Good morning, ladies and gentlemen, and welcome to the ARYZTA AG H1 2021 results call, hosted by Urs Jordi, Chairman and Interim CEO of ARYZTA, and Jonathan Solesbury, Interim CFO. I must advise you the call is being recorded today. I will now hand the call over to Paul Meade, Head of Communications. Please go ahead. Thank you, Tracy. Good morning, everybody, and thank you for joining the call. I just want to mention that our results, the interim report, and the presentation are all available now on our website. Just before we begin, I want to just draw your attention to the fact that the Safe Harbor statement applies to today's announcements and all related discussions. I will now hand you over to Urs. Thank you, Paul. Good morning, everyone. Before we start on page 3 of the presentation, I would like to remind everyone that we announced on March 12th that ARYZTA has signed an agreement to sell our North American business unit to Lindsay Goldberg LLC for $850 million. This disposal represents a significant inflection point in the rebuild of ARYZTA's investment case, as it brings certainty and flexibility in how we repair the balance sheet and de-risk the future. The early and successful conclusion of the transaction reflects the quality of the assets, the strong recovery in the American business under the new management, and a very competitive field of buyers. The transaction represents a major delivery in our strategy to provide an alternative option to shareholders to the outright sale of the entire company. It also vindicates the strong vote for confidence by the shareholders for change last September and December and bodes well for the future development of the remaining business. Now please turn to page 3 of the presentation, which provides an overview of the 2021 first half financial results and the key developments. I will explain the disposal of the North American business for $850 million in more detail shortly. We have made and continue to make good progress on simplifying the business and removing costs. We are on track to deliver reduced group overhead costs by 25%, which would be circa EUR 20 million of annualized run rate basis. In terms of first half revenue and underlying EBITDA performance, both were ahead of expectations, and we improved our liquidity position to EUR 523 million. This, in turn, provides us with an ample covenant headroom with a first-half net debt to EBITDA of 4.07x. In terms of the impact of COVID-19 on our business in the last six months, I can say that the impact varied by region. We see a strong recovery in North America led by quick service restaurant and retail, as North America has opted for less restricted COVID-19 controls and restrictions than other regions. We have also seen a good recovery in Asia Pacific, where COVID-19 has been well controlled. In LATAM, we see a significant impact from high levels of COVID-19, but this will in time pass and lead to a recovery. In Europe, COVID-19 has impacted performance due to increased restrictions during Q2. The rollout of vaccination across our key markets, especially in Europe, offers significant recovery upside, especially in food service, which has suffered the most. We are not providing any output guidance today given the ongoing challenges relating to COVID-19 and the level of change still being implemented across our businesses to improve performance. Turning to page 4, which summarizes our progress on the disposal. On March 12th, we announced that we signed an agreement to dispose the North American business to Lindsay Goldberg LLC for $850 million. The transaction involves assets in the U.S. and Canada only. We expect the transaction to close by end of the current financial year. This is subject to the normal relevant regulatory approvals. The negotiations were greatly assisted by the strong recovery in the performance of the North American business, which was significantly boosted by the quick decision taken by the new team and the new board. Under the transaction, ARYZTA will continue to use the La Brea and Otis Spunkmeyer brands for two-year period. We have also signed a long-term supply agreement for specialized European confectionery with the buyers for product largely manufactured by Mette Munk in Denmark. This transaction is a key inflection point for the recovery of ARYZTA and delivers a critical component of our recovery plan. It provides certainty and flexibility in how we repair the balance sheet and supports future independent development options for ARYZTA. The LatAm disposal process is continuing. We will update the market on progress in timely manner. Turning to page 5 and our business improvement plans. We have set a target of achieving an EBITDA run rate margin of 12.5% by the end of fiscal year 2022. This is our estimated EBITDA margin for our European peers. It is an intermediate target and will need to improve further over time. Our new business model is a multi-local approach which empowers local customer decision-making and also allocates cost responsibility to local management. The implementation of this model is progressing well and is also being well received by local management teams. We have delayered reporting structures so that all business units now report directly to me and have