Chocoladefabriken Lindt & Sprüngli AG

Ladies and gentlemen, welcome to the Lindt & Sprüngli half-year 2026 results conference call and live webcast. I am Mathilde, the chorus call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. Webcast viewers may submit their questions and writing via the relative field. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Martin Hug, Chief Financial Officer. Please go ahead, sir.

Ladies and gentlemen, it is our pleasure to welcome you to the Lindt & Sprüngli half-year results conference, call and webcast. My name is Martin Hug, Group CFO, and with me today is our Group CEO, Adalbert Lechner. The presentation and a transcript of our prepared comments will be uploaded to our website after the call. The presentation will take approximately 30 minutes. Following the presentation we will hand over to the operator who will then manage the question and answer session. The agenda points of the presentation can be seen on this chart and include volume growth agenda, a detailed review of the first half, our expectations for the full year and the medium to long term and a chance for you to ask questions. I would also like to refer you to the disclaimer at the end of the slide deck. To kick us off, I hand over to our Group CEO, Adalbert Lechner, who will take you through our agenda for volume growth.

Good morning, ladies and gentlemen. Welcome everyone, also from my side. In a challenging environment, we have achieved solid results, and I would like to thank our teams around the world for their effort and dedication. We grew strongly in North America and the rest of the world with a softened demand in Europe. Over the last 18 months, the global chocolate category has faced one of the most challenging environments in its history. Record cocoa prices required unprecedented price increases across the industry, while geopolitical uncertainty, inflation, and weak consumer sentiment weighed on demand. The crisis in the Middle East added another headwind with weaker tourism flows from Asia and the Middle East to Europe. As a result, we have seen volume decline over this time across the whole category around the world. It reflects a strong reaction of consumers worldwide to the necessary price increases. These developments were largely in line with our expectations and the scenario we outlined. The majority of our growth in this period was price driven, while volumes came under pressure. This is consistent with our expectation that pricing would dominate in H1 2026 and that stabilization of volumes would begin in H2. However, we believe we have reached an important turning point. The required pricing actions are already in the market. Consumers are becoming accustomed to the new price levels and pricing pressure across the category has begun to normalize. At the same time, we have a clear action plan focused on restoring volume growth. Our objective is straightforward. Stabilize volumes in the second half of 2026 and return to volume growth from 2027 onwards. This recovery is supported by targeted actions on pricing and affordability, increased brand investment, stronger consumer activation, innovation, and further expansion of our global footprint. Over the next few slides, I will walk you through the concrete actions we are taking and why we are confident to get back to a volume growth momentum. The foundation of our volume recovery plan is not pricing. It is the strength of the Lindt brand. and our brand equity is stronger than ever. For the second year in a row, Lindt was named the world's most valuable chocolate brand in the Canta ranking. With a brand value of 11.7 billion US dollars, up 24% year on year, we now rank seventh across the entire food and beverage category. This recognition demonstrates the resilience and strength of the Lindt brand. This strength has been built over many years through a relentless focus on premium quality, continued innovation and consistent investment behind our brands. Most importantly, it reflects the deep emotional connection and trust that consumers have in us. That makes us confident to regain household penetration, fuel consumer demand and get back to volume growth. Our strong brand equity is built on something very tangible, the high quality of our products. We call it the Lindt difference, the combination of premium ingredients, long-standing manufacturing expertise, continuous innovation, and unmatched craftsmanship. For more than 180 years, we have focused on creating the highest quality chocolate from bean to bar. From carefully selected cocoa beans and ingredients to the Lindt conch invented in 1879 and still at the heart of our chocolate making process today, every step is designed to deliver a superior consumer experience. This is what set us apart. And it matters more than ever. Across many markets, consumers are increasingly choosing more mindful and fewer but better indulgences. They are looking for quality, authenticity, and products that are worth the price. This premiumization trend plays directly to our strengths. As the category returns to volume growth, we believe Lindt is exceptionally well positioned to capitalize on this trend and continue gaining market share in the premium chocolate segment. As pricing pressure across the industry begins to normalize, we have greater flexibility to take targeted actions where we see opportunities to support volume growth. We have already announced selective price decreases in key markets such as Germany and Switzerland, particularly in our Christmas portfolio. These measures will support consumer demands during our most important season and reinforce our leadership in seasonal chocolate. At the same time, we are expanding our portfolio with new formats and price points for some of our most popular brands, including Lindorf. By broadening our price architecture, we can attract new consumers, increase purchase frequency, and offer more touchpoints with the Lindt brand without compromising our premium positioning. We are also continuing to invest behind our brands. Strong brand support remains one of the most effective drivers of long-term volume growth, and we are increasing our focus on both traditional and social media. The extraordinary success of our Dubai-style chocolate launch demonstrated the growing power of social media in building awareness, engagement and demand for our brands. We are therefore expanding our social media presence and creating a more seamless consumer journey from inspiration and discovery to purchase. This strategy is helping us reach new audiences and strengthen our relevance with younger consumers. In Germany, for example, a recent YouGov study ranked Lindt as the most popular chocolate brand among Gen Z. Taken together, these actions are designed to improve affordability, strengthen consumer engagement, and support a return to sustainable volume growth. Throughout our history, innovation has been one of the key drivers of growth for Lindt & Sprüngli. It allows us to attract new consumers and increase brand attention. A great example is our Lindt Choco Wafer. Following highly successful pilot launches in the United Kingdom, Italy and Bulgaria, consumer response has exceeded our expectations. Based on this success, we are now preparing for a global rollout. To support the demand, we are investing in additional production capacity and are currently building a dedicated Schoko wafer production facility at our site in Italy. We expect the new factory to become operational by 2027 and will then gradually expand the distribution of Schoko wafer across our global network. When discussing innovation, it is impossible not to talk about Lindt Dubai Style. Following extraordinary consumer demand, Dubai Style has evolved from a trend-driven launch into a well-established product that is now broadly available across retail channels and increasingly becoming part of our core portfolio. While the initial hype has naturally faded, consumer interest remains strong and the platform continues to offer significant growth opportunities. Building on the success of Dubai Style, we are expanding the platform with additional recipes, formats, and flavors. Earlier this year, we launched Tokyo Style Choket, a matcha and strawberry-based recipe inspired by the Japanese tea culture, and we will continue to introduce further city additions to the portfolio. Our ambition is to create a broader family of city-inspired choket creations that combine global food trends with Lindt's premium chocolate expertise. This approach allows us to continually refresh the platform, attract new consumers and generate excitement around the brand. Our global retail business continues to be one of our most powerful growth drivers It allows us to showcase our brands in the best possible way and create unique consumer experiences that strengthen brand equity and loyalty. We continue to invest in both established and emerging markets. Earlier this year, we opened a new flagship store in Lucerne, one of Switzerland's most visited tourist destinations. Later in the year, we will further enhance this location with a chocolate experience exhibition. Later this year as well, we will open a new retail store in a prime location in Oslo. Looking ahead, one of our most exciting projects is the opening of a 1,200 square meter Lindt flagship store at Marienplatz in Munich, planned for next year, which will become one of the largest Lindt stores worldwide. At the same time, retail is an important spearhead for our expansion into new markets. Earlier this year, we opened our first Linn store in China, in Shanghai, marking an important milestone. In India, where we recently established our own subsidiary, we expect to open our first stores in the third quarter. By the end of the year, we will open stores in Saudi Arabia and Malaysia. These investments are much more than additional points of sale. They increase brand visibility, strengthen consumer engagement, and help us attract new consumers in some of the world's most attractive growth markets. Taken together, our retail expansion strategy provides another important growth factor in the second half of this year and beyond. Let me close by underpinning how these trends and our actions will translate into positive volume development. Long-term consumer trends continue to play to our strengths. We have already discussed the ongoing Thank you very much. Such as our city-inspired product range of ChocoWafer and ChocoWafer, we are attracting new consumers and keeping our portfolio relevant for evolving consumer preferences. With our Lindt Metro Chocolatier, we will continue our communication on our heritage, craftsmanship and high quality. Our accelerating expansion in both established and emerging markets allows us to reach consumers wherever they choose to shop. We are expanding the reach of the Lindt brand offering the ultimate shopping experience in our stores. Based on the strength of our brand, the quality of our products, the actions we are taking today and the favorable consumer trends, we are confident to return to sustainable volume growth in 2027. We have the right strategy and are well positioned in the market to confirm our mid to long-term growth ambitions. With this, I now hand over to Martin, who will take you through the half-year results.

