions with you in the next couple of days as well as after the June conference. Thanks a lot, and speak soon. Peter Vanneste: Thank you.

33天前Insight Analytics约5分钟阅读

DRX.TO 2026 Q4 财报电话会议

Operator: Good morning, ladies and gentlemen, and welcome to the ADF Group results for the fiscal year ended January 31, 2026. [Operator Instructions] Also note that this call is being recorded on Thursday, April 16, 2026. And I would like to turn the conference over to Jean-François Boursier, Chief Financial Officer. Please go ahead. Jean-François Boursier: Thank you. Good morning. Welcome to ADF's conference call covering the 12-month period ended January 31, 2026. I am with Pierre Paschini, President and Chief Operating Officer of ADF, who will be available to answer your questions at the end of the call. I will first update you on our full year results, which were disclosed earlier this morning by press release and then proceed with a quick update about our operations, including our recent new contracts announcement and the recent U.S. tariffs change. This said, let me remind you that some of the issues discussed today may include forward-looking statements. These are documented in ADF Group's management report for the 2026 fiscal year, which will be filed with SEDAR in the coming days. On this very call a year ago and in spite of exceptional results, we were confirming the significant uncertainties that the then recently announced U.S. tariffs were bringing to our markets and operations. A year later and considering all the tariffs-related turmoil, we can confirm that we, without a doubt, close our fiscal 2026 with exceptional results and in a much better position to face these uncertainties in light of Groupe LAR's acquisition. Revenues for the fiscal year ended January 31, 2026, reached $258.7 million compared to $339.6 million last year. As a percentage of revenues, the gross margin went from 31.6% in fiscal 2025 to 23.1% during the fiscal year ended January 31, 2026. As just mentioned, fiscal 2025 was an exceptionally good year with a favorable project mix. The fiscal 2026 results have been impacted by the U.S. tariffs, both directly with higher raw material costs and indirectly with delays in project signing and fabrication start. As such, and as already mentioned in previous calls, ADF implemented a work sharing program at its Terrebonne, Quebec facility earlier this year, which reduced fabrication hours, but also enabled ADF to reduce the cost impact, although not entirely, considering that the Canadian employment program compensated some of these reduced hours. The Groupe LAR acquisition added $20 million in revenue since its acquisition was finalized on September 18, 2025, and added $2 million to our consolidated gross margin for the same period. Adjusted EBITDA totaled $43.5 million or 16.8% of revenues compared with $91.3 million or 26.9% of revenues a year ago. The year-over-year decrease comes from the previously explained gross margin variances and by the selling and administrative expenses, which at $23.2 million were $1.1 million higher than a year ago, all of the increase being explained by the inclusion of Groupe LAR in our consolidated SG&A. We closed our January 31, 2026 fiscal year with a mostly nonmonetary foreign exchange gain of $2.1 million compared to a $5.6 million loss a year ago. Most of this variance coming from the end of year mark-to-market valuation of our FX contracts on hand at both year-end. Year-to-date, ADF posted net income of $26.3 million or $0.93 basic and diluted per share compared with a net income of $56.8 million a year ago or $1.84 basic and diluted per share. Cash flows from operating activities generated $49.4 million, while we invested $11.1 million in CapEx, mostly for equipment maintenance at both our plants in Terrebonne , Quebec and in Great Falls, Montana. We plan to invest close to $35 million for our 2027 fiscal year, the majority of this amount being for our Groupe LAR plant expansion and modernization. In parallel, we are presently negotiating financing packages for these investments. We will be able to provide further updates on our next call. As of January 31, 2026, working capital stood at $104.8 million, just $4.4 million lower than last year. Also on January 31, 2026, cash and cash equivalents stood at $62.7 million, which is actually $2.7 million higher than a year ago, even considering the conclusion of our NCIB and the acquisition of Groupe LAR. Yesterday, the Board of Directors approved the payment of a semi-annual dividend of $0.02 per share, which will be paid on May 15, 2026, to shareholders of record as of April 27, 2026. We closed the year with an order backlog of $561.1 million as at January 31, 2026, excluding the new contracts totaling $157.3 million announced last week. The ending backlog included $138.2 million of contracts from Groupe LAR, which also excludes last week's announcement. Quickly looking at the fourth quarter results, ADF recorded revenues of $78.8 million, up $1.4 million from the fourth quarter of 2025 fiscal year. Fourth quarter revenues this year did include $13.8 million coming from the -- from Groupe LAR. The gross margin as a percentage of revenues stood at 21.5% for the fourth quarter ended January 31, 2026, compared with 31% for the corresponding quarter of fiscal 2025. The margin decrease between these 2 quarters is primarily explained by the mix of products and fabrication, including lower margins coming from the LAR projects. We recorded a net income of $6.4 million during the last quarter of fiscal 2026 compared with net income of $9.1 million for the corresponding period of fiscal 2025, with minimal impact coming from LAR, which basically broke even for the quarter. Because the corporation carries out contracts that vary in complexity and in duration, upward and downward fluctuation may occur from quarter-to-quarter. In light of this, revenue and order backlog growth must be analyzed over several quarters, not just from one period to the next. As mentioned at the beginning of the call, the situation was bleak a year ago, and we're definitely very satisfied with how everything turned out, including our overall financial results, our ending balance sheet and cash situation and with the conclusion of the LAR acquisition. As we have seen as recently as 2 weeks ago, with the latest tariffs announcement, we are still in a -- we are still in for more surprises and sadly uncertainties. Talking about these last tariff modifications, we can now confirm that for the time being, our U.S. projects fabricated in Terrebonne will now be impacted by a 10% tariff, which is applied on the value of the commercial invoice, including profit. And this in spite that the steel used to fabricate these projects comes from U.S. mills. Although not ideal, we can say that our recent backlog shift from U.S. to Canadian projects, aided by our July 2025 long-term contract and Groupe LAR acquisition reduced what could have been a much higher cost increase for ADF. Additionally, we are working with our U.S. clients to alleviate some of these additional costs. This said, -- what this latest announcement definitely brings is additional uncertainties to our market as it confirms the unpredictability of the overall trade situation. Nevertheless, as we announced last week, we are still focusing on the elements that we do control, and as such, we have been able to further increase our backlog. The largest of the series of new contracts in terms of values and duration is for the fabrication and delivery of various heavy steel structures for a project in the hydroelectric sector in Quebec. This project is a 4-year master contract for Groupe LAR. Since the acquisition, we've been able to grow LAR backlog, and we are still active as the hydroelectric market delivers its expected growth. We are on the verge of breaking ground in Metabetchouan for our Groupe LAR plant expansion and modernization, which is a key step in our continued growth. In light of all of this, we do anticipate revenue growth for our fiscal year ending January 31, 2027, despite the ongoing challenge of finalizing contracts with our U.S. customers that would normally be carried out at our plant located in Terrebonne, Quebec. However, given that the capital investment that I just mentioned will not have a significant operational impact in the fiscal year ending January 31, 2027, we expect margins to somewhat stagnate in the first quarters of fiscal year 2027, especially when adding the recently announced tariff change. This trend will be reversed as the integration of Groupe LAR continues and we complete the projects inherited at the time of Groupe LAR's acquisition. The acquisition of Groupe LAR, the new Canadian U.S. allocation of our order backlog and the optimal utilization of our fabrication facility in Great Falls, Montana allow us to still look forward to fiscal year 2027 with optimism, allowing us to continue our orderly growth despite tariff uncertainties. Thank you all for your interest and confidence in ADF. Pierre and I will now be happy to answer your questions. Operator: [Operator Instructions] First question will be from Nick Cortellucci at Atrium. Nicholas Cortellucci: First thing I was wondering about was the new 4-year contract. What does the timing look like on that for getting started? Jean-François Boursier: Yes. Most of the volume -- that contract will not have much impact in our FY '27. Most of the fabrication will start next year. So it's going to be 4 years, but with limited impact or close to no impact on our revenues this year for FY '27. Nicholas Cortellucci: Okay. And are you guys seeing anything in kind of these growth markets you're going after, maybe being nuclear or data centers, anything like that? Pierre Paschini: Yes. We're looking at a couple of those projects. But like I say, I mean, right now, we're bidding on some stuff, data centers, stuff like that. But with the tariffs right now and that new 10%, well, we need to be a bit more competitive. So it's going to cost us 5% on our margin. So -- but there's a lot of work out there. So I think it's feasible that we should be able to get some work by the end of the year. Nicholas Cortellucci: Okay. Regarding the CapEx plan and operational efficiencies for LAR, how do you see that playing out kind of sequential improvements throughout the year here? Jean-François Boursier: Well, the construction will occur this year. It's really -- so the expansion itself will not really happen this year. So we shouldn't see too much efficiency gain margin-wise in FY '27 because the plant will be up and running only late in the first quarter of next fiscal year. But as I mentioned earlier, we're -- besides the expansion and the new equipment, we are working with LAR on optimizing our -- the synergies between the 2 entities, and we're still in that process. So that, as I mentioned, should start to transpire on our actual margin, probably more so in the second half of the year. And lastly, as I also mentioned, we did -- with the acquisition, there was a backlog that was in place that had a certain margin profile in it. Obviously, you can understand that last year, while LAR was trying to cope with their situation and as we were negotiating, they were still trying to get business and maybe not have the same leverage in negotiating contract that they normally do. So some of the contracts that were signed in the past months might not be as that might not have carried the usual margin. So they are still positive. They're still good. As you saw from the number I'm giving, it's definitely not the same level of margin. So it did have a downward impact on our overall consolidated margin. But this said, it's added volume. The good news is that we are growing. As we had mentioned, we're seeing huge potential from LAR on the hydroelectric side. We've been pretty successful in signing new contracts, actually probably even better than we had anticipated. We're still seeing lots of opportunities going forward. But obviously, for all of that to work out, we do need to have a successful expansion. So we're obviously spending a lot of time on not only finalizing the bid and making sure that the construction starts on time and the project and the entire project is on time so that we meet our deadline. So once that all pans out, FY '28 and the following years are really -- will really start showing the full positive impact of that acquisition, along with what we hope will be a return to normal to our more ADF regular structural work as we see what will come out of the U.S. Nicholas Cortellucci: Right. Okay. So that kind of $2 million gross margin from LAR, that's kind of a backward-looking number and the new contracts from what I get at or that you guys are signing are more up to that ADF standard or getting closer to it? Jean-François Boursier: Well, pushing that way. Obviously, there are things we need to do to further improve, including the actual operations. So obviously, with the new equipment, they'll definitely be able to be more efficient with the work. So that helps. This is something that ADF has been really good at doing over the years is maintain our equipment as efficient as possible and always invest to be as optimal as we could be from an efficiency standpoint. So there are things we can do now. There are definitely things that will further -- there's definitely going to be a huge step with the new equipment and the expansion, but working and definitely negotiating with not only higher margins, but also with more favorable payment terms and overall conditions. So we're really putting -- I think we've been talking for a number of years about how careful we are on contract signing and our risk management. So we're putting all our processes in place so that we bid projects both for LAR and ADF or actually for LAR the same way and with the same due diligence that we did for our ADF bid. So that should all translate into better terms and better margins. Nicholas Cortellucci: Yes, that makes sense. And then just last one here from the tariff commentary you had there. I think kind of the summary is that you guys qualify for the 10% tariff because the steel is purchased from U.S. steel mills, but because it's being applied to the total value, it's a net negative. Jean Paschini: So it's been applied to the fabrication and the material, even though it's from the state. So we're penalized, I mean, $300 a ton basically, which amounts to maybe 5% on the margin depends on the kind of margin, depends on the work. There's a lot of work in the States right now. I mean most of the plants are busy. So we'll be able to charge a bit more and compensate for that 5%. That's what I think. So right now, the bigger guys out there, 5 or 6 of the biggest companies are busy for the next 2 years, which is a good sign for us because they have more work coming up. So we'll see. I mean I think there's an opportunity because cash flow-wise and financial-wise, we're very sound. It's just a question of hitting the right job with the right margin. Jean-François Boursier: Just to further explain on the tariffs, Nick, the -- with the previous -- there were tariffs, but more specifically on the steel and aluminum, if we were buying our steel from U.S. mills, we were basically -- there were basically no tariffs. We had the exemption. Now in spite of buying all the steel, there is that additional 10%, and that 10% applies not just on the material, but on the commercial invoice, including profit. So I think it just highlights the fact that it is still -- nobody knows, and there were no advanced notice -- from all we understood, things were sort of moving along and then all of a sudden, you've got coming out of nowhere that 10% announcement that nobody saw coming. So as I mentioned on the call, we're not thrilled with it. But obviously, the moves we made over the past year are definitely paying off because the same 10% announcement with our old setup, 85% volume and the majority of the Terrebonne fabrication going to U.S., that announcement could have had the potential of being a really significant negative impact on us. Luckily well, luckily, considering the mix, the portion of volume fabricated in Terrebonne going to the U.S. is much lower. And as I mentioned also, we will be working really hard with our clients. I think we think we've got a couple of opportunities maybe to pass some of those costs along to the clients. And for the upcoming contracts, as Pierre just explained, well, we'll have that discussion. And obviously, everybody is in the same boat. This is not something that's just specific to ADF. All the Canadian steel manufacturers have the same tariffs. And actually, all Canadian fabricators doing businesses with the U.S. have the same that have steel and aluminum and their components have the same impact. So as we've always did, we'll negotiate, make sure that it makes sense. It's just that it won't help from the -- it won't reduce the time the negotiation of signing new contracts will take. And it's too bad because we're starting slowly but surely. I think everybody was starting to get used to the setup -- but as I mentioned, the announcement that happened just reconfirm to everybody that we're still in an unknown and uncertain situation. Nicholas Cortellucci: Okay. Understood. Well, I think you guys have definitely made some major improvements, as you said, from where we were at a year ago. So definitely better positioning going into this. And hopefully, it all ends up in your favor. Operator: [Operator Instructions] Next will be Aniss Gamassi at Bastion Asset Management. Aniss Gamassi: Maybe just to wrap up the gross margin commentary. So as I look at the next fiscal year, you've done 23% this year. Do you expect sort of the full year for next year to be similar with the first half being lower and the second half maybe higher? Or do you expect for the full year overall gross margins to be lower than fiscal -- the current fiscal year? Jean-François Boursier: Well, we don't provide guidelines, margin guidelines. But suffice to say that we're not -- we're definitely not expecting huge improvement. So I'd really be satisfied to maintain the same type of margins for the full year with maybe margin being a bit more sluggish in the first half of the year and improving in the second. But it all -- I think, will depend on what happens next, how successful we are in signing new contracts and avoiding these new tariffs. But based on what we're seeing now, based on the backlog, based on the -- I'd be satisfied to maintain or slightly improve year-to-date on a full year basis, what we've been able to do this year, but really in 2 steps. Aniss Gamassi: Understood. Maybe second question, broader picture question here. We're witnessing sort of a significant acceleration in Canadian infrastructure activity. I'm interested in your perspective on sort of how ADF's current capacity and footprint aligns with the demand shift. Are you seeing this momentum translate into your bidding pipeline within your traditional projects and maybe beyond that in Canada specifically? Pierre Paschini: Basically, we're following our customers. I mean, these guys like the [indiscernible] and all the big guys, [indiscernible], I mean they've been chasing us and looking at some work. Right now, we're looking at major work in the Montreal Airport, some work in Ontario also, some work out West. We're looking basically with the oil right now, which is going up, there's going to be some major investments. So we've got our feet in the right place right now. So -- and we know these customers. So I think that probably right now, we got 57% of our work is here in Canada, maybe it's going to be more than 50%. We've got work in the states. But our plant in Montana right now is busy, but we still can add more work in there. So I think infrastructure-wise, we can do bridge work, we can do any type of work with our facility here in Terrebonne. So like I said, the work is there, the bids are coming in, and we'll be looking at getting more work on the Canadian side. Jean-François Boursier: And capacity-wise, we don't have -- and capacity-wise, there's no issue. We've got -- we still have sufficient capacity. So we've got room to add in Terrebonne. And obviously, with Groupe LAR expansion that we'll be doing this year, we will provide them with the additional capacity. So it's not definitely not a problem to grow -- further grow the backlog with the facilities as they are today. Operator: At this time, Mr. Boursier, it appears we have no other questions registered. Please proceed. Jean-François Boursier: Thank you. Before we conclude today's conference call, I would like to remind you that ADF will hold its shareholders' meeting on June 9 at 11:00 a.m., and our AGM will be held this year at our corporate office here in Terrebonne, Quebec. Financial results for the first quarter ending April 30, 2026, will also be disclosed during our shareholders' meeting. Additional meeting information will be made available in the coming weeks. Thank you again for your interest towards ADF. Operator: Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines. Enjoy the rest of your day.

