Davide Campari-Milano N.V.

Good evening, this is the Corosco Conference Operator. Welcome and thank you for joining the Campari Group first half 2026 Financial Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. Today's call will be hosted by Simon Hunt, Chief Executive Officer, and Francesco Mele, Chief Financial Officer. At this time, I would like to turn the conference over to Simon Hunt. Please go ahead.

Great, thanks very much. Good afternoon, everyone. A pleasure to be here with you again. I've got Francesco with me, and of course, we have our IR team that will be available after the call for any follow-up. So let's get going. With a summary of our first half results, Now, I think it's important to start by stating that we are doing exactly what we said we would do, and we are growing in the important start to the peak season. In fact, we are the only listed Spirits player now with five consecutive quarters of organic top-line growth. Now, overall in H1, we record a plus 2.7% organic top-line growth, with Q2 a plus 2.5%, despite a more difficult comparison base. At the same time, we continue to outperform and gain share across all of our key markets in sellout, especially on our priority brands. In fact, we are gaining share in 95% of our markets. Now, I know you've all heard this a few times, but I think it's worth to reiterate our strategy that we shared at our CMD back in November, because that is exactly what we are doing. So first, we talked about sharper portfolio choices with fewer bigger bets. We're doubling down on the key priority brands and the results on the sellout are clear with solid share gains across regions and especially in the strategic on-premise. Second, winning the first shared drink every day, everywhere, with new formats for new occasions. Following our recent new format launches on our aperitifs, we are seeing very strong initial results. with positive feedback from consumers and trade and encouraging velocity and distribution gains. Third, accelerating our geographic expansion. In the first half, we recorded broad-based growth with expansion into smaller seeding markets by increasing our exposure to these high-growth markets where we under-index. And also, with the rollout of priority brands into new markets like Sati Rosa in the U.S. right in time for the summer season. And the final two, leveraging our investments to work harder and driving efficiency across each line of the P&L, allowing us to invest more behind our brands. Now, as you can see on the page, we strengthened our gross margin profile by 130 bps accretion, mainly driven by positive mix due to the performance of aperitifs, as well as input cost benefit and lower tariff impact. and Francesco is going to go into that in a lot more detail later on. Our brand building investments continued at pace into the peak season and front loaded in the first half in absolute terms as we guided. In fact, we are deploying one of the most comprehensive coverages across music festivals and other events, both with our existing products as well as our new innovations this year. Our cost containment program continues to deliver and we are on track to achieve 70 BIPs organic SG&A benefit on top line as guided with an H1 delivery of 60 BIPs. As a result, we achieved 130 BIPs EBIT adjusted margin accretion. Although the underlying trends on the main contributors to EBIT have not changed, we are raising our margin expectation for the full year due to a more favorable than expected tariff impact. Again, more details on this later in the presentation. On the balance sheet side, we remain comfortable and at sustainable levels. We recorded 64% recurring free cash flow conversion before operating working capital changes, and total recurring conversion was impacted by seasonality. Our distillery expansion in Kentucky is progressing as planned and on track to be finalized by the end of the year. Our leverage is comfortable at 2.6 times, supported by business momentum, with some impact of seasonality in operating working capital. At the same time, we are continuing to streamline our portfolio with new disposals of the rum-agricole business, including Trois-Rivières, Maison Lamoni, as well as Biscay de Boucher and Cabo Wabo. As I'm sure you will have seen, we also recently successfully closed a new euro bond issuance of 600 million euros and a liability management transaction, which allow us to feel comfortable regarding the maturity profile of our funding base. So now let's delve into some of the details, starting with the top line. As you can see, the first half organic top line growth of plus 2.7% was broad based across all regions and most houses again. In terms of FX, the main impact is coming from the US dollar, while the perimeter impact is in line with what we previously told you and mainly driven by the disposal of Cinzano and one month impact of Averna. We'll go one by one, but first let's look at sellout, which as you know, is the critical indicator. So far in 26 years to date, we have recorded outperformance and share gains across all of our key markets. With our priority brands, we are growing everywhere, in most cases with mid-single to low double-digit growth. In the U.S., we are outperforming in all channels, especially in NAPCA and the strategic on-premise, where the share gains are even more evident. In Europe, again, we have an outperformance across the board. Total Europe sell-out data includes 12 countries, and you can see we are growing plus 2% compared to the sector decline of negative 1%. and in the on-premise, which you don't see on the page, the outperformance is even more pronounced. Now, as I said up front, we are gaining share in every one of our markets. And I think with all the noise in the category on CEO changes and significant restructures, merger speculation and consumer pressure, we at Campari are growing. And we are growing share because we have a clear, differentiated strategy and we are executing it without distractions. So now let's move on to Europe top line. Europe delivered plus the 1.9% organic growth in the first half, with growth across all markets except Germany. In fact, Europe growth is plus 2.9% excluding Germany, where the consumer pressure is most evident. This growth was driven by our creative portfolio strategy with contribution from all of our key brands. Innovations also started playing a more meaningful role as part of our convenience strategy. and all together we are implementing the biggest ever activation plan in Europe in terms of days of activation, menu placements and festivals. In Italy we saw continued growth for our aperitif portfolio led by strong executions on innovations, notably Aperol on tap and Campari Spritz ready to serve which hit shelves at the beginning of Q2. In addition, we are executing 4,700 activations during the peak season, especially into Q3, and we already have Aperol Tap in more than 1,000 outlets, including festivals, events, but also new outlets like pizza restaurants. Aperol's performance is further supported by the rollout of our L'Originale campaign, which is reinforcing our leadership in the entree with almost 500 outlets already proudly displaying the certification badge that they proudly serve Aperol. As I mentioned, Germany continues to see a challenging backdrop with subdued consumer confidence and wallet pressure impacting numerous consumer sectors. Despite this backdrop, Sati Rose's performance remains strong. and we've seen strong execution behind Codino and the early success of our innovation rollout, including Campari Spritz ready to serve and Apparel on tap. The environment going forward is expected to continue to be challenging, but we will continue to expand our presence and activate behind our key brands in preparation of the market recovery. In France, the Aperity portfolio is performing strongly with high single-digit growth partially offset by the local portfolio. Aperol continues to lead that performance, and Sati Rosa has also started to gain traction following its launch last year. The U.K. had a strong first half with plus 4.3% growth, once again led by double-digit growth in our aperitif portfolio with contribution from Aperol, Campari, Sati Rosa, and Credino. There's also strong early traction for the Aperol-to-go camp, with ongoing distribution gains and velocity at three times our original targets. At the BST Festival in Hyde Park over a two-week period, we sold 65,000 cans of Aperol Spritz in a format that we wouldn't be able to do previously. And Aperol on tap will also progressively be rolled out over the summer. In other European markets representing about 12% of overall sales, we saw broad-based growth of plus 5.5% across most countries, especially in Spain, Austria, Greece, and Benelux. Having just been to both Spain and Greece, I can tell you the potential for our portfolio there is really exciting. And the bulk of the growth is coming from Aperol, Sati Rosa, Credino, and sparkling wine to support the aperitif trend, as well as solid performance on Courvoisier. Now moving to North America, we recorded a plus 2.6% organic growth with all markets growing. The U.S. recorded a plus 1.5% organic growth driven by our priority brands, Aperol and Espelon, especially with strong on-trade performances. Aperol saw solid growth showing the early benefits of increased investments behind the brand. including an amplified presence at Coachella and the 21 new brand activators in the on-premise across the four states are really driving the business. In fact, the accounts that they are covering, we are seeing four times the velocity of the accounts that they are not covering. In July, we started a campaign with Hilary Duff to sponsor her concert tour, which is further amplifying visibility into the third quarter. Another important development in the U.S. is the June launch of Sate Rosa. Although it's very early days, we are seeing strong pickup, with most locations limiting consumers to a maximum of a one or two bottle purchase. And we're already seeing people come back for reorders. TikTok is leading the social media buzz on this brand, accounting for 41% of the coverage, which is an encouraging signal that the brand is resonating with legal purchase age trend-driven