Sonae, SGPS, S.A.

Good morning. We welcome you to Sone's first half 2025 results conference call. During the presentation hosted by Mr. Joao de Lor, Sone's CFO, all the participants will be in listen only mode. Q&A is available after the presentation. If you wish to ask a question during the Q&A session, you may do so by pressing star key followed by one on your telephone keypad. If you are experiencing any difficulty in listening to the conference at any time, please try calling from a different device. And I will now hand over the call to Mr. Joao Delor. Please go ahead, sir.

Thank you. Good morning, everyone. Thank you for joining us for SunEye's results presentation for the first half of 2025. Besides myself and the investor relations team, we have in the call with us Christina Novais from BrightPixel, Fernando Azuel from MC, Paul Simonich from Vorten, and Miguel Moreira from Sierra. I'll start with a brief reminder of our most recent portfolio changes. As you know, we made an important investment in the pet care space last year by acquiring a controlling stake in Musti, and then by making a first international expansion move into the Baltics with the acquisition of TechCity. We also established a strategic partnership with Bruni, thereby creating the leading health and wellness and beauty player in Iberia. And more recently, in May this year, we reached an agreement to sell Maw and Zippy, two of our fashion retail banners, and last week we announced the closing of this transaction. These operations reflect our active portfolio management and distance and capital allocation approach. We are now focused on helping our new companies grow, building on our know-how and on our capabilities. Just to give you a few examples, we are currently helping Muski on several fronts, namely by leveraging our scale in areas such as IT and product sourcing, but also by providing support in store operating models, streamlining of logistics, and M&A. Muski's expansion into the Baltics through the acquisition of PetCity is a clear opportunity to add value to this operation, namely by exploring synergies in product development, sourcing, and IT between the two companies. With a partnership with Druni, our health and wellness and beauty companies are already benefiting from enhanced efficiencies and improved value propositions across all banners. Let's now move on to our results, business by business, starting with MC. In grocery, Continente once again outperformed the market, reinforcing its position as a leading grocery retailer in Portugal. Like-for-like sales grew 10.5% in Q2, supported by strong volumes performance, which also benefited from the timing of Easter this year. If we look at half-year growth, like-for-like sales, growth reached 7.8% and 9.5% in total, representing yet another significant increase in market share. Grocery underlying a VTA margin improved by 60 basis points year-on-year to 10.4%, driven by the evolution of turnover and also important efficiency gains. In health, wellness, and beauty, results were driven by the contribution of Druni Group, which has been consolidated into our accounts since the third quarter of last year, but also by organic growth and expansion. Revenues reached 415 million euros in the quarter, further reinforcing our banner's leadership positions across Iberia. And the line EVPA margin increased by 1.4 percentage points to 12.5% in Q2, reflecting stronger profitability through the successful integration of Druni in Spain and also solid improvements in operating profitability at Wells in Portugal. So overall, if you look at consolidated results at MCE, we see an increase in revenues of 27% to 2.1 billion euros, or 11.4% year-on-year on a comparable basis. excluding the contribution from Drury. MC was able to improve on the YDPA margin by about 90 basis points year-on-year to 10.8%, supported by stronger performance across both the grocery and the health, wellness, and beauty segments. Regarding financial leverage, MC kept a comfortable position with total net debt to YDPA reaching 2.8 times at the end of June of 25. Moving on to Wharton. The company reinforced its market share in Portugal once again on the back of a strong performance of the online channel in particular. So we continue to increase our market leadership position in both the offline and online channels since the beginning of the year. In Q2, total turnover grew by 10.6% to €313 million, backed by a robust like-for-like growth of 6.9% in a challenging environment with intense promotional activities. Vartan delivered top-line growth across all segments, with volume gains in core electronic categories, strong double-digit growth in new product categories, and continued momentum in the services division. In what regards profitability, underlying energy margin reached 2.5% in the quarter. This was a decrease in margin, which was influenced by higher cost base associated with strategic growth initiatives, mainly impacting logistics and staff costs, as well as persistent inflationary pressures. We are now working to make sure that we mitigate these impacts on the cost base until the end of the year. As for Musti, the company released its quarterly results earlier this week. As you might have seen, during the period, Musti strengthened its leadership position in the Nordic