33天前Insight Analytics约5分钟阅读

BARN.SW 2026 Q2 财报电话会议

Sophie Lang: Good morning, everyone, and welcome to Barry Callebaut's Half Year Results Presentation for 2025/ 2026. I'm Sophie Lang, Head of Investor Relations. And today's session will be hosted by our CEO, Hein Schumacher; and our CFO, Peter Vanneste. Our presentation today will start with Hein's initial reflections and observations then Peter will go into the half year results and the outlook. And finally, Hein will conclude with a preview of the Focus for Growth plan. Following the presentation, we'll have a Q&A session for analysts and investors. [Operator Instructions]. Before we start, take note of the disclaimer on Slide 2, and I'd also like to inform you that today's session is being recorded. And with that, I hand you over to our CEO, Hein Schumacher. Hein M. Schumacher: Thank you, Sophie, and good morning, everyone. It's my pleasure to be speaking with you as part of my first results presentation here at Barry Callebaut and I'm now approaching my first 100 days, and I wanted to start by sharing my initial observations and reflections before I hand it over to Peter to cover the results. So far, I've been in a listen and learn mode and spending a lot of time across the business to gather a broad range of perspectives from our people. And I've had the opportunity to visit a number of our factories and offices around the world and gain insights into our operations and the culture of the company. What has stood out most to me is the passion, the expertise and the resilience that defines this organization. I've also met with several of our key customers, which has sharpened my understanding of what truly matters for them and how we can support them on their growth journey. Back in February, we formed the Growth Accelerator coalition, which is a diverse group of around 30 deeply experienced colleagues, talents from around regions, functions and nationalities. And this working group from within is designed to advise, challenge and co-shape our path back to volume growth. And through a series of focus sessions, this group has developed a unified view of where we stand today, identified key bottlenecks that hold us back and is helping define a set of high-impact priority initiatives. And collecting these insights from across our organization is enabling me to shape a clear and decisive action plan that will sharpen our strategic direction and set our key priorities. Now I will come back to that later in more detail. But first, let me share some initial observations. Over the past years, the company has been navigating a very turbulent period marked by transformation, significant industry volatility as well as supply disruptions. The Barry Callebaut Next Level program was launched with all the right intentions. However, the sheer number of initiatives proved too ambitious for the organization to absorb at once and particularly against the backdrop of unprecedented industry disruption. And frankly, without sufficient course correction in priorities, this created a perfect storm. Now that said, several important steps were taken on the Next Level because the program did deliver savings of around CHF 150 million, and these enabled much-needed capability investments in core fundamentals such as digital, quality and supply processes. But at the same time, these savings were more than offset by the impact of volume declines, higher operating costs, particularly from the cocoa market and supply disruption as well as from a more competitive environment. And the combined effect was an organization that it become overstretched and quite internally focused. And with too many quality incidents, the business also began to lose market share. And as a result, we find ourselves in a position today with clear improvement areas that need to be addressed. I'm calling out 3 areas: First, our manufacturing network. We do have capacity constraints in key growth areas with site upgrades that are still work in progress. A lot has happened, but it's still work in progress. It has contributed to quality incidents with longer recovery times due to limited business continuity plans and we have made progress on the Next Level without a doubt, especially in strengthening quality foundations, but more work is to be done. And our service levels are currently below industry benchmarks. We need to improve. Second, our digital transformation. A good direction, but initiatives were decoupled from core business priorities and the scope was very broad. We moved very quickly before co-processes were sufficiently stabilized and before our data and operating systems had reached the required level of maturity. And third, our operating model and the organization. Historically, Barry Callebaut was highly decentralized and the intention of Next Level was to introduce a greater degree of centralization and standardization and that was the right direction. But in some areas, for example, in customer service, we went too far and probably too quick. In others, we ended up with a hybrid central regional model, and that has created an ambiguity in accountabilities. It added complexity to the organization and it limited regional empowerment, where essentially, the customer is where the market is, and where we need to drive local decisions. Because I believe that food is fundamentally a local business. And our region should define the what, whilst global functions should support the how with scale, expertise and obviously, consistency. And that makes the value of the corporation essentially bigger. Now importantly, while there is work to be done, as I said, we are building from a position of strength because Barry Callebaut has strong and solid foundations, and I'm confident that we can return to growth and reinvigorate ourselves as a reliable industry leader. Because we have a truly unique market position with leading relationships, strong customer relationships and a strong portfolio with benefits from our integrated end-to-end cocoa and chocolate model, very important for our group. And in turn, this gives us deep expertise across R&D, innovation, cocoa and sustainability and these are capabilities that are highly valued and appreciated by our customers around the world. And my conversations with CEOs of our largest customers have reinforced this view. And they see Barry Callebaut as an important partner and they want to grow with us. They expect us to step up and play a key role in unlocking and supporting their growth agendas. And let's not forget that we operate in a fantastic category with strong underlying fundamentals. And as a market leader, we are well positioned to capture significant long-term growth opportunities. And underpinning all of this is our people, as I said in the very beginning, people with deep commitment and passion for what we do. And that's critical to ensure that we can fully deliver on the fundamental opportunities ahead. Now bringing all of this together, clearly, we have strong foundations from our unique market position to the depth of our expertise, and that positions us to win in this industry. And at the same time, to fully deliver on the opportunity ahead, we must refocus behind a reduced set of priorities to stabilize key fundamentals as well as to step up execution. And in turn, if we do that well, it will unlock sustained profitable growth and it will reinvigorate Barry Callebaut as a reliable, innovative global leader. And that is the objective of our Focus for Growth action plan. And I will share a preview of the plan later. But before I go there, let me hand it over to Peter to walk you through the first half year results. Peter, here you go. Peter Vanneste: Thank you, Hein. Good morning, everyone. Let me walk you through the half year performance first, and I'll start with a short summary. Cocoa bean prices have decreased strongly in H1 and especially in the last few months, and this is surely positive for the recovery of the chocolate demand. On volumes, we saw a sequential quarterly improvement to minus 3.6% in the second quarter, supported by double-digit growth in Asia and continued momentum in Latin America. Recurring EBIT decreased by 4.2% and strong cocoa profitability was more than offset by the impact of lower volume, supply disruption and a highly competitive overcapacity environment. In Gourmet, margins were pressured with the context of the very rapid drop of bean prices, and I will come back to that a bit later in the presentation. Despite the decrease in EBIT, however, we grew recurring profit before tax and net profit, thanks to lower finance costs and income tax. And very importantly, despite the peak harvest and heavy cocoa buying season, we generated strong free cash flow and further deleveraged to 3.9x [ net ] debt over EBITDA. Let me get into some details now. Starting with the cocoa market. The cocoa bean prices have decreased very, very rapidly, falling by 53% in just 8 weeks in Jan and February and closing at GBP 2,057 at the end of February. And that's driven by good main crop arrivals in West Africa over the past few months, and favorable recent weather conditions that are supporting output for the mid crop. At the same level, the market is still seeing some demand softness. So global stocks have replenished to healthier levels. Overall, this means we expect a surplus this year for the second year in a row. Importantly, the structure of the cocoa futures markets has also improved significantly. We now have a carry structure meaning that the cost of buying spot cocoa today is cheaper than buying cocoa in the future. This means it is less costly for the industry to carry physical stocks and it's indicative for a more stable outlook. In the short term, given that this is demand-driven surplus, we expect bean prices to remain in the GBP 2,000 to GBP 3,000 range. That said, we continue to monitor the markets very closely as the demand recovers and thus we assess potential supplier risk linked to El Nino and potentially speculative volatility as we have seen in the past. Over the medium term, depending on supply and demand dynamics, we believe prices could move back into the GBP 3,000 to GBP 5,000 range. Lower cocoa bean prices are certainly positive for the future recovery of both the cocoa and the chocolate markets. We're seeing indications of this through our forward bookings. As you know, we contract several months in advance for our customers and in recent months, we've seen a greater willingness to book further ahead again. At the end of February, our futures booking portfolio was much, much higher than at the same time last year when cocoa bean prices were spiking. At the same time, our customers have priced through to their end consumer. As a result, consumer pricing and the rate of end consumer volume declines have started to stabilize. In the most recent quarter, Nielsen global chocolate/confectionery volumes decreased by 6.3% with plus 13.7% pricing. And importantly, we're now seeing our customers gradually shift their focus back to its category investments to stimulate growth. And I'll just quote a few examples. In North America, Ferrero launched their Go All In promotion from April 1 backed by a $100 million investment. It marks their first portfolio-wide campaign and largest marketing commitment in the company's history. Another example is Hershey is boosting media investments by double digit this year with the new quarter 1 media campaigns on Reese's and Hershey, the first launches of this nature. We're also seeing increased interest in innovation from our customers. In half year 1, we saw a significant increase in number of projects in Western Europe for ChoViva, our non-cocoa chocolate offering as well as a growing traction on Vitalcoa, our high flavanol solution, especially in AMEA. Beyond these benefits, the magnitude and the pace of the decline in the cocoa bean prices, as mentioned, just now more than 50% down in the last 8 weeks, helps, of course, the demand and the cash front but has also created some challenges on the short term as well and mainly on profitability. And there's 5 key impacts I just would like to highlight. First, in the past few months, we've seen very favorable margin environment for cocoa. In half year 1, this helped to offset some headwinds we saw in chocolate. Looking ahead, we expect this cocoa margin tailwind to normalize in the second half as market conditions have become less favorable. Second, as we just saw from the Nielsen data, demand has been down for some time. And given the high prices that have been put into the market in the past, this has resulted in some industry overcapacity, which is intensifying competition with more aggressive pricing and commercial actions. In this competitive environment, we've seen a temporary margin effect in Gourmet. The Gourmet business typically works with a 3 to 6 month price list where forecasted sales are covered and then a price list is determined. Given the unique speed now we've seen of the cocoa bean price decreases in half year 1, the result was a long position in a declining market, creating a high price list with not all players following the same approach. And this impacted our volume and profitability through the need for some short-term commercial investments. Also, next to that, there's a more technical effect related to the shift between EBIT and profit before tax due to lowering financing costs. The opposite, if you want, of what we've seen last year. This is a reversal of the finance cost pass-through, again, as we saw last year, and we now have lower finance costs as the bean prices come down. And it also means then a lower pass-through at the EBIT level. But it is -- importantly, it is neutral at the profit before tax level. Finally, there's also a BC-specific headwind in supply disruption. We had operational incidents in North America in the St. Hya factory, resulting in some volume losses and higher operating costs. Before we move to the half year 1 figures specifically, I'd like to spend also a moment to highlight potential implications from the Middle East situation. As many, many industries, the primary impact for us is on the supply chain side. It includes shipping disruptions, increased transit times resulting from port closures or limited container availability and of course, as we all know, there's a sharp increase in energy prices. In some markets, fuel rationing has been introduced combined with higher freight and insurance costs and all of that is adding complexity and costs across our supply chain. Next to the supply side, we've also seen some regional demand effects. Within AMEA, the Middle East and North Africa cluster represents about 10% of the volume there. This cluster has a specific high gourmet exposure and is experiencing therefore, disruption to imported premium products. Clearly, HoReCa food service segments are negatively impacted by the tourism levels in those areas as well as the closure of the schools, offices, rules on working from home and so on. Beyond directly in the Middle East and North Africa, we also see an indirect impact in India, where we have an important business where LNG imports are disrupted and constraining the energy availability for food manufacturers, commercial kitchens has been impacting their operations and, therefore, also ours. Overall, this obviously remains a highly dynamic and uncertain situation that we are monitoring, obviously, as per the latest developments every day. Now let me get into the numbers in a bit more detail, starting with volume. Overall, the group saw a sequential volume improvement in the second quarter to minus 3.6%, meaning we landed the first half with a decrease of 6.9%. Looking to the left of the chart by segment, Food Manufacturers continue to be impacted by negative market dynamics with our customers adapting behaviors in the context of high prices and lower demand. And there was the supply disruption in North America that impacted this segment for us. Gourmet, while more resilient, our competitiveness was temporarily pressured by the high price list in a sharply declining bean price environment, as I just explained. Also -- and also here, there was some impact of the St. Hya closure we saw in the first quarter. Global Cocoa declined as a result, mainly of a negative market demand, especially in AMEA and secondly, also due to our choice to prioritize higher profitability segments, which did have its impact on volumes in certain areas. This business, the cocoa business saw early signs of market improvement in the second quarter with a sequential volume improvement of minus 5.2%, so significantly better than in the first quarter. Now moving to the right-hand side of the chart, to global chocolate. Globally, we've seen chocolate volumes decline by 5.1%, which is ahead of the 6.5% decline of the market as reported by Nielsen. In Western Europe, we saw a 4.2% volume decline as demand continues to be impacted by market softness. Central and Eastern Europe declined for us by 3.6%. And way better than the market as our local accounts saw solid growth, especially in Turkey. North America decreased by 12.6% impacted by a strongly declining market as well, but as well as the network supply disruption we've seen from the temporary closure in St. Hya in the first quarter. Importantly, though, North America saw recent months improvements as the business is rebuilding inventories and meeting increasing customer orders. Latin America grew by 1.5%, well ahead of the market, driven by a strong momentum in Gourmet that we've seen multiple quarters in a row now. Finally, volumes in AMEA grew by a strong 8.5% and reached double-digit growth in the second quarter, driven by strong market share gains in China, momentum with key customers in India and additional business that we secured in Australia. Moving to EBIT now. Recurring EBIT decreased in local currencies by 4.2% to CHF 316 million (sic) [ CHF 310.9 million ]. The EBIT bridge on the page shows the respective moving parts. Cocoa, first of all, the green block on the chart saw strong profitability in half year 1, given a more favorable market environment -- margin environment, sorry, and market volatility where we're able to capture the volatility and increases of the prices and the decrease of the prices that we have seen. In half year 1, this has helped to offset some of the other headwinds that we're facing in chocolate. The impact of the half year 1 volume decrease was meaningful. This is clear when we look at our EBIT per tonne as well, which increased by 3%, whereas our EBIT in absolute declined by 4%. So the impact of volume was meaningful in the first half, and this is something that we'll see turning around in the second half. Next, there was an impact of the intense competitive environment and particularly within Gourmet. As I explained earlier, our high Gourmet price list and long position in the context of this very rapid decline of bean prices required temporary commercial investments. In addition, supply disruption resulted in higher operating costs to maintain service and deliver products to our customers. Finally, we also saw the shift between EBIT and profit before tax that I explained as a result of a lower financing cost year-on-year and therefore, a lower pass-through on the EBIT level. And this effect will get bigger in the second half of the year. While our recurring EBIT decreased, it's important to note, we were able to grow the absolute profit before tax and our net profit. And to be more precise. As you can see on the left-hand side of this chart, our recurring EBIT in local currencies was CHF 14 million lower than last year. This is the minus 4%. In the middle, our profit before tax increased by CHF 2 million or plus 1.3% as a result of a CHF 16 million decrease in financing costs in local currencies driven by our actions to reduce debt and, of course, in the lower bean price environment. To the right, our net profit increased even further by CHF 42 million or by 66%, given significantly lower income tax expense compared to what we saw last year. Recurring income tax expense decreased to CHF 29.6 million versus the CHF 69.4 million we saw in half year 1 last year. This corresponds to an effective tax rate of 21.4%, which mainly resulted from a more favorable mix of profit before taxes and much lower nontax effective losses in some of the countries. Free cash. Free cash flow delivered strongly in the half year at CHF 802 million across the 6 months despite the peak buying season that we're having always this time of year. Now when we look, as always, at the moving parts behind this cash generation, we saw -- and that's the dark black bar, we saw CHF 1.5 billion positive impact from the cocoa bean price this half year. Bean prices decreased significantly in half year 1, especially in the second quarter, as I mentioned. And this has benefited us during the peak buying period, particularly in non-West African origins, which do not have the same forward contracting model as Ivory Coast and Ghana have. There was a, next to that, a CHF 472 million negative impact on operational free cash flow, as you can see in the green bar. This has all got to do with the peak buying season. Half year 1 is always operationally like that with a negative cash out for the bean buying given the timing of the cocoa harvest. This was offset, however, partly by continued operational benefits from actions on the cash cycle reduction that we explained largely already in the previous communications. We continue to do so with our efforts to diversify our origin mix, reduce forward contracting and so on. As a result, actually, our inventory was now this time of year in February, 10% lower than February last year. So that also helped to generate the cash. up to this level. And finally, there was a CHF 183 million CapEx investments, as you can see in the yellow bar in the chart. Leverage. Leverage came down to -- strongly to 3.9x, and that's significantly below the 6.5x we saw in February last year and also well below the 4.5x we saw last August despite, again, the seasonality we always have in half year 1, with an important net debt reduction of CHF 2.5 billion, enabled by the strong cash flow that I've been talking about before. So leverage landed at 3.9x. But in fact, if you would exclude cocoa bean inventories from the net debt, and I'm talking only cocoa bean inventories, so not even correcting for cocoa products or chocolate stocks, our adjusted leverage RMI would be 2.7x. This progress mostly came from a lower inventory value given significantly lower bean prices, which is about 1.3x leverage in this decrease. But also through the actions to reduce our inventory volume, as I talked about, which made up about 0.6x in this reduction of leverage. In terms of gross debt reduction, we repaid EUR 263 million term loan in September '25, so a few months ago and EUR 191 million in February on the Schuldschein. We've also reduced significantly our commercial paper and bilateral facilities over this time. Obviously, all of this has been an important contributor to the lower net year-on-year finance costs that we've seen in the first half already. And we will certainly continue to focus strongly on the deleverage in half year 2. It remains a key priority. We want to end much lower than where we are even today. So with the further actions that we're defining on the cash cycle will bear further fruit going forward. This could be and this will be partly offset to some degree because of the safety stocks that we will be watching and potentially reinforcing a bit in a few key segments. Again, back to the support we need to have on the service levels following some disruptions that we have seen over the last months. So before I conclude the half year 1 section and staying on the financing. Earlier this week, we signed a EUR 2 billion sustainability-linked borrowing base facility. The borrowing base is linked to our underlying inventory asset base and represents an important step in the diversification of our funding sources. The facility strengthens our funding flexibility, particularly in periods of prolonged higher or lower bean price environments. It increases our agility and the agility of our capital structure and our ability to actively manage financing costs more in sync with cocoa price moves. Just to share a few additional details. The facility comprises of a EUR 1.6 billion of committed financing, complemented by an uncommitted tranche of EUR 400 million which is providing additional liquidity flexibility. So moving now to the outlook of the fiscal year. We've updated our guidance, reflecting our focus on volume and deleverage while taking short-term action to protect our market share and drive growth. We have, first, raised our expectations on volume. We now expect a decrease for the group between minus 1% to minus 3%. And this implies a return to positive growth overall in the second half. We've also raised our guidance on leverage. We now expect net debt over EBITDA below 3x using a working mean price assumption of GBP 3,000, so with the continued tight focus on this and further progress despite our updated profit assumptions. At the same time, we have lowered our outlook on EBIT. We now expect a mid-teens decrease on a recurring basis in local currencies. And this reflects short-term actions to protect market share and prioritize growth in the context of the rapidly declined cocoa bean prices. Important to note that a significant reduction in financing costs in half year 2 is an important factor in the reduced EBIT guidance. We expect to recover more than half of the absolute decrease in EBIT at the profit before tax level. Clearly, this outlook is subject to potential impact from the ongoing disruption in the Middle East that I commented on a little bit earlier. Now before I hand back to Hein, I want to take a moment to explain the half year 2 moving parts on EBIT. Our return to positive volume growth will be a clear tailwind for half year 2, of course. However, this will be offset by a number of factors. One is short-term actions in global chocolate. We are prioritizing restoring Gourmet share following this unique and temporary long position impact that I talked about. We're also taking some temporary