consumers. S1 also continues to form well with high single-digit growth, both in Blanco and Repo. Also here, we continue to activate behind the brand with the short King Week campaign featuring Ken Jeong and activations during the World Cup with a series of watching block parties. Commercially, we placed Esplanade in over 7,000 menus, double our original target, with similar success also in off-premise displays. And we'll talk more about the performance later in the day. Moving to Jamaica, we recorded plus 8.8% growth with benefit from the faster hurricane recovery, as well as pricing coming through in the market. For the rest of the region, all countries registered solid growth, including Mexico, which recovered the quarter one phasing impact that we mentioned previously. So now let's have a look at developing markets. As a reminder, we formed this region at the beginning of the year in order to become more agile and benefit from a repeatable playbook across some of our seeding markets. In the first half, we started to see some of the benefits of this increased focus with widespread organic growth of plus 9.1%. Brazil saw continued momentum of Aperol and local brands, partially offset Campari, phasing into the next quarter. Argentina benefited from the ongoing strength of Sky Cosmic, and since the launch of Sky Cosmic was in June last year, we do expect the growth rate to normalize in the second half. In the other countries, one of the key drivers of growth was Cuvoisier, led by Eastern Europe and South Africa. The new region has completed its strategy work and is now working on capital allocation in line with the group-wide strategy in a disciplined way to target the multiple opportunities we have in these markets. For APAC and GTR, we registered a flat trend in the first half. The biggest market in Australia grew plus 2.6% with double-digit growth in both APROL and Esplan to now contributing about a third of the total top line in Australia. and this was partially offset with a flattish trend on wild turkey, which still contributes more than 50% of Australia's top line. Here, we're continuing our focus in the on-premise and activating strongly. In GTR, we recorded a plus 6% growth. As you might remember in Q1, it was negative 13.5. It was off a high base admittedly, but it was also impacted by geopolitical events in certain geographies. In Q2, while an easier comparison base helped, We also focus strongly on the imperatives in Europe. And below you can see our launch in EasyJet and British Airways of the Aperol to go can, for example, while also activating across numerous airports. In the rest of the region, we recorded solid growth in China, India, and other partnership markets. But this was more than offset by South Korea, where the completion of our distribution company integration has led to a negative impact this year. Right, now let's change the optics from regions to houses, starting with aperitifs. Overall top line growth was an encouraging plus four in the first half. Aperol delivered a solid performance of plus 3.3, benefiting from the positive trend in the bottle, which was amplified by launch of innovations such as Aperol Entente. All regions contributed to the positive trend, and we'll talk more about the Aperol innovations on the next slide. Italy saw resilient performance while in Germany the brand was held back by the challenging consumer environment. Elsewhere, we saw good contribution from the US, UK, France, Brazil, and Australia. For Campari, we recorded plus 2.3% growth with solid performance in Europe and North America. And Campari also benefited from the launch of Campari Spritz Ready-to-Serve in Q2 in some European markets. It's early days, but so far the response from the trade and consumers has been very positive, particularly in Italy and Germany. The remainder of our Aperitus portfolio grew 8.8%, primarily driven by Sati Rosa, which continues its solid growth in its core German market and is also progressively benefiting from the rollout into other high potential countries. It's important to note that only a few years ago in 2023, only 4% of Sati Rosa top line was outside of Germany. This has now reached 48%, showing the solid reception that it's having in new markets. As I mentioned before, the U.S. launch is now underway and the initial trends are very positive. In the U.K., it has already become the number one innovation launch in spirits in Sainsbury's in just a short few months. One of the key pillars on our CMD was winning the first shared drink with new formats for new occasions and providing convenient options for our consumers. And here I want to walk you through what we've launched so far for Aperol. Of course, the bottle and the perfect serve remain a critical piece of our strategy. And the on-premise focus remains fundamental in order to reach new occasions and achieve incremental growth. We've accelerated the expansion of the ready-to-serve into new markets. Now we have 15 seeding markets, and the trends are all positive. And this allows consumers to achieve that perfect serve at home in a glass over ice. As you all know, we piloted APAROL on tap last year over the summer in select locations. This year we are rolling it out across the peak season in more and more high-velocity venues and events in select markets. The tap program allows us to use events not solely for visibility, but also for sales. In just three months, the tap volume in Italy has reached roughly 1.5% market share of premium beer. This is exactly the profit pool we want to penetrate further. Lastly, we also launched the long-awaited Aperol to go can in the UK, Belgium, Austria and GTR. The idea is simple, making Aperol accessible in occasions where we're not able to play in the past. Towards the end of the year, we're also planning to launch a glass-to-go alternative for some select markets like Brazil, which, similarly to TAP, can be an on-premise alternative to offset local constraints like the lack of Prosecco in Brazil. Now, all of these innovations give us incremental top line and higher or on-par gross profit per serve versus the 3-2-1. Now moving on to the House of Whiskey and Rum, we recorded a decline of 6%, mainly due to the impact of the whiskey category challenges in the U.S., South Korean impact that are already mentioned, and a temporary demand-led supply constraint on Russell's Reserve, as I've told you before. And going forward, supply will be strategically managed in the upcoming years to ensure that we have a more consistent aging liquid supply. Jamaican runs were resilient with a flattish top line, including solid underlying trends in Jamaica, offset by a high comparison base in the U.S. In the House of Agave, Espolon grew 8.2% in the first half, with balanced growth in both Blanco and Repo, supported by the launch of Extra Inega. Here, while we see the ongoing benefit from geographic expansion, the majority of the growth is being driven by the core U.S., where the brand continues to gain share. On the next page, you're going to see some additional details on Esplan. First, looking back at the performance of Esplan in the U.S. over the last 10 years on the top left chart, you can see what a trajectory it's had. There's been a lot of growth in tequila overall, but both in the initial period of growth between 2015 and 2022, as well as the most recent period, Esplan has outperformed strongly. The premium segment is currently the fastest growing part of the category as many consumers trade down from the larger super premium segment. And Esplan's quality led premium positioning benefits from both trading up and trading down. Esplan in 2015 was the fourth largest premium brand in the US. And now as of 2025, it is the number two. with a CAGR growth of plus 19% between 2022 and 2025. Now looking instead to the year-to-date sell-out data in 26 in the bottom left, we see this trend continuing. In the Nielsen Off-Prem, Esplan is one of only four growing top 10 brands. In fact, across the four largest tequila states, Esplan is outperforming by nine points on average, including key battlegrounds of California, Texas, Florida, and New York. In Nashville, we have gained plus 70 bps market share and are the only top 10 growing brand with a plus 12% growth. Similarly, in the on-premise, we are again the only double-digit scale brand in the category, and we plan to continue this trend with investments behind the brand, selected promotions, but keeping our pricing strategy which we believe the great liquid supports the strong value equation for the consumer. And lastly, looking at the right part of the page, you can see we also have ample incremental room for growth. Smaller pack formats are the main growing part of the tequila category today in the U.S. with plus 3% growth in smaller than 375 mil versus negative four for the overall category year to date. We launched our smallest format to date which is a 200 mil bottle only in June this year. It's already seen a strong pickup, and we expect more contribution going forward with potential additional innovations to come in this segment of the market. Varian innovation will also drive additional growth. The Extra Anejo launch in June at $70 per bottle, for example, cements the brand's accessible premium status with one of the most affordable and, frankly, delicious Extra Anejo offerings on the market. Finally, we can have a look at our House of Cognac and Champagne and then the local brands. The House of Cognac and Champagne recorded a plus 4.6% top line growth with solid performance in Courvoisier driven by developing markets and APAC. In the U.S., we held a stable trend despite the ongoing category pressure. The growth in Dr. Armani on the other hand was mainly due to an easy comp base with normalization expected in the balance of the year. Within our local brands, Sky remains an important part of our portfolio, and we're pleased to see the growth of plus 5.7% in the first half, primarily driven by Argentina, due to the popularity of Sky Cosmic. And that was more than offsetting the ongoing softness in the U.S., in line with other major players in the U.S. vodka category. I'll now hand the floor over to Francesco, who will walk you through the first half financials in more detail. Francesco.

