Chocoladefabriken Lindt & Sprüngli AG

Welcome to the presentation of the full year results 2024 of the Lind and Springly Group. I hope you had a good arrival here. I understand that half of you made some personalized gold bunnies. Is this true? I hope you had fun. It is our Chocolateria, which is very popular here, also with the visitors of our home of chocolate. And I can see that not only children are having fun with decorating chocolate and producing some nice gold bunnies. Well, I will dig into the agenda. I will tackle shortly the highlights of the 24 results. Then I will address the regional performance of the group. Then I will hand over to Martin Hug, our CFO, for the financial results in detail. and an outlook on the sustainability progress that we made. Then I will give you a short outlook for our future guidance. And then we are here for you, two of us, for a Q&A session. First of all, let me say that we are super happy that we can present good results for a year, which was really in a challenging environment. And I think you have all pursued what was going on in the chocolate market with an ever-increasing cocoa price. It came down nicely. Everyone expected that this would continue. And then to all of our surprise, it didn't. inclined again and is at record levels at the moment. So in this surrounding to achieve the results that we present is really a demonstration of the dedication and the resilience of our teams and I'm grateful for this. You know that we have a very experienced team out there. We have huge continuity in our management and I think this pays off in a year like this. 7.8% organic growth was published already in January. 16.2% EBIT, a 16% point increase in a year with dramatic impact from raw material prices, I think is an achievement. We are proud that volume was growing substantially. The volume mix in this case is even slightly misleading because we had a negative mix in this year, so our volume was growing even stronger than the 1.5%. And an improvement in free cash flow for more than 30% also shows that we navigated pretty well through this challenging year. We also made substantial improvements in our sustainability efforts. 84% of our COCOA is sourced through sustainable or responsible sourcing programs. An improvement of 12 person points. 82.2%. of all raw materials, including packaging material, is sourced by a responsible sourcing program, an improvement of 24 person points. And for all of these, we were awarded by the most reputed auditing company for ESG programs, EcoBodies, with a silver medal. So we find ourselves within the top 1% for sustainable procurement in the industry. 91.4% of our packaging is already designed to be recyclable today, so here we are ahead of our target, but we will not stop and we will continue to change packaging material to be recyclable. What are the global chocolate market developments and trends in 2024? We saw volumes decline by 3% globally. With the price increases, the value increased in the area of 4%. We outperformed the market in both dimensions, so we were gaining market share in volume and in value, actually being the only big chocolate company with a positive volume performance, also in the off-tech figures. Next to us, the big winner was Private Label. So we see two behaviors from consumers, those who are really burdened by the high prices and say, I migrate to private label, or those who decide and say, I will consume less and go for better quality. This is an ongoing trend. I explained before in individual talks, it's with the aging population, with the increasing middle class in many economies, we see an ongoing premiumization in the market. The cocoa price inflation, you all know what is driving this inflation. It is, on the one side, weather phenomenons. It is the climate change in general, you can say. So we see more droughts or more heavy rain occasions, which are not good for the plantations. And at the same time, we have a disease, a virus disease, the swollen shoot disease, which is spreading continuously in West Africa and is impacting the crops. that are achievable. So therefore the worldwide crop has substantially decreased and we had three years in a row with a deficit. And for this year, the predictions are varying between a slight deficit or a balanced supply and demand. We will see, in any case, the prices are sky high. These are really record prices. We expect in the mid-term a correction of these prices. In our opinion, it is too high. Probably it will not come back where we have seen it historically. You know that the prices have more or less tripled from the area of $2,000 up to $6,000, in the peak even $8,000. So we think somewhere in the middle it should be a fundamentally right level of the cocoa prices. I mentioned the ongoing premiumization, more mindful indulgence going together with an increased health consciousness. We play in all these roles with our premium products. We have products with high cocoa content which cater to this health consciousness