customer-centric interventions to restore service levels, and Hein will talk about it a bit more later, but action is needed to stabilize supply after a number of incidents that we've seen. Customer centricity is our #1 focus going forward, and we're taking action to reclassify lines, increase spend on staffing, maintenance and quality. Second, as already discussed, cocoa profitability is expected to now normalize in half year 2 following an exceptional half year 1. Third, we are taking further actions to reduce finance costs. This means significantly lower year-on-year pass-through in finance cost at the EBIT level, while neutral on profit before tax. And finally, we have the uncertain and volatile situation in Middle East, which is bringing additional cost and supply chain disruption depending on how it will evolve further. Finally, the uncertain and volatile situation in the Middle East brings additional costs and supply chain disruption. And I will now hand over to Hein to share more on our Focus for Growth. Hein M. Schumacher: Thank you, Peter. Now let's talk about Focus for Growth. And this has been shaped, as I said before, by the insights and learnings from our growth accelerator coalition that I mentioned earlier. And at this stage, me being in the company now for 2 months plus, the plan is directional as we continue to refine and deepen our assessment of the actions as well as the opportunities ahead of us. And I'm looking forward to sharing the full detailed update with all of you in early June. And in the meantime, I wanted to be transparent and therefore, share the direction that we are heading in. Now before we go into details, let me start with why focus is so critical for Barry Callebaut. Because what really struck me when I started engaging with the team on our business portfolio is actually how concentrated we are. As you can see here on the chart, a few examples. So if we look at our top 7, top 7 markets represent 56% of our total volume. And of course, if you would extend that to 10 markets, the concentration increases even further. Similarly, with customers, our top 7 global customers are approximately 1/3 of our volume. In our Gourmet branded business, our top 7 brands or top 7 propositions generate 85% of our volume. And on the sourcing side, 90% of our cocoa is sourced from our 7 origin countries. And finally, although we operate around 30 specialty categories around the world, the top 7 represent approximately 90% of the growth opportunities that we see today. So as we focus on stabilizing the fundamentals, which we talked about and focusing our resources behind reduced priorities, getting these top 7 really right already moves the needle meaningfully. And this is why focus sits at the heart of our growth agenda for the future. Now turning to our Focus for Growth action plan. We do see that compelling need to increase focus across 3 areas. First one is commercially. So concentrating on a defined set of distinct growth opportunities and prioritizing key markets and segments where we see the greatest potential. Second, operationally by restoring fundamentals. I talked about that, and particularly in the areas that matter most for our customers in terms of reliability, quality and service. Customer centricity is absolutely vital. Third is organizationally by prioritizing a reduced number of the most impactful initiatives and restoring that customer-centric winning culture and by driving focus, restoring fundamentals and putting the customer firmly at the center of what we do, our objective is to reinvigorate the company and return to sustained profitable growth, and market share gains and, therefore, unlock strong financial performance going forward. Now let me share some details on each. I'm starting with commercial focus. And we are defining a clear and distinct set of growth opportunities where we will intentionally concentrate our resources and our attention. And this starts with markets. And as we discussed earlier, our top markets truly move the needle, not only in terms of volume but also in profitability. Let me start with the U.S., our largest market, representing approximately 17% of our revenue and ensuring the right level of focus and execution in such markets is critical to deliver growth. But also other markets stand out with clear growth potential, for example, Brazil, where we have a meaningful presence, Indonesia, India, Peter talked about that, and China, where we're experiencing strong growth right now. And it is therefore clear that our resources need to over proportionately support these priority markets, a distinct set. And importantly, this focus must be actionable, value-added defining a set of focus markets within AMEA rather than spreading our attention across that vast region thinly. The same logic applies with Gourmet & Specialties, where we need to concentrate on the right segments and opportunities, and I will come back to that in some detail in the next chart. In cocoa, in itself, we see clear opportunities to unlock growth by increasing our focus on high value-added powders, whilst ensuring that we have the right growth capacity, of course, in place. So across all of these areas, a key enabler will be strong innovation platforms. Not many, but a few strong platforms that will allow us to lead in the market and that we can leverage across the portfolio to drive growth, greater level of differentiation versus our competitors and of course, to support our customers around the world. Now let me talk about Gourmet, such an important segment for our profitable growth, and we are reintroducing here a clear brand hierarchy and customer propositions. Callebaut, Masters of Taste, that will continue to be our group commercial identity. And then we have a clear brand tiering after that to serve the different customer needs with a greater impact. And as you can see here on the top of the pyramid, we anchor the portfolio around our super premium global brands, led by the Callebaut Signature Collection and Cacao Barry. Now Callebaut brings over a century of Belgian craftsmanship and unrivaled bean to bar expertise and Cacao Barry brings 2 centuries of Cocoa Origins mastery and French pastry heritage, important brands on top of the pyramid at a higher price level, strong quality focus. Now beneath that, our core Gourmet portfolio is firmly positioned in that premium segment with the Callebaut core section. And here, the focus is on delivering consistent quality, reliability and strong performance for professional customers in their day-to-day operations. Complementing these, we continue to develop strong regional propositions. Typically, one per region, such as Sicao, Chocovic or Van Houten in Asia, for example, ensuring that local relevance. And across all these tiers, our brands are supported by end-to-end services from the chocolate academies that we have around the world to innovation and technical expertise. These help our customers to succeed. And the objective is simple and clear, a more focused Gourmet portfolio with clearly differentiated propositions and price tiers that enable to serve our customers better, and it will allow us to allocate resources more effectively and drive the profitable growth in this important segment. Now let's turn to specialties. Our plan here is to be a bit more selective, focused on a defined number of margin-accretive specialty categories that we believe we can integrate in the company, and the core of the company and by doing that, scale them first regionally and then globally. And while the final list is currently being defined, we already see clear and compelling opportunities in a number of areas, such as filled and baked inclusions, which you find in products like ice cream, where we have a very strong presence in that segment. But also both chocolate decorations, including toppings for bakery applications and fillings and coatings, for example, solutions with reduced sugar functionality. And once this prioritization is finalized, the intent is to bring these selected specialties much closer to the core on the regional responsibility including, therefore, a tighter system integration. At this moment, they're not that fully integrated in our operating system. And that means we will invest behind them to ensure there is sufficient growth capacity, clear ownership, P&L ownership within the region and stronger category management. And we believe that this more focused approach will allow us to scale what really works. It will simplify the specialty portfolio, and it will concentrate resources where we see the strongest combination of growth, margin expansion and, of course, customer relevance. Now moving to operational focus, where the clear goal is to restore some of the fundamentals. And Peter talked about the disruptions. Our #1 priority is to restore service levels and on-time in full performance that we are now measuring consistently every day, every week, every month. I'm absolutely determined to get us there and to improve on that particular KPI. And as I mentioned earlier, a combination of transformation complexity, industry disruption that we've had and many operational incidents, this has taken our focus a bit away from the basics. And as a result, service levels have been below industry standards. Now that's something that I'm keen to turn around for the company. We have to get this right. Now beyond service, we also need to ensure that our network, our factory network is fit for purpose, both for the portfolio that we operate today, but also where our customers will go tomorrow. And at the factory level, we see currently mismatches between line utilization, so specific line utilization and the overall capacity available in our network. So in the short term, that means we will make targeted and tactical adjustments to unlock available capacity. On the midterm and the long term, we will invest selectively behind those growth capacities that I talked about -- we talked about the focus areas, for example, ensuring that we deploy there for our capital towards the right opportunities. And finally, restoring the fundamentals also means strengthening the core processes and enablers of the organization, very much the intention of Next Level, and we will build on that. We do need better data visibility, more effective end-to-end decision-making on a number of processes. And therefore, the priority for us is to focus on the core process as the company first, get them really right, such as the overall demand and supply planning processes, customer service processes and, of course, the quality and the usability of our data. We made strong progress, but now we need to finish it behind those few big priorities. Going into more detail, there are a few areas where we need to focus operationally. So North America, as I said already, this region contains our largest market in the U.S., and we need to get it right. And as Peter has described, we've seen broad supply disruption across the network, and that resulted in longer lead times for our customers and capacity constraints in several high-demand product categories. Network investments under Next Level were there, but some of them were postponed given the macro backdrop. Now there's an immediate need to stabilize the network and rapidly improve service levels, focusing over the coming months on increasing staffing and adapting shift patterns at relevant sites as well as targeted initiatives to stabilize critical facilities, particularly across maintenance, quality, infrastructure and planning processes. In parallel, we are reclassifying and redeploying existing product lines across the network to better utilize the available overall capacity. We are developing a midterm plan to future-proof the network in order to sustainably support future growth. On emerging markets, here, our focus will be on a select number of key growth markets, large markets, though, but where we have a meaningful presence already and where we intend to invest to support evolving customer needs. Think of countries like Indonesia and Brazil. On this, we will update you in much more detail in June. Service and OTIF, on time in full, we are taking targeted actions not only in North America but also in Europe to immediately improve reliability and to step up our safety stocks in selected categories. Peter talked about that. This will stabilize our key business processes and in turn, it will improve customer service in the months to come. And then finally, core processes. I talked about digital efforts before. We need to focus our digital efforts and investments behind those core processes, such as planning as well as customer service, driving better data visibility and transparency, and this will, therefore, strengthen these processes and, therefore, increase service levels for our customers. Now turning finally to organizational focus. Our objective is to reestablish that winning culture with customers at the heart of everything that we do, while refocusing the organization, as I said, on a set of impactful initiatives that truly matter. And a key priority here is to increase the empowerment and accountability of our commercial regions because these regions are the closest to our customers and our markets, and they should clearly drive what needs to be done to win locally. And of course, supported by global functions. They provide the how. They provide the scale, the expertise and the consistency behind those core processes that I talked about. By doing that, we need to be, therefore, more disciplined on prioritization because the organization, as I said, has been overloaded by a significant number of initiatives during a time of also intense industry disruption. And that, in itself, dilutes the focus and the execution capacity. So by intentionally reducing the number of priorities on the table, we will free up time, energy and resources. And this will allow us to focus on what truly matters. That's what we're going to do in the next couple of months. Before closing, let me briefly highlight some of the initial steps that we have already taken as we start to put the Focus for Growth strategy into action. We've reduced the executive leadership team. I had a team of 20, we've reduced it to 12 members. This creates a smaller, more agile and more importantly, a more commercially focused leadership team in the company, which will enhance the speed of decision-making that we need. We also removed the global transformation office related to Next Level, and we significantly reduced our consultancy spend for the months to come. And this reflects a shift away from a separate transformation office towards a more integrated business ownership and execution. And as such, we have fully integrated the remaining Next Level initiatives into our global functions as well as into our regions. And that has stopped a stand-alone program tracking savings, for example, and therefore, we're now much more focused on the bottom line delivery and therefore, the net impact of these changes. We've also strengthened our global customer account alignment, and the global 7 accounts that I've talked about before are now reporting directly to me. And this is designed to reinforce regional execution actually, but also to accelerate the deployment of global innovation where it matters most for our customers. Now these are early but important steps. Obviously, there's more to come, but the momentum in the company has started. So that concludes my preview of Focus for Growth and we're not reinventing our strategy, as you've seen. What is different is the level of focus, the level of energy and depth supported by clear choices and strong resource prioritization. So to summarize, our priorities are clear: drive focus and discipline and put the customer back at the center of everything that we do. And I'm confident that our unparalleled industry leadership that we have and our truly unique business model will provide that strong foundation to sharpen that customer focus and return to profitable growth. I'm looking forward to coming back to you in early June with a more detailed plan and to share our financial ambitions in parallel. And in the meantime, this concludes today's results presentation, and we are delighted to now take your questions. And with that, I will hand over to the operator to open the Q&A. Operator: [Operator Instructions] Our first question comes from Alex Sloane from Barclays. Alexander Sloane: I'll have 2, please. I guess, overall, you previously guided to double-digit PBT growth in fiscal '26 based on today's guidance. Is it fair to assume you're now expecting PBT in constant FX to decline at sort of mid-single-digit rate for this year? And I guess if that's the case, within that potential 15%-plus downgrade, how much do you see as '26 specific or transitional versus perhaps more structural and put another way, how much of that do you think investors should reasonably expect to sort of bounce back in fiscal '27 would be the first one. And I guess the second one, somewhat related, but in terms of the commercial investments that you've talked about to restore competitiveness in Gourmet, can I just say, does this purely relate to price gaps or -- in Gourmet? Are you also potentially suffering from some of the service level issues highlighted at the beginning of the presentation? Hein M. Schumacher: Thank you, Alex. For the first question on the -- on PBT and this year's guidance, I'll let Peter answer. I'll come back to some of the points on structural as well as take your second question on Gourmet. So Peter, first on PBT. Peter Vanneste: Yes. So Alex, thanks for the question. We will have a significant reduction of finance costs over the year, up to CHF 60 million, so CHF 50 million to CHF 60 million versus last year, which means that a very significant part of the gap that we see on EBIT will be offset towards the PBT level. So profit before tax will be down for the fiscal year, but to a lesser extent than EBIT because of that recovery on the finance cost. Hein M. Schumacher: And Alex, I think a few remarks on the structural nature of the guidance for this year. Look, there are a few things that I would call pretty temporary. These are, for example, the gourmet positions that you talked about. The other one is supply disruptions that we have seen as well as the volume declines that we've seen in the first half. I expect those to -- over time, of course, to come back. Some of that will go faster than others. But more structurally, and Peter talked about that, our finance cost with a lower bean price, overall, the finance cost are not as high as in the EBIT definition, but they will come back and they will be neutralized on a PBT and on a net profit level. So some aspects are structural and some are temporary, but I wouldn't call it overall a rebasing of the company. I think your second question on Gourmet. Yes. So we had long positions out there and -- in Gourmet, which is partially a price listed business. We are seeking to retain market share. Obviously, we're going to drive volume. I think that's super important for us. We have, of course, fixed cost, but also we want to retain our customers after having had some years of disruption. So we're very keen to put the customer right -- front and center for everything that we do. So that's something that we're investing in. But if you look at Gourmet, yes, there have been disruptions also for Gourmet. Some of that in the North American part, but some of that in Europe, obviously, from somewhat longer time ago, but we're still sort of rebuilding capacity, and we're still rebuilding customer service. So this is something that we're now going to do on an accelerated pace. All the key factories are under hypercare. We've added some resources to make sure that we can deliver. We're also pushing some tactical investments through the sites because the customers have evolved their portfolio needs. We were a bit behind. We're stepping that -- we're really stepping that up and going fast after that. And therefore, I'm quite confident that in the second half of the year, overall, as a company, we are going to return to growth, and that will then sequentially improve the volume picture by quarter including Gourmet, which of course, is an important profit segment for us. Next question, please. Operator: Our next question comes from Jörn Iffert from UBS. Joern Iffert: The first one would be, please, on the reinvestment needs to restore customer service levels. For how long do you think it will last that this is more pronounced? And do you think despite these reinvestments, there could be operating leverage benefits for EBIT in fiscal year '27? So just to get a feeling for the time line here? And the second question, please, a technical one. Into the core segment, I assume it is, in particular, the spread, not the combined ratio, which was beneficial in the first half, I mean, what do you expect as a more normalized profitability on the current cocoa bean versus butter and powder spread going forward from here? Hein M. Schumacher: Thanks, Jörn. I'll take the first question. Peter, you can take -- if you would take the second one, that will be good. On the -- yes, on the investments, look, as I said, there's a few different types of investment here. And so the first one as I said, it's around evolved customer needs of what they need in their portfolio. And I think whilst we have an overall capacity that is sort of sufficient given, of course, the volume reductions that we have and the existing capacity that we had, on a line basis, the capacity wasn't always keeping pace with the changes of what customers really wanted. And therefore, we're doing a number of tactical investments predominantly in North America to keep pace and to satisfy the evolving customer needs. Some of that is in compound production. Some of that is in inclusion, for example, we need to step it up there. And so that's part number one. And that's partially CapEx. But of course, with all -- with quite a number of changes that we're doing and these are happening literally to date, that was in North America in the last couple of days and witnessing firsthand of what we're doing to step up that customer service and change portfolio. So that's number one. And that, of course, comes with some extra cost. The second one, given the disruptions that we had, we absolutely want to make sure that food quality and food safety is paramount. So yes, we are investing a bit extra also in manual operations to secure that. We've had incidents over the last couple of years. We simply cannot repeat that. The reputation of the company is essentially what safeguards the value of the company. So I'm very, very keen to focus on that as well. And then thirdly, as I talked about, investments when it comes to the long positions that we -- and we already mentioned that a few times, the long positions that we've had on cocoa and the impact on price listed business. So we're making here the right trade-offs, but we want to stick with our customers and we prioritize volume and we prioritize market share now and that's the third area of investment that we're making. Yes, I mean those are the main ones. But clearly, again, customer centricity and stepping up our efforts to evolve our capacity to that -- to the exact needs of the customer, that for me is really a priority now. And that's pretty short term. But I think in the midterm, that means that we will -- we need to continue to evolve our network, our supply chain through changing needs. And I think we can do that. And obviously, more to come on that in June. Peter? Peter Vanneste: Thanks for your question on cocoa. We've seen a strong EBIT growth on cocoa in the half year 1 year-on-year in local currencies. And very much linked to the fact that we're able to profit in cocoa and benefit from a more favorable margin environment and also the market volatility considering the speed of the market movements we've seen some time ago already with higher butter, higher powder prices, and we were able to capture that. We expect this to normalize in half year 2 going forward because the butter ratios have continued to drop in line with the terminal market evolution. Butter is now below powder and trading at a discount actually to CBE, which means that some of those benefits that we've seen linked to that volatility and the whole market that we captured in half year 1 and to some extent, a bit as well in half year 2 last year is at least, for the short term, not coming back. And then, of course, we'll see how the market evolves further to be more specific about that. Operator: Our next question comes from Ed Hockin from JPMorgan. Edward Hockin: Thank you, Hein, for your preview on your Focus for Growth strategy that I look forward to learning more in June. But on the Focus for Growth strategy, what I wanted to clarify a little bit following on from the last question, is on some of these initiatives you've outlined on capacity investments on focus and scaling of innovations, whether these are a refocus of existing resource or whether these are incremental investments? And within that, how we're thinking about the cash flow? Should we be, therefore, presuming that CapEx is higher for longer? And of your higher safety stocks in H2 that you mentioned, should we also expect that this is something longer lasting. So will you be holding inventory levels as a norm going forward? Or is this specifically an H2 comment? And then my second question, please, is on your volumes outlook for H2 and the return to volume growth. The industry, as you noted, is currently tracking minus 6.5% volumes. So to return to volume growth in the second half of the year, can you try and help me to bridge that? Is it that the industry volumes, you should expect some improvement in the second half of the year? And how significant contribution should the actions you're taking in gourmet have? Is it some reversal of shrink inflations or some reversal of the temporary in-sourcing that you've seen in previous years. Just if you could help me bridge that gap between the current industry volumes and improved picture for your volumes in the second half? Hein M. Schumacher: Thank you, Ed. And let me take first go at it, and Peter, please