Thank you, Simon, and good afternoon to you all. Let's start by looking at the EBIT margin trends. Overall, in H1, we recorded 130 bps organic EBIT adjust margin expansion, supported by the pull forward of gross margin benefit, while AMP and SG&A are progressing as planned. In gross margin, we recorded the solid organic accretion of 130 bps. supported by a combination of stronger mixed effects due to the solid performance of aperitif in early peak season, the saving of COGS productivity gains, which we were able to realize faster than originally expected and now in the base, the tail end of agave benefits that we have flagged previously, and lastly, limited tariff impact of $7 million. Here, the impact was lower than we originally expected for H1. Due to the fact that between February 20 until the end of the quarter, we paid only 10% tariffs in the U.S. instead of the originally expected 15%. As a result, we have updated our full year guidance accordingly. Based on the U.S. administration's most recent decision of just a few days ago, the 10% tariff was for the time being reconfirmed. We will obviously keep monitoring the development around tariffs. Our AMP to sales reached 17.4% in H1, leading to a dilutive impact of 50 bps organic, driven by brand building investment for peak season and to support our innovation pipeline as planned. On SG&A, our containment efforts are continuing, in line with our expectations, and we benefited from an accretive impact of 60 bps organic in H1. This means that we are on track to reach, by the end of 2026, the 70 BIPs guidance that we have provided. Some of you might have seen that Alien Arm Fossil has recently joined us at CHRO and brings with it significant large-scale transformation and automation capabilities. To close, EBIT Adjust was arrived at $358 million, reflecting a margin of 23.7% with plus 8.5% organic growth, excluding the net negative impact of $23 million from perimeter and effects. In terms of P&L, we recorded a positive evolution supported by business momentum. Group net profit adjust grew at 4.7%, mainly driven by the positive evolution of EBIT adjust, as well as favorable impact of financial expenses. EBIT operating adjustments were negative at $109 million, mainly driven by the write-down of assets marked for disposal of $82 million, as we recognize the diminished strategic value for this route to market enhancing past acquisitions. and we'll have that to adjust their asset value as we dispose of them. Simon will comment more on this new disposal later in the presentation. Negative $17 million related to other six assets, negative $10 million related to bread impairments, and finally positive $19 million coming from the Averna and Zedapira disposal capital gains. Adjusted financial expenses were $44 million, with decrease driven by lower average net debt at $2 billion versus $2.3 billion last year, with average cost of net debt stable at 4.3%. The positive $5 million adjustment you see in the table is related to the gain we book due to the bond liability management executed in the context of the $600 million bond issuance. For the full year, we are maintaining our guidance of around 100 million financial expenses, also due to the impact of the new bond issuance, which has further helped improving our maturity profile. The recurring tax rate was at 27.9%, minus 130 BPS versus H1 2025, due to favorable country mix. Recurring cash tax rate is at 25.8%. Lastly, I will cover the key balance sheet indicator on the next page. Operating working capital as a percentage of sales is at 52%, similar to the same period of last year, and seasonally higher mainly due to some build-up of finished goods inventory for peak season and select increased immaturing liquids. Compared to the end of the year, the increase in operating working capital is also due to the normalization in the net trade position, driven by concentration of capex and related cumulated payable at the end of last year. On capex, the maintenance capex remained temporarily contained at 3% of sale, slightly below the run rate of around 4%. Extraordinary CapEx on the other end is at 2% of sales, including the tail of the production capacity enhancement program, especially in Kentucky, with finalization expected in 2026, for a total of 100 million. On cash flow, the recurring free cash flow before operating working capital change conversion is at 64%, aligned with our historical five-year average of 68%. The overall recurring free cash flow on the other end remained more limited at 4% conversion, or 19 million, due to the impact of the operating working capital seasonality. This is expected to normalize into the second half of the year. On leverage, we remain comfortable at 2.6 times, marginally higher than year-end leverage ratio, due to some impact of the seasonality that I mentioned before. In fact, the increase of $110 million in net debt is primarily linked to this operating working capital increase, as well as some impact from the dividend payments, mitigated by the proceeds of the Averna disposal. And with that, I will hand back to Simon to talk about certain activities in 2026 and our outlook. Thank you.