and in general our products are not made to be consumed unconsciously in big quantities but it's really the small moment It is this treat or a gift product that you mindfully buy. Sustainability awareness is also increasing, and I think we are proud that we are on a good track here. Let me get to the regional performance. The biggest area, of course, still Europe. where our brands are established for decades. We have enjoyed very high market shares here and still demonstrate that we can grow nearly double digit in a very mature market with mature market shares. Our brands are well established. We have this strong retail and direct to consumer channel that contributes to grow our brand equity. At the same time, we are heavy spenders also behind our brands, and we did not cut back on the spendings behind our brand. So this all adds up to this nice performance of 9.5% in Europe. On the other hand, in North America, 39% of our total business, we were disappointed, to be honest, with 5% growth. It is, and Martin will explain it, if we deduct some one-time impact, it would be a 6% growth rate, but still this is below our expectations. Why? We have lower market shares in the U.S. We operate with three brands that are complementary in their portfolio, and we have seen double-digit growth throughout the last years. What happened? The market softened dramatically. We saw a decline of volume of 5%. in the US with a stable value growth, so there was no growth. The year before, the market was growing nearly 10% and this swing from 10% growth to zero, we also saw in our performance from a 14% down to 5%. Coming to the smallest segment, which is rest of the world, It stands for 13.2% in our portfolio, but it represents more than 30% in the global chocolate market, so we have a huge potential here. It is supposed to grow stronger than all the other segments, and it did with 10%, but it's also below our midterm plans, and we hope to get back on track in the years to come. Let me dive a bit deeper into Europe. Starting with Germany, Germany really saw a swing from traditional trades to hard discounters. That was the migration, how consumers tried to avoid the burden of price increases, etc. And despite the fact that we are not represented, purposely and consciously not represented in hard discounters, we managed to grow in line with the market. and kept our high market share in Germany, so this 5.6% in this environment is a good result. A tremendous result we enjoyed in France, where we enjoyed the highest market share growth in the whole group. The reason behind it, we are market leader in dark chocolate in France. They produce also most of our excellence, high cocoa rate chocolates. And they grew double digit. We, as a whole group, grew double digit with our excellence tablets. And so with a 12.3% growth, France is really an outstanding result. A similar story we experienced in the UK. The UK established the HFSS regulation two years ago, meaning that high-fat sugar and salt products were restricted in marketing, so no more placement in the entrance area, no placement in the checkout area. And everyone was really concerned that the categories would suffer massively. And of course, also us as a premium player, fact is that this is the second consecutive year where we grow double digit in the UK. So obviously not only our team managed to mitigate the risk of all these restrictions, but also consumers, as I mentioned before, tend to eat less but of better quality. And this trend is clearly to be seen in this figure of nearly 16% growth. Coming to Italy, 4.6 looks a bit weaker, but also here in modern trade, we defended our market share. But in Italy, we have a very strong position with Cafarell and with Lind in traditional trade. And traditional trade, unfortunately, has a negative trend. So many of these smaller stores are closing, don't find successors. And for this, also the 4.6% in Italy is a good result. defending, as mentioned, our market share. Switzerland, 6.8% growth, also in line or above the market average, benefiting also from the strong retail division that we have here. We benefit from tourism in Switzerland, which is getting back to levels that we have seen before the pandemic. So also a very, very encouraging result in the market that I have to mention with the highest market share in the world. So we have nowhere outside of Switzerland a higher market share and still we were able to grow nearly 7%. A real success story is CEE, Central and Eastern Europe. It is Poland, Czechia, Slovakia and Hungary. Here we could double our sales figure since 2020. So in four years, we could increase our market share significantly. And this is a story that is continuing now already for many, many years. Iberia, nearly double-digit growth. Austria, 8.5, far above the market average. Nordic, Benelux. So in all these markets, we performed pretty strong. Let me come to North America. Ghirardelli with a 9.4% growth also pretty strong in a weak market. Lindt US more or less in