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Hello and welcome to the GroupSEB's third half 2024 sales and results presentation. My name is François and I'll be your coordinator for today's event. Please note this conference is being recorded and for the duration of the call, your lines will be on listen only. However, you'll have the opportunity to ask questions. This can be done by pressing Star 1 on your telephone keypad to register your question at any time. If you require assistance at any point, please press Star 0 and you'll be connected to an operator. I will now hand you over to your hosts, Stanislas de Cremon, CEO, and Olivier Casanova, CFO, to begin today's call. Thank you.

Thank you very much. Good afternoon everyone. Welcome to this first half 2024 sales and results call. Thank you for being with us. I know that this time of the year is very packed with meetings and we are grateful that you are with us today. Right, we will cover the results starting with sales, then we will look at the financials, we will finish with the outlook and we will then take your questions. Before going into sales, we had several events in the first half of this year. The first one is, a lot of things happened of course in the group, but the first one was that decision that we announced in January to launch our first professional coffee hub in China, in Shaoxing. I think that's a reflection of our determination and our commitment to building a large and Worldwide Coffee Business in Professional. We also announced in Q1 the acquisition of Sofilac, which is a high-end professional and semi-professional cooking equipment with the very famous brands Charvet and La Conche. Around the end of the first quarter, the beginning of the second quarter, we signed a strategic partnership to reinforce Our footprint in Saudi Arabia, acquiring a majority stake in our distributor Al-Essaich. That's a reflection of our determination also to grow our business in more emerging countries. We see Saudi Arabia as a country with a lot of growth potential and profit potential. So this is a key milestone in our developments in that region. We also launched in the first quarter in our French factory of Vernon, in Normandy, the first versatile vacuum cleaner made in France. You will see that this is a product category that is doing very well for the group, and we've decided to expand our production to this French site. Going on and beyond that, we also decided and announced the opening of our first repair and refurbishing center at industrial scale in France, in our factory of E30 in Burgundy. That's a testimony of our commitment and trust in the fact that repair and refurbishing will be and become more and more important with years to come and second-hand products will be a part of our business in the forthcoming few years. We are starting to equip ourselves to be able to face and tackle these business opportunities. And last, we continue strengthening the group financial structure. We've raised, I think, the longest ever financing for the group, a 12-year loan that we signed in the first quarter that confirms the confidence of the financial institutions in our books and in our results, and that strengthens further the financing of our operations. Now, that is said, going into the numbers for the end June 2024, we've put together a pretty strong performance for Half One sales. We finished the semester, the half year, at 3 billion 740 million, that is 6.5% like-for-like growth versus Half One last year, and that has converted into an operating profit, operating margin of 244 million euros, against 180 million euros in 2023, that's a growth of 35.4%. that came after a strong Q1 and in Q2 indeed we've posted a 5.6% LFG in sales and a 15.8% LFG in offer. To note that this offer is the highest ever operating result from activity of the group in the second quarter in our history. So it's not only a good achievement, it's a highest ever achievement. Now, how did we do that? We start with sales. We had 6.5% organic growth in sales, as I said. We have a negative currency effect of 3.5%. I'll come back to that in a second. And a scope effect of 0.6%. The integration of Pacojet and La San Marco are weighing on that. Leading to reporting growth for the half year at 3.6%. Talking about currencies, we had 127 million euros currency effect. We saw first quarter pretty high at 75 million euros. We have in Q2 a more moderate impact at 52 million euros and if all goes as currently stands, we should have a lesser and lesser impact on currencies on sales in the second half of the year. What did we get that impact from? The Turkish Lira, the Russian Ruble, the Argentine Peso, the Japanese Yen and to a certain extent the Chinese Yuan. Now when we go into the two divisions, the professional posted a remarkable 13.8% growth at 495 million euros. That's 10.9% like for like. The balance is mainly a parameter more than currencies. Whilst consumers posted 3.246 billion euros, sales are 2.2% in the reported 5.9% like for like. If we dive into the detail by activities, starting with the professional business, it's a record half year for professional coffee that is driven by China with a Q1 that was positively affected by large deals phasing. Q2 we have high comps. We have a more pronounced impact expected in H2 from those high comps. We had large deals in China and USA last year in Q1 and in Q2 and we think those will be less relevant and prominent in the second half of the year. Beyond deals, we have a very solid core business in our third market with VMF in Germany. And we continue to see very good progress in Asia, in Malaysia, in Taiwan, but also in Eastern Europe, in Mexico. And in China, what's interesting is that we see a developing business with the tea chains. Tea chains are two or three times as important in terms of number of stores as coffee shops. And they see the potential and the development of coffee consumption and we start to Unsp-Adr Our consumer business had a very