Great. Thanks, Francesco. Look, you've all seen this page before, which is a summary of what we plan for 2026. And the reason we put it up is exactly what we are doing. and I won't go one by one as we've already covered the majority of these points, but it's important to note that all of these points are on track and will remain so for the balance of the year. So now just coming back to our portfolio streamlining, we want to give you an update on what's been keeping Fabio Di Fede so busy over the last 12 months. And with this release, we are happy to announce that we have closed another two disposals that you see on this page, which might be limited in terms of size, but have a clear and solid rationale. The first is Rum Agricole business, including Trois Rivieres, Maison Lamourny, and the second is the disposal of Cabo Wabo Tequila and Biscuit de Boucher Cognac business. Now, in the past, we needed these brands to open up new markets, but this is no longer the case. For example, the Rum Agricole portfolio was acquired to support the route to market in France. At the same time, their margins are lucid, cash intensive, and with very limited upside to growth within our portfolio. So together with the previously announced deals you can see on this page, we have already made significant headway over the last 18 months in this regard, with the disposal of more than 10 brands or businesses. By the end of 2026, we are planning on coming to the end of our portfolio streamlining, which significantly reduces the complexity in the business and allows us to concentrate resources, investment, and management focus behind our fewer, bigger bets. and this is absolutely consistent with our capital allocation discipline. Now moving on to our outlook for the rest of the year. As you can see, we have an update on our guidance. Starting with the top line, we are confirming the full year guidance of circa 3% organic growth. On the EBIT adjusted margin, we now foresee an incremental uplift. And this is due to the more favorable tariff environment, which means we can expect a 10 million euro benefit flowing through to the bottom line compared to our previous guidance. Accordingly, the full year negative tariff impact we now expect is around 20 million euros instead of 30 million euros. Considering the positive phasing into the first half, second half EBIT adjusted margin therefore will be relatively flattish versus the same period of the previous year in organic terms. All other contributors to the margin remain unchanged. This means that the underlying gross margin trend, where we recorded phasing in the first half, is not altered in our full year expectation. Now, as I'm sure you've heard from many companies, the claims on a potential 2025 tariff refund have started. And we've also made a claim and recorded a 15 million euro as a contingent asset. However, Given that the timing and extent of the refund remains uncertain at this stage, and we see additional potential geopolitical volatility impacting in COGS in the second half, primarily from things like logistics, we believe that these two effects might reasonably offset each other with no incremental benefit for the full year. Now, to be clear, if we do see a benefit of that, we'll update the guidance when we give you an update on Q3. But at this stage, we don't want to count on anything given the volatility around tariffs and the geopolitical environment we're operating in. On A&P and SG&A, we confirm our previous guidance as we invest confidently behind the long-term development of the business. So overall, we're encouraged by the progress we made in the first half and we continue to remain fully focused on executing the strategy we presented at our Capital Markets Day with positive traction across our priority brands and geographies for five quarters now. For us, the key word going forward is execute, execute, execute. And we're now happy to open up the floor for any questions you have. Thank you.

Thank you. This is the Coral School Conference operator who will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. To remove yourself from the question queue, please press star and two. We kindly ask to use handsets when asking questions. Anyone who has a question may press star and 1 at this time. The first question is from Sanjit Awila, UBS.

Hey, Simon, Francesco, a couple of questions for me, please. Firstly, on the US, Simon, can you just clarify if there were any further inventory adjustments into Q2? And how are you seeing the pricing environment evolve across your categories in recent months? And then just double clicking on that. I fully appreciate the positives in the portfolio, but there are a couple of drags, in particular Grand Marnier and Wild Turkey. What are you doing to try and stabilize those brands in the portfolio, please?

I've got a second question after that, but maybe we can kick off with the U.S. Sanjay, I've got three questions on that first one, so let me see how we go with those. Look, I think in terms of the inventory adjustment in Q2, business as usual, no extraordinary movements on inventory, full stop. The second one was on pricing in terms of categories in recent months. Yeah, look, I think we're continuing to see people getting a bit more aggressive as the trends remain challenged. I think, you know, in certain categories, we're seeing it more than others. I know there's a huge degree of speculation about what's happening in tequila. At this stage, we're not seeing the read across in terms of really impacting our performance on Espolon. As I've said to you before, we believe we've got the right price strategy with Esplong. We're well positioned in the consumer's eyes and the trade's eyes as a good quality tequila with a good value proposition. And so I think, look, we're going to have to wait and see. There's a lot of speculation as to what may happen in the next couple of weeks in terms of new strategies. We're confident in what we're doing. We're price promoting in the way that we would normally do it, you know, around the key seasons. But, you know, let's wait and see. As we've said before, pricing is always relative, but we don't see a big read across between potential movements of brands above us impacting the business. Last one, I think, is Grand Money and Wild Turkey. I think what's interesting on Grand Money is, and I'm sure you've seen this in some of the data and heard it from other people, we're seeing the traffic numbers in the U.S. starting to come back. But what we're seeing is the tickets aren't following at quite the same velocity yet. So I think where we see the opportunities with things like the Grand Margarita, if people are going out again, if they are going out, they want to trade up, I think we can continue to leverage that trend on Grand Marnier and take advantage of people getting back into the on-trade. I think on Wild Turkey, look, it's a tough category. You've seen it in a number of the reports from other companies. I think we've been rebasing our strategy. We've been looking at what other opportunities we have to work with it. We've got new innovations that we're looking at in ready to drink in Australia to keep things moving forward. But look, it's a tough category at the moment and we've got to carve out our rightful share of it.