pet care retail market on the back of a rebounding market after a period of weaker market growth. Nevertheless, the company increased its market share quite clearly. Like-for-like sales improved yet again this quarter, reaching 5.7% in total, with particularly solid display from Norway and also Finland, which is the company's original core market. Total turnover grew 17% to €122 million, supported also by the consolidation of Peptipi, And despite a still challenging operating environment, underlying EBITDA rose to $12.9 million, although the margin remained under pressure due to continued investments in growth and market share and higher operating costs. But even here in profitability, both in terms of gross margin and underlying EBITDA margin, we are seeing month-on-month improvements, which also give us confidence to what remains for the rest of the year. Moving on to Sierra, our real estate business. The company maintained a strong momentum in the second quarter of the year across its European shopping center portfolio, while services continued to follow the diversification strategy and the development activity progressed steadily throughout the quarter. Sierra's European shopping center portfolio posted solid results, as I said, with talent sales continuing to grow, footfalls rising again, and we have nearly full occupancy levels in all of our shopping centers. In line with its long-term value creation strategy, Sierra also initiated key expansions and refurbishments across several assets aimed at unlocking additional value and improving the customer experience. Overall, Sierra's net result rose to 33 million euros in Q2, up by 5.7% year-on-year, supported by the strong operational performance and at the indirect result level by higher shopping center valuations, which contributes to an increase of NAD to just over 1.1 billion euros. Moving on to cell phone technology, NOSH already reported its results to the markets, as usual, maintaining a strong focus on delivering advanced solutions to customers in all segments supported by its next-generation network footprint. Total revenues reached 458 million euros in Q2, driven by continued growth in the core telephone business, with a specific highlight to the significant growth in the corporate segments, which totaled 9%. Consolidated BTA also increased to 203 million euros, with all business areas contributing positively for this performance. Operational profitability improved, so the north contribution to some executive method results. was lower year-on-year as the prior year benefited from one-off gains related to the sale of towers and also the activity fees from Panacom. But on a comparable basis, profitability was better than last year. On April 24th, Nosh paid an ordinary dividend of $0.35 per share and an extraordinary dividend of $0.05 per share related to the 24 results. which meant a 77 million euro cash-in for Sunicom. Finally, BrightPixel, with more than 50 companies in the portfolio, invested in five new companies since the beginning of the year until the end of June and continued the development of a pipeline of new ventures to expand the portfolio over the coming months. NED reached 328 million euros with cash invested totaling 213, implying a potential cash-on-cash return at this stage of 1.5 times. Moving on to our consolidated view, overall, our consolidated turnover grew 24% year-on-year to 2.7 billion euros, driven by strong organic growth across our core businesses and also the contribution from new companies to the portfolio, including Druni and PetCity. Excluding portfolio changes, consolidated turnover closed at a solid 11% year-on-year increase. And the long EBITDA amounted to 255 million euros, improving by 38% versus last year. This positive performance of our fully consolidated businesses combined with a 33 million euro result in terms of equity method led consolidated EBITDA to reach 274 million euros in Q2, up by 38% year on year. Net results group share increased to 59 million euros, an increase of 23% versus last year, driven by the improved operational performance across our portfolio companies, and also favorable indirect results, mostly related to Sierra's shopping center revaluations. Net deficit for dividends stayed increased 75 million euros in the last 12 months, due to the significant acquisitions that were executed in the last year. If we look at the performance of the original portfolio, Sonai registered a total of 254 million euros in free cash flow as we continue to generate healthy levels of cash flow across all our main businesses. And we continue to have a quite solid financial position with significant available liquidity facilities and a well-balanced debt maturity profile. The holding loan-to-value stood at 13.8% at the end of June and down from 15.9% at the end of December last year as we progress on our deleveraging path. As a final note, I would like to highlight the evolution of our net asset value, which grew 7.3% year-to-date and reached 4.7 billion at the end of June, which equates to 2.44 euros per share. This positive evolution was mostly fueled by improved valuations of MC and also received dividends, which offset the softened performance of the North's stock price in the period. This is all for now. Thank you. And you can now open the session to Q&A.