removed significant overhead costs associated with the previous complex global and European reporting structures. North American and Asian reporting structures have also been streamlined, reporting directly into the CEO as well. We are continuing to remove duplication and reduce the use of external consultants, which had mushroomed under the previous regime. We are currently benchmarking each business and bakery and provide each with realistic and attainable industry performance targets. The customer feedback to our new approach has been positive, and local decision-making has significantly improved reaction times and is leading to positive customer relationship momentum. Turning to cost savings on page 6. You will recall that our board entirely backed the new strategic plan in December 2020. Management changes were swiftly implemented to deliver this new plan. We now have a simple direct reporting structure across the entire group. Restructuring is continuing in Europe with a strong focus on delivering improvements in Germany, our largest European market. We are well on track in delivering our target of a 25% reduction in overhead costs and expect an annualized run rate of about EUR 20 million from these changes. However, [inaudible]. We have disclosed a net EUR 35 million of one-time charges, net of disposal gain of EUR 5.8 million for the continuing business excluding North America. Jonathan will take you through this in greater detail later. These costs arise across three main categories for the continuing businesses. Firstly, headcount reductions costing EUR 15.2 million, which will deliver rapid improvement in performance and early payback. Secondly, we inherited very onerous and excessive advisory fee commitments, largely associated with the plan to sell the entire company. These costs amounted to EUR 24.5 million. Finally, COVID-19 related costs of EUR 1.1 million. While we expect to have some further one- time costs to implement the necessary simplification changes, we expect these to be de minimis, and we need to get back to reporting clean numbers without adjustments in the very near future. As part of our cost-saving efforts, we have delisted from the Dublin Stock Exchange. This reduces costs and also means that we now have just one single regulatory body and a single set of governance compliance rules. I will now hand over to Jonathan for his financial review of the first half year. Jonathan. Thank you, Urs, and good morning, everybody. Turning to page 8, which details the key financial performance for the first half. As we have signed a disposal agreement, we need to report ARYZTA North America or ANA, as held for sale and discontinued operations with the European and rest of world making up the continuing operations. On this slide, we show total revenue and EBITDA for both continuing and discontinued so as to enable meaningful comparisons. You can see the total revenue and underlying EBITDA were ahead of expectations, reflecting a very strong recovery in ANA, a solid performance in the rest of the world, offsetting the Q2 weakness in Europe due to widespread and prolonged COVID-19 government restrictions across the region. Total revenue amounted to EUR 1.286 billion, and total EBITDA was EUR 124.8 million, reflecting a decline of 22.4% in revenue and 26.5% in EBITDA from the comparable period, which was not impacted at all by COVID-19. The revenue decline in organic constant currency was 16.4%. The negative impact on consumption from the pandemic accounts for the entire decline in the numbers being reported. The performance is nevertheless a significant improvement from prior quarters, when the impact from the pandemic peaked. Group EBITDA margin, which includes both continuing and discontinued, was 9.7%, a 60-basis point decline. The margin for continuing operations was 10.1%, a 240-basis point decline, and the margin for the discontinued operations improved by 190 basis points. You can see from the remaining key metrics on this page that good progress continues to be achieved despite the impact of COVID-19 on the business. In the period, we saw a significant improvement in working capital of over EUR 67 million and a reduction in CapEx of over EUR 16 million, reflecting a much tighter focus on cash. The progress in managing these key items boosted our liquidity position to EUR 523 million and a resulting net debt to EBITDA for the group of 4.07 x at the end of the period. Our half-year net debt was largely flat on the comparative period despite the lower underlying earnings, the one-off charges of EUR 35 million and the significant lower disposal proceeds. Turning to page 9, which details a summary of income statements. Here you can see the underlying performance of the continuing and discontinued businesses. Having spoken about the revenue, EBITDA, and margins on the previous slide, I would like to draw your attention to the 17% decline in finance costs due to disposals and improved cash management, and the recurring hybrid interest costs of EUR 23 million, which is up 4% on the comparable period. The net financial result for the period was a loss of EUR 16.4 million compared to a profit of EUR 34.3 million in the comparable period, equating to a loss of EUR 0.0176 at EPS level compared