MHP SE

gentlemen, thank you for standing by, and I would like to welcome you to MHP's fourth quarter and 12-month 2026 results conference call on the 5th of May, 2026. At this time, all participant lines are in listen-only mode. The format of the call today will be a presentation followed by a question-and-answer session. So, without further ado, I would now like to pass the line to Anastasia Sabotik, Director of Investor Relations. Please go ahead, ma'am.

Thank you very much, Michael. Yes, the call there is Good day to you. Thank you for joining us for MHP's conference call dedicated to our first quarter and the results of the year. Just give me a second. I have a problem with the line. Just give me another second. I'm so sorry, but I have a problem with the line.

Can you hear me well? We can hear you loud and clear.

Ah, all right, because it looks like that I do not have a good connection. I'm so sorry. Okay, I can continue, right? You can hear me well. Okay, thank you. Thank you very much. So, once again, good day to you, and thank you for joining us for the conference call, which we dedicate to our first quarter and 12th month results. My name is Anastasia. I'm Director of Investor Relations at and I'm joined today by Victoria Kapelushna, Chief Financial Officer of MHP. Together, we will present and discuss the company's financial and operational performance for the reporting period. Please note that today's discussion is based on the press release, investor presentation, and annual report released earlier today. In addition, during our discussion, we will share our outlook and strategic plans, which reflect current assumptions as well as domestic and international market trends. We kindly ask you to take this context into account during the call. We are moving to page number three of the presentation. Thank you. So let me walk you through the latest macroeconomic picture in Ukraine. Starting with GDP, Ukraine has moved from a deep contraction in 2022-2023 during the peak of the war impact into a stabilization and modest growth pace. As we move into 2025-2026, growth is normalizing. For 2025, real GDP growth came in at around 2% year-over-year, and the central bank expects a similar trajectory into 2026. The key takeaway here is resilience. Despite ongoing infrastructure attacks and security risks, the economy is maintaining positive momentum, albeit at a slower and more sustainable pace. On inflation, we have seen a significant improvement compared to the volatility of prior years. Inflation peaked in 2022 and has since been trending downward overall, though with some fluctuations. As of Q4 2025, CPI moderated to around 8%, down from nearly 12% in the previous quarter. Looking ahead, the National Bank of Ukraine expects inflation to decline further to around 6-7% in 2027, with a continuous downward path thereafter. This disinflation reflects a tighter monetary policy and gradual stabilization in supply chains, which is supportive for real returns and investment planning. Turning to the currency, the hryvnia has shown stability over the past year. The Ukrainian to USD dollar exchange rate remains largely stable through 2025, ending close to its starting level despite external pressures. However, we did see a moderate depreciation of about 13% during the year, reflecting global dollar strength rather than domestic imbalance. This relative effect stability is important. It finals effective central bank management and helps reduce volatility for foreign investors. Finally, on key sectors, agriculture continues to demonstrate resilience. The 2025 harvest confirmed Ukraine's ability to sustain output despite wartime conditions. Grain production reached approximately 64 million tons, up 13% year over year. Let's move on slide number four of our presentation. So we come back to the results of MHP. And let me walk you through our financial performance. Starting with Q4 2025, revenue grew strongly by 44% year-over-year, reaching approximately $1.1 billion U.S. dollars. This was primarily driven by higher prices in poultry and processed meat, as well as continued contribution from our European operations, including the consolidation of the Uvesa business in Spain. Despite this two-client growth, profitability was under pressure. Operating profit declined by 33%, and the bid down was down 12% year over year, mainly due to higher payroll and administrative costs, as well as elevated war-related expenses, which remained a persistent drag on margins. As a result, we reported a net loss in Q4 compared to a small profit last year. Looking at the full year 2025, revenue increased by 24%, reaching $3.8 billion. EBITDA remained broadly stable. at approximately $570 million, with a margin of 15%, slightly below last year. Importantly, net profit increased by 30%, supported by lower APEX losses compared to 2024, despite ongoing war-related costs throughout the year. On the export side, we continue to see a positive mixed shift. Total exports increased from 1.8% billion U.S. dollars in 2024 to over two billion U.S. dollars in 2025. Growth is primarily driven by higher value products, particularly poultry and processed meat, while grain remains an important but more volatile contributor. Let's move on slide number five of the presentation. Here we have the breakdown of our 2025 performance by segment. Starting with revenue mix, our poultry segment remains the core of the business, contributing 51% of total revenue. The European segment is also significant, at 27%, followed by agriculture at 12%, and vegetable oils at 10%. In terms of profitability, the picture is more balanced, Poultry and agriculture are the main EBITDA contributors, accounting for 56 and 46% respectively, while Europe delivers a solid 21% contribution. The vegetable oil segment remains relatively small at 2%. Now turning to the EBITDA breach, total EBITDA remained broadly stable year on year at around $570 million, as just recently mentioned, In poultry, positive pricing, particularly higher meat prices, supported performance, but this was offset by lower sales volumes and higher input costs. In vegetable oils, results declined due to lower volumes and margin pressure. Agriculture was relatively stable. The European segment showed improvement, supported by the U.S. acquisition, along with better pricing and volumes. I would like to pass the word to Victoria here. She will provide you a detailed picture on MHP's financial results across business segments. Please, Victoria.