Thank you. If you would like to ask a question on today's call, please press star 1 on your telephone keypad. To withdraw your question, please press star 2. please ensure your line is unmuted locally and you will be advised when to ask your question. That was star one on your telephone keypad. And we do have a question coming through from the line of Jose Rito, calling from Kaiser Bank. Please go ahead.

Yes, good morning to all. Thank you for the presentation. So I have one question on the health and beauty business. just to have some clarity on the slow down that we saw in Q2. If this was only because of the comparison base or if you are seeing some moderation on the market growth. And related to these, I witnessed that minorities in that P&L increased substantially in Q2. Is this related to its drawing? So this will be my first question. The second on the bottom. So we are seeing a very strong top-line performance, but then both margins and EBITDA declining year on year. I think that's in the past information related to investments, growth investments that the company is doing. Could you explain a little bit better in terms of the dynamics of the margins, if you are seeing a dilution also from the margin needs, so mainly the fact that you're investing in high services online or the fact that online expansion or the growth of the online channel is also diluting margins. So some visibility on this will help. And then finally on MCA, so if you can detail a little bit the difference between volumes and price and price component in the like for like in Q2 and also what was the market share gains in the first half for continuing. Thank you.

Thank you, José. So, I'll hand your questions directly over to Fernando on the BMC ones, and then to Paulo on the question as well. Fernando, do you want to start?

Sure. Hi, José. Good morning. Thank you for your question. So, starting from health, wellness, and beauty, the like for like, as you rightly pointed out, the like for like of health, wellness, and beauty was around 2.9% in Q2-25. I'd like to highlight that if you pro forma for Druni, the like for like goes up to 7.2% on Q2. And when you look at H1, the pro forma is also 7.6 versus 4.6 without Druni. And the main reason for the slowdown of Q2 in terms of like for like is really the impact on Arenal from the integration. So we are, over the last couple of months, making significant changes to the developer position of R&L, both offline and online, and that has an impact on the like-for-like. So when you pro forma for Druni and also when you take into account the performance of Wells, we are seeing a like-for-like of about 7% to 8% year-to-date, and so very positive momentum in the business, despite also obviously the changes we are making in R&L, which during the course of this year should have a negative impact on the like-for-like, which as we don't have drone in Q2, you can see more the impact of Arenal and from Q3 and Q4 less because obviously we have this pro forma. That being said, it's obviously a very competitive market these days, mainly in Spain, and the market is growing about 5%. So we are clearly growing market share in this market in Spain and Portugal. Going to the second question around minorities, yes, the impact is really on Dronee. As you know, we have a 50% partnership with the CAST family for Spain, but we consolidated, fully consolidated in our P&L, and so this is really the impact of the minorities of Dronee in our P&L of MC. Going to the questions on grocery, when you look at Q2, in terms of the 10.5% of like-for-like, as you know, it has probably around two percentage points of impact of the Easter in this year of being in Q2. When you break it down in terms of volumes and price, we're talking about price inflation around 3% over the quarter, slightly above 3%, 5% of volumes, and 1% to 2% of improved mix. Obviously, the mix in Q2 because of the Easter is positive, is particularly positive in these months. So that's really the core of the breakdown. In terms of market share, in the first half of the year, we improved our market share in continent about close to 0.5 percentage points. I think that's it on my end. Thank you.

Thank you, Fernando. Paul, do you want to take the question?