Thank you, Adalbert. Despite a difficult global operating environment with declining volumes in the global chocolate market, sharply rising costs for cocoa, and the need to again implement price increases, Lindt & Sprüngli was able to continue its sales growth trajectory. In addition to price increases, we have continued to implement projects across all regions that drive efficiencies and cost savings. Price increases coupled with those cost savings projects are the key drivers for the positive operating profit development that we expect for the full year. Overall, we are pleased with our progress and remain optimistic about our future prospects. The Lindt & Sprüngli Group has made a solid start to the year. Sales in the first six months achieved an organic growth rate of 4.3%, which is within the range of the guidance provided in March 2026 of 4 to 6%. EBIT margin came in at 11.2% ahead of the guidance we provided earlier in the year. Net income margin reached 8.2%. Free cash flow came in at 2.6% of sales, a significant improvement on the minus 3.4% of H1 2025, and we will go into more detail on this later in the presentation. Our net debt position increased from 1.1 billion Swiss francs at the end of 2025 to 1.6 billion. This balance is slightly higher than a year ago when net debt was at 1.4 billion Swiss francs. The main driver of this net debt increase in the first half versus our year-end position was the shareholder return through dividend payments of 414 million Swiss francs and 100 million Swiss Francs in share buyback programs. Total sales reached 2.33 billion Swiss Francs in H1 with a decline in Swiss Francs of minus 0.99% due to the strengthening of the Swiss Francs. First half sales grew by 4.3% organically. Of note, we saw particularly strong growth in North America. Cumulatively, we have grown 45% over the last five years in the first half representing a CAGR of plus 8.8%. Price increases of 11.8% were in line with the double-digit increase we communicated in March. Due to higher input costs for COCO, double-digit pricing actions were still required. The majority of the increases were pricing increases initiated during 2025. which partially carried over into 2026. The exception was Easter, where we took price increases in the 2026 season. Looking ahead into the second half, we see pricing impact tail off and will therefore see a considerably lower price impact in H2 2026. Volume mix was negative in line with our expectations. with decline of minus 7.5%. However, the price elasticity varied region by region. Higher elasticity was mainly observed in Europe, while North America and rest of the world were better than the group average. The currency effect had a negative impact of minus 5.2%, in particular due to the weakening of the US dollar, Euro, and the British pound. On the following slide, I would like to give you an overview of the sales performance by segment. In the first half of 2026, we experienced a challenging environment in the Europe segment where we generate almost half of the group's sales. We saw a decline in organic sales of minus 2.1% in the first half. I would, however, like to remind you that we had an extraordinary result in 2025 of The North America segment showed a strong organic sales growth of 12.7%. All subsidiaries in the US and Canada continued to grow and Lindt & Sprüngli continued to grow market share in the US. In the rest of the world segment, we grew by 10.2%. Notably, the subsidiaries in Japan, China, South Africa and our international distributors achieved double-digit growth rates. Our global travel retail business was negatively impacted by the conflict in the Middle East. There are many large traditional chocolate markets within the rest of the world where we see significant premiumization potential for Lindt. As a result, we are convinced that we can maintain double-digit growth in 2026 and over the medium term. Let's move on now to the important topic of costs, category by category. Material costs, which have been adjusted for changes to inventories, came in at 35.5% of sales, 220 basis points higher than in 2025. This reflects higher prices for cocoa in our products, which could be absorbed by efficiency gains in other lines of our P&L, price increases, and other revenue growth management measures. Looking forward, We expect that our total material costs ratio for Fulia 2026 should be in line with 2025, as we see some easing in our cocoa prices in H2. For 2027, we will have a positive impact from lower cocoa prices. Market volatility and uncertainty remain very high, which is illustrated in the next chart. The cocoa futures market has been highly volatile, with a sharp decline earlier in the year, followed by a strong rebound in recent weeks. This recent increase is largely driven by weather-related concerns, particularly the potential impact of El Niño and ongoing uncertainty around crop developments in key producing regions, such as West Africa. Over the medium to long term, continued investment in new plantations, especially in Latin America, supports a more balanced supply outlook, although future market developments will also remain closely linked to global demand trends in the chocolate market. Personal expenses continued to see a positive evolution. As a percentage of sales, We saw an improvement of 100 basis points compared to the same period in 2025. Compared to 2022, we have shown strong economies of scale of 100 basis points. Operating expenses as a percentage of sales decreased by 130 basis points. This is driven by continued cost discipline across our business. However, let me assure you that we continue to maintain high brand support across all geographies. At 260 million Swiss francs and 11.2% of sales, EBIT increased 20 basis points compared to the first half of 2025. Bear in mind that we recorded a positive one-time impact in 2024 and in 2023. When looking back, In the first half of 2026, the tax rate is at 19.8% compared to 22.2% last year. The decrease is mainly driven by a lower share of profit in regions with a high tax rate. We maintain our mid-term guidance of a tax rate between 22% to 24%. I would like to take you through the bridge of the main cash relevant developments of the first half. In the period under review, free cash flow is positive at 61 million Swiss francs, improving by 141 million Swiss francs when comparing to 2025. Capital expenditure came in at 154 million Swiss francs in the first half, 16 million lower than 2025. This is in line with our revised plan, which could postpone certain investments. At the end of the first half, net debt reached 1.6 billion, slightly higher than previous year. Overall, we still plan for net debt to EBITDA ratio of 0.5 to 1 in the medium term. After this update, I'm now handing back to Adalbert, who will take you through the financial outlook for 2026 and beyond.