add where you see fit. So I mean, first of all, this is not about incremental resources. I talked very much in focus for growth around galvanizing and rallying our people, and that is people's component, but also indeed capital expenditure as well as cost behind less initiatives. We're choosing essentially 6 to 8 initiatives in the company right now to focus our resources on. We've been looking at many, many process improvements as a company over the last couple of years, ranging from HR processes to supply chain processes to essentially covering absolutely everything. What I'm really keen now is to focus our resources behind those processes that touch the customer first, and that is planning, so demand planning, supply planning, and making sure that we link up with our customer seamlessly and that we optimize our planning processes. So that means also digital efforts behind that. So that's the number one. Number two, customer service. Over the last year, customer service has been pretty much standardized and, in some cases, has been moved from a decentralized model to a more centralized global shared services model for customer service. That was a decision taken. It didn't always go well. So we absolutely have to nail it now and be there for the customer and make sure that, that customer service process runs extraordinarily well. So this is not about incrementalism. No, it's about everything that we were doing under the Next Level program, it's to choose those things that are meaningful and impactful and putting our people behind those. So that's very much the mantra. Not an extra. We're not going to expand on that. When it comes to capital expenditure, also for this year, we're not increasing the guidance. We have redirected some of the capital expenditure spend through the tactical investments that I talked about. And on the medium term, whether that's going to lead to a higher level, I'm going to come back to in June. However, we are very, very committed to deleveraging the company, as Peter has talked about. So that will remain an important priority. We will live within our means, but at the same time, I want to make sure that we spend the CapEx behind tangible, thought through, thorough growth initiatives, in a select number of markets, in our most meaningful segments. Gourmet, I talked to a few specialty categories, for example, and then, of course, in customer processes related to our Food Manufacturing segment. So more focused, clear and not incremental. So that, I think, hopefully answers your first question. When it comes to the volume picture in the second half, a few comments. Obviously, with lower bean prices, what we're seeing is that customers ordering for longer, that's clear, and that's helping the volume picture for us. We also see that customers, and we said that in the presentation, customers themselves are going for growth. And we've seen a number of initiatives from Hershey's, for example. We've seen initiatives from Nestle. And I think that's really important. We are seeing an enhanced growth picture in some of our key markets. In ice cream, for example, in North America, we're seeing overall an increased demand picture. And again, I think the lower bean prices helped. At the same time, and I think this is very important for us, when I talk about our efforts to restore growth, we believe that, in the very recent months, we are growing a bit ahead of the market with a reinvigorated focus on growth. And if we keep the pace, we make those necessary investments, we restore our processes and our credibility and stability, I'm actually very convinced that we will continue to do that in the very near future. So that's going to help us. So with less disruptions, we should see some growth. There's one important caveat, and that's, of course, the situation in the Middle East. At this moment, I mean, that's the latest one this morning. We believe that in the next week or so, business activity in the Middle East will resume somewhat, but obviously, it's very, very volatile. So that's something that we need to manage. So that's more on a high-level basis. I don't know, Peter, if you want to make some further comment on what we have been doing? Peter Vanneste: I'm risking to repeat a lot of what you said. So no. Hein M. Schumacher: Okay. Operator: Our next question comes from Jon Cox from Kepler Cheuvreux. Jon Cox: I have 2 questions really. One, just on what's happened in the last couple of years and what you're doing now to sort of maybe unwind some of that, maybe it went too far. I think under the first program, you laid off about 20% of your workforce and did a couple of factory closures and that sort of stuff. Just wondering, should we assume that maybe you're going to unwind the staff by about 10%, so maybe going back a little bit, or halfway from what you've done? As an add on that, do you think there's anything more needs to be done in terms of the factory network? Or is it more, as you mentioned, it's all about quality issues and maybe some lines are not working as well as you want to? So that's the first question. The second question, more on the top line outlook. I'm quite surprised that we're not really seeing volumes recover given the fact that cocoa prices have declined. I know there's a lag and so on and so on. But in terms of -- I'd imagine the whole industry is short chocolate in various places. Are you worried that maybe structurally, the chocolate market has changed in the last few years, maybe with GLP-1s and we see various data points suggesting that maybe chocolate demand volume growth won't come back to that on average 1% or 2% we've seen historically, maybe it's going to be closer to flat going forward. Any thoughts on that sort of long-term chocolate market outlook? Hein M. Schumacher: Thanks, Jon. I mean, first of all, on the Next Level program, as I said, in the plan on the Focus for Growth plan, look, I think that the Next Level program, again, the intentions to standardize more in the company, to reduce our cost by progressing our network into fewer, bigger sites into doing more with digital, intentionally definitely the right program. But what I'm saying is, therefore, we will build on that. And I have no intention to unwind necessarily what was going on. But I feel that efforts in the company were quite diluted. We have lost a lot of people. We have had quite some incidents and disruptions, and we have let customers down and customer service. So hey, I'm just very keen now to restore that confidence, go back behind a number of core priorities. So that means that we're not going to unwind, but we're going to phase and pace it. We'll go deeper, we're going to finish a number of initiatives, and we're going to do it well, but always with the customer in mind. So yes, we will continue to evolve our network, and that may end up in less factories. But before you close a factory, you need to make absolutely sure that the volumes that you provide to a customer from that factory are then, of course, transferred to another place, and you can help the customer to succeed. So I'm very keen to progress, but again, in a thoughtful manner. There's no point in adding necessarily resources. As I said, we are making some selective investments now in the supply chain, particularly in North America as well as in quality assurance. But overall, I do not foresee that we're sort of adding cost on a structural basis. That is definitely not the intention. And I don't want to talk about unwinding. I want to talk about focus, and I want to talk about fewer, bigger and better. with a strong focus on operations discipline and customer centricity. I think when you talk about volumes, actually, we are pointing towards a volume recovery in the second half. So of course, progressively, quarter 2 was a little bit better than quarter 1, in terms of volume, still negative. But going forward, as you sort of follow the algorithm, we're guiding to minus 1% to minus 3%. And that means mathematically that we're going to have to see a positive territory in half 2. Now where does that come from? And I talked about that lower bean prices? Yes, from our end, a better competitive position, strong focus and of course, with the caveat that I already talked about in the Middle East. But overall, we are actually seeing good signs of restored volumes. So in that sense, certainly on the midterm, we're looking more positively. On GLP-1, I think yes, I mean, several of our customers have also talked about that. And I just wanted to highlight that quality chocolate, the more premium style chocolate, we believe that's actually benefiting in some cases. We're seeing that also in interest for our Gourmet products. So I think, yes, look, there will be some impact, but at this point, it will not be significant for the company. Peter Vanneste: And maybe just to add, there's some reassurance, of course, from the past on the market rebounding. I mean the market pricing has been significant, of course, this time, but also a few years ago on the back of COVID, there was a 20% pricing up in the market, and you could see the chocolate category bounce up well after that. And maybe last, as you said yourself, I mean, there is this lag, right? We had ourselves for the first time now a quarter in Q2 where our pricing was negative year-on-year. So we had our peak pricing, plus 70% a year ago. We had still plus 25% pricing from us to our customers in quarter 1. Quarter 2 was the first quarter where it started to come down. So there is this lag that the market needs to cycle through before it starts hitting the consumer. Hein M. Schumacher: I think, Peter, there's also -- and I think that on your question or the question before, I want to come back on one point, which are inventory levels. We've obviously seen inventories coming down, and that's partially bean price, but also operationally, our inventories are showing a healthy development. What I do believe towards year-end, again, tactically and particularly on what I call the runners in our portfolio, Gourmet products that are pretty standard, we are increasing the inventory levels somewhat to make sure that we have a very positive start into the new year. I believe by the end of last year, the inventory levels were very, very low, and it hampered us a bit in satisfying customer needs. And again, with the positive signs that we are seeing in the market, we believe there is room, again, tactically and in a few areas to increase the safety stocks a bit to safeguard service. Again, a major priority for us going forward. Operator: Our next question comes from David Roux from Morgan Stanley. David Roux: I just want to come back to Alex's question on the guidance. Can you perhaps quantify how much of the cut in the PBT guidance was attributed to the investments in Gourmet, Middle East conflict and then other factors? And then my second question is on Global Chocolate. On the Food Manufacturer client cohort specifically, do you see any need or any risk here that you need to invest in pricing here? I appreciate there's a mechanical cost-plus model with this cohort of customer. But I mean, how robust are these agreements? And then just my follow-up question on Global Chocolate is, where do you see manufacturer inventory levels at the moment? Hein M. Schumacher: Peter, you take the first. I'll come back on the Food Manufacturing. Peter Vanneste: Yes. So David, the first question on the moving parts on EBIT and then PBT overall versus the guidance that we now put into the market. Overall, as we said, still for the full year, there's a positive on cocoa considering the high and the strong benefit that we took on volatility and the increases of the market in the past, normalizing half year 2, as I mentioned. Now if we look at then where the delta comes from in terms of the negative impact, you could basically argue that about 70% or 2/3 is triggered by this very rapidly declining bean price, which had an impact on, first of all, our financing costs, that pass-through had reversed basically on the EBIT line. Secondly, the impact that we've seen on Gourmet, where our long position and high price list forced us to do some commercial investments to secure the volumes that we have. So 2/3 is really coming from that rapid decline of the bean price. The remaining part, basically, there's 2 components. One is volume that over the year will still be slightly negative. And secondly, some of the increased costs that we are taking to manage through the supply disruption, making sure that we can deliver our customers despite some of those disruptions that we've seen. So this is basically the different blocks that you should be considering within our guidance. Hein M. Schumacher: When it comes to the Food Manufacturing segment, you're right. I mean, most of our contracts, they follow the price of cocoa. So I'm not overly -- from everything that I'm seeing margin-wise and so forth, I don't see major volatility in that. I feel pretty confident about the segment going into the second half. And we will move with customers and of course, based on the contracts that we have. So when I talked about the major impact from the long position, that is more related to price-listed businesses. When it comes to global stock levels, as I said, I think there are some -- we see customers buying a bit longer. I can't comment on exact stock levels. I'm not long enough here to give a really educated answer on that. But it's a fact that at this point, with the current bean prices, there is room for some increases globally. That's all I can say at the moment, unless, Peter, you would have further comments? Operator: Our next question comes from Tom Sykes from Deutsche Bank. Tom Sykes: Firstly, just on the capacity expansion that you're putting into North America and your comments to the earlier question around longer-term demand. I mean, if you're investing into compounds, which is the majority, I believe, of your Food Manufacturing business, are you not just signaling that there is a permanent reduction in cocoa demand even if it's not chocolate demand and that's coming from compound growth rather than cocoa content, if you like? And then just on Gourmet, where would your gross profit per unit be standing versus 12 months ago? And are you saying that you're going to be cutting that even more? Because if you do have this shift towards more compounds and we're in a sort of excess capacity, I suppose, are we not just going to see a rebasing of Gourmet pricing? And indeed, is it still going down? Hein M. Schumacher: Thanks, Tom. I mean, first of all, in investing in North America, as I said, I think the network overall probably didn't keep sort of the pace with evolving customer needs. So I think it's more that we were a bit behind. And we are very, very keen to fill in some of the blanks. We have very good relationships with many customers. Obviously, in North America, we are the market leader. But I want to make sure that for particular needs, and indeed, there could be compound production, that they don't go to alternative suppliers. So what we're doing is we fill in tactical needs, and I believe that, that will strengthen our position with customers significantly. At this point, with the bean price where it is now, we don't see compound necessarily growing faster than chocolate. We're seeing some movements that chocolate is actually back, and we're seeing some customers going back to chocolate. And again, with the current bean price, I believe that is overall probably even beneficial for them. We're sort of at that inflection point. So no, I don't think that compound will continue to always gain. I think what is more important for companies like us is that we're agile and that we can fill in the blanks of the portfolio that customers need. And they will have a need for compound for particular parts of what -- in their portfolio, and they have a need for chocolate. And of course, there is the volatility of the bean price. So I think what is important for us, given our role in the industry, is that we are agile, that we have the ability to supply what is needed. And that is exactly what we're going to do in North America with a number of shorter-term investments. So that's, I would say, for the next 4 to 5 months or so. I want to come back in June, as I said, with a more midterm picture for North America as well as coping with growth in a select number of large emerging markets, and I'm talking mainly Brazil, Indonesia, for example. India, we have ample capacity that can continue to grow. I mean we've done that double digit, and I feel that going to happen, that's going to go -- that will happen going forward. But I want to choose a few of the bigger markets where we have an emerging presence where I think we can succeed, but where we have some bottlenecks that we need to resolve. So I hope that answers the first question on investments. On Gourmet profit, I wasn't exactly sure on the precise question. But I would say there's no rebasing on profitability as such. As I said, there were long positions out there, and then you need to determine what you do, what is your priority. And we feel that retaining customers is driving growth, whilst at some point these positions will unwind and we will be returning to normalized profitability on Gourmet. That's at least what I'm seeing going forward. But in the meantime, we want to make sure that we keep the customer connection that we can compete in our geographies. And that's what we're doing. Peter Vanneste: And maybe just one addition because I think I might have understood in your message that for compound production, we need an entirely new setup of factories, which is not the case, right? We can produce from our existing factories. There's a few interventions you need to do in terms of tanks. But overall, I mean, we can convert our lines. So it's not that if any move happens to compound, that is an entirely new network that we need. Operator: Our next question comes from Antoine Prevot from Bank of America. Antoine Prevot: I have 2 questions, please. First, on coatings. So within Global Chocolate, I mean, could you quantify the volume growth of coating versus true chocolates and especially considering that now CBE is more expensive than cocoa butter, are you seeing maybe some pressure there overall, especially as a pretty big buffer on volume for the past couple of years? And second, on Gourmet, so could you quantify a bit how much of your chocolate profit comes from the Gourmet side? I mean, it's about 20% of your volume, but I would suspect it's much higher on the profit. And considering the reinvestments and like the price change you're doing into like H2, how quickly do you expect a situation to improve there on volume? Hein M. Schumacher: Thank you, Antoine. So I think Peter takes the second question on the composition of the profit, if I got it right. I think on your first question, overall on compounds, by the way, we call it cacao coatings, we saw flat growth in the first half, but with a double-digit growth for particular super compound products. Don't forget that I'm talking about investments in compounds. And yes, we need to follow the customer, but we are the leader actually globally in cacao coatings. And we have quite a few R&D projects with many of our customers on the way to continue to compete in that well. So if I sort of take a step back, as a company, what we are offering, we're offering the chocolate solution, we're offering the cacao coatings, but also non-cocoa solutions. And in that sense, we are partnering with Planet A Foods. We're working on what we call ChoViva, which is a non-cocoa product, which also has its own cost structure, and we will continue to invest in those type of alternatives. So we're very keen to provide the whole portfolio. Now again, flat growth in the first half with particular double-digit growth in a subsegment what we call super compound products. Peter Vanneste: Yes. And on Gourmet, Antoine, yes, it's about 20% of our volumes and it's over-proportional in terms of our profit split. We're not really disclosing a lot of details on it. But as you mentioned, it's a lot more accretive than the FM business. Volume-wise, 20%, despite the challenges, it's still performing relatively better than the FM business as we speak. And also in H2, I mean, we will invest, as we said, some of that long position, but it doesn't mean that we'll be cutting even more. We expect actually positive evolution in our business in chocolate, both on the FM and the Gourmet side going forward in the second half. Yes, I think that's where we are on the Gourmet side and everything else I think we said before, as it is linked to the very steep decline of the bean price, we do expect this to be a temporary phenomenon. Operator: Our next question comes from Samantha Darbyshire from Goldman Sachs. Samantha Darbyshire: My first question is just around the end markets. It would be really helpful to get some context from you around how you're expecting them to progress from here. You've got pretty good visibility on the order book, it seems. How much of this is kind of because your customers are innovating, having to bring out new products to kind of support that volume growth? And how much of it is that you think that consumers are adjusting to the price levels of chocolate products right now? And kind of along those lines, are you starting to see any appetite from your customers to reduce prices or increase promotions, increase pack sizes to get the volume coming back in the market? And if there's any regional context as well, that would be super helpful. And then just switching to, just thinking about your service levels, can you perhaps contextualize where they are versus history? I know that it's been quite volatile. There's been a lot of disruption. But if we think about where Barry Callebaut used to be, say, 5 years ago, how significantly below that are we? I know that the company is below industry levels. But any kind of indication of the delta would be really helpful. Hein M. Schumacher: Thanks, Sam, for the questions. So first, I would like to talk a bit about the market and our customers and what consumers are doing. Let me just make a few points here. And some of it will be repetitive, I hope you don't mind. But obviously, there are lower bean prices and we're seeing a flattening as well of the futures curve. So there are some early signs, as I said, of market stabilization for our customers. So customers are therefore also willing to book further in advance. As I call it, these are longer positions, and there is some room for higher inventories overall. I think we're seeing that customers are pricing through to some extent. Obviously, that's a customer decision. I don't want to go too deep on that. But I'm very encouraged by what I'm seeing with some of our large customers in particularly North America. Ferrero, and we said it in the presentation, they launched their go all-in promotion lasting from April to July, and that's backed up by significant investments. They've made a very public statement about that $100 million investment. Hershey also making significant media investments in this year with a very big launch around Reese's and Hershey. It's the first launch for them since a number of years that is sort of at this magnitude. So we're seeing restored confidence. Obviously, the margin profile will help given the lower bean prices. So these are, I think, very positive signs for recovery going forward. We're also seeing, therefore, some increased innovation interest from our CPG customers. And as I said, that we do across the whole portfolio. We're seeing -- particularly in Western Europe, we're seeing interest in the non-cocoa solutions for ChoViva, the brand that I talked about before, but also the high flavanol opportunity, the high flavanol innovation in AMEA, and this is gaining really good traction in Japan as well as in China. So if I sort of summarize lower bean prices, so therefore, customers going a bit long. Secondly, a very specific big initiative from some of our large customers that will help the market. And third, we're seeing if we are focusing our efforts behind scalable innovation platforms, we believe that particularly on a regional basis, we're seeing increased interest. So I would say, these are very positive signs. And therefore, we believe that the second half, we can return to a growth picture. On customer service levels, yes, I look back to a number of years ago. And particularly in the last 1.5 years or so, we have been below our historical averages. I don't want to call out one customer service level, because you need to drill down a little bit. And customer service can, for example, become low if your portfolio is not exactly the customer needs. So can you deliver against an unconstrained demand? That's a question. And in many cases, we haven't been able to do so, and that's why we're making these investments. The second one is, due to disruptions, do you need to cancel contracts or cancel deliveries that the customer has asked for. So in some of our key segments, we've seen customer service levels even somewhat below 80%. They are now improving fast. And again, that's where we're laser-focused on to get them to the highest possible level now. And I think that's something that we do progressively well. So without calling particularly percentages too much, I would say we weren't at the level that we were a number of years ago due to disruptions, due to many process changes, due to the whole transformation impact. We're now going back to fewer initiatives, restoring customer service on those areas where we really need it and preparing for a midterm picture. And obviously, I'd like to come back to you in June on what that looks like. I think that concludes the overall -- if I'm not wrong, this was the last question? Operator: Correct. We currently have no further questions. Hein M. Schumacher: Thank you, everyone, for spending time with us this morning. We are looking forward to come back to you in June with a full update on the Focus for Growth program and to have more interactions with you in the next couple of days as well as after the June conference. Thanks a lot, and speak soon. Peter Vanneste: Thank you.