Sure. Good morning, everyone. Jose, thank you for your question. So, regarding the margin at Wharton, margin percentage-wise is stable, so no impact there. Wharton is having a good market and customer momentum. We are growing significantly by 7% in the quarter. 5.4% on a like-for-like basis, so very healthy growth, as you said. And we are very happy with those results. Our NPS is also increasing one percentage point in this period. So overall, margin is stable, no dilution there, and the excellent sales growth gives us growth in margin in euros. So what's happening in the technical level is that we have higher logistics costs as a result of higher stock level. And consequently, we had to rent additional warehouse space, people and equipment to operate those warehouses. And that brought some inefficiency. Additionally, we are building our future logistics platform near Lisbon. That also impacted a bit our cost base. Also, stock levels. We tested increasing customer service in store and exploited the growth of some new business areas like services, for example. We have been testing that with additional people in the stores. Now, we are able to pinpoint those services that require more people and have positive impact in growth and profitability. So we were just going forward. Additionally, we have a spike in shrinkage, especially in the first quarter, that is now back under control. We reinforced security in our stores and things seem to be back to normal now. So those costs will not carry over in the second half of the year. And finally, we also have an impact of higher energy costs, especially in the first quarter also, resulting from a spike of energy costs in the market. Now it's back again to lower prices, so hopefully this will not happen also in the second quarter. So overall, in summary, we have stable growth margin, no dilution there, excellent growth in sales, especially online. very good performance in the market and with improving customer relationship. And we are investing to accelerate growth, had some learnings, and we will now focus on streamlining the cost base, and hopefully in the second half of the year, we will recover profitability again.

And that's it. Okay. Okay, understood. Thank you. So I assume that these logistics investments that you are making, that you mentioned that eventually includes the cost raising H1, will fade in the second half, and then in 2026 will not be there, right?

Logistics specifically, I think we will need some more time to solve it. We still have a bit of stock above the optimum level that we will be dealing with over the next semester. And so we will have the additional space needs still in place for a couple of months. Let's see how all sales grow. If sales growth is good in the second half of the year, and we expect that to be the case, those costs will also come down. So we'll have to wait, but there's still some lag in solving the logistics parts.

Maybe I would just add to Paolo's remarks that, I mean, I think looking at this performance from parts of what we see is a quite positive performance in terms of growth and market share gains and a healthy growth in the sense that, as Paolo mentioned, the gross margin is relatively stable versus last year. And we do have a few cost lines that we need to work on until the end of the year, which the team is addressing now. So we are also optimistic on what lies ahead.

Okay, thank you.

Thank you. We currently have no further questions coming through. So as a reminder, if you would like to ask a question on today's call, please press star one on your telephone keypad now.

If I can, so I think we got two additional questions from Julianne from Kepler on the chat, which I can address. So the first one is, Could you give us a more detailed explanation on the like-for-like for MC's health and wellness and beauty division, and what's your outlook for the second half of the year? And I will let Fernando answer this question in a minute. And the second one is, your NAV discounts is now at 45% versus share price, below your 15-year historical average. Which are the drivers you identified that could narrow it? So maybe I'll take this one first, and then I'll answer the one on the like-for-like of health and health and beauty. We're very happy with the performance of SunEye's share price since the beginning of the year. And it's true that we have been able to narrow significantly the discount versus NAD, but we're still not happy. So we still feel, obviously, that there's huge potential to unlock value in the share price, given the intrinsic value of our assets. So the drivers that we identify that can narrow it are multiple folds. So I would say that the main driver has to be our continued strong performance. It's only with continued strong results that we are able to prove to the market that we have winning value propositions with very capable management teams that are able to win in their respective markets and generate value for our shareholders. And that has been happening consistently throughout the last quarters and the last few years. And so that's the main driver. If we keep consistently delivering results, I think that that's the most important thing that we can do. And then there's a number of other things that obviously we are doing, making sure that our investor relations activity is as far reaching as possible. that we explained the SunEye's equity story and valuation story to the market, that we reached more investors, and that we have also been doing and investing a lot in that area in the last few months. I think also the international investments that we've done in the last 18 months have helped us reach the attention of a base of investors that was not there before, and so they're now looking more at SunEye and at our performance. So I think it's a number of things put together, but I think we're on a good track, and we are very confident that we can continue on this positive path, closing down the gap versus NAD. Fernando, do you want to take the health and health and beauty question?