good continued sales momentum. As I said, growth 5.9% like for like on the semester. You will see that China is stable over the semester. And in fact, if we look at our organic growth consumer, excluding China, this stands at 9%, which I think is a very, very strong performance that reflects The quality of our innovations, the quality of our go-to-market strategies outside of China. Precisely that performance is strong and within the expected trajectory in Europe and in the USA. Stable sales in Asia, the market environment is difficult, I'll come back to that. We gain market share and that is fueled by innovations. We will develop some of the categories we have some very good news on. And we have positive markets throughout half one in Western Europe. That's including also Germany and France, our main two markets, and a pretty dynamic market in emerging countries. However, overall, we see a global environment that is somewhat slightly less favorable in second quarter as it was in the first quarter. Now, the other remarkable thing of this quarter is that it's the fifth consecutive quarter with organic growth in consumer above 5%. And I think it's great because we had favorable base effects in the last three quarters of 2023, comparing ourselves against negative sales performance in 2022, last three quarters. And it's the second consecutive quarter that we have positive numbers against a positive number. So it's good news. The first story, positive against positive. Now if we drill down into the regions, if we drill down into the regions, we start with EMEA. In EMEA we have positive trends in small domestic equipment market. We are outperforming the markets thanks to a very positive momentum in market driving categories, those categories that really drive The market development we've been doing pretty well in this quarter and this semester. Excluding loyalty programs, our organic growth in France is above 7% in the first half of the year and this is reflected in some of our customers' publications. Small domestic recruitment is dynamic in France and we are dynamic in France. And Germany that was struggling a bit in the first quarter is back to growth in the second quarter. The only maybe less good news in Europe is that we still see a declining UK market but as you know UK is not very important for us as a market. Other EMA countries have put together a growth organic above 30% that is really staggering with a very strong excellent momentum in Eastern Europe. Very nice growth, continued growth in Turkey and Egypt in a pretty complex environment, currencies, devaluations, inflation. And as I said, we are faring better and better in the Middle East with a strong potential development with that agreement we've signed in Saudi Arabia. Moving west, the Americas have posted 12.9% like-for-like growth in this first half. Driven by both North America and Latin America and South America. In North America we've maintained our growth pace with a growth of 5.6% organic. That's driven mainly by cookware in the US and that is in a slightly declining market for this half year. That growth is also made of a continued growth in Mexico driven by a very healthy market and market share gains in fans, in full-auto coffee machines and in linen care. We are leaders in full-auto coffee machines in Mexico and we are developing that market very nicely. South America showed another steady increase this quarter. Of course, it is substantially driven by fan sales. Fan sales are enjoying a very positive weather impact driven by the El Nino phenomenon. that makes higher temperatures, that increases fan sales. We had that in the second half of last year. We're having that the first half of this year. But also to a lesser extent by other categories, strong cookware performance in Colombia, strong coffee partnerships in Brazil, and that despite a rather unfavorable macroeconomic environment with some devaluations in the latter part of the half year. So all in all, a pretty good performance As I said in my introduction, Asia has been stable this quarter. Stable in China and pretty heterogeneous in other Asian countries. China first half year is stable in declining countries. We have continued market share gains. We've been having that for several consecutive quarters, driven by innovations on our core products. We have a product and offering that is expanding into new adjacent categories and that's feeding your growth. We see a weak consumer environment and a somewhat high promotional intensity in the market and we expect for the full year a stable or slight organic growth in China. In other Asian countries, we had a pretty mixed performance. We were first affected in Japan first. by a strong and ongoing yen depreciation. I think we touched 175 yen to the euro, which is, I think, a record low currency rate for that currency. And that affects, of course, our markets, that affects our margins. We did have some commercial successes in South Korea despite a market that is pretty sluggish, and I think we've been doing substantially better than the market in cookware in particular. And last, we see some dynamic activity in Australia, and that is driven by all our product categories, cookware, linen care, but also electrical cooking. Net-net, if we go to the performance of our overall products, you see that most categories, all categories are positive. The star is of course Home Comfort, I mentioned it, but we see a very solid performance in linen care, in beverage, in floor care. We've grossed all of them above 10%. Cookware is very dynamic if we exclude DLP in France. We exclude it because we know there's a phasing effect between last year loyalty program that was in first half and this year loyalty program that's going to be in the second half, so we are not concerned at all about that comparison. Electrical cooking is slightly positive with a negative impact on China and the Chinese market. Right, that's for the overview. Now, we thought we would share with you