Seb Sa Unsp/Adr

Welcome to the Group SEB 2026 First Half Results Presentation. Today's conference will be hosted by Stanislas de Gramont, Chief Executive Officer, and Olivier Casanova, Senior Executive Vice President and Chief Financial Officer. For the first part of the conference call, the participants will be on listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to the speakers. Please go ahead.

Thank you very much. Good morning, good afternoon, everyone. Welcome to this first half results presentation. I'll be doing this presentation together with Olivier Casanova, Stanislas Delamont speaking. Starting with the first half year highlights, I think there are three highlights, three main highlights. The first one is half one has seen recovery of our operating results. We see the first results of the revamp plan during this semester and we confirm at the end of this semester our full year outlook. Now if we go a bit more into details, we've seen in this first half a deteriorated economic and geopolitical environment with mixed consumption prospects. We have had a slight organic sales growth in the first half. Orpha Recovery, I mentioned it, notably driven by internal levers, the famous self-help improvement for the profit. We announced and deployed our rebound plan and the rollout is on track with our objectives and we already see first financial results in the first half. We confirmed our outlook for 2026 with a full year growth of our Orpha, a return to a more normative free cash flow generation contributing the ALFON trend. And we also, to conclude those highlights, have further recognition of the group's ESG commitments, with improved Ecovallis rating, reaching Platinum rating, that is the top 1%, and CDP ratings on water and carbon emissions. Going to the key figures, first half lands at sales of 3.743 billion euros, a growth of 1.7% like for like versus 2025 and flat versus last year in reported. That generated an operating result from activity of 172 million euros, which is 44% growth on a yet low base for 2025. The second quarter was essentially similar with sales growing 0.6% like for like. with 0.9% reported and OFA advancing to 100 million euros up 45.3% versus 2025. Last on the first half, we generated a positive free cash flow of 53 million euros when last year's first half was consuming cash for minus 213 million euros. I hand it over to Olivier to give up the details of these sales Thank you Stanislas.

So starting with H1 sales bridge as you can see as we said our H1 sales at 3 billion 743 million is essentially in line on reported basis with last year which means that the organic growth effect of 1.7% is essentially offset by the negative currency effect. Now let me start with the currency effect first. On the face of it, it looks a similar amount to last year, which was minus 64 million. But the composition actually is quite different. Last year, we had a strong depreciation from emerging market currencies and a modest negative impact from US dollar and CNY. And this year, it's a reverse effect. We have in fact a modest depreciation of emerging market currencies and a much more significant impact from the depreciation of CNY and US dollar. Which leads me to the organic growth. I will comment or see further in the rest of the presentation, but the lower depreciation of currencies in emerging market is also translating into a lower price increase impact And this is costing us approximately one percentage point in organic growth, leading to plus 1.7%. Commenting further on Q2, you can see this effect of currency is even more pronounced, is positive in fact in Q2. So, on the next page, you can see what I was referring to. We have, in fact, a positive contribution from a strengthening of the Colombian peso, the Mexican peso, the ruble, even a small negative impact in Argentinean peso. And, on the other hand, we have a strong negative impact from the depreciation of the CKY Unsp-Adr Unsp-Adr Unsp-Adr Unsp-Adr Minus 2.8% on a like-for-like basis. This is made of a solid core business, but a low contribution from large deals. We are operating in, as we know, an uncertain geopolitical context. Stanislas referred to it in his introduction, which translates for the professional market into a persistent wait-and-see attitude from food service clients. And this is particularly true in the US and the Middle East. We see, however, a steady core business, including a strong service contribution, which represents, as you know, approximately 35% of sales, and on the other hand, a low contribution compared to historic basis from large deals. That being said, we continue to prepare for future growth. We are ramping up the Shaoxing Hub, as we explained, and our two new models, Peak and Elevation, which are addressing the segments, the entry level and the semi-professional segments are being rolled out into more than 15 countries now. We see also progress on the expansion of our customer portfolio, in particular with success in Chapanda, which is a famous tea chain in China, but also scooters in the US, and a global listing with McDonald's. which is also quite positive for the future. And finally, on the strategic front, we strengthened our one-stop-shop offer with the acquisition of a stake in a small specialist ingredient dispenser in China. So let's turn to consumer now. As you can see, we have organic growth in all regions. 