Thank you, Natasya. Good afternoon, everyone. Let's turn to policy and related operations segment performance, slide number six. Despite the ongoing challenges of the war in Ukraine, MHP delivered solid performance in 2025, with results significantly exceeding those of the same period last year. Revenue grew 18 year-on-year. For 12 months last year, this was driven by high price for both poultry and processed meat, introduced to pass through rising production costs, preliminary reflected grain price inflation, and annual salary review. The stronger price environment also contributes to higher evaluation of biological assets and agricultural produce, which supports our performance. As a result, adjusted TBDA grew 26% to $370 million for the full year, with margin improvements 1.260%. Total poultry mean sales declined modestly from 652,000 tons to 626,000 tons in 2025, preliminary due to the low domestic sales in Ukraine, while export volumes remain stable. Process meat volumes grew from 45,000 to 57,000 tons, driven by higher production and ongoing shift toward production of added value products. Poultry prices increased year-on-year through 2025, Before moderating in Q4, the decline has continued into Q1 2026. However, we already saw signs of price stabilization in April. Looking ahead in 2026, we expect the overall cost and price environment to remain challenging. In addition, ongoing commodity price volatility We factor in increased energy costs, including diesel, as well as continued pressure on logistics and supply chain stability due to the war in the Middle East. These factors may limit margin expansion and require continued pricing discipline. Let's proceed to the vegetable oil segment slide number 7. Performance in the Segment remained weak in 2025. Revenue declined 18% year-on-year, and adjusted EBDA fell by 71% to the $14 million for the full year. Q4 results were particularly sold with EBDA near break-even. The pressure continues to reflect higher sunflower and soybean seed price. which were not fully recovered through oil price movement and dynamic driven by an increased crushing capacity in Ukraine. Sunflower oil sales volume declined across the year, as visible in the chart, while soybean oil volume partially upset this through the production adjustments changed in recipe, as described in our previous communications. Looking ahead to 2026, we expect some improvement in segment profitability, supported by gradual normalization of the raw material cost environment and higher production volumes. The phases outlook remain highly sensitive to commodity price dynamic and potentially increase in input cost including energy and logistics, particularly in light of ongoing instability in the Middle East. Additionally, any continual imbalance between seed price and oil price could further weight on margin. As a result, the pace of extent of recovery remains uncertain, and we maintain a cautious near-term outlook. Let's move to the slide number A, agriculture operation. This segment demonstrates solid resilience in 2025. Renting grew 14% year-to-year, supported by higher price across most crops and increased sales volume of soybean and wheat, which offset low volume of corn and rice seed. Adjusted EBITDA held broadly flat $259 million. Group yields across the 2025 harvest were broadly stable year-on-year and in line with expectations across both winter and spring campaigns. The 2025-2026 winter sowing campaign has been fully completed and spring sowing campaigns are currently underway. We expect the 2026 harvest to be broadly comparable to 2025, while we take into account the risk of higher production costs, including fuel, fertilizer and logistics, as well as potential disruption to export routine streaming from instability in the Middle East. The impact of increasing fertilizer price on the 2026 harvest is expected to be limited. The reflex effect, MHP has already produced a sufficient quantity of fertilizer required for the 2026 harvest. Accordingly, any adverse effect from higher fertilizer price is more likely to be seen, starting from 2027 harvest, which may affect overall profitability even in case of stable heat. Let's proceed to the slide number 9. Several words about European operation segment. 2025 was the landmark year for the segment, Together with results from nearly acquired U.S.A. group, the segment crossed $1 billion USD in revenue up 76% year-on-year. Adjusted EBITDA net FRS 16 growth 37 to $119 million USD. For a full year, for 2025, the U.S. has contributed $318 million in revenue and $15 million of adjusted EBITDA, representing five months of consolidation. The Retina Ptui continues to perform well organically, with both poultry and processed meat price and sales volume rising constantly through the year. Video margin for the segment came in at 12 for the full year, down 3% point year-on-year, partially due to downward devaluation of biological assets in Spain following an African swine fever outbreak with pressure pork-related margin. Slide number 10. If you worked about our cash flow, debt, and liquidity. The group demonstrated strong cash generation last year, while full absorbing the U.S. acquisition into the balance sheet and debt structure. Operation Cash Flow Group, year-on-year to $413 million 2025, driven by improving earnings, working capital representing as investment $142 million for the year, mostly reflected seasonal sunflower seed procurement and trade receivable growth in line with revenues. CAPEX, $275 million, was directed at maintenance and modernization of existing facility, expansion of international poultry operation, new bioenergy production, and compliance and margin improvement process. Cash used for acquisitions and investments amounted to 180 million, mostly reflected the net cash outflow from acquisitions of 92% stake in U.S.A. Group, complete on 3 July last year. Regarding debt, net debt at the end... By the end of 2025 was 1,532,000,000 in comparating both the new facilities drawn to financing the U.S. acquisition and U.S. existing debt on consolidation. Total acquisition was around 415 million by the end of the year, The group's acquisition leverage ratio by the end of the year was 2.5. It remains comfortable with a defined limit of 3.0, and the group has complied with all bank covenants as of the reporting date. Thanks to support of MHP bondholders, we successfully complete the refinancing of 550 million senior notes that were due in 2026. In January and February 2026, MHP issued 150 million in aggregate of new senior notes due to 2029 and used the proceeds to repurchase of outstanding 2026 notes. As a result of all obligations in respect of our notes have been fully discharged and our net bond maturity now 2029. We are grateful for continual trust and support of our investors throughout the process. And now I give the floor to Anastasia.