Thank you, Martin. As we have already mentioned, we had a solid first half year with double-digit growth in North America and rest of the world. In the second half, we are expecting a more even spread of growth across the regions. As I shared with you at the beginning of this presentation, We have strong plans for our markets to support volume development. That is why we are confident to meet our guidance for the full year. Accordingly, sales are expected to grow organically in the range of 4-6% with an improvement of the EBIT margin of 20-40 basis points compared to the previous year. For the future, we expect the trend of premiumization in chocolates to continue. This supports our long-term strategy and market position as a global leader in this category. This gives us the confidence in achieving our mid- to long-term goal of an organic sales growth between 6% and 8% on average per year, and we expect to deliver an average annual increase in EBIT margin of 20 to 40 basis points. Thank you very much for your attention. Back to you, Martin.

Thank you for listening to our presentation. I will now hand over to the operator who will manage the question and answer session. We ask you to limit yourselves to maximum two questions so everyone can participate. Please note that written questions asked via the web will be answered by email after the webcast.

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and 2. Questioners on the phone are requested to disable the loudspeaker mode and eventually turn off the volume from the webcast while asking a question. Webcast viewers might submit their questions in writing via the relative field. Anyone who has a question may press star and 1 at this time. The first question comes from the line of John Cox from Kepler-Chevreux. Please go ahead.

Yes, good morning, guys. Thanks for this presentation and for taking the questions. A couple of questions then. Just the first one on Europe. How confident are you that European organic sales growth will swing positive in the second half of the year? And as you're talking about a better balance between the rest of the world, North America and Europe in the second half, would you expect volumes then to go positive in Europe in the second half of the year? And also you talk about an improvement in volumes for the group in Europe. In the second half of the year, are you talking about flat volume or are you still talking about potentially a decline in volume? That's the first question. I know it's a bit of a broad one. Second one, you know, there's been some discussion in the market about your medium term guidance for six to eight percent. You've expressed confidence today that you would get there. Just wondering any thoughts on that medium term target. If you look back historically, you have cut it previously to five to seven. Just wondering how confident you are on that six to eight going forward. Thank you.

Thank you, John. To your first question. So for the second half, we currently expect flat volumes for the total group. For Europe, we have experienced quite a difficult first half with a surprising, also for us surprising, negative NTS development. You have probably also read that we reacted, I would say, pretty agile. addressed price points where we saw the biggest elasticities or especially for the Christmas business after I would say relatively bad press coverage on pricing for the Easter business. but also for other products we went out with price pack architecture so more affordable smaller pack sizes on Lindor which were launched for the second half but also re-calibrating our promotion prices so with all this package we are confident that also in Europe the volume should improve substantially and be positive for the second half. So this is Martin you want to add?

John bear in mind as well that in Europe last year we had kind of certain issues, certain customers which was also mentioned in the press etc. Like Leclerc in France we were completely out on the Christmas business and there was a time where we had some negotiations in Switzerland with one of the big retailers as you may be aware. So those two have been resolved actually last year at the end of last year beginning of this year. and that would be positive for Europe, specifically because those are two important markets for us, France and Switzerland.

Then to your second question, how confident are we about the medium-term guidance, 6-8%? Given the strength of our brand, I mean, we have invested in the last years, despite the pressure from the Cocoa price, more than ever behind our brands and also across geographies. Given all the activities in extending our geographical footprint, extending the footprint of our retail stores, the field pipeline with innovations, we are confident to get back to this growth trajectory. The caveat that we have to make is 27. It's too early to give a guidance for 27. You can imagine there are too many Thank you very much. The sticker shock of us is the volume reacting with new pricing. So for 27, it's too early to give this guidance, but for the mid to long term and as an average for the mid to long term period, we are confident to achieve the 6 to 8%. Like Martin mentioned, also for the past years, we had an 8.8% CAGR. For the last five years, despite the fact in the first half, despite the fact that we only had a 4.3% growth in this year, but given the double-digit growth of the last years altogether, it was an average of 8.8%. And I would see a similar pattern and a similar picture for the years to come.

And you know, when you look at the last 10 years or so, in normalized years before the cocoa crisis, if you want to call it cocoa crisis, when we achieved the 6 to 8, typically we didn't have a huge price impact, let's say. It was probably in the 1 to 2% area. And volume, we have proven that we can grow volume mid-single digit, right? I mean, we have done that in all the years prior to 2020. We have still low market shares. I mean, typically in the 6 to 8% algorithm, North America will outperform Europe because in North America we still have low market shares compared to some of the European markets and the rest of the world we should be able to go double digit because there is still a lot of markets where we actually have very low market shares and where we are now planting the seeds to harvest them later on.

Thank you.

The next question comes from the line of Jörn Ishert from UBS. Please go ahead.

Good morning and thank you for taking my questions. The first one would be please, I mean you can also use your own retail shops a little bit as try and fail or try and succeed. I mean the things you want to change at the retailer to stimulate volumes in the second half. Have you tried this already in your own retail shops and what was the consumer response? to better grab evidence and conviction level for the second half volume recovery here. And the second question would be please on North America. Year-to-date looks like a pretty good performance also versus the market. Can you give us a feeling which product lines exactly are behind this? Is it mainly driven by Dubai style or is it more product-based? Also linked to Dark Chalk and Lindor. So some more color you would also appreciate it. Thank you very much.