some examples of a good product performance. As you know, the performance of the group is driven by the sum of the performance of the various categories, and the performance of the various categories is driven by a mix of go-to-market, excellence in execution, and innovation. So, I'll review with you what are big blockbusters for the group and how they performed in the semester. We start with cookware, around 25% of our consumer business, that grew organic by a double digit in the second quarter, excluding DLP, and that was including in France, where we could have had some questions about the polemics on PFAS. In fact, we post a double digit positive quarter and semester in France, and we see a very good growth overall in the quarter, Our sales grew that first half by 80% versus first half last year. So again, it's a growing, it's a booming market and we are taking full advantage of the growth of this product category. We've been developing in the last five, six, seven years our business in the bins to cup full auto coffee machine as we call them. It's the second consecutive semester that we see sales increasing by over 25% in Europe. So again, a very strong development and a very steady growth in that business. And as I mentioned, we are internationally expanding those categories. We've reached leadership in Mexico and we are pushing the market consumption in this market. Vacuum cleaners are the biggest category, one of the biggest categories in all markets in SDA worldwide. Versatile vacuum cleaners are the bigger category in Europe and we've enjoyed once again organic sales growth over 40% in EMEA in the first half. We are strengthening our number two position in this continent, reaching number one position in our home country, France. And last, we've been talking about clean and care with some questions in the last few years on whether linen care would be a category in decline because of the evolution of consumer habits. And we were saying that consumer habits were not disappearing, they were evolving towards more garment steamers, stand garment steamers, portable garment steamers, you name it. And in fact, we see that, and we see that our latest launch, PurePop, has launched in the last 18 months over a million units. And those sales grew over 30% in Europe over the last two consecutive quarters. So even in more mature categories, we see a development of new alternatives, new products, and we see again that innovations and go-to-market excellence in execution can deliver and does deliver strong results. So that was my run the world and run the products. Olivier, you want to take us through The financial performance?

Yes, absolutely. Thank you, Stanislas. So let's turn to Section 3. First page, of course, the highlights, I think, are well known. As Stanislas indicated, the ORFA in the second quarter was the highest ever for the group. You can note that in the second quarter our Orpha margin stood at 7.2% and it was 80 basis points above last year, so slightly below the performance in the first quarter, but this is normal. Of course, we started our recovery in the second quarter last year, so you will see this, let's say, difference reduce over the second half as well. Moving on to the usual bridge, so I will start with currencies first and then I will take you through the two other blocks in turn. So first on currencies, you can see 73 million negative impact. This reflects, of course, two things. First, the fluctuations and depreciations of currencies in emerging markets. and including the depreciation of the Chinese Yuan in the first semester compared to the first semester last year. And also, secondly, the variation in hedging results from this semester versus the last semester. It was positive last semester. It's slightly negative this semester. And that explains about half of the difference. Now, let's go back to the first block, the green block. So here you can see first a very strong positive volume effect at 78 million, which is both linked to the strong growth in professional, which we had already last year, but this year we have an even stronger contribution from the consumer side, which is of course very positive. Let's turn to the other big block, which is 103 million of reduction in cost in sales, Of course, it's a combination of a carryover effect from the reductions we enjoyed last year, which of course impacted us throughout the year. So we have a full year effect in this first semester. Plus, of course, a big positive effect from the increased volume in this first half in the form of increased absorption of fixed cost. And we had also some additional, let's say, benefit from further reduction in raw material and components. So this is obviously very positive, and as is usual, we have used, of course, reinvested part of this strong decrease in cost to fuel our dynamic sales performance, and this explains partially, let's say, the small negative price effect that we have in this first half. It is counterbalanced by, as usual, a positive mix effect Thanks to the dynamic new product introduction that we have in the first half, as explained by Stanislas, notably on oil-less fryers in electric cooking, hand-stick vacuum cleaners, linen care, full auto, etc. Let's move now to the second part. So we have a slight increase in growth drivers, which is largely, let's say, supporting the positive development in our sales. Of course, it's largely marketing, but it's also further investment in new product development. We have also slightly higher commercial expenses. which is reflecting again the further investment in our commercial development, notably online and at retail. And then administrative expenses were largely, let's say, stable versus the first half of last year, showing, let's say, the strong control that we continue to exercise on this cost. So this translates into a net profit for the half at 100 million euro and a net profit margin of 2.7% versus 76 million in the first half of last year. So up 31.6%.