MHP SE

Ladies and gentlemen, thank you for standing by and I would like to welcome you to MHP Second Quarter 2026 Results Conference Call on 28 September 2026. At this time, all participants' lines are in listen-only mode. The format of the call today is a presentation which will be followed by a question and answer session. So, without further ado, I would like to pass the line to Anastasiya Sobotyuk, Director of Investor Relations. Please go ahead, ma'am.

Thank you, Rafal. DST holders and partners, good day to you and thank you for joining MHP's conference call covering second quarter and six months of the year. My name is Anastasiya, Investor Relations Director and I'm joined today by Viktoriia Kapeliushna, CFO of MHP. Together we will present and discuss the company's operational and financial performance for the reporting period. Please note that today's discussion is based on the press release, financial statements and investor presentation published earlier today. During the call we may also discuss our outlook, strategic priorities and future plans. These statements are based on our current expectations, assumptions and assessments of market conditions and are therefore subject to risks and uncertainties. We encourage you to consider these factors when evaluating the information presented today. With that, let us begin. We are on page number three of the presentation. Let me start with a brief overview of the macroeconomic environment in Ukraine. The operating environment remains challenging, but the economy continues to demonstrate a degree of resilience. In the second quarter of 2026, real GDP increased insignificantly, less than 1% year-on-year, and by less than 1% compared with the first quarter. This growth was achieved despite continued missile attacks on infrastructure and ongoing pressure on the energy system. For the full year, the National Bank of Ukraine currently expects GDP growth of around 2%. The outlook continues to reflect significant infrastructure damage, electricity constraints and the impact on higher energy prices. Turning to inflation, Q1 Q2 CPI moderated to approximately 2.2% in the second quarter, compared with 3.4% in the first quarter. According to the latest NBU forecast, Average annual inflation is expected to reach 9.4% with a further gradual decline projected over the following two years. On foreign exchange, the hryvnia has continued to weaken during the year. The exchange rate moved to approximately 44.5 hryvnia per US dollar, reflecting among the other factors damage to the energy sector and the broader external environment. As before, the NBO continues to play an important role in managing foreign exchange market imbalances. Finally, looking at agriculture, the 2025 harvest demonstrated continued resilience of the Ukrainian agricultural sector. Total grain production reached approximately 63.5 million tons. I'm sorry, I'm talking about 2026, of course, and 63.5 million tons is up by 13% year-on-year. Wheat production was around 23 million tons and corn approximately 31 million tons. At the same time, oilseed production was weaker, with sunflower production declining by 7% to approximately 10 million tons. Overall, the macroenvironment remains demanding, particularly from infrastructure, energy and foreign exchange perspective. While economic activity and the agricultural sector continue to operate with a significant degree of resilience. Let us move on slide number four. It's about the financial overview. So for the first six months of 2026, revenue of the company increased by 32% year-on-year to around $2,161,000,000. The main driver of this increase was the consolidation of Uvesa within our operating segment, European operating segment. Gross profit increased by 8% to $397 million. The increase was more moderate than the growth in revenue as the positive contribution from agriculture and Uvesa was partly offset by weaker performance in the poultry segment. Operating profit decreased by 17% year-on-year. Adjusted EBITDA net of FRS-16 remained broadly stable at 232 million US dollars compared to 236 million US dollars in the first half of 2025. The corresponding EBITDA margin declined from 14% to 11%. At the net income level, the group recorded a loss of 57 million dollars compared with a profit of 75 million dollars Sorry, 75 million exchange loss in the current period compared with the gain in the prior year period. So the key message for the first half is that strong revenue growth, including the contribution from U.S. supported broadly stable growth EBITDA, while profitability was affected by weaker paltry performance, higher operating expenses and foreign exchange movements. At the same time, the second quarter showed a meaningful sequential improvement in operating performance. Let us move on slide number five and let's look at the financial results by segment. Starting with the revenue mix, here Paltry and related operations remained our largest segment, generating $976 million, or approximately 45% of group revenue. The European operating segment contributed $738 million, representing approximately 34% of group revenue. The EBITDA contribution, however, was quite different from the revenue mix. Agriculture was the largest contributor to first-half adjusted EBITDA, net of EPRS-16, generating $149 million. The European operating segment contributed $86 million, while poultry and related operations contributed $49 million and vegetable oils only $9 million. Looking at the EBITDA breach versus the first half of 2025, group adjusted EBITDA, net of arrest 16, moved from $236 million to $232 million, meaning remained stable. The largest negative movement came from poultry and related operations with a reduction of 118 million US dollars. This reflects lower meat prices, lower sales volumes and high costs. This decline was largely compensated by stronger performance in other businesses of the group. I think we are ready now to move to the segment overview. And I think, Viktoriia, we can move on.