to EUR 0.035 in the comparable period. Page 10 provides a reconciliation of underlying income statement to IFRS. Here you can see a significant decline in amortization of intangible assets and the one-off restructuring costs of EUR 39.7 million, contributing to reported net IFRS loss of EUR 48.8 million for the continuing operations. The net loss for the discontinued operations of EUR 76.6 million includes the underlying performance as well as the loss on disposal of EUR 62.5 million. Taken together, this gives a loss of EUR 125.4 million for the group in the period. Moving to page 11 and the group revenue performance in the period. You can see the performance by region with discontinued operations obviously representing ANA. The negative organic revenue movements were largest in Europe due to a spike in COVID-19, which resulted in weakness in Q2. You can clearly see the good recovery in the rest of the world and a significant improvement in ANA. At group level, the organic decline was 16.4% in the period, a significant improvement from the previous lows reported at the height of the pandemic. More on that in the next slide. In the lower half of the chart, we can see the price, volume, and mix impact, which shows positive price mix of EUR 10.5 million, but volume declined very significantly by almost EUR 282 million across the group. Disposals had a negative impact of EUR 41.5 million, and currency had an adverse impact of EUR 56.9 million, reflecting the strength of the euro against most of our reporting currencies. Turning to page 12, which provides further details of the quarterly progression of organic revenue growth. The trend line in Europe, as you can see, improved sequentially from Q3 2020 to Q1 2021, and then weakened again in Q2 2021 due to the high incidence of COVID-19 impacting the region. The trend line in the rest of the world shows continuing improvement over the last four quarters. In terms of discontinued operations or ANA, the trend line is also one of significant sequential quarterly improvement over the four most recent quarters. Page 13 provides EBITDA and EBITDA margin details. For IFRS purposes, we've reset the comparable period. You can see continuing operations experienced a 36% decline in underlying EBITDA to EUR 76 million, compared to a 26.5% decline for the group when discontinued operations are included. This reflects the Q2 European weakness due to the COVID-19 and the strong recovery in North America, as evidenced in the margin performance detailed in the lower half of the page, which shows 190-basis point improvement in the North American margins. European margins declined by 260 basis points to 9.4%, while rest of world margins declined by 110 basis points. Turning to page 14 in the details of the one-time exceptional costs for continuing operations. Total impairment, disposal, restructuring, and COVID-19-related costs for continuing operations was EUR 35 million. The main items were a EUR 5.8 million positive gain on disposals. Offset by a EUR 15.2 million severance cost, reflecting the dismantling of the complex and costly executive management structures. In addition, it includes a EUR 24.5 million advisory costs relating to commitments made previously in relation to the attempted disposal of the company. The COVID-19 costs were relatively modest in the continuing business at EUR 1.1 million. Page 15 shows the cash generation for the group. Here you can see the key factors contributing to the improvement. Working capital improved by EUR 67.5 million, with the cash conversion cycle improving five days, while CapEx decreased by EUR 16.1 million. Despite a decline in underlying EBITDA and a significant increase in one-time restructuring and COVID-related costs, operating cash flow improved modestly, and overall cash flow from activities improved by over EUR 10 million- EUR 33.8 million. Turning to page 16, which details the net debt evolution at ARYZTA. You can see the net debt was largely flat in the period at EUR 869.5 million. That despite a lowered EBITDA and a significantly lower proceeds from disposals. The current year saw the disposal of the A&O pizza business, as well as the remaining share in Picard. Closing net debt, excluding the impact of leases under IFRS 16, is EUR 655 million. Thank you. I'll now hand you back to Urs. Thank you, Jonathan. Turning to page 18. I would like to briefly remind you of our new business model, which has four revenue drivers and all involving excellence and best-in-class delivery. Starting on the top left-hand side on the page, we will focus on three channels and route to markets: food solutions, which includes food service, convenience, and bakery. The second is the retail channel, and the third one is the quick-serve restaurant part of the business. Each of these channels has specific needs in terms of revenue drivers, and our multi-local approach will enable us to increase our market share in each channel by exploiting local-based knowledge regarding customers and competitors. On the top right-hand side, we have innovation and category management knowhow across six key product groups. We can grow revenue by customizing products locally for our key customers through innovation, and also quickly managing these categories as local