Barry Callebaut AG

Good morning, everyone, and welcome to Barry Callebaut's half-year results presentation for 2024-2025. I'm Sophie Lang, Head of Investor Relations, and our session today will be hosted by our CEO, Peter Feld, and our CFO, Peter Van Ester. After the presentation, we'll have a Q&A session for investors and analysts. And as normal, please limit yourself to no more than two questions. Before we start, please take note of the disclaimer on slide two, and I'd also like to remind you that today's session is being recorded. With that, I will hand you over to our CEO, Peter Feld.

Thank you very much, Sophie, and good morning and good day from my side. Thank you for joining our half-year results presentation today. As you are fully aware, we are today in an ever-seeing environment, also in our chocolate industry. On one side, we have the pleasure to create the little happy moments for millions of consumers and to operate in a category that will prevail to be a growth opportunity globally. It is also very good to see that we have started our next level investment program already 18 months ago and we're strongly progressing, delivering on our set course. However, we must recognize today that we are sailing through what one could call a perfect storm right now. The key thing that I want to leave with you is we are here to play to win. We're in an unprecedented bean price volatility environment as we have experienced in the last 12 months, which especially in the last course have significantly impacted customer behavior and hence our financial performance in the short term. We're enhancing our operating and financing model in the new market reality to deleverage and to drive higher returns. This will take some time to be fully implemented in the market. Given offsetting costs from highly disruptive and volatile environment, we will anticipate a 12-month delay to fully reflect the Barikali VAU next-level savings into the bottom line. We're confirming the initial plan of 250 million synergies and 75% of that to flow through into the P&L. So ultimately, we're building Barikal about into an even stronger leader and unlocking sustainable, profitable growth for our next decade. So when we step back a little bit and look at the past 12 months, and one could say we've seen a never, ever experienced impact from highly volatile and spiking bean prices in the sourcing countries. The most important thing I want to share, though, today is that we believe that the bean price in the terminal market has disconnected to a good degree from the reality of what it takes to actually farm a cocoa bean and price to that. So we've seen significantly higher and more volatile bean prices, with prices almost doubling on average year on year. And it's good then to see that the market has self-corrected itself probably at around 10,000 GBP for the second time in February. The exchange opened interest more than 60% lower than February 24th. All of that has obviously had a significant impact to the entire industry. Operating costs are sky high right now, with initial margins nine times higher than before. Stronger backwardation creates higher cost to roll short futures, more than 65% expensive in the first half-year peak. We also see significantly higher carry costs given the market prices in this environment that impact our short-term results. The surplus in the harvest in 2024-25, as we indicated earlier to you, is coming through, but about with an 8% increase year on year. Remember, the downwards trend in the last year's crop was about 20% to 30%, depending on the crop and the sourcing country. We at Barry Callebaut have secured bean supply into early 2026 to safeguard our paths going forward and protect our customers' deliveries. So when we sum this up then, you know, next to the turbulences that we've seen in the bean price, we obviously also have a shifting macroeconomic landscape in the United States, which has temporarily paused some networks decisions that we were preparing in North America. The key achievements that we have is we secured additional liquidity through the euro and the Swiss bond issuances, and that is a major accomplishment. That is a strong sentiment to the conviction that our investors have in Barik Kalibau into the journey and the strategy that we've mapped out to you. We're also delivering strong progress on all key Barik Kalibau next level initiatives. I've personally had, over the past six to eight weeks, several top-to-top meetings with key customers. And together with them, we're working on shortening our cash cycle to improve the operating in the entire industry. And then as we're understanding more where we're heading, we clearly now see our path for the North American network strategy and confirming the investments that we have done there and expanding rapidly to build an even stronger supply environment for our customers globally. We're very proud also to talk about the progress we have on future farming initiative, and I will take you through that in a minute. So with that, let me hand over to Peter to take you through our financials.

Still you, still you. Yeah, maybe you take this one still. Yes.