line with the market performance. Both brands growing strongly market share. as they also had a good performance in volume. Russell Stover, we had some issues with the price increases. And in addition, Russell Stover is still streamlining its portfolio, which also contributed to this result. But I would like to remind you that in the last three years, we had two years with a significant growth. This was the first year with a decline. If we add up the three years, we still are up 10%. versus 22, so that's also, or versus 21, that's also a good and encouraging result for Russell Stover. Canada, 6.8% in line with market, and Mexico, 9.3% ahead of market. We made progress, but our ambitions are clearly higher. We opened a store in New York City, the first store of Ghirardelli. If you have ever the opportunity to travel there to your headquarters or to your As I understand, you're all coming from big banks. So visit the Empire State Building in the ground floor. You'll find a nice Ghirardelli store, and you can enjoy your hot fudge sundae on the roof garden with a nice view. Rest of the world, as mentioned, the smallest of our regions with a 10% growth. We enjoyed a nice growth in Japan, 25%, Brazil, 18%, China, 17%. Also global travel retail, where we are market leader in the duty-free sectors of all international airports. We had a tough year in Australia, which is a big part of this region. I think we mentioned it already at the half-year presentation. The biggest customer in Australia did not accept our price increase. This is why we sustained promotions for several months until we solved the issue, and the result is a very weak growth of 2.5%. The same happened to the distributor business. Some of the distributors were hesitant to pass on the price increases we had to implement and also therefore a slightly lower sales growth than we would like to see. Direct-to-consumer business getting more and more important. Again, a year with significantly overproportional growth of 16.7%. And very important to mention a like-for-like growth. We call it com store growth of 7.6%. which substantially contributes to the increased profitability of this channel. And in addition, an expansion of 45 new stores that added up together to a 16.7% organic growth. 21 e-shops with double digit growth in additions. Here, we put a lot of effort to expand even more aggressively. We opened our first stores in Chile. We have a plan there to open quite a number of stores in Mexico, New Zealand. Then we roll out our loyalty program, MyLint, which gives us access to first-party data. Very important to understand the behavior of our consumers, not only for the retail division but also for wholesale, and also to state here it's clearly a unique feature that Lindt has versus other chocolate manufacturers, that we have a strong direct-to-consumer business and also a very close contact to our consumers in their own channels. We see an ongoing trend toward gifting and personalization that we can perfectly play, of course, in our own retail channels. With this said, I hand over to Martin Huck to give you a presentation on the financial results.

Thank you, Adelbert, and a warm welcome from my side. You probably have noticed all the seats are sold out here in Kilkberg. It's really great to see so many of you here in Kilkberg, and then as well a warm welcome to everybody who is attending this conference online. So I will start with a quick overview of our key financials, and I think the good news is basically we have either met or exceeded all our expectations. guidance is. Organic growth was 6 to 8. We have achieved higher end of the 6 to 8 at 7.8, mainly driven by Europe. As you have heard, then the EBIT margin, you have clearly exceeded, right? We're coming from 15.6, going to 16.2, so that's a 60 basis points improvement, which I think is a really good result in a very difficult environment. You shouldn't forget that, right? Cocoa bean prices are going through the roof, and I think it's really good to see that we have executed well in terms of managing this situation. Free cash flow is also at the record level of 635 million. I should add here actually, I don't know if you have noticed, that we had also a positive variation margin of 230 million, which is actually not included in the free cash flow number, right? So excluded 230 million. We have shown this in our alternative performance measures. So excluding this 230 million plus positive unrealized gain, we came in at 635 million plus 33%. We have a record new earnings per share of 2,917. I will show you later that's actually massively up compared to 2021, plus more than 40% compared to 2021. And net debt came in better than one year ago at $882 million. And I would say despite the share buyback that is running, and I think we have actually accelerated the share buyback in quarter four, the current share buyback, we have Bought back 300 million Swiss francs in total in 2024. So despite that, we are coming in with a much better net debt. And