Thank you, Jörn. To your first question, of course, you can imagine if you experience volume declines that everyone is alerted here. And we did not only two tests in our retail stores, but we did broad scale tests in wholesale. So before we initiate measures and when you launch additional smaller packaging, it's always a risk because first, You have a lower NTS per SKU and you need to have confidence that the volume uplift compensates for this negative effect and all of this of course is properly tested and this is why we are confident when reaching the market then finally in autumn we will see the results. To the second question, North America, so the year-to-date performance is mainly driven by dark chocolate, as you have mentioned, where we see globally a very strong trend, so our excellence range is growing and a strong double-digit NTS across all markets including North America. And then yes, Dubai Style is incremental in the first half here in North America as we have launched it in Europe first half. only second half in North America so this will also have a slightly softening effect for the second half in North America but then also Ghirardelli next to its range of dark chocolate we have a very strong range in baking where we also saw in 25 very strong growth and this continues now also in the first half of 26 Lindor also had in the everyday business a very good performance and also worthwhile mentioning Russell Stover grew nearly double digit in the first half they also launched a Dubai style chocolate but they also are successful with their sugar-free range where they did a new price-back architecture last year already and could harvest the fruits in this year and also worthwhile to mention Canada is gaining substantially market share and is also growing double digit in the first half. So I hope this answers your question.

Thank you.

We now have a question from the line of Warren Ackerman from Barclays. Please go ahead.

Yeah, good morning, Adalbert and Martin. It's Warren here from Barclays. I've also got two. The first one, could you dig a bit more into your pricing interventions and your price pack architecture capability? I mean, you've said that pricing will fade fast from here. How fast do you think it will fade in H2 and into 2027? I heard, for example, you've taken pricing down in Germany below critical price thresholds like 20 euros for Lindor. But do you see any scenario where pricing will actually be positive and a number of others. Marketing spend you said is up, but then you also had a VAT benefit which boosted the margin in the first half. How should we be thinking about the margin moving parts for the second half?

Thank you.

Thank you, Warren. Let me take the first one, pricing. So I start with the second part of your question. No, we don't see a likability of increasing prices in 27. So the opposite, we expect that we will do some price adjustments where needed and where possible. On the other side, we are fully with you that we have to be very cautious with, let's say, passing on potential tailwinds that we see from COCOA price in 27, knowing that with our hedging policy and with the current terminal market price of COCOA, We are in a situation that we might be under pressure again in 2028 to increase prices and of course this we want to avoid like a roller coaster going down now and having to increase prices again. So it might be a slight price adjustment in 2027 but which will be for sure helpful to regain momentum in volume. To your question what exactly are we planning, I'll give you some examples. So, first of all, we have a double-digit growth in two out of our three regions. So, we did not see any need and urgency to address price points in some of the price corrections already this year, and this was in Germany and Switzerland mainly. For example, in Germany we reduced prices at the Christmas range because Easter the sell-through was weak. Easter we were in the press that our Gold Bunny went now from 4.95 to 5.95, so there was a big outcry from consumers. were agile enough to say we correct this. So in Christmas you will see lower prices and of course we try with our customers with joint business plans to mitigate this impact by higher volumes etc. But we will, let's say also, we will probably see in these markets, Germany, Switzerland, Austria, we will see softer Christmas orders, while we see North America and rest of the world very solid Christmas orders with strong or good volume development. An example for price-back architecture. Key SKU in Germany for Lindor is 137 gram Lindor bag. It went up with the cocoa price increase, and I must mention that Lindor is especially affected, as Lindor has a very high content of cocoa butter. And cocoa butter, as you know, with the ratio, increased twice as much, has a bigger impact in the calculation than cocoa. So the price has increased up to $7.99. We will change now the bag from 137 grams to 100 grams. with the same 100 gram price, but it brings us back to 4.9 of sales. And of course we had to be sure that the uplift in volume compensates for this. So we did tests and we saw a dramatic uplift in volume and we are confident that with this changing in pack format, with this price-back architecture, we will overcompensate the impact of the lower volume. Other examples are Exelon, also on Exelon we had to increase prices understandably with the high cocoa content. We sell chocolate here 70%, 85%, 99% cocoa and here we change simply our promotional policy because there's a relatively high volume on deal and as we go out with a more attractive promotion price we have also seen significant uplifts in volume and we agreed already promotions with our retailers and they are also somehow relieved because also Something I mentioned today in the morning with the press agencies, also the retailers are not happy if their margin provider number one, Lindt, is losing volume. So together we come up with plans that we reverse this trend. and yeah these are some examples then I would hand over to the second part for Martin.

I mean in summary I mean the price increase net effect will still be positive in H2 right because there's still a carryover from last year and I think that's important to bear in mind for H2 they still have slightly positive pricing. Now from a margin perspective I think if we look at the big picture and look at it by segment, it's clear that, as in the last years, it is North America that is the key driver of the EBIT margin improvements because North America is traditionally still below our group average. I mean, also now it's half a year. North America is at 7.7%, massive improvement compared to the first half in 2025. where we were at 3.2% in North America. And the same picture, not exactly in the sense of the growth, but the picture that North America is the key driver of our EBIT margin improvement will be also true for the full year. I think that's number one. Number two, as you have seen in our report, half-year report, Half of the profit improvement versus our original forecast of 10%, we believe that we are at 10%, now we are at 11.2. Half of this improvement more or less comes from the tariff reimbursement in the US, that's about 60 basis points, and the other 60 basis points are true efficiency gains, cost savings in areas such as personnel and operating expenses. We continue to have a high investment in marketing, so it is really our Good work, let's say, in many areas of the business, such as logistics, supply chain, also maintenance and repair in the factory, where we have been able to drive efficiencies. In H2, we'll have an additional benefit, which is the lower cocoa bean price compared to the second half last year. You remember that last year we had still high cocoa bean prices, especially because we buy forward. So there we will have benefits. And we have continued tailwinds. in the same areas where we have tailwinds in H1, such as operating expenses, for example, logistics, for example, maintenance, and also in the area of personal expenses. So I'm pretty confident with the 20 to 40 basis points that we will be able to improve our EBIT margin also in 2026.

Thanks, Martin. Just a quick clarification. The VAT reversal, will that continue into the second half of the year? Will there still be a margin benefit in the second half, or is that a one-timer in the first half?