trends change. Moving to the bottom right, we call out excellence in business development as a key revenue driver, which involves our new multi-local approach. This leverages the really important local customer knowledge, also knowledge of our local competitors. Excellence in business development is key to being able to provide solutions for our customers to allow them to grow their share of the market, ultimately also grow our share of the market. Finally, on the bottom left-hand side, we will focus on improving our supply chain and procurement as these are really critical factors in delivering excellent products every day to our customers and consumers. We will focus on a continuous improvement in quality and efficiency across the entire value chain, as this is critical to delivering improved financial performance. You can see that our business model represents a significant change as we switch to a local model. This multi-local approach allows us to have very simple structures to act fast in decision-making to address our local customers' needs. It means we become closer to our customers with shorter supply chains and accelerated innovation response times. This will improve the local management's engagement and understanding of our customers and deepen these relationships. To achieve this, we empower local management with decision-making powers, giving them responsibility for their own costs, their own profit and loss accounts, and revenue generation approach. As a result of this change, ARYZTA can return to organic growth and deliver an improved financial performance. We are already implementing these changes, and our new structure is already less complex, more efficient, and at much lower costs. Turning now to page 19, which details the European performance in the first half. The table highlights the financial performance, and Jonathan has already commented sufficiently on this. The key factor of the Q2 weakness and the impact of the H1 performance in Europe was COVID-19, and the variation in COVID-19 government restrictions and lockdowns across Europe. The recent wave of the virus triggered tighter restrictions across many of our European markets, as evident in the Q2 decline and this continued to impact performance. However, the rollout of vaccines offers significant hope of positive recovery, especially in food service and independence, which has suffered the most in Europe. Retail and QSR have taken market share. We are aligning with this change as evident with our investment in new QSR capacity in Poland. All European senior management now report directly to me as we have removed the global structures. The customer feedback to our new local decision-making process is very positive. We have more to do in terms of European cost removal and simplification. Turning to page 20 and our rest of the world business. You can also see that this region continued to recover through H1 as COVID-19 remains well controlled in most of our markets in APAC. Our business in Brazil has suffered from a significant increase in COVID-19, but this will improve and in time lead to solid recovery as vaccinations take hold. The APAC management structures have already been simplified. The combination of market share gains for QSR and new product rollout supports the ongoing recovery in rest of the world. We are well-positioned to leverage growth in this region given our strong customer relationships. Turning to page 21 which details ARYZTA North America performance which is now classified as discontinued operation due to the signed disposal agreement. As you can see, North America achieved a significant improvement in performance assisted by the swift management actions in terms of strategic pricing and cost containment. This improving trend from its COVID-19 lows significantly helped the disposal process. While we have streamlined the reporting structures and removed costs, the North American consumer has not to be subject to the same severe restrictions and lockdowns put in place like in Europe. The big winners in North America are QSR and retail. Vaccination will boost further recovery in this market. Now turning to our final slide on page 22 today, which highlights that our value creation plan is well underway and delivering. We have signed a disposal agreement for North America and the process for LATAM disposal continues. The sale price secured for North America significantly improves our balance sheet strength and adds certainty and flexibility to the ongoing balance sheet improvement and refinancing options, including the hybrids and the associated accrued interests. We are confident in terms of our target and run rate for cost savings given the process achieved to date and the additional implementation plans. While these changes carry a cost, the repayment period is short. We will have further change costs, but these are expected to be de minimis and we need to return to reporting of a clean, unadjusted number sheet. We see our 12.5% EBITDA margin target in fiscal year 2022 as an intermediate target and one that needs to improve further in time. Our plan is working and will see a return to organic growth and sensible M&A in time. We remain confident that our clear and simple strategy is delivering and will create sustainable value for all shareholders and stakeholders. Thank you very much for this patience. We will take now questions in the remaining time and will now hand back the call to the operator to open the lines for questions. Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and one on your telephone and wait for your name to be announced. Should you wish to cancel your request, please press the hash key. Star and one on your telephone to ask a question. Your first question comes from the line of Patrik Schwendimann of ZKB. Please ask your question. Good morning, Urs and Jonathan. You are aiming for an EBITDA margin of 12.5% end of financial year 2022. This target is before IFRS 16. Is that still correct? That's my first question. Second question related to this, could you elaborate a little bit more how you can achieve this target in terms of customer and product mix? What is the CapEx expected for the current and next year as a best guess? Final question, you were mentioning some further extraordinary costs in H2. How much is this as a best guess? Thank you. Good morning, Patrik. I would start with my part of the questions, would then hand over the others to Jonathan. The EBITDA run rate target of 12.5% is pre-IFRS. This is correct. How to get this? At the end of the day, the company will get back to organic growth. We are working on the cost base. On the business excellence, on the customer relationship, on innovation of product, and this will help us to get back to this performance. Jonathan, maybe you for the investment. Let me add maybe something to the investment. As you saw in the presentation, there is a line for quick serve restaurant customers being planned and soon being installed in Poland. This is the first step. There are maybe others coming in this part. This is the development we are looking to. Jonathan, with the numbers, please. Yeah, sure. Hi, Patrik. Good morning. Yes, as Urs confirmed, the 12.5% definitely is pre-IFRS 16. In terms of CapEx, Patrik, we've historically guided 2%-3% of revenue as been the industry norm for CapEx. In this year, it will be a little bit higher than that because as you probably know, we're building a new bakery in Brazil, so there's some capacity going in there. As a general rule, I'd use 3% of revenue. Your question on further restructuring costs. There's a little bit of additional restructuring that needs to get done in H2, which has not been announced as yet. You can't make provision for that. I would say EUR low single-digit millions, Patrik, if that helps. Okay, great. Thank you. Maybe just for Urs, does this mean that we should see more QSR in the next couple of years then? Amongst others, yes. QSR is clearly a winner in these days. They pick up volume, so we follow this trend. What about retail? In retail, we are quite well-positioned. There are maybe some adjustments to do, mainly in packaging of the product. This we will follow as well. These are the two pillars. The real plan at the moment these days is the QSR investment there in Poland and maybe then followed by others. In terms of geographic countries in Europe, are there any spots to go? For the moment, there is this Central European spot, which is Poland, obviously, and the eastern part of Germany. With the rest, we are in the phase of analysis and discussions with customers. Okay. Thank you, Urs. Thank you, Jonathan. Thank you. Our next question comes from the line of Andreas von Arx of Baader Helvea. Please ask your question. Yeah, good morning. Thank you for taking my questions. First one is, given the disposal in North America, I guess you know this coming, what is now the plans on the hybrids? When can we expect an announcement on what plans you have with regarding to these hybrids? Second question is, now with the disposal being announced, how is the setup looking going forward? Have you decided on the reporting structure? Might there be a change in the reporting currency? Might you move to Swiss GAAP? What is here planned? Maybe also which might further reduce costs. The third question I have, more strategic one. It's still declining revenues that you have, and I think the company has been in a stage of, let's say, surviving in the last years, let's put it that way. With vaccinations coming, there might now a recovery phase coming in your new main market, Europe. Could you give some concrete examples how you're going to grasp the opportunities to generate that organic growth, maybe other than the one example in Poland? Are you working on an innovation pipeline? Are you working on optimization? Are you working on additional cost saving just to be prepared? How do you make sure that you are best positioned if the market re-accelerates, also compared to competitors? Are you really sure that this might not need, let's say, additional spending, be it with CapEx or on R&D or other to get the engine re-accelerating again? Thank you very much. Good morning, Andreas. I will take question one and question three, for the segment reporting, I would then hand over to Jonathan. On disposal and usage of the disposal, as Jonathan already mentioned, we will address the debt side of the balance sheet, the bank financing. We will have to address as well the accumulated interests on the hybrids, we