the net debt compared to the EBITDA is at 0.75. So still well below the 1, which is good. Organic sales. Basically, we had three years of double-digit close, 13, 11, and 10%, and now 7.8. Compound, including 2020, we are at almost 7%, which is right in the middle of our guidance of 6.8, including the COVID year 2020. Then in Swiss francs, we are achieving a total of 5.47 billion, and when we compare this Again, with 2021, I think it's the best base of comparison, not 2020, but 2021, we have added almost 900 million in sales, even though the Swiss franc strengthened basically each single year compared to the major currencies. The same happened again in 2024. And therefore, our growth was 5.1%. We had a negative currency impact of 2.7%. As Bertel already said, Volume mix in this very difficult environment was positive at 1.5 and it was actually driven by volume because mix was negative, slightly negative. So the pure volume performance was even better than the volume mix. And price came in at 6.3%. We have already mentioned this morning and also in the past that there are further price increases planned in 2025. It's difficult to say what the exact number is because it's kind of... Some of the plans have still to be decided in terms of promotions, etc., but we anticipate a double-digit price increase also in 2025. From a sales analysis point of view, Europe has been really the key driver. I mean, we have seen double-digit growth in the UK and France, very important markets, also in Czech Republic, in Poland, and in Benelux. And then in all the other European markets, we have grown between mid and high single digits, which I think is also a very good performance, considering that we have very high market shares in Europe. North America came in at 5%. We could exclude now this one-off effect by Easter, by the very early Easter in 2024. So without that impact, our growth in North America would have been at 6%. And that is actually considering a flat chocolate market. So in value in the U.S., the chocolate market was flat. In volume, just between minus 5 and minus 6 percent. So we outperformed the market by between 5 and 6 percentage points in North America. And you could argue the same in Europe, right? In Europe, we grew 9.5 and the market grew around 3 percent. So, we also outperformed the market by about six percentage points. So, in comparison to the total market, the performance in Europe and in North America has been very similar. Rest of the world at 10%. Going forward, we want to accelerate that. Australia brought some challenges with regards to the price increase implementation. I think we are particularly proud of the performance in Japan, in China. Again, China, super difficult environment, right, for fast-moving consumer goods in 2024. We grew double-digit in China. And then also in Brazil, we have successfully rolled out the wholesale model in Brazil, coupled with our successes in retail and opening more stores. Moving on to costs, no surprise. Material costs are going up by $200 million. Probably even more importantly, when you look at the ratio, it was more or less at 33% over the last three years before 2024, and it now went up to 35%. So in other words, we were not quite able, either by strategic choice or because of market conditions, to completely hand over or pass over the entire increased material costs through prices. We actually lost here 200 basis points. But I personally think, considering that the cocoa market has gone up so far, it made sense to do this kind of step-by-step price increase and also protect volumes and protect, at the end of the day, our total value growth. Cocoa bean price has been the big kind of volatile factor. It has made us all a bit nervous, of course. The total industry has been a bit nervous. You can see here that it started... sometime in 23, actually, the increase. I mean, if I showed you this chart for the last 20 years, it would be really flat at about 2,000. Then it started to go up in 23. And then it started to really go up in 24. And in 24, on top of it going up, you had a lot of volatility. So you can imagine that this kind of caused a lot of nervousness. We had another hike from October up to 8,000 or even above 8,000 in London. And then now in the last few weeks, it has come down again to about 6,000. And actually the month relevant for us, they are even below 6,000, right? Because it's probably from December 25 that is relevant for us into 26. So it is somewhere between 5,300 and 6,000 right now, which is still a tripling of the cocoa bean futures for us, right? So it's three times higher than it was in the long-term average. You should also bear in mind when you look at this chart, The 2024 P&L, normally you buy the cocoa in 2023. I mean, just simplified, right? A lot of the beans that we use in 24, we kind of price fix them in 23. So I think on this chart, it becomes very clear why the chocolate industry will go up further with price increases in 25, because you have to buy cocoa in 24 for 25. So