Thank you very much, Victoria. Thank you for a detailed view on the results. Let me briefly outline our outlook going forward before we start our discussion. We remain prudent in our approach to growth while continuing to pursue selective international expansion in Europe, focusing on opportunities that enhance synergies. diversify high currency earnings and support long-term sustainable growth while maintaining stable operations in Ukraine. The operating environment remains highly uncertain. We continue to closely monitor the war in Ukraine, where any progress towards a lasting peace could support economic stabilization, although visibility remains limited. We are also monitoring the ongoing conflict in the Middle East, as you rightly mentioned, Victoria, particularly its potential impact on logistics and global supply chains. Since 2002, we have demonstrated strong operational flexibility, adapting to significant disruptions and maintaining stable deliveries to key markets. However, further deterioration in conditions could still impact our operations. On course, we expect moderate increases in grain, vegetable oil, and poultry prices, driven in part by high energy and fertilizer costs, including the impact on the ongoing conflict in the Middle East, which may pressure margins in the short term. Over the medium term, we expect pricing to adjust with a lag, helping to offset these increases. We have secured key inputs and do not anticipate immediate supply constraints, as mentioned by Victoria. However, continued geopolitical instability, including the war in the Middle East, alongside inflationary pressures, may weigh on demand. Overall, our priority remains maintaining resilience, ensuring continuity of supply, and carefully managing risks in a volatile environment. I think this summary concludes my presentation, our presentation. We are now ready to take your questions.