That's really helpful, Kala. My second one was really on Germany and just understanding the weakness there. To what extent is that a continuation of the The retailer headwinds you had in Q1, or is it just a weak category and you expect those trends to persist in page two?

Yeah, look, great question. I think it is just a weak category. We've got no issue with the German retailers. We've managed to continue to work with the retailers across Europe. I think we're pleased with where everyone ended up this year. But I think, look, if you look at the consumer data, you look at what's happening in terms of other consumer goods outside of our sector, the German consumer remains under significant pressure. And you see that that you know, that very selective purchase power. And as a result, look, we've got to position ourselves the right way for when they do come back, and I think we're doing exactly that. Thank you.

The next question is from Andrea Pistacchi, Bank of America.

Yes, thank you. Hi, Simon, and ciao, Francesco. Two questions, please, on two aspects of your guidance, starting with the top line. Just on the 3% in H1, so your guidance for the year, which is to confirm about 3%, implies I'd say something similar or a fraction more in H2. Now bearing in mind the more difficult comparison base in H2, where do you see the incremental positives that will take you to close to 3? And are you able to share any color maybe on how Q3 may have started? And for Francesco on margins, up 130 basis points in H1. I think, Simon, there are a lot of moving parts in the margin, but I think you said flattish for H2. That's a way to think about it. Now, the tariff benefit should be a positive in H1 and in H2. Positive mix, I assume, should continue as you outperform with aperitifs. So where is the main offset that will hold back margins in H2 versus H1? Is it, I mean, there's probably a bit less agave benefit, but maybe you can talk about the COGS pressures, the input cost situation along with this. Thank you.

Chand, okay, I mean, I think in terms of the top line question first, We're guiding on the full year at three. As you can see, we're pretty close to Q1, pretty close to Q2. We've got a bit of work to do, but I think what we've got is we've got some good momentum coming through in terms of the brands. We're seeing very strong execution, particularly from Q2, to answer your question, and into Q3. I'm pleased with what I'm seeing in terms of the activations we've got across not only North America, but also across Europe, which is giving us, I think, some strong momentum coming into Q3. So I think from that point of view, that's really where we're seeing the difference between where we've got the first half and then landing the full year. But look, it's a competitive market. We've got some work to do, but that's our target and that's what we're going for. So, Francesco, you want to take that?

Absolutely. In terms of margin, I mean, you pointed out the key driver of the margin trend during the second part of the year. We still expect a positive COX evolution, but, you know, to a lesser extent compared to H1. And to be fair, we actually feel that for the entire part of the period, the weight of the tariff on the other side. So we expect Some accretion on the COX side, but limited. And clearly the rest remain the same. We expect some pressure on price offset by mix. Mix remain positive as we see in H1.

And again, I might just add one thing to that comment as well. As I said in my closing comments, I think the key thing here is Around the tariff, we've seen, I think it's fair to say, a fairly massive degree of volatility on how that has played out. And as a result, like any updates we have on that on refunds or anything else, we can pick up in Q3. But at this stage, we don't have that level of confidence yet. And I think we can continue to see what that looks like and update you accordingly.

Maybe something I can add in terms of input cost, we actually... still maintaining a good position on general input cost with the exception of logistics. Logistics clearly have increased already in the first half and keep increasing in Q3, and we expect the same to continue in Q4. Perfect. Thank you.

The next question is from Celine Panuti, JP Morgan.

Thank you for taking my question. My first question is on Italy. You mentioned that, well, can you talk a bit about the market? I understand from your chart on slide four, I think the market was up 1% on sellout. It seems to have decelerated in Q2. But what, if you can talk about... Like those new tabs, you said it's 1.5% of the beer market. What is it in terms of total apparel? And if you can talk about price point in that market and how you think there is further upside to grow in Italy. And then my second question is in the U.S. Can you talk about the market environment? It seems on-premise has slowed. Are you seeing any change throughout the quarter in terms of maybe an improvement at the end of the quarter or early July if there's anything you can do? And overall, what is your assumption on the U.S. as you look at your guidance for the second half? Thank you.

I think in terms of Italy, the important thing is when you look in comparison between the quarters is, remember the first quarter in Italy is significantly smaller than the second quarter, so there may be some movement there which is driving your read of one point down. I think the key thing on this is if I reflect on the same conversation we had last year where the market was very negative and the fact that we're now delivering as a group plus 5% and with the focus brands plus 4%, I think it really reflects the momentum that we've got. I think it's coming for a number of things, as I said. The first one is I think we're seeing extremely strong execution this year with over 4,700 activations across Italy. I mean, that's a massive amount and a real step forward for the brand. We increased the investment, and we've also, as I said, we've increased the formats. So suddenly we're starting to broaden what is already a very established ritual in Italy into new occasions we couldn't get in before. If I just use the example of one of the festivals we went to, which was the Bad Bunny concert at San Siro recently. Previously, we would have sold zero Aperol Spritz. By having it on tap, we sold 22,000 Aperol Spritz in one night to a very dynamic legal purchase age crowd. So I think what we're seeing there is a broadening of the occasionality through the formats, and I think just momentum in terms of getting the brand back on track in its own market. So I think for that first point, having the answers, I think the second one is, let's see, any changes seen in any kind of course of date? I think, look, as we said in our overall guidance, look, it still remains quite a tricky market, and you look at all the same data we do. I think the key thing where we have points of difference is on the brands we're focusing on and where we're building them, both in NABCA and also in the on-premise, we are significantly outperforming the market. And so I think it's a balance between a very positive story on those priority brands Balance also with the broader portfolio that don't have the same level of focus behind them. And as a result, that's why on the full year guidance, I think we're being quite sensible in terms of balancing those two sides of the portfolio out.

Can I just have a follow-up on the previous question? And you know your gross margin saying that the beating H1 doesn't change the outcome for the year. So if I understand correctly, it's a question of the phasing of the productivity savings and maybe as well phasing of the cost benefit and maybe again cost impact in the second half. I just want to understand on the mix because you mentioned that as a positive impact and the fact that you mentioned a good start to the year is potentially a good summer incremental to your flat margin or let's say gross margin guidance for the year.

Yeah, Celine, for sure, you know, it's a phasing on the coxides, so we can confirm that. In terms of mix, clearly mix is still positive. Also, in the second part of the year, it's driven by the aperity growing faster. But, you know, then the rest is clearly affecting more. When it comes to price, we feel more pressure in terms of price, so the net-net, the impact in terms of margin is lower compared to H1. Thank you.

The next question is from Simon Hales, City.