Thank you, Anastasiya. Good afternoon, everyone. Let's turn to poultry and related operations segment performance, slide number six. Following the softer pricing environment we experienced in Q1, poultry export price showed a partial recovery through Q2 this year, so the segment's results still reflected the path towards the weaker price based only in the half. Both poultry meat and processed meat volumes grew year-on-year and quarter-on-quarter, Domestic sales volume remained relatively low with growth driven by high export sales to European market. Process meat volumes continued to grow supported by our ongoing shift towards high value-added products. Revenue for Q2 increased by 10% year-on-year and by 15% quarter-on-quarter to $523 million and for 6 months increased by 9% year-on-year to $976 million, driven by higher sales of by-products from poultry production as well as energy products such as biometal. Average selling price for poultry meat decreased year-on-year in both periods, while showing a partial recovery on a quarter-on-quarter basis. Prideful process meet, continue on consistent upward trend. Gross profit declined to $63 million in Q2, down by $48 million year-on-year, and to $123 million for six months, down $44 million year-on-year. Primary mariners reflected low meat prices and high production costs, together with significant effects of IFS-41, Biological Assets Revaluation Loss compared to the gain in the prior year period. Adjusted EBITDA followed the same trend down 65 year-on-year in Q2 to 30 million and down 70 for 6 months to 49 million while improving 58 quarter-on-quarter as pricing stabilized. I would like to also note that following a reneview attack on Black Sea port and export infrastructure, the group managed to adjust its export delivery routes for poultry products. There is no significant effect on export logistics and volume to EU and UK. However, it remains challenging and takes longer and more expensive to export to Middle East and Africa. Looking ahead, policy expert prices reached the low point in Q1 this year and have shown gradual recovery since we don't expect a quick return to the peak level seen during the Q2 and Q3 last year. Poultry export price in EU remain weak. At the same time, should the disruption to Black Sea grain logistics continue to wait on regional grain prices, this could help offset pressure on the segment production cost in the second half of this year. Turning to our vegetable oil segment, slide number seven. Revenue in Q2. increased by 38% year-on-year and by 25% quarter-on-quarter to $145 million and for six months increased by 17% year-on-year to $261 million due to the higher sunflower and soybean oil prices together with higher sunflower oil sales volumes. Sunflower oil sales volume continued to grow both year-on-year and quarter-on-quarter, supported by the launch of new sunflower extraction line, which increased oil yield and expanded overall processing capacity. Soybean oil sales volume remained low year-on-year through stable on this basis, mainly due to the high internal consumption of soybean oil in feed recipes. Gross profit increased in Q2 and 6 months driven by higher sales volume and improved margin in sunflower oil. Adjusted EBDA follows the same trend increased to 7 million in Q2 and 10 million for 6 months. Looking ahead, the segment profitability will remain highly dependent on the availability of export road from Ukraine port which has already had a significant effect on price for our key inputs, sunflower seed and soybean. Should this situation persist, we see potential for substantial improvement in segment profitability through an increasing of processing volume and better margin due to the lower price of oil crops in Ukraine. As of today, despite closed the port of Black Sea in Ukraine, MHP established a number of ways and roads to export vegetable oils to partners in different parts of the world. Let's move to slide number eight, agriculture operations. Revenue for six months remained broadly stable, year-on-year, $186 million. Gross profit more double, $141 million. Due to the higher effect of IFRS 41 Biological Assets Revaluation Gain compared to the last year, adjusted EBD following the same trend, more than double, Such improvements were the result of significantly improved market price for both grains and all seeds at June and July this year. Winter crops harvested is complete with yield 6.7 tons per hectare for the wheat and 3.8 tons per hectare for rapeseed. Harvesting of spring crops is underweight. with yield expected broadly in line with last year. Looking ahead, however, I should note that since July this year, prices for grains and oilseeds have declined in Ukraine, reflecting the same export capacity constraints I referenced earlier, driven by logistic cost increase. Should this trend persist, it could be a weight of EBDA in the segment, so we would expect this to be largely offset by low production costs in our poultry and vegetable oil segments starting mainly from Q4. Given those segments, direct exposure to grain and or seed input costs. Let's proceed to slide number nine. Several words about our European operating segment. Revenue for Q2 more than double year-on-year to 384 million and increased 8% quarter-on-quarter, while six months revenue more than double year-on-year to 738 million. Driven by consolidation of U.S.A. and supported by higher process mid-sales volumes and prices. Gross profit increased by 26% year-on-year in Q2 to $59 million and $57 million for six months to $124 million as higher revenue outpaces the increase in cost. further supported by positive contribution from the U.S. acquisition and positive revolution of SOZ and PIK following the price recovery on Spanish market. EBDA followed the similar trend up 47% year-on-year in Q2 to 44,076,000 for six months to 86,000,000. Looking here to the remainder of 2026, we expect price for poultry and processed meat in European operating segment to remain broadly stable with sales volume continuing to grow. This is expected to support steady growth in EBITDA over the course of the year. Slide number 10, a few words about our cash flow, debt, and liquidity. Operating cash flow for six months decreased year-on-year, driven by low cash earnings. Many reflected negative trends in poultry meat prices. Working capital represented an investment of 107 in six months, including seasonal investment in crop fields, partially offset by consumption of agricultural produce harvest in 2025. CAPEX decreased to $93 million for six months with capital expenditure focused mainly on key strategies area including the maintenance and modernization of existing facilities. I would like to also note that on 16 June 2026, our Spanish subsidiary, Uvesa, acquired 100% of Payan, a Spanish poultry company, for total consideration $28 million. The acquisition generates goodwill $17 million and accounting remains provision of 30 June 2026. The transaction strengths our position in the Spanish poultry market. Regarding debt, the shift towards long-term debt reflected this year's refinancing of the 550 million senior notes in 2026 with new senior notes due to 2029. Cash and cash equivalents stood at 348 million, by the end of the first half of the year. The group complied with all bank covenants of the 30th June of 2026 with the acquisition leverage ratio reflecting QVSA on a full performance basis of 2.8 to 1, comfortable below the 3.0. Now I give the floor to Anastasiya.