1.6% in EMEA, 8.4% in the Americas and plus 1.1% in Asia. So we'll start with comments on EMEA with Western Europe. So we have an organic growth of 2% in H1. Generally speaking, we have a positive seller trend, but we have to acknowledge an increased caution amongst retailers in Q2, which is translating in some cases to lower inventory policy. We have, however, a good product momentum, in particular driven by floor washers, garment steamers, cookware with the launch of Fusion Core and Full Auto Coffee Machine with the success of Coffee Crush. We have in particular, and it's notable, a good performance in France with market share gains across the board, a favorable impact, of course, of loyalty program, particularly in Q1. And in Germany, which remains, let's say, a difficult market in general, a complex environment, The priority is being given to margin improvement, which is progressing to the detriment of sales growth. In other EMEA countries, we see, as you can see, a stability in H1 despite the disruptions in the Middle East. Turkey and Egypt are accelerating, driven by lean care, cooking, and e-commerce. Eastern Europe presents a heterogeneous picture. with, in some cases, a high comparison base, especially in Poland, for example. But we are seeing promising launches of our latest innovations, in particular, of course, the success of Coffee Crush as well, but also, interestingly, on ice cream machines, with the success of Dolce and Frizi, and also on washers. And as I mentioned, finally, we are seeing, of course, a sales decline in the Middle East. It's not surprising. It represents a small percentage of the group cells, but it's about 10% of the cells in other EMEA countries. Turning to the Americas, starting with North America, we see 9.5% growth in H1 and an acceleration in Q2 at plus 15%. Of course, it's of a low base last year, in particular in the US. Last year in North America, our cells decreased by 12%. That being said, we had a volatile market, not very favorable in Q1, but better oriented in Q2. And more generally, we are registering market share gains in cookware, which is our main, as you know, activity, and also in linen care. In Mexico, we have a positive sellout, particularly online, in a market which remains quite competitive. Turning to South America, we grew 6.1% in H1, which is, let's say, driven by Columbia, with a strong momentum across our product range. We continue to expand our categories with coffee, floor care, and interestingly, we returned to growth in sales in Q2. which is different from the situation in Brazil in Brazil we have a good online performance but generally we are penalized by the difficulties of the physical retail and we have to say that the weather contrary to Colombia was unfavorable to find sales in Brazil but if we believe the weather forecast it will change in H2 with the return of El Nino so consumer in Asia Starting with China, we had overall a slight growth in H1 with plus 1.3% and a more difficult context in Q2. Generally speaking, support continues to grow in cookware, kitchenware and in care. However, we see increased promotional intensity in the market in Q2 and we are, as we've indicated before, focusing primarily on, let's say, managing the balance between chasing sales growth and protecting profitability. We are, however, registering market share gains overall in H1. One specific situation, which is large kitchen appliances, you know, it's not an activity that we have elsewhere in the group, but it's an activity that we have in China. It's a modest activity at less than 10% of sales. It did benefit last year from the incentives that were introduced by the government, and the removal of these incentives, this half is impacting significantly this modest activity. Turning to other Asian countries, we had a stable situation in H1 with a strong performance in online and offline across the region. Growth in key categories in Japan and stable sales in Southeast Asia, but a more difficult situation in South Korea with a market decline marked in particular by difficulties in physical retail. So let's turn now to results and cash flow generation. So starting with ORPHA, as Stanislas indicated, our ORPHA increased from low base last year to 172 million in the first half, generating an operating margin of 4.6% up 140 basis points. So how do we explain this evolution? We have the bridge on the next page. Starting with the combination of volumes, price mix, cost of sales and in fact also currency. So we are