Thank you, good evening all. So two for me as well. I wonder Simon if we could just come back to your comments around how Q3 has started. I hate really to ask about the weather and maybe building on Celine's comments there. Clearly we've had good weather in Europe through the back end of June and into July. Is that supportive to your business in all of your markets, or has it been problematic in some regions? Has it been too hot for people to go out, I suppose is my underlying question, because I think there was some fear that that's what we might see on the terraces in Italy. Is that something that you've seen? And then secondly, with regards to the recently announced brand disposals, Are you able to help us in terms of how we should think about the impact of those disposals on earnings in 2027? You've given us the rough proceeds number of around 30 million euros. How do we think about what the contribution of those brands from a sales and EBIT standpoint is at the moment?

Sure. Hi, Simon. Yeah, look, I think in terms of Q3, I think it's one of these,

I mean, the way we run the business is, look, we hope for good weather, but we don't count on it, is the way we look at it. And that's why we've increased the number of activations and putting out. So I think actually, I haven't got the days in front of it, but from memory, I think actually the number of sunny days across European capitals has been reasonably similar year on year. So I don't think it's been a big driver of it. I think what's been a more positive driver David Souperbiet, David Souperbiet, The overall impact we talked about coming through. Francesco, you want to take this one or do you want me to?

Yeah, no, no, let me take it. If you look at 2026, we have indicated a perimeter impact of 70 million in sales and 30 million in terms of EBITDA. You know, you need to consider that Cinzano is impacting for 11 months and Averna is impacting for for seven months. So, all in all, when you look at the entire assets that we dispose, the, let's say, pro forma revenue were about 130 million, including Cinzano, Verma, all the rest. I mean, the last bit, the last transaction are for about 40 million in total. So, the other were 90, and so the additional is coming for a much, much smaller number. When it comes to Since Arnaverna, they had a positive EBIT contribution, but when it comes to the last disposal, they had a very, very negligible contribution in terms of EBIT. So they are EBIT accretive in terms of, and I would say they are also gross margin accretive and EBIT accretive. So you need to look at this disposal in a very different way. These are assets that were more difficult, were not generating growth, and were not generating gross margin. Got it. Thanks very much.

The next question is from Trevor Sterling Bernstein.

Hi, Simon. Hi, Francesco. Two questions from my side. Simon, concerning A&P, A&P could be up in the first half. I think from memory, you said that that increase in A&P would probably be first half weighted behind the activation. So given the momentum in the business, I wouldn't be surprised if you're going to throw a bit more A&P into the second half as well. But any more, any guidance on that would be welcome. And the second main question for Francesco around the extraordinary capex. I think buried in the back of the presentation is a chart that says that was 34 million in the first half. So implicitly stepping up to 66 in the second half. And I wanted to just explain why the capex is second half weighted on the extraordinary capex.

Hey, Trevor. Yeah, look, on the A&P, as we guided, look, we always have a bit of a waiting into the second quarter as we get ready for peak season. But, of course, there's a balance between that as we go. Look, we don't just have one peak season. It runs Q2, Q3. So, actually, there's a balance in between first half and second half. Clearly, if we see the opportunity to invest more behind the brands, I've said before in the C&D, I really think now is the time you invest. When everyone is pulling back and kind of making short-term decisions, we're investing for the long term. So if the top line is there, we'll be reinvesting behind that. And one of the good examples of that would probably be Sati, where we see some outperformance and we are maintaining a healthy reinvestment rate to build a brand for the long term. So Francesco, do you want to take the second one?

Yes, you actually pointed out, we actually confirm around 8% of CapEx overnight sales for the entire year. You know, there are a number of items that, you know, have been moved to the second part. You know, there is for sure the headquarter where we are progressing, but, you know, the vast majority of the work are taking place now because the first part was more foundation and we are completing the Kentucky. That is the part that is attracting most of the CAPEX in the second part. All in all, we are going to have, let's say, maintenance CAPEX, let's say, of around 4% a bit more. and Extraordinary CapEx a bit less than 4%, all in all slightly below 8%, and we can confirm that.

And Trevor, as you know, just practically on this, you don't normally pay up all of it until you know it's working. So we're heading out to Kentucky in about four weeks' time to make sure it's there.

The next question is from Lawrence Wyatt, Barclays.

Hi Simon and Francesco, thanks very much for the questions, a couple from me. Firstly, you've now got your 21 brand activators been in the U.S. market for about six months. You sort of mentioned that they were performing particularly well, but I was wondering if there's anything that's appeared from the last six months that perhaps was unexpected or any other way that you think they've done better than you thought or any issues in them being in the market you didn't expect and perhaps I assume the majority of the impact has been in the on-trade, but wondering if they've had any further impacts on any off-trade sales as well. And then secondly, I was just wondering on Espolon, just wondering if there was anything inherent to the brand that's driving the better performance in other tequilas in the market. You sort of talked about the execution that you're doing, but wondering if there was anything unique to the brand that is helping it particularly Thank you. Okay. Hi, Lawrence.

Look, I think in terms of the 20-on-brand activators, as we said, look, to give you an idea, they look after between 75 to 100 accounts depending on which state they're in and the geographies they're in. I think in answering your question, and not really unexpected, I mean, that's the reason we put them in is we were anticipating that there would be a positive impact on velocity, which is exactly what we're seeing in the on-premise. But I think there are two parts to that that are not really unexpected, but I think beneficial. It's difficult to quantify from a model point of view. One is, at the moment, a lot of companies are pulling back on their on-trade support, and we're not. And I think the trade is recognizing that and very much welcoming it, given the fact they're under quite a lot of pressure as well. That's the first part. The second part is Campari has always had a very strong on-trade relationship with bartenders through the Campari Academy, through the activations and things like that. So I think from that point of view, I think that definitely helps in terms of reinforcing what makes us a bit different with the trade and with customers. There is a knock-on effect. We think by investing in the on-trade, we think we do see some uplift in terms of off-trade that is nearby. and that's the model that we've seen work several times, but there's less direct calling into the off-trade of that group. They're predominantly an on-premise focused team. I think in terms of Esplanade, a few things going on there. There's been a lot of speculation for the last six months that suddenly it's going to be this massive price war and various other things going on in the category. The key thing we've been doing is really just focusing on what we do well. And we've been building the distribution. We've been getting the menu placements. As I said, we ended up targeting twice as many menus as we'd originally set out. We got significantly more displays heading through Cinco de Mayo. We've got good trade support behind the brand. Bartenders love serving Espelon. We know that. There's a real momentum there. And that's not stuff that you can build in a couple of weeks. That's stuff that's been built over the last 10, 15 years. So I think That's really where we're seeing the benefit. I think the other part is just practically on the liquid. It's really good tequila and at a fair price. And I think both the trade and the consumers see that. There's nothing on additive free status. There's nothing that we focus on on that. We focus on just really good tequila, fair price, well represented by bartenders because they like working with us and they love the irreverent side of the brand. and as we talked about before, things like the cocktail fights is something that no one else does with them. It's fun, it's engaging and it kind of puts a bit of fun at how serious the rest of the world is on this. It's a fun brand and I think people feel that.