You know, a lot of uncertainty, I would say, in this area. I mean, I don't want to promise anything. There may be still a little bit more, but we have to see. You know, once we get the cash, we know that we have it. There may be still a bit of a benefit, but we confirm.

All right, thanks.

The next question comes from the line of Samantha Darbyshire from Goldman Sachs. Please go ahead.

Morning. Thank you for taking my questions. I may have missed some of this, but just on your margin expectations for H2, could you maybe just explain from the H1 movements, I mean the absolute personnel and operating expenses, came down quite a bit year on year. Was that mainly driven by FX or was there other initiatives and particularly thinking about the personnel side of things? Can you quantify how material that will be year on year or is it really that most of the tailwind is coming through from H1-27? And then my second question is just, could you talk to us a little bit more about your marketing investments? I've seen quite a few of your peers seemingly putting a lot of money behind big events like the World Cup, F1, the Olympics. Just want to understand how you're thinking about your own marketing investments for Lindt, which has historically probably been a A bigger spender relative to sales and some of these pairs, how you're making sure that you stay relevant when everyone else is kind of competing harder and harder for that share of voice. Thank you.

I mean, I can start with the cost question and take over with the marketing expenses. Personal expenses, I mean, yes, partially driven by Forex. At the same time, we also make improvements in many areas of the business, so it's a combination, but yes, you are right. We also have benefits here. From a forex perspective, COCO tailwind, we can't share it here, let's say how much of the tailwind will be in H2 and how much will be in H1, but yes, we already have a certain amount of tailwind in H2-26, but of course, the bigger part of the tailwind we'll see in H27. And yes, with that, you had a good question about the marketing.

One thing which I would like to emphasize, when we increased prices throughout the last years, and you know this was a significant price increase, we had in mind on the one side to protect our gross margins, on the other side not to overdo it with price increases. As Martin has explained, our gross margin slightly came down, but still we were able with efficiency measures and cost consciousness to protect the bottom line. But what we for sure were always protecting was the brand support in ratio, not in absolute money. So in absolute money, in the last three years, we had a significant higher spend in AMP than we had in the years before. And this is also for me the explanation why in this Kanta ranking, We have seen an increase of our brand value which was unprecedented only in last year by 24% and ranking now within really the top food and beverage brands ahead of all global chocolate brands with content of our marketing. I think one of our strengths is that we have a very consistent and also coherent marketing strategy centered around the craftsmanship of our matri chocolatier, insinuating this high premium quality and focus on product and indulgence and not focused on consumer occasions, which is, let's say, what most of our competitors are doing. So I think this campaign is ownable. It is consistent throughout decades, so people immediately recognize it and we have a strong brand linkage whenever. This is why we focus on showing these ownable key distinctive assets in our advertising and we don't believe that events or Olympics or World Championships in soccer would strengthen Thank you very much for your time. Thank you. Thank you.

We now have a question from the line of Antoine Prévost from Bank of America. Please go ahead.

Thank you. Hi, Adalbert. Hi, Martin. So two for me, please, which I guess really implies U.S. and the rest of the world negative, but the trends here in H1 were clearly improving in volume, maybe not in the rest of the world, but at least in the U.S. So just trying to understand if there is anything you want to flag there for 2H volume in U.S. and the rest of the world. And second question on global retail. I mean continue to have a good improvement in the number of stores and I guess you will cross the 1 billion revenue mark this year. I mean do you continue to target like 40 to 50 stores in the coming years? Like do you see like a good pipeline of where of with new locations and yeah maybe like what kind of like level of growth it could contribute in the coming years as a price fade?

Thank you.

Thank you.

So For the volume in second half, I think important to mention is that in the first half we cycled against the period with very strong development and also volume development in Europe. If you remember, we grew nearly 18% last year. in the first half in Europe. Now, why? Because the price increases were not yet fully implemented. Plus, in addition, we had this big launch of Dubai Style Jocket. So we cycled now against the period with higher prices in first half 26, plus, of course, a slight fade of this hype of Dubai Style Jocket. Now we cycle in the second half against the period where volumes started already to correct. and Dubai Style Chocolate will be on the same level. So this makes us confident that volumes will increase in Europe and in the other markets. I mean, we have anyhow seen a good development also in the first half and we don't expect things, might be a slight softening there in the second half. Global retail. Yes, as you have probably observed, we are really using global retail as a spearhead to enter those regions where we are still weak. And in a nutshell, we are strong in Europe and North America. We are weak outside of these two regions. So Latin America, we started to expand aggressively outside of Brazil. We only opened in two years 14 outlets in Chile. We enter now Colombia. We have other markets there. and on our list which we cannot publish yet. We signed a joint venture in Saudi Arabia where we will see the fruits end of this year. We opened the first two stores in Saudi Arabia. We opened the first stores in India. We have a retail operator for Malaysia, Singapore, Thailand, Indonesia. So we will see, then China I mentioned, we opened the first store and of course we have a plan to scale and to roll out. But it's also worthwhile mentioning that the biggest share of our retail business is still coming from Europe and North America.

And while we were decreasing our footprint in North America,

In North America that's the clear plan for the years to come and in Europe anyhow we have a certain A number of store openings every year, especially as I've mentioned before, we go now in a more qualitative expansion, also increasing the visibility, increasing the footprint, 1200 square meters in Munich on the main place next to the Rathaus of Munich. That's a statement like we did last year in Vienna. We have more or less flagged all European capitals for new retail stores and these retail stores will have a different impact than the one that we had in the past time because we saw that we can make decent money on a bigger footprint, 500 to 800 square meters. and there is more to come. So I think retail will be like it used to be in the past time, a strong contributor not only of profitable growth, but also of enhancing our brand equity and also the awareness of the brand, especially in the emerging markets.

Maybe just a couple of things to add to the first part of your question. Europe, North America and the rest of the world where we saw a very strong growth in North America and slightly decline in Europe in H1. I think in H2 the picture basically cannot give you the exact volumes. The picture will change a little bit in the sense that we will see an acceleration in Europe, not only but also driven by the additional listings we have in Leclerc and, you know, also in Switzerland, in Migros, where we kind of had some period of time where we were in negotiations. Also relatively weak comps in November, December in Europe, right, where the volumes were down quite substantially. So in Europe, at Fulia, we believe the numbers will be improved versus the minus 2.1% in H1. In North America and the rest of the world, we may see a slight softening, not because our business is not healthy anymore, because we had such a strong growth now in North America, also because last year we were low at 3%, so the comps were obviously also a bit easier. So I think at the end of the year, it will look different to the minus 2, plus 12.7 and plus 10. So acceleration in Europe, and North America and the rest of the world. Slightly less growth than we see right now, year to date.