33天前Insight Analytics约5分钟阅读

TMOAY 2026 Q1 财报电话会议

Operator: Good day, ladies and gentlemen. Welcome to TomTom's First Quarter 2026 Results Conference Call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to your host for today's conference, Claudia Janssen, Investor Relations. You may begin. Claudia Janssen: Yes. Thank you. Good afternoon, everyone, and welcome to our conference call. In today's call, we will discuss the Q1 2026 operational highlights and financial results with Harold Goddijn and Taco Titulaer. Harold will begin with an update on strategic developments. Taco will then provide further insight into our financials. After their prepared remarks, we will open the line for your questions. As always, please note that safe harbor applies. With that, Harold, let me, for the last time, hand it over to you. Harold Goddijn: Yes. Thank you. Thank you very much, Claudia, and good afternoon, everyone. Thank you for joining us. I will start with a brief update on our strategic and operational progress, and then I'll hand over to Taco for the financials. The first quarter of 2026 execution was solid. Profitability continued to improve. Our core Location Technology business, Automotive and Enterprise, both made good progress, while revenue trends reflect the transition we expected this year. In Automotive, we see carmakers accelerating their software strategies and taking more control of the in-vehicle stack. And at the same time, the industry continues to move towards higher levels of automation. Our Lane Model Maps are becoming an important differentiator. We're building on that, working closely with OEMs to support advanced driver assistance and autonomous driving. In Enterprise, we extended both our customer base and our use cases. We strengthened our position in traffic and traffic analytics through new partnerships, including AECOM, Kapsch TrafficCom and LOCUS. These partnerships extend our real-time traffic data into infrastructure planning, traffic management, location intelligence. They also underline the value customers place on quality and depth of our data and on TomTom as a trusted partner. Overall, we are confident in our progress. The steps we are taking, advancing our maps platform and building strategic partnerships position us well for 2026 and beyond. Before I hand over, a few words on the leadership transition we announced in March. Following a structured succession process, Mike Schoofs has been appointed CEO in today's general meeting. Mike has been with TomTom for over 20 years and built our global commercial organization. He knows the company, he knows our customers, and he knows the market inside out. I'm confident he will lead the next phase of our strategy with clarity and momentum. As a co-founder, it's very satisfying to see TomTom move in this next chapter with strong leadership in place. And with that, I'll hand over to Taco for the financials. Taco Titulaer: Thank you, Harold. Let me discuss the financials and after that, we can take your questions. In the first quarter of 2026, group revenue was EUR 129 million, an 8% decrease from last year's EUR 140 million. The decline was in line with the expectations and guidance we provided with our Q4 results. Let me briefly break down our top line performance. Automotive IFRS revenue came in at EUR 76 million for the quarter. That's a 5% decrease compared with the same quarter last year. Automotive operational revenue was EUR 70 million, which is 16% lower year-on-year. The decrease in revenue related from the gradual discontinuation of certain customer programs, along with the effect of a stronger euro relative to the U.S. dollar. Enterprise revenue was EUR 38 million, down 8% year-on-year. Adjusted for currency fluctuations, Enterprise revenue showed a slight increase year-on-year. Taken together, our Location Technology segment generated EUR 114 million in revenue, which is 6% lower than Q1 last year. On a constant currency basis, Location Technology revenue increased marginally. The Consumer segment, as expected, declined versus prior year. Consumer revenue was EUR 15 million, down 21% year-on-year. Q1 2025 was EUR 19 million, reflecting the development of the portable navigation device market. Consumer now represents a smaller part of our total revenue. Gross margin improved to 90% this quarter, up from 88% in Q1 last year. The 2 percentage point increase was driven by a higher proportion of high-margin Location Technology revenue in our revenue mix. Operating expenses were EUR 103 million, a reduction of EUR 15 million compared with the same quarter last year. The decrease is mainly the result of the organizational realignment we carried out last year, which lowered our cost base, combined with the higher capitalization of our investment in Lane Model Maps. As a result of higher gross margin and lower cost, our operating result was EUR 14 million for the quarter, a sharp improvement from EUR 6 million in Q1 last year. Our operating margin was 11%, up from 4% in the same quarter last year. Finally, free cash flow for the quarter improved to a positive inflow of EUR 1 million when excluding restructuring payments compared to a EUR 3 million outflow in Q1 2025. We continued our share buyback program during the quarter. By the end of Q1, we have completed EUR 11 million of the EUR 15 million announced in December last year. We ended Q1 [indiscernible] of EUR 248 million with no debt on the balance sheet. This cash position provides us sufficient stability and flexibility. Our first quarter performance confirms that we are on track for 2026. The revenue decline we saw in Q1, as mentioned before, was anticipated, and we managed to improve our profitability despite the lower revenue. Looking ahead, we are reiterating our full year 2026 outlook. We expect group revenue of EUR 495 million to EUR 555 million in 2026, with Location Technology revenue of EUR 435 million to EUR 485 million and an operating margin around 3% for the full year. As we indicated previously, some transitional headwinds, like the phaseout of certain customer programs, will weigh on this year's top line, but this impact is temporary. Therefore, we're continuing to invest in our Lane Model Maps, which are critical for a higher level of automated driving. As a result, free cash flow for 2026 is expected to be negative. As new automotive programs ramp up and newer products gain traction, we expect higher revenues combined with our ongoing cost discipline to drive a further step-up in operating margin in the long term. And with that, we are ready to take your questions. Operator, please start the Q&A. Operator: [Operator Instructions] We will take our first question. And the question comes from the line of Marc Hesselink from ING. Marc Hesselink: Yes. Thanks, Harold, for all the conversations over the years. I would take the opportunity to also look a little bit beyond for the long term on the question. I think when I started to cover TomTom, like more than a decade ago, one of the big promises was always autonomous driving, driving the long term. I think if you're looking at the market today because of all the developments in AI, both on the side of producing the map, but also on using it and now maybe autonomous driving being much nearer than it has ever been. How do you see that next phase? Is that do you really see that we are now at the start of that next phase and we are going to see major differences for how the map is going to be used and the opportunities in the map and how important it is for autonomous driving? Just giving a little bit your long-term view on how this developed over the years and what's coming in the next few years. Harold Goddijn: Yes, Marc, thank you. Yes. So you're right, the self-driving technology has been a big promise for a very long time. And it has always until recently, I would say, failed to live up to the expectations. What we now witness is a new approach to self-driving technology, more based on AI and self-learning, which is much more promising. And at least in the laboratory, we can see sophisticated levels of self-driving technology being deployed in real cars. So I think from a technology perspective, we are closer to solving the problem than ever before. What remains are the economics and also the regulatory framework, which will follow the technology. But I think from a technology perspective, we are motoring now literally. And we see that also in the demand for our products. Carmakers are now asking for higher levels of accuracy, more dynamic data, lane level information to enable self-driving technology and to provide a powerful additional data set next to the Edge processing that's placed in the car based on sensor information. We have seen that coming back also in the orders and the -- so first of all, the interest in our products and the way we produce our products. But we've also seen it coming back in the order book. We had a big win last year with Volkswagen, as you know, which was a significant contract. And that is a product and a contract clearly aimed at higher levels of automation. To what level exactly, remains to be seen. But what we do see is higher degree of automation than we have seen before. And also that technology will enter into the mainstream sooner or later. And we've seen comparable questions and demands from other OEMs. Some of those demands have translated into contracts, but there's also a healthy pipeline in '26, '27 to go further than that. Last thing, I think, is another trend that we're witnessing, is that carmakers want to have -- seem to prefer a unified map offering that is both suitable for navigation and display and map rendering and at the same time, can power the robot of the self-driving system. And the reason for that is that the self-driving system is also looking for a way to communicate with the driver what's happening. And when you do that on the same data set, it's technically an easier problem to solve. So we see a preference developing for united -- unified map that does both the traditional navigation and route planning, traffic information as well as being the sensor for the robot, for the self-driving part of the vehicle. Marc Hesselink: Okay. That is clear. Maybe as a follow-up, I think also there, the debate has been the same for a long period of time, which is, is a map layer needed for this autonomous driving, yes or no? And I think there is still a debate, at least reading through all kinds of articles on that one. I guess there's still the redundancy element of the map. Anything which you can add in the most recent conversations with your clients why a map would be required for functioning autonomous driving in the right way? Harold Goddijn: Yes. So it's a bit of a marketing story as well, I think, from vendors who are offering self-driving technology that is "mapless." We don't know of those systems that are mapless. They don't -- they do not exist other than in the laboratory and are not battle-hardened. The -- I think one of -- the way to think about it is that it makes self-driving technology easier when you do have a map and more reliable and redundant. And the big challenge for software developers is not to fix the first 95% of accuracy. That is kind of a solved problem. The real problem is to solve for the last 5%. That is the hardest bit. And solving that last 5% is a whole lot easier if you have a reliable map underpinning your system than doing it without a map. And we see that also translated in our own interactions with customers, both OEMs, but also providers of self-driving systems that we are closely aligned with and talking to, to see how we can collectively come up with a system that is robust, reliable, but also, I have to say, affordable. One of the reasons that the old HD Map never took off is cost. And cost was a problem because we were driving those roads ourselves with mapping vans. And that's, A, expensive; and B, does not provide for regular updates and a too long cycle time. With the new technology, the new approach, we have solved for both those problems, cost as well as cycle time and freshness. So I think the market opportunity is wide open. And I think that battle will play over the next 2, 3 years, I think, for presence in that self-driving ecosystem. Marc Hesselink: Great. And then final question from my side is, leveraging that one also in the enterprise segment, because I can imagine that the point you just mentioned, cost, freshness, cycle time, eventually also very important beyond automotive. I think at the Capital Markets Day, this point was quite promising, then it leveled off a bit. But maybe now with the progress we've made over the last 2 years, is it time that this one also can see some reignited growth? Harold Goddijn: I think the product challenges on the enterprise side are slightly different. There is some overlap, but the challenges are not the same. The Lane Model Maps is -- the development of that is predominantly driven by the requirements of carmakers and systems providers of automated driving systems. But I do expect overlap in the Enterprise world. And I think given its sufficient time, it will be harder to start distinguishing between what we call SD Map or -- and a lane-level map. So those worlds will come together. There will be some overlap, but growth in the Enterprise sector will come from mostly initially from other initiatives that we are deploying. And I think we're getting on track also a little bit better on the Enterprise side, in filling that pipeline better than we have been able to do in 2025. So I think the initial signs on the Enter sides are encouraging. Marc Hesselink: Okay. Great. Thanks for all the conversations over the years. Harold Goddijn: Thank you. Thank you for covering us. It was a pleasure. Operator: [Operator Instructions] We will take our next question. And the question comes from the line of Andrew Hayman from Independent Minds. Andrew Hayman: Yes, Harold, just maybe one clarification. You just mentioned that the old HD Maps never took off because of cost. Does that mean you've changed the pricing on the lane-level maps? Harold Goddijn: No, we have not necessarily changed the pricing. But the -- I think everybody understood that scaling that Edge-level HD Map, as we did it 10 years ago, was just too expensive and prohibitive. We have seen traction on the HD Map, and we still have customers driving with that HD Map. But everybody understands that if you want to improve the freshness and more importantly, if you want to improve the coverage, and when I say coverage, it's basically beyond motorways, there you end up in an unprofitable business case very, very quickly. So it's not the unit price so much that I'm talking about, but it's more the capabilities of the product. Carmakers as well as systems providers are looking for coverage and accuracy on all roads, not just motorways. And motorways is only, what is it, 5% of the total road network, is motorways. The rest is all secondary and tertiary and local roads. And so if you want to do an accurate product on all roads, including freshness, then the old technology could never deliver that. Andrew Hayman: Okay. And then maybe if I look at the forecast for 2026, it's quite a large range for revenue overall. It's a span of EUR 60 million. And then for the Location Technology component, it's a span of EUR 50 million. What's the thought process behind that range? Is it just that there's so much uncertainty at the moment about car production levels? Taco Titulaer: Yes. It's a bit of that, of course. Currency plays a role as well. So for all the 3 revenue-generating units, there is a bell curve of expectations. We do think that the middle of both revenue ranges is the best guidance that we can give. Andrew Hayman: Okay. Okay. And then on the change in management, I mean, there's clearly considerable continuity because Mike has been with TomTom for a long time and Harold, you're moving up to the Supervisory Board. But any new CEO is going to want to make adjustments or emphasize different areas or components. Do you -- what changes do you see happening under Mike going forward? Harold Goddijn: Well, that's for Mike to talk through, and I'm sure he will do that in -- when it's his turn in 3 months from now and start to give you some of his ideas. What I want to say is this, I think we have [indiscernible]. We've gone through a major product transition over the last years that has led to a competitive product. Based on the product, there is market share to be gained. And I think we're well positioned. That needs to land, and there's all sort of things that can go wrong, obviously. But net-net, I think that is a -- that gives focus and clarity of what we need to do at least in the next 12 to 24 months. And I think that's good. But of course, the world is changing rapidly. It's not only what we see geopolitically in terms of tariffs and in terms of energy and whatnot, but it's also the impact of AI potentially going forward that will have a significant effect on how we do things, how customers are consuming upward. I think the -- our anchor product, the map, is safe, and we will use AI to optimize processes and make it cheaper to maintain it. But that anchor product is good. And AI will have -- and the way we deploy AI going forward will -- and how the world evolves around AI, will affect the company like any other company in the world. So those are the -- I think, for the moment, the 2 big axes where we need to follow progress going forward. Andrew Hayman: And then maybe on a smaller note. On enterprise, it's -- if you adjust for currency, it's growing, but it's not having the easiest time. And if we look back to you joining with OSM, the idea was that you get more detailed maps and that may open up more market opportunities or expand the potential market for your maps, maybe social, travel and food delivery. How is that going? I mean, are you making some progress, but the clients are quite small in those areas that you're getting through? And how do you see that progressing? Harold Goddijn: Well, yes, I think it's a good question, Andrew. I think -- and then 2025 was slightly disappointing in terms of order intake and traction around -- always in the Enterprise market. But I think we have turned the corner, and we see some early green shoots. I think that central promise of having a better map that's easier to maintain is valid also for the Enterprise world. And we are now pitching for contracts and opportunities that we could not win based on the old technology. So the addressable market is -- and I mean, there's tons of examples of that. So it's slightly disappointing that it's taken longer. But I think the central idea of having a better map, more detail, more freshness, more efficient to maintain is still valid. And I hope that we will see that also being translated into Enterprise growth in 2026 and beyond. Operator: We will take our next question. The next question comes from the line of Wim Gille from ABN AMRO-ODDO. Wim Gille: This is Wim from ABN ODDO. Apologies for the noise, but I'm in the train. So I hope you can hear me. First, on the rollout of the lane-level maps, you started off just in Germany. So can you give us a bit of clarity on where you are in the rollout in terms of number of countries? But also, are you still just on the motorways? Or are you basically doing all the other roads as well throughout Germany as well as the other countries that you're rolling out? The second question would be on capitalized R&D. That seems to suggest you're accelerating the investments that you're doing in the rollout. So can you give us a bit more clarity on that decision? Is that based on the demand? Or are you basically just needing to invest more to get to the same results that you were looking for? And what is the reception of clients since you introduced this concept earlier last year? Harold Goddijn: Yes, Wim. Yes, you're coming through loud and clear. So no worries on that side. Yes. So the Lane Model product, our goal is to build it completely automated. So expanding coverage is just a matter of compute and electricity, but no other practical limitations on coverage and speed of production. That's where we want to end up. That's not where we are. There is a certain level of fallout following those automated processes. And that means that manual labor and operator interaction, in some cases, is required to filter out inconsistencies to checks and so on and so forth. So -- and we are in a position now where we are producing, but we are also making investments to reduce that fallout in order to prevent manual labor and improve the speed of the process and the associated coverage. The idea is that by the end of the year, we have a fully lane-level map, both for North America and for Europe. We're producing it now for parts of Germany, whilst improving the processes, improving the factory in the pipelines, if you like. And the aim is to reduce the amount of manual labor we need to produce those maps close to zero. It will probably never get to zero, but it needs to get close to zero because that gives us speed, flexibility and efficiency but also quality. Wim Gille: And what are clients saying about the products? Harold Goddijn: So people are excited that it's possible. We are producing a product that could not be produced before. They're excited that it has been developed with a view to serve security and safety critical applications. So it's an industry strength product. That's also how the quality systems are designed to make sure that we meet those standards. So yes, both carmakers and systems providers are excited that there is a product that can play an important role, and they're looking at progress with interest. We will start doing test driving with integrated systems now or in the next couple of months or something like that where we get for the first time, real-time feedback on how the system, not the map, but the system with the map is behaving in practice and in real-life situations. So those are important milestones. Taco Titulaer: Yes. If I can add to that. Then you also had a question about CapEx. So in the cash flow statement, you see that line investment in intangible assets, that's indeed higher than what it was last year same quarter. I expect that to normalize between "below EUR 10 million" going forward. So it is more -- yes, I wouldn't call a one-off, but it's not a clear trend that it now will go up every quarter. Wim Gille: Very good. And if you are now participating in RFQs, specifically related to HD, I can suspect that most of the RFQs that you're participating in are now HD driven and no longer [indiscernible]. But how is your product [indiscernible] up against the competition? So are you still producing HD Maps in the old way? And what does it do to your competitive pricing advantage? And which parties do you actually engage in these RFQs? I can only assume that here -- is there -- and in some cases, Google. But do you also see newcomers joining in these RFQs? Harold Goddijn: Sorry, Wim, I tried to understand your question. It was not entirely clear, to be honest, the first part in particular. Yes. So in terms of market position, I think we are currently leading in specs in ambition. Of course, we need to deliver all that goodness as well. And our internal target is by the end of this year to have significant coverage on both continents. And I think that will be a leading and it is a leading product both in terms of what it does and how it is produced, which is not a minor point actually. In this case, it really matters how you produce it because it tells you something about economics, quality, repeatability and so on and so forth. And there is significant interest, I think, from industry players, in what's going on. And so we feel good about that. I think Google obviously is an important competitor, but Google has a tendency to leverage consumer-grade products for the automotive world. And this is not typically an area where they're focusing on. Wim Gille: And are you encountering any new competition in RFQ processes? Harold Goddijn: No, no, we do not. It depends how you define competition, but I think there's no one else that I know of that has an integrated approach to both navigation, self-driving, ADAS, all on one product stack. Wim Gille: And with respect to enterprise, I do have a question on kind of the conversion and basically the acceleration that you are seeing at the moment. Can you give us a bit of feeling on kind of what types of, let's say, projects you are now converting or are close to converting? Are these still the smaller projects? Are we also now looking at the bigger clients and the ones that can really move the needle? Harold Goddijn: Yes. Yes, I think I wouldn't say acceleration. I think what I've said, I've used the word green shoots, some -- both contracts but also a pipeline that is building. A couple of areas where we see good traction, insurtech, defense. There are significant opportunities opening up, intelligence, public usage of our data, both traffic planning, intelligence. Those are the sectors where we see the order book and the pipeline really filling up. And some of those opportunities are significant as well, multiple millions per annum. Wim Gille: Thank you. And that leaves me with, yes, basically one last comment. So I would like to thank you for, I think, close to 80 earnings calls that we did together. No doubts. Harold Goddijn: this sounds like an awful lot, Wim. Wim Gille: It is. Harold Goddijn: This sounds like an awful lot. But thank you very much. It's been a privilege and a pleasure. Wim Gille: likewise. Thank you. Operator: [Operator Instructions] Claudia Janssen: As there seem to be no additional questions, I want to thank you all for joining us today. And Heidi, you may now close the call. Operator: Thank you. This concludes today's presentation. Thank you for your participance. You may now disconnect.