managing the balance of these different elements and in total delivering a net positive. Of course the benefit that we have on the currency is especially on the short currencies which we are using to purchase Unsp-Adr We have also, as I mentioned earlier, a lower depreciation from emerging market currencies, which is in turn translating into a lower price increase effect in emerging markets. This is costing us approximately 30 million in the price mix bucket. Finally, we have on the cost of sales, Yes, a positive impact from the reimbursement of U.S. tariffs to the tune of about $15 million, but this is merely offsetting, in fact, the increased tariffs in H1 versus last year. As you know, the tariffs, in particular the reciprocal tariffs, were introduced at the beginning of Q2, and therefore, if we compare to last year, we have, let's say, a negative effect in terms of tariffs which is offset by the reimbursement so net net the positive impact in cost of sales translates or is the reflection of positive effect on our purchasing of raw material component and finished goods which is contributing to the business. And then finally, we have a decrease, as you can see, in structure costs by about 25 million, which shows in particular the first results from the rebound plan. So now if we move below ORFA, you can see in particular that the big, let's say, item is the line Other Operating Income and Expenses, which was Minus 24 million last year and is now minus 185 million Of course this reflects principally the provisions for social costs related to the rebound plan in France and Germany. We now have, and this will be detailed further by Stanislas in the second part, we have now reached the stage where we can make a good estimate of those costs, but at this stage, of course, it is still an estimate. Secondly, you can see the income tax is, let's say, made of two different elements. We have to distinguish, let's say, the normal recurring business, which I will say is called excluding rebound effect, where, in fact, we have a higher tax rate than usual. Normally, we are around 25%. This year, we have an unfavorable country mix, which is increasing this rate from 25% to 30%. And then we have the negative impact from rebound, which is creating a significant, as I mentioned, significant charge. At this stage, in order to take a prudent position, we have limited the recognition of deferred tax asset at this stage, and this is why we are not benefiting to the full extent from the expected tax yield. Finally, this translates into profit attributable to shareholders of minus 124 million, and we have stated below, let's say, the profit excluding the rebound plan effect, which would be plus 41 million, which compares to plus 1 million last year. Moving to balance sheet and cash flow, so starting with the working capital requirements, As you can see, of course, in H1, we have, let's say, a traditional season IT in our business, which means that H1 June working capital is traditionally higher than December. That being said, this year, as you can see, we are reducing working capital to 1,466,000,000 compared to 1,540,000,000 last year, so the ratio is moving from 18.6% last year to 17.9% this year. This is first and foremost as a result of lower inventory compared to last year. On a reported basis down 115 million but there is in there a negative currency effect so on a light for light basis it's down 160 million. Of course, the inventory level is not yet at, let's say, our optimum level, in particular because we continue, as you know, to be impacted by the closure of the Suez Canal and the longer transportation time, length. So, moving to free cash flow generation, of course, the adjusted EBDA is up by 53 million in a similar way to the increase in ROPA. We have the positive effect of the optimization of working capital. On the capex side, we are much lower than last year. H1 last year was minus 160 million. Of course, you remember that last year we had substantial investment in our Shaoxing Hub and also the talent of the Tille Châtel investment which is our coop warehouse for Western Europe and then of course we have the effect from tax and financial debt and all that translates into a positive free cash flow of 53 million which compares to minus 213 last year so were better than last year by €266 million. On a rolling 12-month basis, this translates into a cash-free cash flow generation of €390 million. And then finally, to conclude this section, let's look at the change in net debt. If we take into account the €160 million of dividend to the SEF shareholders and the €43 million a dividend to the super minority shareholders. The currency effect and modest acquisitions, which is mostly in a few contributions of Save Alliance and the modest acquisition of a stake in our beverage dispenser in China, we end up with 2,516,000,000, which is down 152,000,000 compared to last year. And now I hand over back to Stanislas.