That's really helpful Simon, thank you very much.

The next question is from Olivier Nicolai, Goldman Sachs.

Hi, good evening, Simon, Francesco and Gustavine. I've got two questions. First, on RTDs, you have good feedback in the European markets where you've launched RTD. It doesn't look like there's much cannibalization. Could you give us perhaps a bit of an update on your potential plan to expand in the U.S. and if you would prefer to use a local partner or do it in-house? And then, secondly, going back to SARTI, if I may, on slide 9, Could you give us an idea of the additional capex requirements that you would need if the brand is really being scaled up across Europe? In terms of marketing difference with Aperol Spritz, is it the same price point or is it even more tilted towards the female consumer? Thank you.

Okay, I think some good questions there. The first one is in terms of local production. Yes, I'm ready to drink generally as a principle. I would much rather be in local production as close to the consumer and the customer as we can, particularly given logistics, and I think that's a A model that we can look to other industries that you want to, particularly in higher volume products, you want to be as close as we can. It's not saying we're going to be building, maybe further down the line if this is even more successful than we think it's going to be. But at the moment, I'd rather use someone else's CapEx. There's more than enough capacity in America to be able to go after that. So I think we'll continue to see how that develops. I think easy one on Sati. We have no additional CapEx requirements on Sati. We've already invested. in our major plant in Novi Liguri. That's some of the extraordinary CapEx we put in. We're in good shape on that. I don't see any problems in capacity of that taking off. We have enough capacity for both Aperol, for Satis, for Chinard, for Mondoro, for all of the brands. I'm very pleased that the previous team had already put that in. I think the second part of the question, I think, if I get this right, was the same price point. Satis is slightly higher, and as a result, What we find on this is that even though it's got a very exciting color in terms of being bright fluorescent pink, it does feel a little bit female in terms of the color. But in terms of liquid delivery, we see lots of guys very happily drinking this as well. So it's more gender balanced. What comes through is a very different Spritz experience from the rest of our portfolio. More tropical, slightly sweeter, passion fruit and blood orange coming through. And as a result, I think it's more gender balanced than anything.

Thank you very much.

The next question is from Richard Wittagen, Kepler Schupruer.

Yeah, good evening all.

Thanks for the presentation. I have two questions as well, please.

First of all, on the SG&A benefits, the 70 basis points that you're looking for this year, you already achieved 60 basis points in the first half of the year. Is there any reason for a slowdown in delivery of these benefits in the second half of the year? And the second question is on the FIFA World Cup. You're obviously not the official sponsor, but I think Simon you mentioned on Espolon you had some activation and so on. Is there any impact from the World Cup on your numbers in the second quarter?

Let's start on the first one.

Honestly, when we see at 70 at this point, it means that the attrition in the second part needs to be higher, to be fair, because in order to get to 70, you need to have a 360, but we are going to get more. You know, there is also some fading when you think you are, you know, we actually reduce our workforce by, Short of 500 people during 2025. So now we are also changing our operating model, which is going to be, I would say, the next phase to gain efficiency, and clearly this requires some time. But we don't expect it to go down in the second part of the year in terms of H&A accretion. To the contrary, we expect some further efficiency.

and I think, look, as we said at the Capital Markets Day, and you might find this a bit odd, but every single hire in the company is signed off by us. So it's a very strong message to the organisation about being disciplined with SG&A, making sure that we're putting the money where it's most important and has the biggest impact. So certainly from that side, I think we'll continue to keep that a big focus. In answering your question on FIFA and the World Cup, I don't think it was a big contributor. I think there were a couple of things we saw that worked quite well. One is we had some block parties on Espelon that were irreverent. There was a bit of a counter the $11,000 a ticket final average pricing, which allowed people to get engaged in the event, in the momentum of the event, but in a fun way that was a bit lighthearted and not too serious. And so we had some watching block parties that worked very well. I think one of the other things is I think the UK team did a brilliant job of actually getting Aperol into some very high volume, high venue, high football accounts and watching some of the videos of England play and every time England scored, instead of seeing beer being thrown in the air, we saw this wall of orange going up as Aperol was being used to celebrate. So I think the key thing here is our brands can play across these platforms. And it's not about the football. It's not about what's there. It's about the conviviality and the sociability. And as you heard me say before, our brands are uniquely positioned for that. We're down to earth, good fun, easy. They can fit into those occasions very well.

Thanks.

The next question is from Chris Pitcher, Ross Child and Cole Redburn.

Thanks very much and good evening all. A couple of questions. I want to follow up on the ready to drink question in the United States. Just wondering your view on one of your big competitors taking their cognac brand into the subcategory. I mean, clearly there's enough stock around to do, whether it's something you're doing, whether I've missed it or not. And then secondly, a sort of a specific question on the UK, but more broadly for the group. Is the UK business now, all the supply issues and disruptions a year ago coming through, is that now on a much more even keel in your wealth position for the summer? And more broadly on the group, do you feel in the second half that you've got most of your markets on a much more steady footing, having been through quite a disruptive sort of 18 months? Thanks, Simon.

Yeah, hi, Chris. Look, in terms of the U.S. one, look, I don't really comment on other people's products. You can ask them that question. We're not planning to get into ready-to-drink and cognac. That's all I'll say at this stage. But I think, in answering your question on the U.K. side, yeah, very comfortable in terms of supply. I think we've had some good learnings. We've made good progress. I think our forecasting is getting better. I think we're also benefiting from the investments we've put in through the extraordinary CapEx. to make sure that we've got the headroom to be able to deal with it. I think some of the great things we see in some of these markets where you're suddenly getting double-digit, we're all delighted, and the supply chain team's having a heart attack because it's more than they were planning. But I think what we've managed to do is build that flex into the system, and as a result, we have no issues in terms of supply. Our on-time is full is improving, and we continue to make good progress on our OEE and on our COGS measures, which is what Francesco was mentioning in terms of some of the input costs and seeing those improve.