whatever you did in 24, be it us, be it our competitors, Most likely will not be enough because it has gone substantially up in 24 versus 23 in terms of the cocoa future price. On the other side, cocoa butter ratios have come down, right? They were at more or less 3.3 in October last year, and now it has gone down to more or less 250. So this does not tell you the whole story. It tells you the story on cocoa beans. It does not tell you the story on cocoa butter. So slight improvement with regards to prices on cocoa butter. In terms of personnel expenses, we have some leverage here. It has decreased to 19.5%. Some reasons for this are the price increases, which have been higher than the wage increases. We have had very nice growth over the last four years. Three years double-digit, now 7.8%, so that brings some operating leverage. Then we have had successful projects to drive efficiency in the factories and across the organization. So there's really quite a few drivers of this improved ratio. And it has actually come down by 200 basis points when we compare it versus 2021. So I think it's a significant improvement here in the last four years. Operating expenses, that's a mixed bag. I mean, we have in here advertising, for example, brand support. That went up, actually, in dollars or in Swiss francs, so an increase in brand support. Absolute. We have in here supply chain costs, like logistics. I mean, we have had a huge benefit there. I mean, you remember that in the U.S., we actually combined the logistics between the three companies there a few years ago. And a lot of the benefits are still coming in from that. And then you have other costs in here, like maintenance, repair, et cetera, et cetera. The total cost has remained flat, as you can see, $1.4 billion. but an improvement of 140 basis points. I'm anticipating that this ratio will go further down in the next years, even though we will continue to improve or to increase our support levels in advertising. Depreciation has also come down in percent from 2021 from 6% to 5.4%, even though the total amount has gone up to 297 billion. And that's also something I've been speaking about in the last two years, so it shouldn't come as a surprise to you. I've always said CapEx is above 300 million, so sooner or later depreciation catches up with the average CapEx. So we are now getting closer to the CapEx of above 300 million with regards to the depreciation. But with regards to the ratio to sales, I'm also expecting that to come slightly down over the next years. Operating profit came in at a new record of 884 million, so we are roughly at plus 70 million, plus 8.7%. The driver for that, I would say, okay, from the regional point of view, it's obvious. I mean, the key driver is North America. It would have been nice even to show you the last five years in North America, starting in 2020, we're actually at 5.8% EBIT margin in 2020. Okay, you can now say this was a COVID year, fair enough. So in 2021, we were at 8%, or 7.8. So we have increased more than 500 basis points. We have increased the EBIT margin in North America by more than 500 basis points since 2021. So I think that's a very nice improvement. And we have announced it. I mean, we said our goal is to increase the EBIT margin by 50 to 100 basis points per year. And we have delivered, I mean, even slightly more last year. This is the key driver. In Europe, we have been flattish to slightly positive. I think a good performance, right? 10 points more from 19.2 to 19.3 at the high level. And then rest of the world, we have invested strategically behind the brands. We have built up organizations like Chile, et cetera, et cetera. It's a planned decrease of the EBIT margin in the rest of the world with the goal to really accelerate growth in that area, which is 30%. So it's a big chunk of the total chocolate market. It's 30% of the chocolate market. EBITDA also positive, the third time in a row, above 1 billion, plus 8%. The tax rate is at 21%, probably slightly lower than what we would have anticipated, but it's more or less aligned with the average over the last years. In 2023, we had a special one-off effect driven by the Swiss tax rules. So we had a 70 million benefit. So we are showing this here just so it's clear what was happening. So actually, the right comparison was the 23.6%. Net income also increasing by 11.8% if we exclude the 70 million, which I again think is the right basis. And oftentimes for these numbers, it's even better to look at the longer term. So compare it again versus 2021, and we are up by 180 million, which is a very good achievement, I think. CapEx at roughly 6% of revenue. That's also our guidance for the midterm, right? 