Operator, Michael. Thank you very much for the presentation. We'll now be moving to the Q&A part of the call. If you are dialed in by telephone, please press star 2 on your keypad, star 2 on your keypad, and wait for your name to be called. We're also welcoming text questions. However, please know that those text questions will be followed up by Anastasia and the team after the call. Thank you very much. Our first question comes from Stella Critch from Barclays. Please go ahead, ma'am. Your line is open.

Hi there. Afternoon, everybody. Many thanks for all the updates. I was just wondering if I can ask in a couple of areas. Could you firstly just talk a little bit more about the pricing pressure that you've seen Where's that coming from? Is that coming from domestic market or some of the export markets? Secondly, on the Middle East, in 2026, have you actually seen pressure on any sales volumes in the Middle East? Or is it more of a case of what you're discussing around the freight cost element? And do you think you could potentially, would that be reflected in higher prices to potentially offset that? And finally, just on the CAPEX side, it would be great if you could give us an update on plans for bending and what their priority areas would be this year. That would be great.

Thanks. Thank you for your question. Yeah, regarding pricing, yes. First quarter, it was very difficult regarding price, especially in Ukraine. Because, to be honest, first quarter always is very low season. Yeah, but what we see right now, now the price stabilized, and current price is the same level that we had in December. Regarding export price, yeah, the same situation, especially regarding price in Europe, in EU. Current price and price of the first quarter approximately by 10%, 13% lower than first quarter. Regarding cost of production, what we see right now, we see right now significant, it is not something special in Ukraine, I'm sure that everywhere in the world, price of fuel increased, and in Ukraine increased approximately by 40-50%. And our cost of production, fuel, sales of fuel, in agro-farming segment approximately That is why we see increasing cost of production approximately 3%. And the same in Portugal, share of fuel left. It is approximately 5%. It is the main pressure. But to be honest, in the first quarter, we had a very cold winter, and we consumed a enormous amount of gas. But anyway, now is a good weather. But anyway, total hour expectation of cost of production based on current situation in poultry segment increase year to year approximately by 5-7%. Now, at the beginning of the year, we always try to be very conservative based on conservative scenario. Regarding CAPEX, total hour CAPEX for 2026 approximately 200 50, 270, 5, that's 80, include maintenance complex and include complex for expansion and for modernization in our European businesses.

That's great. Many thanks for all those details. And just on the GCC side, could you comment on what the impact has been on that side? Middle East.

Sorry? Yes, Middle East. No, Middle East, yeah, as I told, because in Middle East, regarding volume, no, we sell, yeah, because our logistic cost, yeah, our logistic cost significantly increased. Logistic cost for delivering our product to Middle East increased approximately by 30-40%, but it was compensated by price. Yeah. It's a big influence to us regarding war in Middle East, increase the fuel price in UK. And potentially, as I told in the presentation, fertilizer price. But fortunately for us, we bought all fertilizer for the season 2026 in the first quarter. And that is why we will not have any influence on our cost of production. It would be our factor for increasing our cost of production for the next year, next

Thank you very much.

Our next question comes from Mr. Dimitri Ivanov from JFS. Please go ahead, sir. Your line is open.

Hello. Can you hear me?

Yes, please go ahead.

Thank you again for the presentation. I have a few questions as well, if I may. Maybe elaborating on the previous questions, can you remind us about your share of Europe and Middle East in your poultry sales, so how much of your exports are expected to be exported to European countries and the Middle East for 2026? Just remind us about the kind of the proportions.

Based on volume, yes, our exports are approximately 35% in Europe, 35-40%, and in the Middle East, in total, the Middle East includes Iraq, approximately by 20%.

30%, approximately, Middle East sales.

Yeah, because it depends on, you understand, yeah, we have some limitation of export volume, and that is why we see what is the price, and that is why not approximately around 30%, yeah.