Thanks very much.

The next question is from Tilly Anno, Morgan Stanley.

Hi, good evening. Thanks for taking my questions. First, just on the US sellout, clearly still incredibly strong compared to the overall market. But if I just compare the slide on sellout for H1 versus Q1, there was a bit of a moderation. Is there anything that you would call out there driving that? And if that sellout trend was to improve into the second half, you mentioned that you didn't do any further inventory adjustments on the non-priority brands in Q2 in the end. If your overall sell-out trends improved elsewhere, would you take the opportunity to do any more of that cleaning up of inventories on the non-priority brands? And then the second one, just for Francesco, you mentioned the working capital seasonality. There was quite a significant increase in receivables as well. Could you just explain a bit what was behind that and what was different this year? Thank you.

Okay, hi Kelly. I'm answering your question. A couple of things on that. You've also got a bit of converse we need to think through between Q1 last year in the U.S., which I remember was quite a tricky quarter and then a more positive Q2 and then cycling the opposite this year where we had a steady Q1 and a better Q2. So I think there's always a bit of that going on. Look, I do think that we need to recognize the U.S. market is still tricky. Now, I'm really pleased with what the team's doing and we're getting a good lift in terms of overall market share. But look, it is a tough market and so we're having to carve that out. And I think the more we continue to do that, The more we'll continue to see those share gains coming through, we're well positioned for the long term. As you've heard me say before, we're 3% of the U.S. market. So even if the market is tricky, we need to go and get an unfair share going forward, and that's what the team's doing. I think I'll pass it on to Francesco on the receivable side.

Yeah, absolutely. I mean, you're actually right. Receivable increase, the main reason is that they were linked to innovation that was tuned into quarter end. We've made many, many launches in quarter end. in a ready-to-serve, in tap, in ready-to-drink. And so this was concentrated in order to be available for the peak season, and that's the reason for that. So in a sense, it's a business-related reason, which is a positive, driving innovation and volume.

Great. Thank you very much.

The next question is from Edward Mundy Jeffries.

Evening, guys. So I've got two sort of interrelated questions. First, and I don't think it's an unfair question because I know you know the industry very well, but 15 years ago we saw the growth of the copycat spritz, especially the Hugo, and that lasted a couple of years and then it was nipped in the bud I think about 10 years ago. Could you remind us what was the strategy to sort of suppress that and for Apo to really do its thing? And then the second question is, as you've broadened distribution of sati outside of Germany, What are the learnings that you can bring to the U.S. rollout, in particular when it comes to taking on other sweet spritzers, such as this elderflower variety?

Yeah, hi, Ed. Look, I think you're testing my memory here from 15 years ago, but I think what I can tell you what we are doing on this is, I think as we continue to broaden our offering within spritz, I mean, let's be clear, this is our category. We invented it. And as a result, our leadership position that what I'm really pleased to be seeing now is taking more of a category management approach. And so the fact that we have Mondoro doing very well in Europe playing in the Ugo Spritz category, Ugo Spritz is not branded like Aperol. They're like sati. And as a result, I think consumers are very happy for us to be able to come in and offer a great tasting Ugo spritz at a more competitive price point. And so I think some of that we'll continue to see. But the big thing for me is actually just that as we see consumers work through spritz, same as you see in other categories, you know the different flavors that build different consumers and we are uniquely positioned to be able to take someone from a tropical blood orange you know passion fruit sati into a more bitter apple into a more bitter Campari into a very bitter Chinard with all the flavors that run through that and I think that's unique and as a result we continue to to see the trade recognize that and want to work with us so I think from that point of view I think it'll be a more a combination of doing what we do well and just reconfirming our leadership in the category we created. I think your second question on Saati, I mean, some of the learnings we have on this is what's a bit different on this brand is we're still building the on-premise. That's very much where the brand lives, and we will build it that way. I think one of the learnings we have in Germany is that the brand can mostly be built in the off-premise, and that's what we've seen, and we're seeing some of that already in the U.S. So if you look at and a total one or more and the pace that the brand seems to be moving there, we're seeing a significant lift from it already. Now, we're still in the on-premise, we're still building the brand and three, two, one and all the stuff we do really well, but we're now seeing the off-premise potentially playing a bigger role than we've seen in the past. And I think that may just be that the, as you see that the more consumers looking for earlier in the day, lower alcohol, all the brand fears, all the great color cues and the exciting passion of Italy behind all of it, then I think we're seeing a bit more permission to steal from other categories.

Great, thank you.

The next question is from Paola Carboni, Equita.

Yes, hello. Good evening, Simon, and ciao, Francesco. I have a few questions. Many of you can come back on COGS phasing at the gross margin level and if you can elaborate a little bit more what is the reason behind it. Then on tariffs, I'm puzzling a little bit that we are going to have a bigger impact in H2, let's say, so I was expecting a bit more balanced impact, and so I was wondering whether you have been cautious to some extent in quantifying the 20 million euros impact for the full year. and possibly a clarification, if I may, on your indication about phasing for marketing costs. Is it still valid to stick to your previous indication of a skew on H1? I didn't get clear on that. Thank you.

This one. Okay, do you want to start with this one?

So gross margin, what actually we experience in H1 is a number of positive on glass, sorry, glass, other agave input costs. The only negative, the only added was coming from logistics and insurance and the cost of moving goods that clearly are affected by what's going on. And so this is clearly, we actually improve also our technology to do that, but you know, at the end of the day, You know, the price of energy has increased. On the other side, when it comes to tariff, you're right, you know, that, you know, there is 20 more than the seven that you saw in H1. We are taking a balanced view about the quantification for the year. We don't know whether the 10 will continue or whether we are going to be 15. There is a second investigation pending. Honestly, we don't know. So that's why we are taking a guess, which I think is an indication where we see a reasonable amount for the entire year.

And I think the only other thing adding to that, I mean, if you look at the volatility we've seen on this topic over the last 12 months, I think we're absolutely right. I think Francesco's going bang on just to make sure that we are being as prudent as we can. It also depends a little bit on the brand mix. So if you're seeing what happens with tariffs in Mexico or tariffs in Europe, again, we're going to have to see how some of that plays out. Perfect, thank you very much.

Gentlemen, there are no more questions registered at this time. I turn the conference back to you for any closing remarks.

Great. Thanks very much, everyone. Thanks for your time. Hopefully, you can see we've had a solid first half. I'm really pleased with the results, but further questions that come up, please follow up with the IR team directly. And thanks for your time. Thanks very much.

Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.