33天前Insight Analytics约5分钟阅读

IPSOF 2026 Q1 财报电话会议

Jean Poitou: Hello. Good afternoon or good morning. Thanks for joining. Welcome to our first quarter results announcement session for 2026 at Ipsos. I'm Jean Laurent Poitou, the CEO of Ipsos, and I'm here with Olivier Champourlier, our Chief Financial Officer. What I'm going to be covering today are our results for the first quarter of 2026, an update on our strategy execution. Horizons is the name. You heard about it if you attended our January Capital Markets Day, and we talked about it a bit as we announced our full year results of 2025. I'll provide an update of where we are on the execution path. And then we will take a look at how we are considering the rest of 2026 with an outlook. But let me start with our first quarter 2026 results and our revenue, which stands at EUR 555 million. If we compare this with the same number a year ago, it's 2.4% less, which, in fact, if we didn't have a significant 5.4% negative currency impact would be a total growth of 3%. That total growth is broken down into 4.3% of impact of the acquisitions we made, particularly the BVA Family, minus the negative impact of having disposed of our Russian business or 80% of it as it happens. So it's not consolidated anymore. And then the organic growth is minus 1.4%, and the combination of all this is what drives the minus 2.4% total growth, but this is in the context of encouraging commercial momentum in Q1. I have had the opportunity to look at the order book for Q1 in many different dimensions, and I'll cover them in a second. Overall, our organic growth of our order book is 1% against the same quarter last year with an acceleration towards the latter part of the quarter in March, which means that the revenues for many of those orders, which happened late in the quarter will generate revenue further into 2026. Now as I look at the order book expansion, first by sector. One notable encouraging signal is the fact that our Public Affairs business, which we have had lackluster performance with in the years past and which dragged on our growth in '25 in particular, is back, rising demand, rising order intake. And I'll talk about it some more because it's so important. Solid traction with our consumer and packaged goods clients. They represent about 1/4 of our business. So it is very important for us that our computer -- our consumer and packaged goods clients, which are also the clients among which the AI solutions that we increasingly deploy in the market are resonating with most. If I look at this now by geography, our 4 largest market, North America, France, U.K. and China are driving our growth. And in particular, we have a very robust performance in China, which, as you may remember, has had some quarters of stability or a bit less. Now looking at it from the standpoint of our largest clients, the top 30 clients of Ipsos, the ones where we have dedicated client account leadership and campaigns. Those 30 drive our growth very significantly from a sales standpoint in Q1. So good performance across several dimensions of our business from a sales standpoint. Late in the quarter, this will translate gradually into revenue as also our strategy implementation accelerates and drives expanding order book through the quarter. So that's what I wanted to cover, generally speaking. Let me focus a little bit on Public Affairs because as you heard, we made among our strategic choices, one of them was to continue as a multi-specialist, in particular, continue to believe strongly in the power of having Public Affairs being the global player present in 66 markets serving public decision-makers, doing political polling and helping with policy assessment. That global footprint is one of our very, very differentiating assets as is the fact that we have our own proprietary panels, which serve us extremely well in the public sector. We also have the ability in many of our large markets and countries to do face-to-face interviews to knock on doors and ask real respondents about what their views are or what their voting intents are. And then finally, we have the ability to leverage some of the methodologies and some of the services that primarily have been borne out of our private sector business into Public Affairs, such as, for example, when we know how to interview and assess the engagement of employees in the private sector, we apply that in the public sector as well. So Public Affairs is back. We have won prominent government contracts across multiple geographies, which had struggled in quarters past, particularly in the U.S., but also in France and the U.K. So I have confidence that Public Affairs will be one of the drivers of our growth in 2026. Let me now hand it over to Olivier, who will comment on the numbers on a more detailed basis. Olivier Champourlier: Thank you, Jean-Laurent. Good afternoon, good morning, everyone. Let me go into the details of our Q1 revenue. As said by Jean-Laurent, the revenue was EUR 555 million in Q1, down 1.4% on an organic basis. There was a negative impact of currency of 540 basis points due to the appreciation of the euro against several currencies, in particular, the U.S. dollar, the pound sterling and APAC currencies. Acquisition net of disposals contributed positively to the growth in Q1 by 430 basis points, reflecting the impact of the 2025 acquisition, mostly the BVA Family that was acquired in June 2025, net of the disposal of our Russian operation in Q1 2026. As a reminder, Russia was accounting for around 2% of our total revenue. Factoring in those items, the total revenue was down 2.4% and excluding foreign exchange currency effect, it was up 3%. Moving on to the revenue by region. EMEA, our largest region, representing 52% of group revenue, delivered total growth of 5.3% on a reported basis, including 0.1% organic growth. The positive performance was mainly driven by the acquisition of the BVA Family because this business was mostly in France, U.K. and Italy, offset by the disposal of the Russian activities in Q1. In contrast, the Middle East, which represents around 3% of the total revenue of the group was impacted by the geopolitical situation in the region and posted an organic decline of its revenue of 4.4% in the first quarter 2026. In the Americas, which represents 1/3 of the total revenue in Q1, revenue declined by 4.1% on an organic basis. This is mainly driven by the U.S. However, commercial momentum has improved with a strong increase in the order intake at the end of the quarter in March, particularly. Several contract wins in Public Affairs sustained a recovery in the segment. As a result, the order book in the Americas was slightly positive at the end of March. In Asia Pacific now, the revenue was up 0.2% on an organic basis but declined by 6.3% on a reported basis due to the negative impact of many currencies in the region against the euro. The first quarter was encouraging with China returning to strong growth. We have indeed a strong momentum in China with large international local clients, especially in technology and automotive. China is one of the markets where we have seen a rapid adoption of our AI-driven offers. Let me now turn to the performance by Audience segment. Our Consumer segment revenue, which accounts for half of the revenue in the quarter posted a positive growth organically of 0.5%. We continue to see sustained demand from CPG clients for deeper understanding of consumer behavior in a volatile and rapidly changing environment. Our services in market positioning, innovation testing and brand health tracking are benefiting from this demand. This is also an area where our AI solutions and platform such as Ipsos Synthesio and Ipsos.Digital play a growing role in helping clients reacting faster and making better informed decision. The Clients and Employees Audience revenue was down 3.3%. This decline is mostly explained by timing effect in our Audience Measurement activities which will translate into positive growth over the coming quarters, thanks to a positive order book at the end of March. The Citizens segment now. The revenue, which include Public Affairs and Corporate Reputation, declined by 2.3% on an organic basis. As mentioned by Jean-Laurent previously, the first quarter marks an important turning point as we have seen the return of public sector orders in markets that had impacted our growth in the last few years, like the U.S. and France, where we see a rebound. During the quarter, we booked several significant multiyear contracts, which reinforce our confidence in the rebound of this activity later during the year. Finally, the Doctors and Patients Audience revenue was down 4.4% on an organic basis. This activity had a strong start of the year in 2025, where Q1 was plus 5.4%. So this, therefore, creates a tough comparison basis. In addition, we have experienced a slowdown at the start of this year in qualitative studies from the pharma industry clients, but we see an improvement trend based on our order book. Beyond those 4 Audiences, I would like also to underline the performance of our Do-It-Yourself platform, Ipsos.Digital, which recorded a double-digit growth in the first quarter of 2026. At the end of the first quarter, I would like to underline that our order book is growing by 1% and is in line with the historical pattern. More specifically, the order book at the end of March 2026 represents 55.6% of expected full year 2026 revenue at the end of the first quarter. Overall, this is consistent to the average of the last 4 years, where the total of the order book at the end of the first quarter was 55.5% of the full year revenue. Overall, this analysis supports our outlook for the remainder of the year. Turning now on profitability and cash generation. It's important to notice that our gross margin and our cash generation at the end of the first quarter are in line with our expectations. I will now hand over to Jean-Laurent, who will tell you more about how we have been able to execute our Horizons strategic plan. Jean Poitou: Thanks, Olivier. And before I provide some color on the outlook for the remainder of the year, let me say something about what's going to drive our growth for the remainder of the year and namely the switching to execution mode on the Horizons strategy, which we talked about back in January and which we highlighted the main components of during our Capital Markets Day. Those 6 items here are the 6 key strategic choices we made and the ones that we are starting to see bear fruits in our positive growth of the order intake in Q1, starting with the fact that we have confirmed our intent strategically to leverage our multi-specialist business offerings. I talked about what this means with the return and rebound of Public Affairs, but it is also very important to note that we are equipping our teams with a first set of 6 and more to come as those are successful, Globally Managed Services, powered by our Ipsos.Digital platform, systematically and consistently applied to services for each of them wherever the client we serve is based. Those GMSs led by Shaun Dix are already structured with representatives in the key markets where we have decided to grow them with specific accountabilities, budgets, the platforms are there. We are leveraging some of the past investments and adding more through the course of 2026. And then Ipsos.Digital, the platform, which is showing continued momentum in the market, led by Andrei Postoaca. The teams there have also been demultiplied by having specific leaders in our key markets to drive further growth of our digital platform, reinforced by the fact that it is the foundation on which many of our service line-specific, activity-specific AI solutions are based. Our global company with a local footprint, strategic choice starts to show us the first fruits of growth, particularly in the market you saw in China, where you saw Lifeng, our CEO there, in the Capital Markets Day, explain how he had already started to launch some of the initiatives, and that's what we are seeing translate into significant growth in that particular market. But also in the U.S., which is the other big market where we decided that we would have in addition to the core Horizons initiatives, some markets, particularly tech industry and technification specific initiatives in the U.S. Mary Ann Packo, our CEO; and Lindsay Franke, who you saw on the Capital Markets Day present that strategy are driving it aggressively, and I'm pretty confident that this will materialize in the quarters ahead into accelerated growth. Speed is an initiative where it will take time because it's the most profound from an operating and tooling standpoint, from a training and capability and skills evolution standpoint. So this will take a bit longer to materialize at scale. We have started on this. AI as a catalyst for market leadership is now being led from a technology standpoint by Nathan Brumby, our recently appointed Chief Technology and Platforms Officer. Nathan joined us close -- just over 2 months ago and is in full swing. And we have a road map, and I'll show you some examples of Ipsos AI solutions in a minute for Q2, Q3 and Q4 launches of AI-powered products. Also access to real people as a critically relevant competitive advantage is one of our key choices. I'm happy to report that we are seeing increasing level of in-sourcing. What we mean by this is using our own panels, our own respondents rather than outsourcing to third-party providers of such. And this is a key component of our operational transformation, which is led by Alexandre Boissy, our newly appointed Deputy CEO, joining us from Air France, where he had very important responsibilities. And we are happy to say that our operations transformation agenda is also starting to show signs of increased ownership of our own panels. And then if I think about our evolution to higher value-added services and in particular, our ability to expand our footprint at the clients we serve, our commercial excellence, I mentioned the fact that we are starting to see very superior growth at our top clients. And this is being led by Eleni Nicholas, who's driving an initiative across those large clients. So with Olivier now being formerly our Chief Financial Officer, he was named an interim, and we are happy to confirm it, and I'm very happy, Olivier, that we will be able to continue and work together in that capacity. And more importantly than those leaders, the whole of 20,000 or close there to people at Ipsos and many of our leaders across the globe are being mobilized to make the strategy execution happen at scale and at pace. So let me give you examples of some of the AI technologies and global services -- new services that we are launching or that we have already in store and that we are accelerating through the GMS model. First of all, an example of what we call behavioral measurement, looking at how people behave when they either buy or consume or use the products of our clients. Two examples of very large consumer and packaged goods players, one in the beverage industry, the other one in the home care industry, products for detergents and washing machines and the like. We are using AI technologies to help observe with clips and videos that people themselves provide us rather than checking diaries on paper saying how much coffee did I drink today or how many washing machines and how much powder did I use for each of them. So we're using videos to not just translate what was written into what's visible on the video, but also understand better the gestures, the expressions, the satisfaction, many subtle consumer signals that wouldn't be otherwise available to our clients. A second example is in social media. We are using AI technologies to examine at scale what videos are successful and why detecting patterns on social media. For example, in China, that would be RedNote, which is a very prominent video channel on social. And then we are using the insights generated by this video analysis of those clips to identify which influences, which patterns are the most likely to drive interest and ultimately, the brand awareness or decisions to buy. This is helping our clients decide faster where to target, which influencers to pick and what formats to use at scale. A third example is in China, which is, of course, one of the innovation hubs of the world, where we have now a very large consumer and packaged goods clients who's relying on Ipsos' synthetic consumer digital twins to replicate the personality traits and the behavioral logic of the clients of that CPG company. Now we are doing this because it helps answer sometimes simple, sometimes slightly more complex questions faster than a full-fledged survey, bearing in mind that we do that with a lot of care to the reliability and continuous update by recalibrating with real respondence and continuously validating the results of those digital twins. So those are 3 examples I wanted to give of how we're embedding technology and AI to create more value at our clients. Let me now turn to the numbers for 2026. First of all, it's very obvious that everything I'm about to project is based on factoring in what we know and acknowledging what we don't know about what's happening in the Middle East. What we know? In the Middle East itself, which as Olivier highlighted, is about 3% of our total revenue, we are seeing obviously an erosion of our revenues to the tune of several millions, and that's no surprise. But we believe that the outlook will turn as -- governments, in particular, and large spenders will return to growth as and if the crisis and the war slows down and ends, which we all hope for. We don't see significant consequences outside of the Middle East region, very few, if any, client cancellations, delays in decisions or postponements of contracts. So there's marginal examples here and there, but essentially limited observed consequences outside of the Middle East, which therefore means that barring escalation or prolonged conflict in the Middle East, we don't see at this stage, at this stage, significant impact on our group's full year outlook. Now the situation, as we all know, remains highly volatile, and therefore, both the monitoring, but also the contingency planning in case things deteriorate or escalate or continue in the long run are being prepared. We've done that in 2008. We've done that in 2020. So we know how to adjust and react in case we need to do so. On a more positive note, let me reiterate why we believe that the positive order book momentum of the first quarter is a good signal of accelerating order intake and therefore, gradual expansion of our revenues throughout the remainder of 2026. First of all, we launched the strategy. We're in full execution mode. But obviously, we're going to bear fruits increasingly as quarters after quarter things happen, particularly with Globally Managed Services, Ipsos.Digital, the impact of our commercial actions and so on and so forth. It's also reassuring to see that we're about at the same percentage of our full year outlook from an order book already in our books at this point of the year as we have historically over the last few years. But also, I have spent time with our leaders in the various markets. We are looking at it both from a pipeline analysis standpoint and from an outlook based on their knowledge on the front line closest to our clients. And this also reinforces the predictions that we have already highlighted for the year of a 2% to 3% estimated organic growth and an operating profit, which would be equivalent to 2025, which it was at 12.3%. And I have to highlight something here. Russia was a profitable business compared with the average of Ipsos, and it's now no longer in our numbers. BVA is a company that we acquired, and we're extremely happy with this acquisition, but it was in 2025, and it will continue for a good part of 2026 to be a drag on our profitability with the fact that it was 6 months only in '25, and it's going to be the full year in '26. So in fact, reaching an equivalent profitability in '26 to the one we observed in '25 is actually increasing the core profitability outside of those perimeter effects. So with that, I would like to thank you for your attention so far. I'm about to open to questions and answers, obviously, invite you to our May 20 General Meeting of Shareholders and also to our first half results announcement, which will take place on July 23. Thank you very much, and let's open it up to questions and answers. Operator: [Operator Instructions] The first question today comes from Davide Amorim with Berenberg. Davide Amorim: Two questions from me, please. Could you please give us a bit more detail on the organic growth decline in Q1? What exactly happened compared to your initial expectation at the start of the year? And what makes you confident that you can still achieve the full year guidance growth despite the more challenging environment? Secondly, Middle East is, I mean, approximately 3% of your group revenue and declined by almost 4.5% in Q1, even though the conflict only started in March. How should we think about the trend for the rest of the year? And how could be the impact on your profitability if the conflict continues? Jean Poitou: Thank you. I'll start on the Q1 1.4% negative organic growth first. Of course, the 2.4% is heavily impacted by currency effects to the tune of minus 5.4%. But the minus 1.4% in organic growth is, I guess, what your question is focused on. So on that point, it is in line with our expectations that we would have a negative Q1. That is not a surprise based on what we had calendarized for the year when we looked at the full year. We knew that horizons would kick in gradually throughout the year. So that was part of our expectations for the year. In terms of what makes us confident, I highlighted the fact that having an order book that is growing, having a percentage of the full year outlook at this point of the year, which is similar to what it has been relative to the previous full year's actuals, the fact that we see when we look at it country by country, service line by service line, we see confirmation that we will be in the bracket we have given guidance around are some of the parameters that I wanted to reinforce as positive signals towards meeting our initial growth expectations. I don't know, Olivier, if you want to provide additional color on this? Olivier Champourlier: Well, I would like to say that the order intake at the end of Q1 actually is slightly better than what we thought when we have built up our budget in 2026, so which makes us confident or slightly confident that we are in line with the way we calendarize the phasing of the order intake this year. So as you have seen actually, there is a lag between the revenue and the order intake. But this is really important to look at the way we recognize revenue over the full year because in our company, actually, depending on whether you recognize a short-term contract or long-term contract, it can create some phasing effects when you look at the quarterly revenue. So one of the KPIs that we are looking at is more the order intake and how it's going to translate into the full year revenue more than focusing on the single quarter itself. Lastly, on Middle East. So as we have disclosed, so the MENA region represents 3% of the revenue. For the moment, there have been a couple of million of impact. It's pretty small actually. We have reacted pretty quickly to mitigate the impact on the profitability of the region. There are a couple of actions that we can take place, hiring freeze and so on. There are a couple of measures. But it's pretty limited to MENA for the moment. We have spent a couple of days with all the management discussing the impact. And for the moment, we don't see any impact or any cancellation anywhere else. This being said, the macroeconomic environment is pretty volatile. It's true that if the conflict is continuing, we know that the consequence will be that the barrier will be high. There will be some further inflation and it may have an impact and it will have an impact on the global economy. But we are watching that very carefully. And we are used to this kind of macroeconomic condition like in 2008, 2020, and we are able to adapt our cost basis to mitigate any shortfall in the revenue that will come if the conflict will continue. Jean Poitou: But we are not -- to the latter part of your question on the what if it lasts for months and not weeks and what if it escalates and drives, for example, the global economy into recession in some of the major geographies we serve. We are not providing a guidance that assumes any of that at this point. If it was to happen, of course, we will adjust the cost base to mitigate the impact on profitability, but that's not something we're guiding to at this juncture. Other questions? Operator: The next question comes from Conor O'Shea with Kepler Cheuvreux. Conor O'Shea: Three questions from me. Firstly, on the Healthcare business, it was down in Q1. I think in the press release, you mentioned tough comps, but I think the comps were similar for the first 3 quarters of last year. So would you expect that activity to remain under pressure for at least another couple of quarters? That's the first question. Second question, in the clients and employees activity, in the press release, you mentioned some effects of timing, phasing lags that should unravel and improve in the subsequent quarters. Can you go a little bit more detail about that? I think it's in Audience Measurement. And then third question, just more generally, given the expected time horizon of some of the new initiatives to take hold and make a contribution to growth and so on. Would you expect the second quarter to potentially to be also negative in terms of organic growth at say, a constant macro outlook? Or would you be expecting to see at this stage an improvement already in Q2? Olivier Champourlier: Yes. I will answer the first question regarding the Healthcare business, which is actually the way we disclose it is not exactly the Healthcare business, but it's more the business with the pharma companies. So what happened this year, so that's true that we disclosed a negative growth, but we have seen the order intake improving gradually. There have been some clients in the pharma sector that are under restructuring and are taking longer to take a decision. We have also some program that have been confirmed last year at the beginning of the year for the full year, but the client, they confirm it more on a quarterly basis, so which drag -- drop in the revenue in H1. But overall, the order intake is improving month after month. So it should turn into more positive territory in the coming months. It's a similar pattern when it comes to Clients and Employees because we mentioned that the Audience Measurement activities, the revenue is declining in Q1. But when you look at the order intake, it's positive at the end of March because the way contracts have been confirmed by clients is different from last year, and this will translate into positive growth in the coming months. And last question is more about the phasing of the revenue. So as you can see, the first Q1 is minus 1.4%. And obviously, to finish the year in line with the guidance, which was between 2% to 3%, you will see an acceleration of the growth moving gradually in positive territory to finish in line with the guidance. Jean Poitou: And I think that's the key point. It's gradual recovery. What will exactly happen in Q2, we're not guiding by quarter. But yes, it is an acceleration throughout the year. And it is based on the speed at which we execute our Horizons strategy. It is based on the fact that we have mobilized the leadership of this company around the key initiatives I've referred to when reiterating what the main strategic pillars were and how we stand relative to each of them. The Globally Managed Services, the Ipsos.Digital, the commercial acceleration, the technology and AI investments will gradually add more solutions to our bag of tricks, and this will gradually allow us to expand our revenue and strengthen our growth. Conor O'Shea: Okay. Very clear. But I mean just to drill on the numbers. I mean, if the second quarter is better than the first quarter, but it's, as you say, a gradual process, but the first half is, let's say, flattish overall on organic, then the second half needs to be around 4% or so. The order book has improved, but we're talking about plus 1%, not talking about plus 4%. So is the pickup, let's say, month-over-month so significant that, that kind of second half trajectory is looking doable at this stage? Jean Poitou: The short answer is it is looking doable. As I said, we spend a lot of time also with the teams in every one of our markets and services looking at this, looking at obviously, the pipeline at a more granular level. Historically, as you will have witnessed, there are quarterly changes, which is why we're not -- it's not a perfectly constant 1 month after the next progression. There's always swings because some of the orders can be quite sizable and then they generate revenue later. Some of the orders we took in Q1 were actually in March. So they will generate revenue starting already now. So that's why we're not looking at it at a month-by-month or certainly announcing it at a month-by-month basis. But yes, the short answer is it is doable. Operator: The next question comes from Hai Huynh with UBS. Hai Huynh: It's Hai from UBS. Just again a little bit on the order book and revenue conversion. Can you help me a little bit on how the stronger March order intake translate into revenue? Is it going to be kind of Q2? Or is it more weighted towards half 2 in terms of the timing? And within that also, in April, have you seen an improvement sequentially in April so far versus March as well? That's the first question. And then the second one is, I know it's only the quarterly top line update, but you're still guiding for flat margins despite some dilutive effects from BVA Family. And you're investing a lot this year into in-sourcing, for example. So what are the offsets that makes you confident that you're actually going to be flat margins this year? Jean Poitou: Okay. On your second question first, maybe. We are taking, obviously, a number of measures. We are looking at our cost structure. We are looking at our pricing and everything. So yes, we are offsetting the impact of both losing the Russia accretive business and absorbing some of the remaining dilutive impact over 12 months against 6 of BVA through very disciplined execution on our cost base. But on the conversion and on the ability to say something about April, April, we're still very early to have any numbers worth disclosing here, but on the conversion pattern. Olivier Champourlier: Yes. And I would say about the order book, it was positive in March, and it will generate and translate into revenue from April to the remainder of the year. It's difficult to say at this stage of the year, if it will be more in Q2 or in the second half of the year, but it's going to be in the coming months for sure. This is true that you should have in mind that we have a growth trajectory that is going to accelerate. As far as all the investment that we are making in this Horizons plan, will deliver some fruit. We mentioned the GMS, the local country-specific plan. There are some regions that are more advanced than some other. In China, the plan started already at the end of last year, and we have seen that it's delivering already some fruit with a very good Q1 and good sales momentum in China, which is really encouraging us to continue in that direction in some other markets outside China. Operator: The last question today comes from Anna Patrice with Berenberg. Anna Patrice: A couple of questions from my side. First of all, when you talk about the organic growth in the order book of 1%, what kind of organic growth is it? So until when this organic growth? Does it mean that it implies that you already have in your pocket 1% organic growth for the full year 2026? Or where does it stop? That's the first question. Second question, you mentioned several times in China that there was a significant improvement. Can you maybe elaborate what was the organic growth in China last year, for example? And what is it already in Q1? And what was the comparison basis maybe? And then the last question is on the America performance, minus 4%. If you can elaborate which sectors are declining and which sectors are growing? Jean Poitou: Can you reiterate the first question, please? Anna Patrice: Yes. First question is on order book, 1% organic growth at the end of March. This 1% organic growth, what is it exactly? Is it 1% organic growth that you have in your books for the full year 2026? Or what exactly does it mean? Jean Poitou: So just to clarify, when we talk about the order book and the order book growth, it is the part of the orders we took that is delivering revenue in 2026, right? So there's 1% more in our order book for the year, right? Then some of them are shorter term than others, which can last all the way until December. Olivier Champourlier: Yes. So that means that at the end of March, the order book is plus 1% compared to the end of March last year. And the order book in the Ipsos definition is the sales that have been converted that will generate revenue on the full year. And as we mentioned it, at this stage of the year, we have in our order book 55.6% of the annual revenue. And it's in line with what we have seen in average over the last 4 years. Now answering your last question about what was the growth in Greater China in Q1 2029. So it was around minus 3%. So we have seen definitely a turning point in our activity in Russia, which started in China, which started already at the end of last year, but has accelerated and now it's quite strong in Q1 2026. Operator: This concludes our question-and-answer session. I would like to turn the conference back over for any closing remarks. Jean Poitou: Okay. Thank you very much. So in closing, our commercial momentum is strong in spite of a minus 1.4% organic growth Q1. And to use the words of one of the questions, the signals we see on the commercial front, not just that 1% increase, but also the pipeline, the comparison with prior years says that the growth we have suggested for the year is absolutely doable. So I want to thank you for your attention today, and we will be talking again in May. Thank you. Olivier Champourlier: Thank you very much.