You mentioned you're seeing some pressure from pricing perspective in European markets. I'm just trying to understand from, like, overall product mix and from, like, geographical mix, Like, do you expect to see lower, like, realized poultry prices? I'm kind of trying to understand because you mentioned you see some increase in prices in the Middle East, basically lower prices in Europe. So you're also selling, like, some volumes to other, like, geographies. Should we expect some reduction in poultry prices for the business? Or, like, how should we look directionally?

I don't know. I will explain. Yeah, just a poll. When I speak about the Middle East, price increased, but just this increasing only compensates significant increase logistic cost. You understand? Our profitability remains even with increasing price the same. Yeah. Okay, okay. I cannot say it is more attractive. And to be honest, and yeah, because if you, yeah, we send mostly for the needle, mostly the small chickens Yeah, it's chicken with weight 1, kilo 1.2 kilo. It is a completely different product. And shawarma, it is something different product. Okay. But anyway... Yeah.

Hold on. I'm just trying to understand basically, like... Just another follow-up question on CAPEX. So, basically, your CAPEX guidance, right, basically, and how much of this CAPEX guidance will be spent in Ukraine operations versus, like, international, like, Pyrotino-2E and Uvesa? So, what's, like, the proportion of CAPEX allocated to Ukraine and non-Ukraine businesses?

Sorry, sorry, sorry. Approximately 50-50%. 50% in Ukraine. But in Ukraine, it mostly consists of maintenance complex. Our maintenance complex approximately 80-90% in Ukraine. In Europe, it amounts to 140. But maintenance of them totals only 40 million. 40-45 million. It is a different project, especially in the U.S., a project which will allow to increase our production and sales volume.

Thank you. Is it reasonable to assume that your immigration will be officially negative this year?

Yes. Yeah, a little bit, yeah. Yeah. No, but anyway, yeah, we have the clear target for. We provide acquisition and UESA, and we have the clear business plan how we increase size of this business and increase profitability and increase sales volume. That is why we must invest money.

Understood. So this year, like, it will be a financial negative European business, basically. Yeah.

Yeah.

Okay. Okay. Okay, and I'm just trying to understand when it comes to your, like, Ukraine business, basically, with all this development that you just mentioned, like increasing cost of sales, reduction in portly sales. Do you expect to be a financial positive in Ukraine business perimeter?

Yes, we expect that it would be positive cash flow, but anyway, unfortunately, this year, based on the factors which we discussed, we expect that low will be in, based on current situation. I don't know, and we will try, in the past we tried to be always very conservative, but yes, in Ukraine we understand that we will generate positive cash flow.

Okay, just two quick final questions. Basically, if like you were just to stay conservative and like share some base case assumptions, how much EBITDA reduction do you expect in 2026 versus 2025? Basically, are we talking about like 10, 15% reduction year over year?

Our expectation. Yeah, our expectation. Now we understand that there are 50%. 15%, not 50. Why 1.5%? Yeah.

Understood. So, basically, versus 2025. And could you also share the latest cash position? Because it's already May, and we're looking at 2025 financials, a bit outdated. What's the latest cash position?

Now it's 350.

Yeah, 350. Now it's 350. 350, and I guess the majority is still outside of Ukraine.

Yeah, you're perfectly right.

I will get back into the queue. Thank you very much.

All right.

Yeah, thanks. Okay, thank you. Thank you very much. Once again, star 2 for any additional questions. That's star 2 for any additional questions. Thank you. We have a follow-up question from Mr. Dimitri from JFS. Please go ahead, sir.

uh apologies uh just there's not many other questions in the line just maybe i will ask on the working capital because uh this increase in working capital 188 million in q4 was a bit higher than i think you expected before right when we discussed uh you kind of explained it by increasing inventories and could you please like help us understand how should we look at working capital in 2096, basically. Should we expect some release of working capital? Basically, you expect more build-up So, just trying to understand what happened between, like, the latest updates and this 188 million working capital hit in Q4, and what's your expectations for 2026? That would be my last question. Thank you.