Sure. I think the question was more or less the same as José, but just to clarify that, We have a 2.9% like-for-like in health and wellness in Q2. If we proformate for the acquisition or the partnership with Druni, we get to 7.2% proforma, which is more or less in line with what we have seen over the last quarters for health, wellness, and beauty. And this is mainly due to the fact, as I was mentioning before, that at Enal, we are making important changes to the value proposition, which is impacting the like-for-like, and we expect that to happen over the course of this year. On the second part of your question, around the second half, it's obviously difficult to predict what's going to happen. I would say that if the macro environment stays the same, we should expect, I would say, more or less the same level of like for like of around 7% in the health and wellness division. That being said, and obviously both for grocery and health, wellness, and beauty, it's going to be key really to understand if the macro stays as robust as it is in Iberia, mainly driven by disposable income, immigration, tourism. But I would say that if the macroeconomic environment stays the same, that's more or less our expectation and the continuation of the growth in market share, both in Portugal and in Spain.

Thank you, Fernando.

Thank you, Joel.

We do have some further questions coming through via the audio lines. The next question comes in from the line of Antonio Saladas, calling from AS Research. Please go ahead.

Hi, good morning. Thank you for the presentation, and thank you for taking my questions. I have two. First one on bright pixels provides some color on the environment, because I noticed that we're being I know that you have been buying assets, but it seems difficult to sell it or at least to do the asset rotation. And second question is on Sierra. I know Sierra pays a generous dividend, 49 million, I think. So maybe you can – is that something that should be repeated in the coming years or it was just a one-off payment? Thank you very much.

Thank you, Antonio. Cristina, do you want to take the back page for one?

Yes, of course. Thank you, Antonio, and all the rest. Good morning, everyone. So giving some solar about the market is very difficult, but we have mixed times nowadays. We have some parts of the world, namely U.S., with higher activity, but mainly focused on AI investments with strong valuation. And the rest of the world is more calm. Even Europe is very soft. We keep continuing investing, as you said, in our rhythm. So we are investing, for the last 12 months, more than $50 million. And we are doing some exits. We did it in the last quarter of last year. We did small exits this year. And we are working on a couple of them. But this depends not only from our side, but our main focus is to keep our strategy in our third segment and, of course, coupled with a good level of recycling capital. So, we hope that in the next quarter, we have some assets and continue investing in the port side. Okay.

Miguel, do you want to take this heroine?

Yes, I go for the questions. And thank you, Antonio. Regarding dividends, what we can say is that they are 50-50% between the more recurrent components and the other not so recurrent. We have a stable policy regarding dividends with our shareholder, and that policy is supported by the distribution of dividends related with our current activity and non-activity, but also the dividends that result from the adjustments from the portfolio and sales of assets and all that. So these results are composed by these two components and 50% division between them.

So it means that around 25, or between 20 and 25 million, these Yes. Okay. Thank you. Just on Vorton, a follow-up question on Vorton and taking margins and so on, you mentioned that it should improve. Nevertheless, if you look for it, well, margins have been under pressure not just this quarter, last quarter, but over the last year. So it seems that there's a downward strain on margins. So... I don't know. Well, it seems that it's not just a specific reason of logistics or whatever. It seems that in the market environment, that is very tough. I don't know if you could provide more color on this or some more insight.

Maybe I can start because I gave that answer, then I'll let Paolo complement. So what we're seeing is in terms of commercial margin, commercial margin versus last year is true that it's always been under pressure, and this is a challenging sector. But if you take a comparison with last year, it's fairly stable if you take into consideration the mix of products and services that we have had in recent months. So that's why I was saying that we are not unhappy with the performance in terms of sales and in terms of commercial margin. But obviously it's below that that we are seeing some additional pressure that we are working to try to solve. But I will let Paolo complement my answer as well.