Very clear. Thank you both.

The next question comes from the line of Matthew Abraham from Birnberg. Please go ahead.

Morning all, thank you for taking my questions. First query just relates to Dubai Style Chocolate, just wondering if you can actually quantify the percentage that Dubai Style Chocolate accounts for within the group as a percentage of sales? and just confirm if that rollout in North America for distribution has been complete or if there's a further tailwind to come as that distribution expands in the second half of the year. And then second query is just a high-level query with respect to organic sales growth guidance for the full year. Just wondering if you can provide some further background to the reiteration of that guidance today, given the shift from expecting H2 volume growth, which you've previously said today, talking about stable volume expectations in the second half, and also the newly announced pricing resets which will result in a less positive impact of pricing in the second half of the year. Just wondering if there's anything else to factor in that's fed into the reiteration of OSG guidance for the full year. Thank you.

Thank you, Matthew. Please understand that we do not disclose individual product ranges or brands, but Dubai Styles is, let's say, one of our bigger brands in the meantime. And to your question, roll out in the US, we have launched under Lindt the Dubai Style Chockette last year in the second half. We rolled out the distribution first half with Lindt and Russell Stober. and in the second half we will still see an extended distribution especially on Russell Stover. Of course with Lindt we cycle against a very strong period of Dubai style chocolate because in America the hype was also but Russell Stover is incremental and Ghirardelli is also out with a product. So altogether I would say we see a positive contribution to growth from Duva Style Chocolate in the second half in the U.S. To the volumes, H2.

You just asked what volume H2. I mean, as we already said, volumes will be H2 overall in the group, which implicitly means, you know, when we say our guidance is 4 to 6, we confirm the guidance. It means that pricing will be in the mid-single digits in H2, so tailing off afterwards in 2027. But in H2, despite the fact that we have some price decreases in certain markets, the net-net is still a positive price impact overall in the gold.

Okay, understood. Thank you.

We now have a question from the line of David Hu from Morgan Stanley. Please go ahead.

Good morning, gentlemen. Two questions from my side. The first one is just on your product price points. Where do you see the affordability of your product portfolio now versus the chocolate markets and in particular those premium segment peers? And could you just tell us if you believe the portfolio is now more or less affordable compared to prior to the inflationary cycle that we've just gone through? Back in the day when you guys were growing volumes at the sort of mid single digit rate that you mentioned. And then my second question is a very brief one on global retail. Could you tell us what same store sales were for the first half? I may have missed it. I know that you had disclosed this number at FY25 results. Thank you.

Thank you. So the question, are we less affordable? I would say the whole category increased prices substantially and if you want so, of course, it's less affordable and the whole category has suffered in volumes throughout the last years. If I take the example of Easter business in Germany, it was not a Lindt issue, it was a category issue. The whole category suffered in volumes. But we shouldn't forget that we cycle now against these volumes. And when we speak about volume growth, of course, this is the comparable base. We normally see when prices go up that there is an initial reaction of consumers, the so-called sticker shock. and our experience is that it takes 6 to 12 months that consumers adjust to the new price points. Our premium did not improve substantially because the whole market went up with, let's say, some exceptions. If we take products that had a lower core content, like take one of our key competitors Ferrero Rocher, that's a product that contains a wafer They didn't see an increase in raw material. A hazelnut, they didn't see a dramatic increase in raw material. And a lot of palm oil. And then there is a coating of chocolate. Of course, if I compare this product to our Lindor ball, they had a lower pressure to increase prices than us. But other than that, if you take the portfolio of other competitors, they are in the same position as us. In percentage, the highest price increases, by the way, we have seen from private label. because they operate with lower margins and with a very high amount of raw material in their calculation. So if you want the price premium of our products versus private label has even come down. And so I would say within the category, we are not less affordable. What we have also learned during the course of these price increases that in some packaging formats we simply across the price thresholds where consumers were no longer prepared to pay this for a confectionary or for a small treat. So this is why I said before we will launch in mostly all markets smaller formats but also with lower prices to avoid any inflation suspicion here. So if we bring a packaging, let's say, 100 instead of 137 gram, the 100 gram price will be parity or slightly lower, which makes us more affordable in terms of the ex-pocket price. So also when you ask now where's our positioning in comparison to the premium peers, I mean, first of all, we have to mention we don't have too many premium peers out there, at least no global premium peer. Mostly we compete with local brands. We compete also with retail-only brands. For example, if you take Lederach, they still sell their products for minimum twice the price. So they charge 13 Swiss francs for 100 grams of praline, while we charge between 5 and 6 Swiss francs per 100 grams. So I think that our price positioning is where it has always been. We are premium mass market player. There are brands above us and there are many brands below us, but I don't see an issue in affordability. The last question or second question, same store growth in retail. We saw negative same store growth in Europe. and that was driven mainly by a steep decline in tourism that we have experienced or Asian tourists that were traveling across the Gulf state hubs, Dubai, Qatar, whatever. We saw a steep decline there. We suffered in global travel retail, but we also suffered in our retail stores. Then also tourists from the Gulf states themselves didn't show up in the same amount. So then in general traffic issues in the inner cities because the consumer sentiment is, especially in Europe, extremely weak with the high inflation, the geopolitical insecurities. plus also high fuel prices which were biting immediately so for the first time we saw negative comp store growth in Europe in the rest of the world the US and and rest of the world it is fine and here we also expect to get back to to positive comp store growth in in the second half that's very helpful thank you very much and just one follow-up question if I may the

The fall in profit in rest of world, obviously we've had the Middle East issues, etc. Are there any other contributing factors to this? Just be good to get some understanding if there's anything else driving this.

I mean number one we have new markets in there like one example is Saudi Arabia right which always in the beginning there is not that although India as well there are costs but not to invest over proportionally in this segment and therefore you can also see the let's say if you look at the last five or even last ten years the profitability in that segment has come down It was a strategic choice. We want to make North America more profitable. That has been our promise, let's say, to the investors in the last six or seven years, and we have delivered. If you look at the numbers, our guidance is 50 to 100 basis points per year in North America improvements, and we have delivered against that. At the same time, we were able to invest some of that money in growth markets in the rest of the world.

Thank you.