will have a close look on the hybrids as well. This is the plan exactly in this row. There needs to be activity on this, there is still work ongoing, this is the plan. Again, the bank debts, the hybrid coupons, the hybrid itself. On the growth question of the business- Sorry. Really sorry to interrupt. Can I just ask, does that include potential negotiations with the hybrid holders or is that something the board and yourself do not see on the agenda? Maybe to ask very specifically. It's still work in progress, Andreas. I can't disclose now too much detail, we will address these hybrids in all aspects. That's the only thing I can say at the moment to this. Let me come to the growth, the future growth of the business. There is a base effect we will have in the next some months and in the 1.5, two years to come, which are basically working on the food service sector. Food service is, as you know, down hotels, restaurants, tourism, reception, which is the main part of the food service business. This business will come back. That's a product innovation and service business. We are well-positioned in that business with our French, German, Polish, Swiss operation, with our Asian operations. They will pick up this recovery fast and on a lower cost basis. This is important to understand. The cost work we are doing now leads to a lower sustainable cost basis, and the volume pick-up will have the effects then on this. Quick Serve Restaurant, we discussed. The system gastronomy is one of the big winners in these days. We are well-positioned there, creating more capacity as we told. We are installing a Burger Bun line in South West Poland and will address other needs in this part of the business in other areas in Europe and maybe in Asia. This is the work ongoing. In retail, then as well, a bit connected to your second part of this question. We are quite well-positioned for the bake off part in retail, and we are looking into the packed part of the retail business, which had the growth. Once the business is seeing a recovery, especially in Germany there, we will be prepared the same way like in food service on a much lower cost basis with a higher efficiency. There are investments needed for this. I mentioned the investment in Poland, that's all together roughly EUR 15 million investment. There will be punctual investments in production plants in Germany and in Denmark, in Poland to correct some product abilities. At the end of the day, the 2% CapEx will be sufficient for the years to come. Innovation is a key driver in our business. Addressing new trends is key. There were some changes in the market in the convenience part of the business. We will have a workshop with all involved people on a European basis in April if COVID allows. This is a first step into that direction, which will help us there to get back on track. Andreas, you allow me now to give the question for the segments and the reporting structure back to Jonathan. Hi, good morning, Andreas. Thank you. In terms of the structure, I think we've made it quite clear in the presentation that we've eliminated the, what I'll call the above-market structure. We've effectively eliminated the European structure. We've streamlined Asia. We've closed the Asian office, the Singapore office. Effectively going forward, you'd have two business units. You'd have APAC and Europe, and those will be reporting into us. There won't be any regional MDs per se. In terms of currency and whether we go to Swiss GAAP, to be honest, Andreas, that's something that we haven't considered at this point in time. It really hasn't been high on the priority list. Certainly something for the future but that I haven't given much thought, to be honest, Andreas. Does that answer your question, Andreas? Thank you very much. Yeah. Thank you. Your next question comes from the line of Joern Iffert of UBS. Please ask your question. Yes, good morning, gentlemen, and thanks for taking my questions. The first one would be please on Eisleben. Is this a production site that you can think this can really become a key European hub, not only serving predominantly Germany, but also other regions that you could significantly increase utilization here over the next couple of years by streamlining overall European capacity? Second question would be please, is there any overlap in terms of brands, client relations you have to consider after the divestment of North America, considering your European business? If so, have you already talked to some key customers, and what was the reaction in Europe? The last question is, please, Mr. Jordi, how committed are you to ARYZTA? Are you here now for the next three, four years until you have delivered the new EBITDA margin targets? Do you say, "Okay, look, I want to turn around the company now for the next 12, 18 months, and then we have to see what is following. Many thanks. Thank you for this. Let me start with the Eisleben plant. The Eisleben plant is state of the art. It's one of the biggest, if not the biggest machinery in Europe, and mainly designed for the German market, which is by far the biggest one in Europe. Nevertheless, Eisleben is having export business to Eastern Europe, to other countries in Europe, and is as well having some exposures to Asia. Eisleben is