6% of revenue CapEx. On average, it can be one year a bit higher, one year a bit lower. But assume more or less 6%. I mean, the big projects in the last couple of years were surely the Cocoa Mass facility in Switzerland, in Olten, which we have built out and expanded. And then secondly, our manufacturing in the US, in New Hampshire, which we have also expanded with regards to capacity. Free cash flow. I would assume this is one of the key highlights also for you. It surely is for us. I mean, that's something we have really been working on a lot, a lot of hard work. from lots of the colleagues, also in the subsidiaries. And we have increased free cash flow by 33%. We have a very strong operating cash flow on the one hand. If you look actually at the operating cash flow, always consider that the 230 million is in the operating cash flow, because following IFRS, we have to show it in there, this variation margin, the positive 230. But we have then excluded it here from the free cash flow calculation, just to give you a real picture. Didn't want to show us including 230 million because this is an unrealized game that we will actually not really realize, especially when the market comes down. So excluding that, we are still at plus 33% and 635 million. Networking capital management has been very successful. We've decreased inventories because especially on cocoa beans, we had a very long inventory one year ago, longer than you would normally have. with the intention to avoid any supply risks. And we have now been able to bring it down again to, let's say, a level that makes sense. And then on accounts payable, we have also had some successes. Non-diluted earnings per share, 2917. Again, for 2023, I assume that you would probably exclude the 300 one, which is driven by the tax benefit. Again, probably even a better picture when we look at this over the four-year period, coming from $2,000 to almost $3,000. So it's 42% or 44% improvement over the four years, which I think is very good. And then net financial position is coming down, which I think especially the bond analysts in here will be very happy about. And free cash flow and shareholder return was in line, more or less, with $630 million. We had the capital increase of $160 million. And most importantly, EBITDA multiple is 0.75 times, which is well below our maximum target, so to speak, of one. Equity ratio also high. When you compare this one with peers, it is still above 50%, 52.8%. It has come slightly down because of the share tax, but we still feel very comfortable about this level of equity. Also combined with the liquidity and the liquidity reserves, we are in a very comfortable situation with regards to our balance sheet. Then on the shareholder return, we have increased the dividend for the 30th time in a row. We are planning to increase it. It has still to be approved by the AGM. We are going up by 100 to 1,500. That brings us to a dividend yield of 1.5%. And payout ratio probably is 50%. We are now even slightly higher at 52%. And yes, I think going forward, the payout ratio goal is still at 50%. Then the market cap as per end of 2024 is 100,000 as the registered share price was at 23.3 billion. If you took today's value, of course, it has gone up. And it would basically be at the second highest level since 2021 as per today. So that's, in a very short summary, our financials. A few words about sustainability. Sustainability is a very important strategic pillar for our business. It is actually a driver of business value. As a chocolate manufacturer, cocoa is our most important ingredient, of course. And I'm just giving you a few highlights around cocoa here. So we joined in 2020 for the ICI, the International Cocoa Initiative. that will really support our collaboration within the sector to tackle child labor. We have also engaged ICI to redo our child labor monitoring and remediation system in West Africa to make sure that we are really best in class. We have improved our traceability systems. We had to improve our traceability systems further because of EODR. EODR has now been postponed by one year. Deforestation regulation has been postponed by one year, but we had to be ready basically in January 2025. We introduced Rainforest Alliance as a certification. We started a living income program, design of a living income program for 5,000 farmers. This is a pilot to be rolled out by 2027. And we also initiated an agroforestry program in Ivory Coast, which will help our emission targets related to science-based targets. Some farming program highlights. We have seen some of the numbers already. 