The next question comes from the line of Tom Sykes from Deutsche Bank. Please go ahead.

Yeah, morning. Thank you. Three quick questions, please. Firstly, just on North America. In the scanner data, the baking products have increased far more quickly than in growth and the retail product. So that also has a higher level of price increase in it and presumably a higher raw material. So in H2, if you're talking about lower cocoa costs in North America, would you expect the profitability on the baking product to disproportionately benefit from that? Then just in your retail stores, could you maybe just confirm what same store like for like volumes have been like and where you are sort of as a run rate now versus maybe where you were when we were at the height of conflict and travel retail impacts and perhaps just related to that is the reduction in personnel costs. Disproportionately retail store driven as well, please. So would that have to go back up essentially if volumes through retail stores start improving? Thanks.

I can maybe take the last one first. So personal expenses, no, I'm not worried if the volumes go up. I'm not worried that we'll have a negative impact. We'd rather have a positive impact on our personal expense if we have higher volumes in retail. It was other contributing factors that led to these lower personal expenses, such as efficiencies, such as forex, as we discussed before. So, no worries there.

We did like for like. I'm sorry, we do not disclose. And North America baking products, if we see a profit improvement due to the lower cocoa prices, I would say in line with the rest of the assortments of the baking products are not specifically burdened by cocoa products. The highest burden, of course, we have with the very high cocoa content Dark Excellence tablets. Also Ghirardelli has products with 78% cocoa, etc. And Lindor, as mentioned, there we would see a bigger impact but not on baking products.

I mean, bear in mind, you know, when the market went from £2,000 to £10,000, we never increased our prices to offset the £10,000 if it had stayed at £10,000, right? So baking has had the biggest impact on the cost of goods. So in theory, yes, you're right. And when the market comes down, there's also benefit. But it always depends how much we have really increased the prices in relation to our hedging. and we don't disclose that but I think it really depends on that so you cannot automatically say if the market comes down we'll have the biggest benefit there because it depends by how much we had originally increased the prices by and what we'll do in the future.

Can the timing on hedging differ between baking and non-baking in North America?

No, we do not. We hedge for the entire business, not specifically baking.

Okay, sure. Thank you.

We now have a question from the line of Callum Elliot from Bernstein. Please go ahead.

Hi, thank you both. Just wanted to come back to volumes please. Your confidence in the long term I think was very clear, but I wanted to ask specifically on the sort of phasing of the recovery over the next 12, 18, 24 months and I guess the nascence of this question is what we've seen quite consistently in the rest of Staples over the past couple of years is that volumes have remained stubbornly quite weak for a couple of years after the pricing cycle. So my question is, do you guys have good reasons to believe that the chocolate category is going to behave differently from what we've seen in the rest of Staples with this persistent volume headwind over the past couple of years and to drive some kind of faster recovery in volume for chocolate. And, you know, I guess the second part of the question, how much of this speed and phasing of the recovery over the next year or two do you think is going to be driven by your actions specifically rather than just how the category behaves? Thank you.

So thank you for the question. So the answer is no, we don't have any reasons to believe that the chocolate category will see, let's say, a faster recovery than other fast-moving consumer goods categories. but we have reasons to believe that we will get back to the momentum to outperform the category which we did in all these years in the past time. We could also argue that we have seen now also a stronger volume decline and we have learned in which products, which price points, which promotions led to these declines and as we are able to address Specifically, those areas with high elasticity, we are confident that we can correct this trend and get back to an over-proportional growth within the category. So it's not that we give a prediction how the category behaves, it's just a prediction how we as Lindt will recover volume and will gain volume. and I think we have enough data points to be confident that with the means in hand, meaning with the relief of COCOA price in 27, we can invest especially in those areas that give us volume growth again, being the right promotion prices, being the right price points, being also a brand support, cooperation with retailers, Revenue Growth Management, etc. So this would be my answer to the first question. How much of the recovery of the category would be driven by our actions, you ask? I mean, honestly, this is one of our We are a growth driver for the category. So if we are able to get back to a significant volume growth, yes, we can be a contributor to the development of the category. but according to our market share so it needs also in general of course a better consumer sentiment and also activities from our competitors to drive the category.

Okay, thank you very much. Thank you.

The next question comes from the line of Pinking Xu from Rothschild & Co. Redburn. Please go ahead.

Hi, good morning. Thanks for taking my question. I have two. My first one is a general question relating to the premiumization trend. I guess, can you share like how you see the premium chocolate trend developing in the current macro environment? How resilient are those, you know, against the environment? And have you seen any signs of the consumer trading out of premium maybe up at today's price points? Then my second question is, would you be able to quantify the H1 drag from the reduced tourist flows and decline in travel retail? And given the renewed instability in Middle East, have you embedded a continued headwind into second half or are you assuming some level of recovery? Thank you.

Thank you. Let me start with the last question. Of course, You know, I think like everyone, we were more optimistic about the length of this conflict in Middle East. And yes, we have baked in a recovery of tourism and travel activities and passenger figures, traffic figures, etc. for the second half. So we still are... I'm confident that this conflict will not last until the end of the year, despite the fact that the recent days only indicate, unfortunately, a new escalation. But yes, I'd say also the key season for the tourists from the Gulf states starts only now, mid of July. Normally, we see tourists from the Gulf states escaping the heat down there. Yes, we are for sure also a bit dependent that the situation doesn't stay like it is. Premiumization, I mean, that's an ongoing megatrend which we observe now for decades, I would say, especially also driven by... Increasing middle class and an aging population. We see consumers who are more affluent and who also, we call them also our empty nesters, like they are no longer providing for the family, but they can use the money for themselves. They become more hedonistic and they invest more in their quality of life. And this is one driver for striving for premium products, premium travels, premium hotels, etc. So this mega trend is intact and hasn't changed. Of course, there can be setbacks like now when consumers are burdened by inflation or insecure due to the geopolitical situation. But in general, we see this trend going on. Did I answer your question or is there anything open?

Thank you.

Thank you.

The next question comes from the line of Ed Hocken from JP Morgan. Please go ahead.

Hi all, thank you very much for taking my questions. My first one is on pricing. I think you say mid-single digit pricing still in the second half of the year. I think this is and as had been expected already so I'm keen to understand on these targeted price investments being made what magnitude of price give back are we talking about at the group level and what magnitude of volume improvement you're expecting from that in the second half and then I think on 2027 The comment was that pricing would not be positive. What do you see as the range of possible outcomes on pricing in 2027? Should we think that it could be in the range of flat to negative mid-single digit pricing at the group level? And on margin, should we have as an expectation that 2027 is a 20 to 40 basis points improvement in margin year aligned with your mid-term ambitions? Thank you.