Yeah, you're completely right. You're completely right. In 2026, we expect to have the release from working capital. Why we have so high investment in working capital last year, first of all, because it There are a few reasons. One of them, significantly increased price in export and in Ukraine, and that is our trade receivable increase. And we slightly increased our stocks in meat, especially in export. At the second point, we purchased a big amount of sunflower seed, significantly higher, our stock of sunflower seed by the end of 2025. It grew approximately by 40% higher compared to the last year. It is a main contribution in working capital. And we have some issues with the IT risk government. We received this money in January, but anyway, by the end, you know, And regarding 2026, yes, you are right, we expect some release in working capital, minimum 30-40 million.

Minimum 30-40 million for the full 2026 year, right?

Yeah, it's a minimum. Because, as you remember, we try to be very conservative, because I don't know what will happen with VAT reimbursement. Because you know that we are a big exporter from Ukraine, and our total VAT reimbursement for a full year is approximately $170 million. It is always some issues.

Thank you very much.

Okay, thank you very much. We have a question from Mary. Please go ahead, Mary, your line is open.

Thank you. So my question is, and I'm not sure if I mentioned it before, but what's your expectation for 2026 in terms of EBITDA? Where do you hope to end by the end of this year? Thank you.

I think it's a good question, but you understand it's very difficult to predict our PDA, especially with so challenging environment, but we put in our capacity around 15% low compared to the last year, around 500, slightly higher than 500 million dollars.

520 million dollars. Okay. $500 million.

Thank you. Okay, thank you.

Okay, thank you very much. We'll give another 10-15 seconds for any follow-up questions. Okay, we have a question from Zana Nikina from BCB Securities. Please go ahead, your line is open.

Hi, thank you for the presentation. I may have missed it. Connection was not great for us here. We noticed quarter-to-quarter slight decline in production volumes and consequently a decline in sales. What is the reason for that, and is there an expectation of reversal of this trend anytime soon? And also, I also may have missed, what is the reason for the reduction of EBITDA going into 2026? Thank you.

Sorry? Please clarify issue. Sorry? Do you hear?

Hi, Rana. Just once again, your line is open. I think that we have a question to clarify your question regarding the quarters.

Can you hear us? Yeah, regarding, yeah, decrease volume.

We saw that there was slight decline in production of poultry, like in the past few quarters. What is the reason for the decline, and do you guys expect to have it restored to the previous?

Sorry, this is the sales. As I told previously, by the end of the year, we have the highest stock of meat, and it is one of the biggest reasons why it is the sales decrease. And another very important point is that we have the strategy and we produce more ready-to-cook products and more value-added products, and that is why less carcasses, less whole chicken. And if you speak about, and that is why quantity, volume of this is less than if you sell just whole chicken.

Okay, so the reason is diversion of more poultry to the ready-cooked meal. Okay, understood. Thank you so much.

Yes, yes, yes, yes. And the second question about EBDA is I would like to repeat that, yeah.

Yeah, so basically, yeah, trend EBDA seems to be with all acquisitions and we're hoping.

some growth, but you're guiding... Yes, regarding U.S., we have this plan, how we increase our size of the company, we understand how we increase sales and production of chicken, and how we increase our BDA in this segment. Yeah. Yeah, but you know that we have, but this company... not just segment of pork, pork segment, and due to decreasing price of pork in Spain, because it was a case of African view. Yes, and that is why we have some negative evaluation.

Thank you.

Rana, to add more to the question and to the answer which Victoria has just given, I would like to add that the decreased EBITDA assumption now is driven by the challenges which we all see and face, right, because of the Middle East conflict, right, and as we've started to the year, right, we can see that we are impacted by the logistics, right, especially the logistics price, which we are trying to offset. And we expect also going forward to have an adverse impact on the production cost of grain because of the diesel price and next year, fertilizer prices.

Right. Great. Thank you so much for this clarification.

Thank you. Okay. It looks like we have no further questions at this point. I'll pass the line back to the MHP team for the concluding remarks.

Thank you. Thank you very much, Michael. Thank you very much, everyone. Thank you for joining us today, and thank you for the questions. In case you have any additional questions or you would like to clarify something, please give me a call or send me a message and I will be glad to meet with you. Thank you and have a lovely day. Bye.

Thank you very much. This concludes today's conference call. We'll now be closing all the lines. Thank you and good