84% is at the moment the number in 2024 with regards to sustainable cocoa. We will get to 100% in 2025. We have spent more than 33 million behind those programs in 2024. To give you a few examples of investments that we have done as such, or spending that we have done, we have built more than 250 drinking water systems in West Africa. We have built 75 schools. We have worked with almost 12,000 individuals on income-generating activities. So you can think about alternative crops. We help them to build so they don't depend only on cocoa. We have actually worked with more than 65,000 farmers since the initiation of the system on this specific point, on this income generating activities. And more than 115,000 farmers are part of the farming program as of 2024. So you can see this is really a huge program, right? More than 100,000 farmers participating in the program. So maybe just a quick update also with regards to science-based targets. In 2023, we started a project. At the end of 2023, the SBTI, so the SBT Initiative, which is an organization, approved our mid- and long-term targets. In 2024, we started to really work on getting our emissions down. We worked with all our subsidiaries. They submitted their plans. So in scope one and two, which is actually everything that happens within the factory, it is mainly about using renewable energy. It's also about becoming more efficient as regards to energy use. And if you analyze scope one and two, you can actually see that compared to 2020, which is the base year, we have improved it by 9% more or less, the emissions. So the emissions have come down by about 9%. And then scope three, which is logistics and everything that happens outside of our own facilities. Also our, let's say the cocoa sourcing is relevant there. So we are working on basically addressing deforestation as one area. We are also engaging with dairy farmers to improve sustainable farming processes. Then we are redesigning some of our packaging to make it more sustainable. Or we are also trying to improve our shipping efficiencies, which help these targets here, but also brings our costs down. So you can see a lot of things going on in scope three. We have been able to reduce our emissions in 2024 compared to 2023 by about 8%. We are a little bit higher than in 2020 because of the higher volumes. But I think we have good plans in place to decrease it further by 2030 and 2050. So I think it's a project that is progressing really well. So in summary, you can see 2024 was a very successful year. I've already just given you now an update on sustainability with regards to the financials. I think the two key highlights for today from my side is number one, the improved debit watching, 16.2% in a very difficult environment, 60 basis points more. Despite the fact that our material cost margin actually came down 200 basis points. I mean, that was a hurt, right? 200 basis points for material costs, but we have been able to offset it. And secondly, provision number one highlights the free cash flow, 635 million plus 33%. Good management, I think, from an operating cash flow point of view. Great management also from a networking capital point of view. So it's something we're quite proud of that we have really been able to further increase our free cash flow. So with that, I hand over to Adolbert now. We will talk about the growth agenda and also the outlook. Thank you.

Thank you, Martin. We come to the end of our presentation. Our strategy, how we want to... deliver the guidance that we are giving to the outside world and to the financial community. Expansion is of course the key word here. We want to expand geographically. We want to expand the footprint in retail. We have huge potential there and a very unique leverage compared to our competitors, strengthening the brand equity. But we also want to expand distribution in countries where we are already operating. And we also want to extend our portfolio into areas where we believe premium chocolate has a relevance and where we are not yet into. Customer or consumer centricity is the driver behind all our activities. This means we try to understand better the needs of our consumers. As mentioned, we do a lot of market research. We observe our consumers and monitor them in our own channels, be it in the e-commerce or in the physical stores. We track them also with our loyalty program. And we focus, of course, on indulgence and gifting, which is also something that is unique for Lindt compared to other mass market players. And it has also proven that these gifting occasions are more resilient also to price increases than self-consumption. Innovation and quality are key. Highest quality, best taste is super important for a product where you can experience the product performance immediately when you put it into your mouth. So we always try to stay ahead of competition in these areas. We try to strengthen the core, so our key franchises that we have determined also have to surprise the consumers regularly with new flavors, with new packaging, covering new demand moments, etc. If you take Lindor, we have it as an impulse item, as a stick or a trio. We have it as self-consumption item in small bags. We have it as sharing items. We have it even as a gift. And we have it in all seasonal variations from eggs to Christmas hangers. So this is how we also stretch our brand for every consumer demand or occasion. Yes, and continuous innovation, I will show you later an example, a recent example that you probably have also noticed. where we have also proven that we are very close to social media and close to trends that are evolving in the viral community. The fundament and the enablers is one, our entrepreneurial culture. Also here, I