Thank you, Ed. Again, for 2027, it's too early to give an outlook. So we gave this indication that it's unlikely that prices will increase because this was a concrete question. I think to the margin, we can also say that given a windfall from raw materials, we don't see pressure on margins next year, the opposite. But to determine now pricing, volume or top line, it's too early and we don't give guidance.

I mean, bear in mind also, if you look at the cocoa market, how volatile it is. I mean, it came from 10,000 straight down to 2,000, and now it's back up to 4,200. So in this environment, it's difficult even to give now already a concrete outlook on every single example of pricing action, et cetera. So it's just really to fall right now in this volatile environment, as Adalbert said.

Yeah, the first question, Thank you very much. Thank you very much.

We now have a question from the line of Feng Zhang from Jefferies. Please go ahead.

Hi, thanks for taking my question. Just got one question. What's the volume run rate in Germany and Switzerland after the price action you've taken, trying to figure out how much visibility is out there? Could you remind us on the pricing negotiation timing in the second half for the key Christmas season, particularly in Europe? Thank you very much.

Thank you. So if you ask about the corrective actions that we take, for example, for Christmas, we speak about a low double-digit price decrease across the Christmas season. On everyday business, it's, as I mentioned, more different promotion pricing, price-back architecture, so we are not in the position for the everyday business to lower prices. There are some small exceptions in Switzerland with some and many others. But on a broad scale, we speak about the correction in the Christmas business as the sell-through was weak in the Easter business and everyday business is more RGM activities.

We're talking about Germany right now, but Germany specifically on Christmas. That's Germany Christmas.

That's Germany Christmas. I understood this was the question. I speak only for Germany. You know Germany represents 17% of the total group. and Christmas is a part of the second half, so it has an impact, but I would not overestimate the impact on the total group.

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Ladies and gentlemen, there are no more questions. We have a last-minute registration coming from the line of Sir Johann Effert from UBS. Please go ahead.

Thanks for taking the follow-up question. It's a quick one. It was in the media. I think this is one large retailer in Germany. You have not yet agreed for the Christmas orders. Is there any update from your side You can share. And the second question is, please, the average selling price negotiations for Easter 2027 have they kicked off already? And what you observe among your key accounts, your key retailers, is this meeting your expectations more or less on pricing currently? Thank you.

Thank you, Jörn. So, yes, the issue with the big retailer in Germany is solved. It was a tough negotiation because they were not happy about the sell-through of Easter and had some demands for the Christmas business. We found, I would say, a reasonable compromise and so now all the Christmas orders are coming in and we are in constructive cooperation with the customer again. Average selling price is Easter for 27. That's nothing we can comment on if you understand, please. But I don't expect any disruptions there because we do not go out with further price increases and normally the friction starts with price increases. Thank you. Thank you.

We have a follow-up question from the line of John Cox from Kepler-Chevreux. Please go ahead.

Yeah, so thanks for taking the follow up. I'm really coming back to this medium term growth guidance. And you've mentioned, you know, you don't know what's going to happen in in 2027. And Martin, you know, how can you give us reassurance then that what we're seeing now is different to that period 10-15 years ago, when you did cut your goal from six to eight to five to seven. And I think at the time, There was pretty much zero pricing and maybe you weren't as developed in some of the emerging markets. How can you give us comfort that you can maintain this 6% to 8% based on what you can see today and what is different today compared to what it was 10 or 15 years ago? Thank you.

Thank you. John, I would say what is different. First of all, we always have earmarked the U.S. with a very low share as our growth driver number one and the US has grown in the meantime to a 35-37% share of our group. The second thing is we have reached out more aggressive to all the other markets outside of Europe and North America than we did before, we will see an impact there. And retail has been a very small, we only started in 2009, it has been a very small contributor to the growth, but it has always been in percent and over-proportional growth contributor with the numerical expansion, but also, let's say, with the perfect execution in our own store, so we always had a substantial This retail division in the meantime is a significant part of our group and will have a stronger absolute impact to our growth story. So this is why we hold on to the 6-8% and all our mid-term plans and all our bottom-up plans which are discussed with the countries confirm this and this is why we don't have a reason to Yeah, to step away from it.

And in addition, I think also, you know, there's still a certain inflation in next years that we should expect, right? I mean, we can see it now with certain food ingredients, for example, in next years, also driven by El Niño, right? If it happens, especially if it's strong El Niño, we will see a lot of food inflation outside of cocoa. and just in general I think the inflation is likely to be around still in next years so it may well be that our pricing in the next five years on average is still Let's say 1% to 2% as it was in this period that you're mentioning where we had 6% to 8%. It doesn't mean that pricing, net pricing, including all revenue growth activities, will be zero, right? It will most likely rather be in the neighborhood of 1% to 2% as well. I'm not talking about 27% necessarily specifically, right? I'm talking about 28% and beyond, next five years or so. So I think that's also one change. As Adalbert said, I mean, rest of the world in this Thank you very much. We have a follow-up question from the line of Samantha Darbyshire from Goldman Sachs. Please go ahead.

Hi, thank you. I just wanted to come back to, you mentioned the ChocoWafer expansion next year and that the capacity would be online by 27. Can you just confirm that by the beginning of 2027? And then also, what kind of magnitude do you think that could support sales growth next year? Could it be a similar size to Dubai style? And how would you expect that to kind of phase? Thank you.

So we can confirm that the capacity should be available beginning of 27, so our internal plans are even end of 26 that the line should be installed, but normally you have also a couple of months until the line has the full output. We don't confirm, we don't disclose individual product ranges, but let's say given Ladies and gentlemen, there are no more questions at this time. I would now like to turn the conference back over to the speakers for any closing remarks. From my side, first of all, I would really like to thank you for your interest, also demonstrating how detailed you are, informed about our performance. Yes, and as John said already, wish us good luck. We also hope that Some things are getting better in the months ahead, especially all these geopolitical conflicts. And I'd say also the heat wave is already here in Zurich. It seems to be over. We enjoy now a nice 25 degrees and no longer a nice 35 degrees. So we also hope for some tailwind and we are sure As we say, at the end of the tunnel there is always a light and we are seeing it already. Thank you very much.

Thanks everybody.

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