Yes, thank you, Antonio, for the question. We don't feel that this year we have especially aggressive competitive environment in terms of price, so we don't feel that on competitive environment, and there's no impact whatsoever on commercial margin. So we are happy with the margin performance in the company, and as I and John already reinforced, these are operational costs we did some some tests in terms of accelerating growth and we will be correcting those uh those excess costs going forward and we expect the the company profitability to recover on the second half and going forward so we don't we don't have that that view that uh the competitive environment is worsening um our results this year okay commercial margin and gross margin yes Exactly, that's it.

Okay. Okay, thank you very much. Thank you, Antony.

I believe we have further questions coming through from the webcast, so I'll hand it back across to yourself.

Okay, so we have a couple of additional questions from Luis Colasso from JV Capital Markets. Can you please provide us with some color on how the competitive environment in the food retail sector has been evolving over the past six months? Which players and segments are underperforming? And also, can you please provide us some color on the indirect income results that were much higher than in the most recent quarters? What role is revaluation? So I can start with this one. So it's true that we have important revaluations during the quarter and we had revaluations in both senses. Most were on the positive side. So the most important ones come from SCARA, revaluation of assets, real estate assets, and that has mostly to do with the net operating income of the assets because yields have been fairly stable since the beginning of the year. So this is just a revaluation based on the positive performance of our shopping center assets. We also have some positive impacts in our smart food division from some re-evaluations of participations there. And we have some headwinds in terms of the U.S. dollar-euro exchange rate, which brings down, which slightly counters these positive impacts at 5 pixels. You know, we have several investments which are denominated in dollars, and so that adds. So it's a combination of different things, but mostly positive effects. Fernando, do you want to take the one on the competitive environment in food retail?

Sure, sure. Hi, Luis. Good morning. Thank you very much for your question. Around grocery retail, as I was mentioning before, the market overall is growing at a healthy pace, and this is mainly driven by macro disposable income, again, immigration, tourism. When we look at the competitive environment, it remains quite challenging and fierce. So when we look at all the initiatives of the different players around price, promotions, and new products, assortments. On one hand, we're seeing a lot of pressure on that side. On the other hand, when you look at expansion and remodeling, we continue to see a various number of players opening new stores, remodeling their stores, as well as we are doing. And so we feel that on the two angles, all the big players in the Portuguese market are investing in their value propositions as well as new stores and remodelings. In terms of segments, as you asked, I would say that the segments, the growth is more or less homogeneous. That being said, we see the fresh products in the market outperforming the SMCG in total, and this is mainly driven by fruits and vegetables, meat, fish, and so those are the categories that are growing at a faster pace in the market as we stand. All in all, market is growing at a healthy pace, mainly driven by macro, but remaining with a very competitive market in all its dimensions.

Thank you, Fernando. We have an additional question from Luis. If we can provide more detail on the 14 million euro negative non-recurrent items. So this is We have several impacts here, but the two biggest ones are the capital loss that stems from the transaction, the sale of Mo and Vivi. So we had announced to the market an estimated capital loss of roughly 24 million euros. It was actually a bit below that, so it was 19 million euros. And then we have a positive impact from Sierra's activity that relates to portfolio management in Brazil. which is 8 million euros positive. So these are the two main impacts of that line. And then we have some smaller non-recurrent items, but these are the two most important impacts. So we do have a couple of additional questions from Rita Velo and from Kaisha Di. What's the market share of Sonai's health, wellness, and beauty segment in the Iberian beauty sector? And also a question for Vorten. During the last course, we have seen a decrease in Vorten's VTA margins. Do you expect operating profit to be positive in 2025, or do you expect profitability to remain pressured in the second half of the year? I believe we mostly covered this question. I will ask Fernando to take the one on the health, promise, and beauty segments.