33天前Insight Analytics约5分钟阅读

IPS.PA 2026 Q1 财报电话会议

Jean Poitou: Hello. Good afternoon or good morning. Thanks for joining. Welcome to our first quarter results announcement session for 2026 at Ipsos. I'm Jean Laurent Poitou, the CEO of Ipsos, and I'm here with Olivier Champourlier, our Chief Financial Officer. What I'm going to be covering today are our results for the first quarter of 2026, an update on our strategy execution. Horizons is the name. You heard about it if you attended our January Capital Markets Day, and we talked about it a bit as we announced our full year results of 2025. I'll provide an update of where we are on the execution path. And then we will take a look at how we are considering the rest of 2026 with an outlook. But let me start with our first quarter 2026 results and our revenue, which stands at EUR 555 million. If we compare this with the same number a year ago, it's 2.4% less, which, in fact, if we didn't have a significant 5.4% negative currency impact would be a total growth of 3%. That total growth is broken down into 4.3% of impact of the acquisitions we made, particularly the BVA Family, minus the negative impact of having disposed of our Russian business or 80% of it as it happens. So it's not consolidated anymore. And then the organic growth is minus 1.4%, and the combination of all this is what drives the minus 2.4% total growth, but this is in the context of encouraging commercial momentum in Q1. I have had the opportunity to look at the order book for Q1 in many different dimensions, and I'll cover them in a second. Overall, our organic growth of our order book is 1% against the same quarter last year with an acceleration towards the latter part of the quarter in March, which means that the revenues for many of those orders, which happened late in the quarter will generate revenue further into 2026. Now as I look at the order book expansion, first by sector. One notable encouraging signal is the fact that our Public Affairs business, which we have had lackluster performance with in the years past and which dragged on our growth in '25 in particular, is back, rising demand, rising order intake. And I'll talk about it some more because it's so important. Solid traction with our consumer and packaged goods clients. They represent about 1/4 of our business. So it is very important for us that our computer -- our consumer and packaged goods clients, which are also the clients among which the AI solutions that we increasingly deploy in the market are resonating with most. If I look at this now by geography, our 4 largest market, North America, France, U.K. and China are driving our growth. And in particular, we have a very robust performance in China, which, as you may remember, has had some quarters of stability or a bit less. Now looking at it from the standpoint of our largest clients, the top 30 clients of Ipsos, the ones where we have dedicated client account leadership and campaigns. Those 30 drive our growth very significantly from a sales standpoint in Q1. So good performance across several dimensions of our business from a sales standpoint. Late in the quarter, this will translate gradually into revenue as also our strategy implementation accelerates and drives expanding order book through the quarter. So that's what I wanted to cover, generally speaking. Let me focus a little bit on Public Affairs because as you heard, we made among our strategic choices, one of them was to continue as a multi-specialist, in particular, continue to believe strongly in the power of having Public Affairs being the global player present in 66 markets serving public decision-makers, doing political polling and helping with policy assessment. That global footprint is one of our very, very differentiating assets as is the fact that we have our own proprietary panels, which serve us extremely well in the public sector. We also have the ability in many of our large markets and countries to do face-to-face interviews to knock on doors and ask real respondents about what their views are or what their voting intents are. And then finally, we have the ability to leverage some of the methodologies and some of the services that primarily have been borne out of our private sector business into Public Affairs, such as, for example, when we know how to interview and assess the engagement of employees in the private sector, we apply that in the public sector as well. So Public Affairs is back. We have won prominent government contracts across multiple geographies, which had struggled in quarters past, particularly in the U.S., but also in France and the U.K. So I have confidence that Public Affairs will be one of the drivers of our growth in 2026. Let me now hand it over to Olivier, who will comment on the numbers on a more detailed basis. Olivier Champourlier: Thank you, Jean-Laurent. Good afternoon, good morning, everyone. Let me go into the details of our Q1 revenue. As said by Jean-Laurent, the revenue was EUR 555 million in Q1, down 1.4% on an organic basis. There was a negative impact of currency of 540 basis points due to the appreciation of the euro against several currencies, in particular, the U.S. dollar, the pound sterling and APAC currencies. Acquisition net of disposals contributed positively to the growth in Q1 by 430 basis points, reflecting the impact of the 2025 acquisition, mostly the BVA Family that was acquired in June 2025, net of the disposal of our Russian operation in Q1 2026. As a reminder, Russia was accounting for around 2% of our total revenue. Factoring in those items, the total revenue was down 2.4% and excluding foreign exchange currency effect, it was up 3%. Moving on to the revenue by region. EMEA, our largest region, representing 52% of group revenue, delivered total growth of 5.3% on a reported basis, including 0.1% organic growth. The positive performance was mainly driven by the acquisition of the BVA Family because this business was mostly in France, U.K. and Italy, offset by the disposal of the Russian activities in Q1. In contrast, the Middle East, which represents around 3% of the total revenue of the group was impacted by the geopolitical situation in the region and posted an organic decline of its revenue of 4.4% in the first quarter 2026. In the Americas, which represents 1/3 of the total revenue in Q1, revenue declined by 4.1% on an organic basis. This is mainly driven by the U.S. However, commercial momentum has improved with a strong increase in the order intake at the end of the quarter in March, particularly. Several contract wins in Public Affairs sustained a recovery in the segment. As a result, the order book in the Americas was slightly positive at the end of March. In Asia Pacific now, the revenue was up 0.2% on an organic basis but declined by 6.3% on a reported basis due to the negative impact of many currencies in the region against the euro. The first quarter was encouraging with China returning to strong growth. We have indeed a strong momentum in China with large international local clients, especially in technology and automotive. China is one of the markets where we have seen a rapid adoption of our AI-driven offers. Let me now turn to the performance by Audience segment. Our Consumer segment revenue, which accounts for half of the revenue in the quarter posted a positive growth organically of 0.5%. We continue to see sustained demand from CPG clients for deeper understanding of consumer behavior in a volatile and rapidly changing environment. Our services in market positioning, innovation testing and brand health tracking are benefiting from this demand. This is also an area where our AI solutions and platform such as Ipsos Synthesio and Ipsos.Digital play a growing role in helping clients reacting faster and making better informed decision. The Clients and Employees Audience revenue was down 3.3%. This decline is mostly explained by timing effect in our Audience Measurement activities which will translate into positive growth over the coming quarters, thanks to a positive order book at the end of March. The Citizens segment now. The revenue, which include Public Affairs and Corporate Reputation, declined by 2.3% on an organic basis. As mentioned by Jean-Laurent previously, the first quarter marks an important turning point as we have seen the return of public sector orders in markets that had impacted our growth in the last few years, like the U.S. and France, where we see a rebound. During the quarter, we booked several significant multiyear contracts, which reinforce our confidence in the rebound of this activity later during the year. Finally, the Doctors and Patients Audience revenue was down 4.4% on an organic basis. This activity had a strong start of the year in 2025, where Q1 was plus 5.4%. So this, therefore, creates a tough comparison basis. In addition, we have experienced a slowdown at the start of this year in qualitative studies from the pharma industry clients, but we see an improvement trend based on our order book. Beyond those 4 Audiences, I would like also to underline the performance of our Do-It-Yourself platform, Ipsos.Digital, which recorded a double-digit growth in the first quarter of 2026. At the end of the first quarter, I would like to underline that our order book is growing by 1% and is in line with the historical pattern. More specifically, the order book at the end of March 2026 represents 55.6% of expected full year 2026 revenue at the end of the first quarter. Overall, this is consistent to the average of the last 4 years, where the total of the order book at the end of the first quarter was 55.5% of the full year revenue. Overall, this analysis supports our outlook for the remainder of the year. Turning now on profitability and cash generation. It's important to notice that our gross margin and our cash generation at the end of the first quarter are in line with our expectations. I will now hand over to Jean-Laurent, who will tell you more about how we have been able to execute our Horizons strategic plan. Jean Poitou: Thanks, Olivier. And before I provide some color on the outlook for the remainder of the year, let me say something about what's going to drive our growth for the remainder of the year and namely the switching to execution mode on the Horizons strategy, which we talked about back in January and which we highlighted the main components of during our Capital Markets Day. Those 6 items here are the 6 key strategic choices we made and the ones that we are starting to see bear fruits in our positive growth of the order intake in Q1, starting with the fact that we have confirmed our intent strategically to leverage our multi-specialist business offerings. I talked about what this means with the return and rebound of Public Affairs, but it is also very important to note that we are equipping our teams with a first set of 6 and more to come as those are successful, Globally Managed Services, powered by our Ipsos.Digital platform, systematically and consistently applied to services for each of them wherever the client we serve is based. Those GMSs led by Shaun Dix are already structured with representatives in the key markets where we have decided to grow them with specific accountabilities, budgets, the platforms are there. We are leveraging some of the past investments and adding more through the course of 2026. And then Ipsos.Digital, the platform, which is showing continued momentum in the market, led by Andrei Postoaca. The teams there have also been demultiplied by having specific leaders in our key markets to drive further growth of our digital platform, reinforced by the fact that it is the foundation on which many of our service line-specific, activity-specific AI solutions are based. Our global company with a local footprint, strategic choice starts to show us the first fruits of growth, particularly in the market you saw in China, where you saw Lifeng, our CEO there, in the Capital Markets Day, explain how he had already started to launch some of the initiatives, and that's what we are seeing translate into significant growth in that particular market. But also in the U.S., which is the other big market where we decided that we would have in addition to the core Horizons initiatives, some markets, particularly tech industry and technification specific initiatives in the U.S. Mary Ann Packo, our CEO; and Lindsay Franke, who you saw on the Capital Markets Day present that strategy are driving it aggressively, and I'm pretty confident that this will materialize in the quarters ahead into accelerated growth. Speed is an initiative where it will take time because it's the most profound from an operating and tooling standpoint, from a training and capability and skills evolution standpoint. So this will take a bit longer to materialize at scale. We have started on this. AI as a catalyst for market leadership is now being led from a technology standpoint by Nathan Brumby, our recently appointed Chief Technology and Platforms Officer. Nathan joined us close -- just over 2 months ago and is in full swing. And we have a road map, and I'll show you some examples of Ipsos AI solutions in a minute for Q2, Q3 and Q4 launches of AI-powered products. Also access to real people as a critically relevant competitive advantage is one of our key choices. I'm happy to report that we are seeing increasing level of in-sourcing. What we mean by this is using our own panels, our own respondents rather than outsourcing to third-party providers of such. And this is a key component of our operational transformation, which is led by Alexandre Boissy, our newly appointed Deputy CEO, joining us from Air France, where he had very important responsibilities. And we are happy to say that our operations transformation agenda is also starting to show signs of increased ownership of our own panels. And then if I think about our evolution to higher value-added services and in particular, our ability to expand our footprint at the clients we serve, our commercial excellence, I mentioned the fact that we are starting to see very superior growth at our top clients. And this is being led by Eleni Nicholas, who's driving an initiative across those large clients. So with Olivier now being formerly our Chief Financial Officer, he was named an interim, and we are happy to confirm it, and I'm very happy, Olivier, that we will be able to continue and work together in that capacity. And more importantly than those leaders, the whole of 20,000 or close there to people at Ipsos and many of our leaders across the globe are being mobilized to make the strategy execution happen at scale and at pace. So let me give you examples of some of the AI technologies and global services -- new services that we are launching or that we have already in store and that we are accelerating through the GMS model. First of all, an example of what we call behavioral measurement, looking at how people behave when they either buy or consume or use the products of our clients. Two examples of very large consumer and packaged goods players, one in the beverage industry, the other one in the home care industry, products for detergents and washing machines and the like. We are using AI technologies to help observe with clips and videos that people themselves provide us rather than checking diaries on paper saying how much coffee did I drink today or how many washing machines and how much powder did I use for each of them. So we're using videos to not just translate what was written into what's visible on the video, but also understand better the gestures, the expressions, the satisfaction, many subtle consumer signals that wouldn't be otherwise available to our clients. A second example is in social media. We are using AI technologies to examine at scale what videos are successful and why detecting patterns on social media. For example, in China, that would be RedNote, which is a very prominent video channel on social. And then we are using the insights generated by this video analysis of those clips to identify which influences, which patterns are the most likely to drive interest and ultimately, the brand awareness or decisions to buy. This is helping our clients decide faster where to target, which influencers to pick and what formats to use at scale. A third example is in China, which is, of course, one of the innovation hubs of the world, where we have now a very large consumer and packaged goods clients who's relying on Ipsos' synthetic consumer digital twins to replicate the personality traits and the behavioral logic of the clients of that CPG company. Now we are doing this because it helps answer sometimes simple, sometimes slightly more complex questions faster than a full-fledged survey, bearing in mind that we do that with a lot of care to the reliability and continuous update by recalibrating with real respondence and continuously validating the results of those digital twins. So those are 3 examples I wanted to give of how we're embedding technology and AI to create more value at our clients. Let me now turn to the numbers for 2026. First of all, it's very obvious that everything I'm about to project is based on factoring in what we know and acknowledging what we don't know about what's happening in the Middle East. What we know? In the Middle East itself, which as Olivier highlighted, is about 3% of our total revenue, we are seeing obviously an erosion of our revenues to the tune of several millions, and that's no surprise. But we believe that the outlook will turn as -- governments, in particular, and large spenders will return to growth as and if the crisis and the war slows down and ends, which we all hope for. We don't see significant consequences outside of the Middle East region, very few, if any, client cancellations, delays in decisions or postponements of contracts. So there's marginal examples here and there, but essentially limited observed consequences outside of the Middle East, which therefore means that barring escalation or prolonged conflict in the Middle East, we don't see at this stage, at this stage, significant impact on our group's full year outlook. Now the situation, as we all know, remains highly volatile, and therefore, both the monitoring, but also the contingency planning in case things deteriorate or escalate or continue in the long run are being prepared. We've done that in 2008. We've done that in 2020. So we know how to adjust and react in case we need to do so. On a more positive note, let me reiterate why we believe that the positive order book momentum of the first quarter is a good signal of accelerating order intake and therefore, gradual expansion of our revenues throughout the remainder of 2026. First of all, we launched the strategy. We're in full execution mode. But obviously, we're going to bear fruits increasingly as quarters after quarter things happen, particularly with Globally Managed Services, Ipsos.Digital, the impact of our commercial actions and so on and so forth. It's also reassuring to see that we're about at the same percentage of our full year outlook from an order book already in our books at this point of the year as we have historically over the last few years. But also, I have spent time with our leaders in the various markets. We are looking at it both from a pipeline analysis standpoint and from an outlook based on their knowledge on the front line closest to our clients. And this also reinforces the predictions that we have already highlighted for the year of a 2% to 3% estimated organic growth and an operating profit, which would be equivalent to 2025, which it was at 12.3%. And I have to highlight something here. Russia was a profitable business compared with the average of Ipsos, and it's now no longer in our numbers. BVA is a company that we acquired, and we're extremely happy with this acquisition, but it was in 2025, and it will continue for a good part of 2026 to be a drag on our profitability with the fact that it was 6 months only in '25, and it's going to be the full year in '26. So in fact, reaching an equivalent profitability in '26 to the one we observed in '25 is actually increasing the core profitability outside of those perimeter effects. So with that, I would like to thank you for your attention so far. I'm about to open to questions and answers, obviously, invite you to our May 20 General Meeting of Shareholders and also to our first half results announcement, which will take place on July 23. Thank you very much, and let's open it up to questions and answers. Operator: [Operator Instructions] The first question today comes from Davide Amorim with Berenberg. Davide Amorim: Two questions from me, please. Could you please give us a bit more detail on the organic growth decline in Q1? What exactly happened compared to your initial expectation at the start of the year? And what makes you confident that you can still achieve the full year guidance growth despite the more challenging environment? Secondly, Middle East is, I mean, approximately 3% of your group revenue and declined by almost 4.5% in Q1, even though the conflict only started in March. How should we think about the trend for the rest of the year? And how could be the impact on your profitability if the conflict continues? Jean Poitou: Thank you. I'll start on the Q1 1.4% negative organic growth first. Of course, the 2.4% is heavily impacted by currency effects to the tune of minus 5.4%. But the minus 1.4% in organic growth is, I guess, what your question is focused on. So on that point, it is in line with our expectations that we would have a negative Q1. That is not a surprise based on what we had calendarized for the year when we looked at the full year. We knew that horizons would kick in gradually throughout the year. So that was part of our expectations for the year. In terms of what makes us confident, I highlighted the fact that having an order book that is growing, having a percentage of the full year outlook at this point of the year, which is similar to what it has been relative to the previous full year's actuals, the fact that we see when we look at it country by country, service line by service line, we see confirmation that we will be in the bracket we have given guidance around are some of the parameters that I wanted to reinforce as positive signals towards meeting our initial growth expectations. I don't know, Olivier, if you want to provide additional color on this? Olivier Champourlier: Well, I would like to say that the order intake at the end of Q1 actually is slightly better than what we thought when we have built up our budget in 2026, so which makes us confident or slightly confident that we are in line with the way we calendarize the phasing of the order intake this year. So as you have seen actually, there is a lag between the revenue and the order intake. But this is really important to look at the way we recognize revenue over the full year because in our company, actually, depending on whether you recognize a short-term contract or long-term contract, it can create some phasing effects when you look at the quarterly revenue. So one of the KPIs that we are looking at is more the order intake and how it's going to translate into the full year revenue more than focusing on the single quarter itself. Lastly, on Middle East. So as we have disclosed, so the MENA region represents 3% of the revenue. For the moment, there have been a couple of million of impact. It's pretty small actually. We have reacted pretty quickly to mitigate the impact on the profitability of the region. There are a couple of actions that we can take place, hiring freeze and so on. There are a couple of measures. But it's pretty limited to MENA for the moment. We have spent a couple of days with all the management discussing the impact. And for the moment, we don't see any impact or any cancellation anywhere else. This being said, the macroeconomic environment is pretty volatile. It's true that if the conflict is continuing, we know that the consequence will be that the barrier will be high. There will be some further inflation and it may have an impact and it will have an impact on the global economy. But we are watching that very carefully. And we are used to this kind of macroeconomic condition like in 2008, 2020, and we are able to adapt our cost basis to mitigate any shortfall in the revenue that will come if the conflict will continue. Jean Poitou: But we are not -- to the latter part of your question on the what if it lasts for months and not weeks and what if it escalates and drives, for example, the global economy into recession in some of the major geographies we serve. We are not providing a guidance that assumes any of that at this point. If it was to happen, of course, we will adjust the cost base to mitigate the impact on profitability, but that's not something we're guiding to at this juncture. Other questions? Operator: The next question comes from Conor O'Shea with Kepler Cheuvreux. Conor O'Shea: Three questions from me. Firstly, on the Healthcare business, it was down in Q1. I think in the press release, you mentioned tough comps, but I think the comps were similar for the first 3 quarters of last year. So would you expect that activity to remain under pressure for at least another couple of quarters? That's the first question. Second question, in the clients and employees activity, in the press release, you mentioned some effects of timing, phasing lags that should unravel and improve in the subsequent quarters. Can you go a little bit more detail about that? I think it's in Audience Measurement. And then third question, just more generally, given the expected time horizon of some of the new initiatives to take hold and make a contribution to growth and so on. Would you expect the second quarter to potentially to be also negative in terms of organic growth at say, a constant macro outlook? Or would you be expecting to see at this stage an improvement already in Q2? Olivier Champourlier: Yes. I will answer the first question regarding the Healthcare business, which is actually the way we disclose it is not exactly the Healthcare business, but it's more the business with the pharma companies. So what happened this year, so that's true that we disclosed a negative growth, but we have seen the order intake improving gradually. There have been some clients in the pharma sector that are under restructuring and are taking longer to take a decision. We have also some program that have been confirmed last year at the beginning of the year for the full year, but the client, they confirm it more on a quarterly basis, so which drag -- drop in the revenue in H1. But overall, the order intake is improving month after month. So it should turn into more positive territory in the coming months. It's a similar pattern when it comes to Clients and Employees because we mentioned that the Audience Measurement activities, the revenue is declining in Q1. But when you look at the order intake, it's positive at the end of March because the way contracts have been confirmed by clients is different from last year, and this will translate into positive growth in the coming months. And last question is more about the phasing of the revenue. So as you can see, the first Q1 is minus 1.4%. And obviously, to finish the year in line with the guidance, which was between 2% to 3%, you will see an acceleration of the growth moving gradually in positive territory to finish in line with the guidance. Jean Poitou: And I think that's the key point. It's gradual recovery. What will exactly happen in Q2, we're not guiding by quarter. But yes, it is an acceleration throughout the year. And it is based on the speed at which we execute our Horizons strategy. It is based on the fact that we have mobilized the leadership of this company around the key initiatives I've referred to when reiterating what the main strategic pillars were and how we stand relative to each of them. The Globally Managed Services, the Ipsos.Digital, the commercial acceleration, the technology and AI investments will gradually add more solutions to our bag of tricks, and this will gradually allow us to expand our revenue and strengthen our growth. Conor O'Shea: Okay. Very clear. But I mean just to drill on the numbers. I mean, if the second quarter is better than the first quarter, but it's, as you say, a gradual process, but the first half is, let's say, flattish overall on organic, then the second half needs to be around 4% or so. The order book has improved, but we're talking about plus 1%, not talking about plus 4%. So is the pickup, let's say, month-over-month so significant that, that kind of second half trajectory is looking doable at this stage? Jean Poitou: The short answer is it is looking doable. As I said, we spend a lot of time also with the teams in every one of our markets and services looking at this, looking at obviously, the pipeline at a more granular level. Historically, as you will have witnessed, there are quarterly changes, which is why we're not -- it's not a perfectly constant 1 month after the next progression. There's always swings because some of the orders can be quite sizable and then they generate revenue later. Some of the orders we took in Q1 were actually in March. So they will generate revenue starting already now. So that's why we're not looking at it at a month-by-month or certainly announcing it at a month-by-month basis. But yes, the short answer is it is doable. Operator: The next question comes from Hai Huynh with UBS. Hai Huynh: It's Hai from UBS. Just again a little bit on the order book and revenue conversion. Can you help me a little bit on how the stronger March order intake translate into revenue? Is it going to be kind of Q2? Or is it more weighted towards half 2 in terms of the timing? And within that also, in April, have you seen an improvement sequentially in April so far versus March as well? That's the first question. And then the second one is, I know it's only the quarterly top line update, but you're still guiding for flat margins despite some dilutive effects from BVA Family. And you're investing a lot this year into in-sourcing, for example. So what are the offsets that makes you confident that you're actually going to be flat margins this year? Jean Poitou: Okay. On your second question first, maybe. We are taking, obviously, a number of measures. We are looking at our cost structure. We are looking at our pricing and everything. So yes, we are offsetting the impact of both losing the Russia accretive business and absorbing some of the remaining dilutive impact over 12 months against 6 of BVA through very disciplined execution on our cost base. But on the conversion and on the ability to say something about April, April, we're still very early to have any numbers worth disclosing here, but on the conversion pattern. Olivier Champourlier: Yes. And I would say about the order book, it was positive in March, and it will generate and translate into revenue from April to the remainder of the year. It's difficult to say at this stage of the year, if it will be more in Q2 or in the second half of the year, but it's going to be in the coming months for sure. This is true that you should have in mind that we have a growth trajectory that is going to accelerate. As far as all the investment that we are making in this Horizons plan, will deliver some fruit. We mentioned the GMS, the local country-specific plan. There are some regions that are more advanced than some other. In China, the plan started already at the end of last year, and we have seen that it's delivering already some fruit with a very good Q1 and good sales momentum in China, which is really encouraging us to continue in that direction in some other markets outside China. Operator: The last question today comes from Anna Patrice with Berenberg. Anna Patrice: A couple of questions from my side. First of all, when you talk about the organic growth in the order book of 1%, what kind of organic growth is it? So until when this organic growth? Does it mean that it implies that you already have in your pocket 1% organic growth for the full year 2026? Or where does it stop? That's the first question. Second question, you mentioned several times in China that there was a significant improvement. Can you maybe elaborate what was the organic growth in China last year, for example? And what is it already in Q1? And what was the comparison basis maybe? And then the last question is on the America performance, minus 4%. If you can elaborate which sectors are declining and which sectors are growing? Jean Poitou: Can you reiterate the first question, please? Anna Patrice: Yes. First question is on order book, 1% organic growth at the end of March. This 1% organic growth, what is it exactly? Is it 1% organic growth that you have in your books for the full year 2026? Or what exactly does it mean? Jean Poitou: So just to clarify, when we talk about the order book and the order book growth, it is the part of the orders we took that is delivering revenue in 2026, right? So there's 1% more in our order book for the year, right? Then some of them are shorter term than others, which can last all the way until December. Olivier Champourlier: Yes. So that means that at the end of March, the order book is plus 1% compared to the end of March last year. And the order book in the Ipsos definition is the sales that have been converted that will generate revenue on the full year. And as we mentioned it, at this stage of the year, we have in our order book 55.6% of the annual revenue. And it's in line with what we have seen in average over the last 4 years. Now answering your last question about what was the growth in Greater China in Q1 2029. So it was around minus 3%. So we have seen definitely a turning point in our activity in Russia, which started in China, which started already at the end of last year, but has accelerated and now it's quite strong in Q1 2026. Operator: This concludes our question-and-answer session. I would like to turn the conference back over for any closing remarks. Jean Poitou: Okay. Thank you very much. So in closing, our commercial momentum is strong in spite of a minus 1.4% organic growth Q1. And to use the words of one of the questions, the signals we see on the commercial front, not just that 1% increase, but also the pipeline, the comparison with prior years says that the growth we have suggested for the year is absolutely doable. So I want to thank you for your attention today, and we will be talking again in May. Thank you. Olivier Champourlier: Thank you very much.