think we have a huge point of difference to our competition. We are a decentralized organization. We have experienced managers who are highly empowered. So we are agile, we are responsible, we are accountable. And this is a proven success model that we live for many, many years and decades. We have a clear commitment to sustainability. In this year, we celebrate 108 years of Linden Sprüngli. This shows already that in our DNA, we have this sustainable approach. We are here for the long-term success and not just capitalizing on short-term opportunities. Of course, also our business ethics is something where we are proud of and that we foster within the whole organization. Operational efficiency is something which is a competitive advantage. precondition and I think we make big progress probably also under the pressure of raw material prices to mitigate the risk of this increased cost drivers and not to force us to pass on the full amount in price increases to protect our volume technology at the beginning of our history there was an invention the invention of the conch so we were drivers of new technologies and also today we embrace new technological developments we are investing heavily into a new erp backbone for our for our group so we will have a worldwide uh harmonized uh backbone in in in the IT system and we are also cooperating with universities in AI in the production but also in our web shop. So we came up with a metric chocolatier on our web page with generative AI advising our consumers what to, let's say, proposals for the best gift or also providing information about allergens or whatsoever. This leads me to the outlook. Our clear ambition is to continue to grow faster than the market, so we want to gain market share, gain household penetration. These are key parameters to measure our success. The cocoa price hikes, as Martin has explained in detail, with the time lag due to the coverage of cocoa beans, will force us to increase prices in 2025. And these price increases will be higher than we have seen them in the past. So it will be double digit price increase. And we are on the way to negotiate it with our trade partners. We are on the way to implement it. So, the full dimension is not even visible at the moment because it is in negotiation different from country to country, different also in the time span. Some countries do it end of February, some countries do it mid-year, some countries do it beginning of the year. One thing we don't want to cut back is brand support. We believe that a premium brand like our brands, Lindt, Ghirardelli, Russell Stover, Cafarel, et cetera, needs top of mind awareness. And that's also probably the key measure to mitigate price elasticity. So we will keep the foot on the pedal in brand support. And, of course, also the expansion of our retail business is a strong tool to increase the brand equity. With this said, we increased our guidance for this year from 6 to 8 to 7 to 9% top line growth, 20 to 40 basis points bottom line, and mid to long term we confirm our guidance from 6 to 8% sales growth and 20 to 40% points EBIT margin per year. And with this, I come to one highlight that I announced already. I'm not sure if you have kids at home like me. She's 10 years. And in summer last year, she came already every day. Papa, papa, why don't we have a Dubai chocolate? And she was not the only one. The whole younger generation went nuts with this trend. And we said, what can we do with it? So it's a very complicated recipe. very high amount of pistachio cream, which is quite tricky, combined with this kadaif, which is a stripes from dough. So we soon found out it's impossible to produce it on our lines. So we said, okay, but we, Maître Chocolatier, we can do it also by hand. So we came with a handmade version, super complicated, super expensive. And then we said, where can we distribute it? Certainly not in a supermarket chain. They would be quite disappointed if we tell them that for that thousand supermarkets, we can provide them in ten markets the product. So we said, we have our own retail channel, which is a huge advantage. And we launched it as a limited edition in our top boutiques. And when we saw the reaction of our consumers, but also of media, We were simply overwhelmed. We did not expect this. And then we said, Jesus, we should better find a product that we can distribute to a wider audience than to these lucky few that found it in our retail stores. And we changed the recipe slightly. We called it also Dubai style chocolate to avoid any confusion with the handmade chocolate. We lowered the price because we can produce it now on our lines. And it goes live in these days as we speak on the 20th of March. It will be available in all co-op outlets in Switzerland. It is already available in Germany and it will be rolled out in the next weeks and months. I can say globally the demand is unbelievable. And I show you now a video with some impressions of this, I would say, dream come true for any marketeer.