Thank you very much for the question. Quite a good one and a very complex one. So, as you know, in terms of our value proposition, we have a lot of different segments, health, beauty, optics across Iberia. And so, we don't have a market definition overall or any kind of public information and source that gives us the different, the combined market share, obviously. That being said, I can give you a couple of data points. In terms of health and beauty in Spain, Drune and Arenal, they are clearly the market leader in health and beauty. Specialized retail, obviously, excluding the grocery, let's say, size of these markets. When we look at health and beauty in Portugal, Wells is already also the leader in this sector. And then when we go to optics, obviously, Wells is still growing its business, so it's not the market leader, but already has an interesting close to 10% market share in this segment. And so, all in all, I would say we are the market leaders in all the different dimensions. That being said, even the definition of the different segments are markets, they are not super easy to make, and so it's difficult to give you an aggregated market share, but clearly the leaders in all the different segments. And reinforcing the positions this year.

Thank you, Fernando. And just to comment on Peter's second question, we do expect, obviously, Barton's operating profits to be positive in 2025 and recovering in relative terms from what we saw in the first half of the year. I believe we have another question on the call.

The next question comes in from the line of Jose Rito calling from Kaiser Bank. Please go ahead.

Yes, just a question on Moosey, just to ask if you think that the bottom has been reached in Q2.

Was that on Moosey? Moosey, yes, Moosey. Moosey, okay. Okay. Look, yes, we're very happy with the performance of Musti in Q2. We see the market rebounding in terms of total growth. So as you know, the pet care retail market had a rough year in 2024 overall and globally. But we are seeing now the market rebounding, coming back to growth. But Musti is clearly growing ahead of the market, as I said. So we are growing steadily. Right now in Norway at double-digit like-for-like, in Finland at high single-digit like-for-like, and in Sweden a bit lower because we are managing a bit more for margins and for profitability. But still, in all the geographies, we are increasing our sales ahead of the market, taking share from the competition, and seeing our operating profitability also improve. And that's on the back not only of global sales, total sales, but also on the back of the mix So we are seeing a rebound in all categories and particularly discretionary spending, which is especially relevant in terms of profitability. And so now we are seeing positive figures in food, disposables, and also toys and accessories. And so that's very, very important for us to make sure that the economic equation is a sound one for the company. And we also are implementing a number of efficiency measures. working collaboratively alongside the MUSTi team to make sure that these efficiency gains are extracted. And so we are quite positive in what concerns the rest of the year. And so we are positive that the second half of the year will follow the trend that we have been seeing in recent months of recovery, not only in terms of top line, but also in terms of profitability.

Okay. Thank you, Shlomo.

Thank you, José. We do have another question in the chat from Alexandre Depré. Could you please comment on the outlook for MC in the second half of the year? Fernando.

Hello, Alexander. Thank you very much for the question. In terms of the second half of the year, difficult to forecast at this stage. As you know, the first half of the year was quite positive, driven both in food and health levels and beauty. So, in terms of the top line, I would say that clearly the key driver of the potential growth over the next month are going to be the macro environment. Again, I think that's going to be critical. In terms of margin, in the first half, we have seen, again, the commercial margin more or less flat. And so we would say, given the competitive pressure we're seeing, we expect more or less the same trend over the second half. So the market's quite competitive, mainly in price promotions. And so we are not expecting an improvement in commercial margin clearly over the course of the rest of the year. And in terms of the margin profile, mainly across the grocery sector, I would say that the evolution of the margin is really going to depend on the top line. As you can see with the commercial margin flat, we have a very important and relevant cost to serve program to make our company more and more efficient. But clearly the fact that the top line has grown significantly in the first half of the year also helped obviously to dilute some of the fixed costs we have. And so I would say that in terms of profitability is really going to depend on also how the top line evolves. But what we have seen also in the first month of H2 in July, is a similar trend to the first half. Let's see how it evolves over the next months.

Okay. Thank you, Fernando, for that answer, and also thank you, everyone, for the questions that you posed. As you can imagine, given the performance that we saw in page one, we are quite positive about what remains of the year, and so we will be back in November to comment on the Q3 results. Thank you very much and see you then.

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