33天前Insight Analytics约5分钟阅读

AA 2026 Q1 财报电话会议

Operator: Good afternoon and welcome to the Alcoa Corporation First Quarter 2026 Earnings Presentation and Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Louis Langlois, Senior Vice President of Treasury and Capital Markets. Please go ahead. Louis Langlois: Thank you, and good day, everyone. I am joined today by William F. Oplinger, our Alcoa Corporation President and Chief Executive Officer, and Molly S. Beerman, Executive Vice President and Chief Financial Officer. We will take your questions after comments by Bill and Molly. As a reminder, today's discussion will contain forward-looking statements relating to future events and expectations that are subject to various assumptions and caveats. Factors that may cause the company's actual results to differ materially from these statements are included in today's presentation and in our SEC filings. In addition, we have included some non-GAAP financial measures in this presentation. For historical non-GAAP financial measures, reconciliations to the most directly comparable GAAP financial measures can be found in the appendix to today's presentation. We have not presented quantitative reconciliations of certain forward-looking non-GAAP financial measures, for reasons noted on this slide. Any reference in our discussion to EBITDA means adjusted EBITDA. Finally, as previously announced, the earnings press release and slide presentation are available on our website. Now I would like to turn over the call to Bill. William F. Oplinger: Thank you, Louis, and welcome to our first quarter 2026 earnings conference call. Today, we will review our strong first quarter performance, discuss our markets, and highlight the progress we are making on our strategic priorities. Let me start with the headline. We had a strong start to 2026 driven by execution. We are well positioned to deliver a strong second quarter and full-year 2026 performance. Starting with safety, we continued making progress with improved total injury rates in the first quarter. While we are never satisfied, both our leading and lagging indicators are moving in the right direction. Our focus remains clear: fatality and critical risk management combined with leader time in the field. Our leaders are expected to be on the production floor or mine site, interacting, coaching, and reinforcing standards. Safety is not an initiative. It is the foundation of everything we do. Operationally, we delivered. We maintained stable performance across the system and captured higher metal prices. Despite significant disruption in the Middle East, our teams ensured continuity of supply for our operations. Our flexible cast house network continues to unlock value-add opportunities, and the depth of our commercial, procurement, and logistics capabilities was evident this quarter. Strategically, we kept moving forward. In Western Australia, we advanced our mine approvals, completing responses from the public comment period and continuing to work collaboratively with stakeholders. We continue to anticipate ministerial approvals by year-end 2026, consistent with the timeline we have previously shared. We are in advanced discussions on the monetization of our former Massena East smelter site for a data center project. The potential developer has applied for public review. We are still finalizing terms and will not comment on value today, but we will provide additional details later in the process. Additionally, we are making progress on two other sites in parallel. Our momentum continues into the second quarter. On April 7, we successfully and safely completed the restart of the San Ciprián smelter. And on April 14, we issued notice to redeem the remaining $219 million outstanding of our 2028 notes—another clear example of disciplined capital allocation supported by our strong cash balance of $1.4 billion at the end of the first quarter. Looking ahead, we are focused on increasing profitability through higher shipments, continued operational performance, and realizing the benefit of strong market conditions in the Aluminum segment. At the same time, we will maintain momentum on the company's strategic initiatives aimed at creating value. Now I will turn it over to Molly to take us through the financial results. Molly S. Beerman: Thank you, Bill. Revenue decreased 7% sequentially to $3.2 billion. In the Alumina segment, third-party revenue decreased 33% due to typically lower first-quarter shipments, lower purchased and resold alumina to satisfy third-party commitments, as well as vessel constraints related to the Middle East conflict and vessel loading issues caused by Cyclone Narelle in Western Australia. Realized prices were also lower for both alumina and bauxite. In the Aluminum segment, third-party revenue increased 3% primarily due to an increase in average realized third-party price and increased shipments from the San Ciprián smelter. These impacts were partially offset by seasonally lower shipping volumes from other sites as well as timing impacts from proactively repositioning inventory within North America. The repositioning creates a timing difference deferring revenue recognition until the second quarter, while providing cast house flexibility for additional value-add product production and shipments which yield higher margins. Related to my comments on typically or seasonally lower first-quarter shipments in both segments, it is important to note that our first-quarter shipments are historically only 23% to 24% of the annual outlook and our fourth-quarter shipments are typically 26% to 27%, depending on portfolio changes. Coming off the strong fourth-quarter 2025 shipment levels, the first quarter of 2026 was mostly in line with our expectations even if consensus analysts projected higher. First-quarter net income attributable to Alcoa Corporation was $425 million versus the prior quarter of $213 million, with earnings per common share increasing to $1.60 per share. The sequential improvement reflects realized aluminum prices and a favorable mark-to-market change on the Ma’aden shares. These impacts are partially offset by the net unfavorable sequential impact from non-recurring items in 2025 including CO2 compensation recognition in Spain and Norway, the reversal of a valuation allowance on deferred tax assets in Brazil, and a goodwill impairment charge. On an adjusted basis, net income attributable to Alcoa Corporation was $373 million, or $1.40 per share, excluding net special items of $52 million. Notable special items include a mark-to-market gain of $88 million on the Ma’aden shares due to an increase in price during the period. Adjusted EBITDA was $595 million. Let us look at the key drivers of EBITDA. The sequential increase in adjusted EBITDA of $68 million is primarily due to higher metal prices, mainly driven by increases in LME and the Midwest premium, partially offset by lower sequential shipping volumes in both segments. The Alumina segment adjusted EBITDA decreased $52 million primarily due to lower alumina prices and lower bauxite offtake margins, partially offset by the non-recurrence of a fourth-quarter charge related to the announced agreements with the Australian federal government to further modernize the mining approval framework. The Aluminum segment adjusted EBITDA increased $174 million primarily due to higher metal prices and lower alumina costs. These impacts were partially offset by the non-recurrence of CO2 compensation in Spain and Norway recognized in the fourth quarter, lower shipping volumes including the impact of inventory repositioning which deferred EBITDA recognition on 30 thousand metric tons to the second quarter, and higher costs associated with the San Ciprián restart. Other costs outside the segment were unfavorable $54 million sequentially, primarily due to unfavorable intersegment eliminations. Moving on to cash flow activities for 2026. We ended March with a strong cash balance of $1.4 billion despite consuming cash as we typically do in the first quarter. The $595 million of adjusted EBITDA generated in the first quarter was mostly offset by an increase in working capital. The seasonal working capital build resulted from lower accounts payable, inventory replenishment, and higher alumina inventory due to shipping delays at the end of the quarter and an increase in accounts receivable primarily on higher metal prices. On a days basis, the working capital increase is consistent with prior years and is likewise expected to decrease as we move through the year. Capital expenditures were $119 million which reflect our typical trend of lower spending in the first quarter. We maintain our 2026 outlook for capital expenditures. Environmental and ARO payments were $85 million, which include progress on the Kwinana site remediation. Net additions to debt reflect short-term borrowings related to inventory repositioning, which will be repaid when the sale of the inventory is recognized in the second quarter. Now let us take a look at the key financial metrics for the first quarter. Return on equity through the first quarter was 21.9% reflecting a strong start to the year. During the quarter, we returned $27 million in cash to stockholders through our regular quarterly dividend. Free cash flow was negative $298 million for the quarter, primarily reflecting seasonal working capital build, capital expenditures, and environmental and ARO payments, offsetting the quarter's strong EBITDA. We finished the quarter with a cash balance of $1.4 billion and adjusted net debt of $1.8 billion. As announced on April 14, the company issued notice to redeem in May the remaining $219 million outstanding on our 2028 notes. The notes will be redeemed at par value. This announcement is aligned with our goal to delever and further strengthen our balance sheet. We will continue with disciplined execution of our capital allocation framework where excess cash will be evaluated in competition between value-creating growth opportunities and additional returns to stockholders. Now let us turn to the outlook. We have two updates to our 2026 full-year outlook. Interest expense will decrease slightly to $135 million with the redemption of our 2028 notes in May. Additionally, our estimate for environmental and ARO payments has increased to approximately $360 million, up from $325 million, to reflect the cash requirements from the announced agreements to modernize the mining approvals framework in Australia. For 2026 at the segment level, Alumina segment performance is expected to be unfavorable by approximately $15 million due to lower price and volumes from bauxite offtake agreements, and higher energy prices, primarily diesel, associated with the Middle East conflict. Aluminum segment performance is expected to be favorable by $55 million due to inventory repositioning actions taken in the first quarter, higher shipments and product premiums, and lower production costs due to the completion of the San Ciprián smelter restart, partially offset by seasonally lower third-party energy sales. Based on recent pricing, we expect second-quarter benefits from higher LME and Midwest premium pricing as well as higher shipments, but this results in higher Section 232 tariff cost on our Canadian metal imported to the U.S. We expect tariff costs to increase by approximately $35 million. Alumina costs in the Aluminum segment are expected to be favorable by $20 million. Regarding intersegment profit elimination, any further decrease in API prices is estimated to result in no intersegment profit elimination. If API increases, our prior guidance applies. Below EBITDA within other expenses, 2026 included favorable currency impacts of approximately $30 million, which may not recur. Based on last week's pricing, we expect the 2026 operational tax expense to approximate $110 million to $120 million. Now I will turn it back to Bill. William F. Oplinger: Thanks, Molly. Let us begin with the Alumina segment dynamics. The current environment remains challenging with the Middle East conflict exacerbating margin pressure across global refineries. FOB Western Australia alumina prices stayed relatively weak through the quarter. At the same time, disruptions tied to the Middle East conflict, including the closure of the Strait of Hormuz, have pushed energy and freight costs higher, while related demand losses are weighing on refinery margins outside of China. Our alumina cost position provides resilience in a low-price environment, and we have insulated ourselves from spot energy volatility through long-term contracts and financial hedges. In China, pressure on margins has been more muted. Higher domestic alumina prices, lower bauxite costs, and stable coal pricing, largely unaffected by the conflict, have supported refinery margins. That said, we do expect costs to rise as the caustic market tightens and higher freight costs begin to flow through seaborne bauxite supply. To date, in 2026 roughly 4 million metric tons of annual refining capacity has been curtailed in China. With cargoes originally intended for Middle East smelters rerouting into China, we expect pressure on China prices in the near term. Forthcoming supply from new refinery projects in coastal China and Indonesia, along with the weaker demand from Middle East smelters, will continue to weigh on the global alumina market through the first half of the year. Finally, on bauxite, prices remained weak through the first quarter on ample Guinea supply. Elevated freight rates related to the Middle East conflict have lent some support to CIF China pricing, despite soft FOB levels. And the market is now closely watching Guinea's export policy for the next directional signal. Now let us look at the conflict in the Middle East and why it matters to the Alumina segment. The Middle East is the largest alumina importing region in the world, with supply routes for raw materials heavily dependent on the Strait of Hormuz. Each year, roughly 8.8 million tons of alumina and 6 million tons of bauxite transit through the Strait. That changed on February 27. As a result of the conflict, more than 2.5 million tons of annual smelting capacity and nearly 2 million tons of refining capacity are offline year to date. That is a meaningful disruption to the global system. Alumina refineries in the region are integrated with aluminum smelters. However, approximately half the region's bauxite requirements are imported from outside the Middle East. This structure leaves the regional aluminum system particularly exposed to shipping disruptions and logistical constraints. And it does not stop at bauxite and alumina. Several smelters in the region also rely on imported anodes, calcined coke, and coal tar pitch. With transit through the Strait restricted, those materials are harder to move, raising costs and increasing uncertainty. Given the Middle East's important role in global green petroleum coke exports, these disruptions are already rippling through the global calcined coke market. The takeaway is clear: structural dependencies in the Middle East mean that disruption there does not stay local. It moves quickly through the aluminum value chain, tightening supply, increasing cost volatility, and elevating risk well beyond the region itself. Let us now move on to aluminum. LME prices rose approximately 10% sequentially and have continued to increase, recently exceeding $3,600 per metric ton, driven by tight inventories and supply disruptions. Announced curtailments have already tightened the 2026 balance; any further disruption in the Middle East has the potential to constrain supply even more. And that matters because the Middle East is the largest primary aluminum exporting region in the world. Disruptions to metal flows from the region are not only lifting LME prices, they are also driving higher regional premiums across Europe, North America, and Asia. Higher oil prices and the resulting impact on raw materials are increasing production costs globally. But importantly, these cost pressures have been more than offset by higher aluminum prices. For Alcoa Corporation, our exposure to spot electricity prices is less than 1% of our electricity consumption, thanks to our long-term power contracts and financial hedges. That gives us real margin advantage in this environment. These disruptions are occurring when the market was already tight following the announced smelter curtailment in Mozambique and disruptions in Iceland. Aluminum inventories were already at historically low levels, and have been further exacerbated by the disruptions in the Middle East. We expect global demand to grow sequentially this year driven by ex-China markets, albeit at a slower pace than previously anticipated as the conflict poses downside risks. However, given the scale of supply disruptions, softer demand will be outweighed by supply impacts in the market. Underlying market conditions remain largely consistent, with packaging and electrical markets leading demand growth while automotive and construction remain soft. Most importantly, our core regions, North America and Europe, remain in substantial deficit and are particularly exposed to potential supply disruptions due to their strong reliance on imports from the Middle East. Turning to our quarterly highlights, value-add product volumes increased sequentially alongside a rise in customers reaching out to us across both North America and Europe as they look to domestic supply in the face of ongoing disruptions and heightened supply uncertainty. North America and Europe are meaningfully exposed to Middle East supply, particularly for billet, slab, and foundry products. In North America, roughly half of imports come from the Middle East. In Europe, reliance is even more pronounced in certain value-add products. Since the escalation of the conflict, regional premiums have moved materially higher. In North America, foundry and billet markets are experiencing an uptick in spot demand as customers look to backfill Middle East supply. Similarly, in Europe, demand for billet, slab, and foundry is increasing, supported by the same driver. The full impact of the supply reduction has not yet been felt by North America customers since most of the aluminum manufactured before the Middle East conflict is just reaching North America now. Overall, the current environment reinforces the value of secure, diversified supply and highlights the strategic advantage of Alcoa Corporation’s regional footprint and ability to serve customers in our key regions with both primary metal and value-add products. Let me step back and connect the dots. In volatile markets, it is easy to focus on the headlines. At Alcoa Corporation, value creation starts with disciplined execution anchored in safety and operational strength. And that discipline is paying off. First, safety. We are driving a step change in our safety culture across the company. By reinforcing critical risk management and increasing leaders’ presence in the field, we are focusing on learnings and ultimately getting ahead of incidents. This is more than doing the right thing; it is also about operational excellence and reliability, resulting in long-term value. Second, license to operate. In Australia, we have advanced our mine approvals with confidence. We have completed responses from the public comment period, and we are working constructively with the WA EPA and the timeline remains unchanged. Longer term, the strategic assessment will provide a clear pathway for operations through 2045. And in Brazil, our partnership with government continues to support communities through social services and health care programs. This is how we build trust, and keep it. And finally, execution. ABS is delivering value every day. Disciplined execution, clear leadership, and accountability are embedded in how we operate. That integrated performance framework is driving productivity, supporting full-year financial targets, and helping us adapt quickly even in times of disruption. Here is the bottom line. A safer workplace, a stronger license to operate, and disciplined execution—that is how we create long-term value. Let me close with a simple summary. Execution matters, and we are delivering. In the first quarter, we got important things done. We strengthened safety, delivered strong operational performance, and stayed agile in the face of disruption in the Middle East, all while continuing to support our customers. We safely completed the San Ciprián smelter restart, and we proactively managed the balance sheet by issuing notice to redeem our 2028 notes. This is disciplined execution in action. As we look ahead, our direction is clear. We remain relentlessly focused on safety, stability, and operational excellence. We will continue to be a trusted supplier of choice, supporting our customers even in times of disruption. The message is straightforward: consistent execution and steady progress on our strategic priorities. This is how we create long-term value at Alcoa Corporation. We will now open the call for questions. Operator, please begin the Q&A session. Operator: Thank you. We will now begin the question and answer session. If you are using a speakerphone, please pick up your handset before pressing the keys. When called upon, please limit yourself to two questions. Our first question will come from Carlos De Alba with Morgan Stanley. Please go ahead. Carlos De Alba: Yes, hello, Molly and Bill. Thanks for taking the question. The first one is maybe can you comment on what is the impact of the Middle East smelters reducing operating rate for your cost alumina shipments. I think around 30% of your annual shipments go to that region. So it would be great to get color on how you are handling that. You kept your volumes unchanged for the year, but presumably you are redirecting shipments to Asia or other regions. Any impact on profitability or margins as you do that? And just to confirm, as you redirect these shipments to China, does the API pricing remain, or would you be changing to a different pricing mechanism? And any progress on the gallium project in Western Australia? William F. Oplinger: Carlos, thanks for the question. We are working with our customers to redirect those shipments. As you said, we held our full-year guidance consistent with where we were in January, and we are working with those Middle East customers who continue to take the product to redirect it. That is being redirected, as you mentioned, mostly into Asia, largely into China. There are no direct impacts on profitability from the redirection itself. Obviously, our profit in the alumina market is impacted by API pricing, and API pricing has declined, so our profitability in that segment follows the impact of API pricing, which you have sensitivity to in the back of the deck. But no impact other than that. And to your pricing question, we still price based on API. On the gallium project in Western Australia, we are making progress. We are continuing to work with the major stakeholders, which are the Japanese government, the Australian government, and the U.S. government, to finalize the documents. I am confident that we will progress the gallium project successfully. Operator: The next question will come from William Peterson with JPMorgan. Please go ahead. William Peterson: Yes, hi, good afternoon. Thanks for taking the questions and strong execution navigating everything that is going on right now. Within the second-quarter guidance of the Alumina segment, you mentioned that there are some unfavorable impacts of $15 million due to price as well as higher energy prices. Can you unpack this further—how much is pricing, how much is energy? And maybe stepping back on the cost side, carbon products, freight, and diesel were flagged as driving cost pressure. Where is Alcoa Corporation most exposed on these fronts, and how are you looking to mitigate? And second, you are keeping your production and shipment guidance for aluminum fixed. Do you see any opportunities within your footprint to increase production in light of the shortfalls from the Middle East—Alumar, San Ciprián, other sites—to meet the demand? Molly S. Beerman: Hi, Bill. I will take your question. First, on the Alumina segment guidance, we are going down $15 million—lower price and volumes from bauxite offtake agreements represent $10 million of that $15 million. Then on the energy prices, that is primarily diesel within our mining operations. On raw materials in general, we do not have concerns at this point on supply. Our procurement and logistics teams have done a great job navigating the challenges of the conflict. We only have a small portion of caustic soda that we were sourcing from the Middle East, and that has already been redirected to alternate supply. On the price side, in addition to that diesel price that we talked about, we do expect to have price increases in the second quarter, but because of inventory lags, those purchase prices will not flow through to the P&L until beyond the second quarter. If you look at caustic, we do expect rising prices with the lower petrochemicals processing that impacts chlorine production, where caustic is a byproduct. Caustic is on a five- to six-month lag. Carbon prices are also rising due to higher green petroleum coke pricing and availability dynamics, so we will have some exposure there, but not within the second quarter. We also have elevated oil prices that are impacting our freight. There is a portion of that that will flow through, but it will be fairly small. A lot of the freight cost goes into inventory; again the lag, so that will be experienced a bit later. Then we also have energy exposure within our São Luís refinery. We have some indexed fuel oil there, but we have under $5 million incorporated in the outlook. Even though we did not call it out because it was too small. William F. Oplinger: Thanks, Molly. I would also add to a comment that Molly made. We have had tremendous teamwork with our procurement, logistics, and commercial teams. When you consider the fact that we have a conflict in the Middle East that has massive impacts on shipping schedules, and in addition to that we had a cyclone that was nearly a direct hit in Western Australia, the teams have done a fantastic job of making sure that we do not stock out of anything across our entire portfolio, have ships available for shipping—which is a nontrivial task these days—and get product to our customers. In addition to that, as I alluded to on the CNBC call earlier, we are seeing a lot of spot order requests coming to us based on the disruption in the Middle Eastern supply chain. Both in Europe and North America, our commercial teams have been extremely busy trying to see whether we can match up our excess capacity with what our customers are needing currently. On your second question, we are increasing smelting production at Portland—adding pots in Australia. We are steadily increasing production in São Luís in Brazil. We have completed the restart at San Ciprián, which will have a full second-quarter benefit versus the first quarter. We have a similar situation as in Lista; we have been quietly restarting pots at Lista and getting that back to full production capacity. That is on the smelting side. But probably more importantly, what we are seeing today is on the value-add side. We are matching up some excess capacity that we have in places like Québec and to some extent in Europe with the needs of customers that have struggled given the supply chain disruptions. Operator: The next question will come from Katja Jancic with BMO Capital Markets. Please go ahead. Katja Jancic: Hi, thank you for taking my questions. Maybe just as a follow-up to the commentary about increasing production: I assume that is already embedded in the guide, or how should we think about it? And as a follow-up, I was saying that the upside there will probably be less prime P1020 production and higher value-add production, so higher premiums would be expected. And on San Ciprián, given that it is now restarted, in the current environment do the operations—both refinery and smelter—run profitably? Molly S. Beerman: It is embedded in the guide that we have provided. On your point about product mix, yes, that is right—less P1020 and more value-add supports higher premiums. The smelter is doing very well now that it has completed the full restart. Unfortunately, though, we are continuing to have significant losses at the refinery, and within 2026, the smelter will not generate enough cash flow to cover the refinery’s free cash flow losses. We remain on our plan, we are meeting our commitments under the viability agreement, and we are working toward our objective of achieving a neutralization of our cash flows there by 2027. But at current pricing, the refinery remains very challenged. William F. Oplinger: To tag on to that, the fact that we repositioned metal in the first quarter is looking smarter today than it did even when we did it because of the demand for value-add products. That allows us to free up our cast houses a bit to create incremental capacity for VAP for our customers. Operator: The next question will come from Nick Giles with B. Riley Securities. Please go ahead. Nick Giles: Thanks, operator. Good evening. Obviously, there is a lot of volatility, but Alcoa Corporation has the opportunity to generate a lot of cash in price environments like this, and net debt reversed a bit in 1Q, but you are ultimately nearing your target. How has the impact of the conflict changed the way you are weighing M&A versus shareholder returns? Could buybacks appear less attractive and M&A across refining appear more compelling, just as one example? And second, an update on the monetization of idled sites—if I heard you correctly, I think Massena East is furthest along, with two other sites in the works. Are terms still being worked through on Massena East, and should we assume the highest-value opportunities would be monetized first when we think about your $500 million to $1 billion range across multiple sites? William F. Oplinger: The conflict has not changed our capital allocation framework. To reiterate, first and foremost is to sustain the operations that we have—it is even more important today than it has ever been given the margins in the smelting business. Secondly, it is to maintain a strong balance sheet, and we have a strong balance sheet, but we have put out a range of $1 billion to $1.5 billion of target net debt, so we still have room to get into that. Beyond that, we will balance between shareholder returns and growth opportunities. So short answer, no, the conflict has not changed that, and we will balance those items. On the idled sites, do not assume that the highest value will be monetized first. Each site has a set of parameters to work with buyers on. In the case of Massena East, it is a buyer we have worked with in the past at the site, and that has accelerated the opportunity to sell Massena East. We are still finalizing terms and will provide additional details later in the process, and we are progressing two other sites in parallel. Operator: The next question will come from Daniel Major with UBS. Please go ahead. Daniel Major: Hi, thanks. Can you hear me okay? Operator: Yes. Daniel Major: Great, thanks. First question, just to follow up on how well you are covered with respect to fuel and other energy input costs. You mentioned financial hedges and supply contracts. What is the duration of those financial hedges? Secondly, how much inventory do you hold in Western Australia, in particular in the scenario that supply out of Asian refineries is constrained? William F. Oplinger: Before Molly gives you a more quantitative answer, I want to step back and make sure that everyone listening understands our major exposures to energy around the world. Smelting is electricity intensive, and we have less than 1% of our total electricity needs subject to spot purchases. That is the first and foremost largest energy use and we have a very small exposure to spot. On natural gas, we have rolling natural gas contracts in Australia. In Spain, we have hedged our natural gas exposure for the production that is running in San Ciprián, and we have hedged that out through 2027, which, in hindsight, looks really good given some of the dynamics we are seeing in energy in Europe. On fuel oil, we have some exposure in Brazil, but it is not significant. And lastly, we have diesel exposure, and we have baked our best knowledge around diesel into the second quarter. Right now, we have commitments from our suppliers that we will have diesel through May. I do not know that they have the foresight to be able to commit past that, but at this point we are feeling pretty good about our supply of diesel. Molly S. Beerman: On our energy contracts, 99% of them are on long-term commitments, and they do differ by date as disclosed in the 10-K. A couple of the nearer-term ones: we will have an upcoming price negotiation in Iceland for 2027, and we have our Canadian contracts coming up for renewal in 2029. The others are beyond those dates, and of course we just renewed at Massena recently, so we are set there for ten years plus another two five-year increments. Daniel Major: Okay, thanks. Just to follow up, specifically on the diesel in Western Australia, you have certainty on supply through May—is that what you said? William F. Oplinger: Yes, and just to put that in perspective, we are very focused on diesel in Australia. We would typically have that type of line of sight. I am suggesting we feel pretty confident about our diesel position in Australia. Molly S. Beerman: We are a preferred customer there, so we have a long relationship with the supplier. They know we will be first in the queue. Daniel Major: Okay, that is clear, thank you. And then a follow-up on value-add products: can you give us a breakdown of the $55 million positive benefit in the Aluminum segment? And on shipments versus premiums, what proportion of sales are exposed to the billet premium, and what assumptions have you embedded in the $55 million for premiums during 2Q? Molly S. Beerman: I have some of those details, but not all of them. In the $55 million that we guided favorable for the Aluminum segment, we have about $30 million of benefit coming from the inventory repositioning—actions that we took in the first quarter but that will result in sales in the second. Generally, higher shipments and product premiums together are $35 million. We will have better production cost after completing the San Ciprián restart—that will be about $10 million of the improvement. That is partially offset by seasonally lower third-party energy sales of about $20 million, split between our Warwick power plant resale and our Brazil hydro resales. Daniel Major: Very clear. Maybe just one follow-up. So that $30 million reposition of inventory—that is simply moving the lower sales reflected in 1Q into Q2? Molly S. Beerman: Correct. Operator: The next question will come from Alexander Nicholas Hacking with Citi. Please go ahead. Alexander Nicholas Hacking: Hi, thanks for the call. I apologize if I missed this, but did you quantify the cadence of aluminum shipments as we head into 2Q given the deferrals from 1Q? What should the delta be there? And any update on the Canada Section 232? It seemed like we were making some progress last year, but kind of radio silence—any comments around that? Molly S. Beerman: Alex, of course we had lower seasonal sales in the first quarter, but if we look at what was actually missed related to the Middle East shuffling as well as Cyclone Narelle, it was only about 60 thousand metric tons—on a revenue basis about $20 million. William F. Oplinger: On Section 232, no updates on specific progress. As we go into USMCA negotiations during the course of the summer, we will have to keep an eye on that. Clearly, when the administrations—both the Canadian and the U.S. administrations—talk to us, our position is we would like to see an integrated market across all of North America. That is our position because of the dedicated supply lines that go from Canada straight to our customers in the U.S. So no real updates on any Section 232 changes at this point. Operator: The next question will come from Glyn Lawcock with Barrenjoey. Please go ahead. Glyn Lawcock: Good morning, Bill and Molly. Bill, I just wanted to go back to the mine approvals. Obviously, in your comments, you said there is no change to the timeline, and you have been in discussions with the EPA. Any red flags coming up at all? And maybe just remind us of the timeline—is it still end of this year for approval? As a follow-up, I believe there is another mine move beyond Holyoake and Myara North for the other refinery—is that true, and what timeline does that come through? When would you start to apply for that—two or three years in advance as well? William F. Oplinger: The timeline is still targeting ministerial approval at the end of this year. We have done significant work to ensure that the comments from the public comment period have been replied to. We continue to provide information to the EPA and to work in support of their decision-making process, and at this point, we are continuing to hold to an expectation of ministerial approval by year-end. My recollection is that there is a Larego mine move in the early 2030s that will occur—that will commence in late 2031. We would have to get back to you on the specific timing of the application process for that move. Operator: The next question will come from Timna Tanners with Wells Fargo. Please go ahead. Timna Tanners: Hey, good afternoon, Bill and Molly. I wanted to circle back on some comments that Bill made last quarter about substitution of aluminum for copper. Do you have any observations on that dynamic given the change in prices, and anything you are seeing on substitution away from aluminum given the rise in price as well? And on capital allocation, the last couple of months’ dynamics have changed and potentially a bigger amount of free cash flow—any updated thoughts or any timeframe when you might have updated thoughts on allocation of that additional cash or key uses going forward? William F. Oplinger: Timna, thanks for the question. At a high level, with copper pricing where it is, there are still real reasons to substitute into aluminum. Aluminum prices have gone up sharply in this conflict, but we believe there are still good reasons to substitute into aluminum. On the other side, on the margin, we have seen some small substitution out of aluminum into steel for applications that can do that. But the larger automotive applications—because they are multiyear platforms—we have not seen that substitution yet. And when you consider things like packaging, the alternative is PET, and with oil prices at current levels, PET would not look attractive to substitute for aluminum. On capital allocation, I get excited about getting into our target net debt level. Our leverage ratios are low; getting into that range translates to the lowest WACC, and once you have the lowest WACC, you have the highest firm value. We are paying down debt—as of the April 14 notice—and in cash in the first quarter we did see a large working capital build. We typically see that, and over time working capital should come back out and into cash. So we will continue to delever and get into that range, which, to me, maximizes firm value. Molly S. Beerman: As we look at our outlook for the second quarter and the second half of the year, we see strong benefits in cash generation, and we expect to have growth options that will compete with shareholder returns in the rest of the year. Operator: The next question will come from John Tumazos with John Tumazos Very Independent Research. Please go ahead. John Tumazos: Thank you for taking my question. It is great that the Middle Eastern customers honor the contracts in this period of war and do not allege force majeure. Are you able to help them resell the alumina or redirect the cargoes, or do they do that on their own? How do they do it where the war disrupts about 400 thousand tons a month, and the shutdown of Mussafah disrupts about 100 thousand tons a month of alumina? It feels like it requires great skill. And separately, Kwinana was idled brilliantly a year or so ago—does everything you have now run full? William F. Oplinger: John, up until now, our customers are all honoring their commitments, and we assist them with timing of loading and shipping. If they need flexibility around when ships can be loaded, we provide that flexibility. We will also provide flexibility around size of shipments—if they need larger or smaller shipments, to the best of our ability we will do that. It is a pretty dynamic, fluid situation. Molly and I just reviewed today all of the forward bauxite and all of the forward alumina shipments out of Western Australia, looking at the laydays and making sure that the ships are coming in correctly. Up until now, we have been able to do that smoothly by supporting our customers. Everything we have now is ramping back up to full. Remember we had Cyclone Narelle—it was nearly a direct hit in Western Australia and shut down the gas system to a large extent. We curtailed our sites in Western Australia to conserve natural gas to be used in other parts of the community, and we are now in the process of ramping both Wagerup and Pinjarra back up to full volume. Spain, as we all know, runs at half volume—Spain is there to largely support the smelter restart. And Alumar has had a fantastic first quarter and had a fantastic fourth quarter; on the refinery, knock on wood, the smelter has very good stability. Operator: The next question is a follow-up from Nick Giles with B. Riley Securities. Nick Giles: Thanks for taking my follow-up. Can you clarify how you are thinking about Warrick in terms of a restart? What would it take from here for you to move forward, and do you have any rough estimate for the CapEx requirements? And on February’s significant revisions on downstream trade measures the other week, what are you hearing from your customers—any sensitivity to those changes? William F. Oplinger: Warrick—glad you asked. We talked about restarting capacity in Australia, the ramp-up in Brazil, ramping up capacity in Lista, and we just completed the ramp-up at San Ciprián. So you should be asking about those 50 thousand tons at Warrick. First, the condition of the curtailed line at Warrick is pretty poor. It will require about $100 million of capital, and we think it will be one to two years for that restart. There are some long lead time items, specifically around the electrical equipment, required to restart Warrick. On paper, the restart looks positive at this point. However, we are weighing availability of short-term and long-term electricity, and our ability to successfully run that plant at a four-line operation safely. If you have followed us long enough, you know we were running five lines, went down to three lines, ultimately went down to two lines, and restarted back to three lines. We have good stability and good safety there today, and we will factor all that into an analysis of a potential restart of that fourth line. On the downstream trade changes, my understanding is they allow downstream customers in the U.S. to have a level playing field with imports, and that has been favorably received. Operator: This concludes our question and answer session. I would like to turn the conference back over to Mr. Oplinger for closing remarks. William F. Oplinger: Thank you for joining our call. Molly and I look forward to sharing further progress when we speak again in July. That concludes the call. Thank you. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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