designed for Germany being able to fulfill export businesses as well, which is well on the road. Concerning the overlaps connected to the North American disposal, there are basically two. There is a brand usage in Europe from the European business and from the Asian business, La Brea Bakery and Otis Spunkmeyer. These brands can be used for another two years. Within these two years, we will develop an alternative brand structure to replace then these brands in Europe or to prolong the agreement with the buyer. There is a second overlap, which is business we do out of Europe via our American friends into the American market. There are agreements in place. This business will continue. Concerning commitment, I mentioned this at the board meeting. I think this is a five, six-year journey. I will stay, if the shareholder wish so on board, to provide this journey over these five, six years, whatever it is then. Is this answered with that statement? Yes, many thanks for this. If I may just ask one quick follow-up. Can you remind us what is roughly the total sales capacity of Eisleben? That depends on pricing product mix, but Eisleben is a 300,000 ton output capacity annualized. Many thanks. Thank you. Your next question comes from the line of Jason Molins of Goodbody. Please ask your question. Hi. Good morning. A few questions, if you don't mind. Firstly, just kicking off on disposals. What's the net proceeds that you're likely to receive from North America after fees, etc? In terms of LatAm, can you give us a sense of profitability that's generated from that business? Second question, I guess, is around sequential trends that we're seeing in recent quarters, particularly in Europe. Just wondering if you can give any comments around recent trading. Does it look more like the recent Q2, or are we getting some better signs? Thanks. Thank you for this. I would give the question about the net proceeds on disposal to Jonathan. First, the LatAm performance and the trends in Europe. The LatAm performance is overall a performance which is over the average of the group. They are very well on the way. Can't give you the detailed figures now. LatAm with its exposure into the business is a very well performer under normal times. Unfortunately, Brazil was hit now by the third, or call it the fourth COVID wave. There are news in the newspapers we don't like. On the normalized level, which will come back there as well, the LatAm business is a very nice business in our portfolio. The trend in Europe is split in three parts. QSR is quite resistant, not having that big impacts from COVID. As well, of course, being lower than prior year. QSR will come back very fast once the lockdowns and the restrictions will disappear. Food service is the most impacted part of the business. We have impacts between -20% to -40% versus prior years. We are using these days and this time to reduce the overall cost base in people cost, in logistic costs, mainly in order to be well prepared once the lockdowns are released and the business is coming back. Retail is split in packed and bake off. Bake off is less because there is less shopping frequency in the market. There is still a hesitance to buy open, not packed products, slowly disappearing, but still there. On the convenience, on the packed side, the volumes are in some product groups rather up. In a nutshell, the entire trend for all these three business channels are very close connected to the lockdowns and recovery. Having soon spring, warmer weather outside, and a better and faster rollout of the vaccinations will bring the businesses back to the levels we are wishing. The disposals, Jonathan. Thank you. Hi, Jason. Good morning. In terms of the net proceeds, first of all, I think we need to understand that these are provisional numbers. Okay. The transaction will close in the months ahead, and there will be adjustments at close, particularly around things like working capital and the like. Our best estimate at this stage, Jason, is circa $800 million. There are obviously advisory fees that come up the gross number. There are also retention payments to management and employees in the organization. There are some costs related to transition, particularly around the IT separation piece as well, which have to come off. Thank you. Your next question comes from the line of Jon Cox of Kepler Cheuvreux. Please ask your question. Yeah. Good morning, guys. Congrats on the disposal and the figures there. A couple of questions from my side. Just in terms of an impairment on that North American business, is there likely to be one? Sort of just wondering how much that would be if it's booked in the second half of the year. Maybe I just missed that. The second question really is back to the hybrids and what you may do on that. If you look at the way the perps are trading at the moment, they're pretty much back to face value. It looks like those guys think they're going to get fully paid up. I'm just wondering then, from your perspective, can you at this stage rule out another capital increase to actually finance the hybrids? I understand it's all a work in progress, but if you can give us an idea of the timing. Should we see some sort of resolution before the end of this financial year? Thank you. Good morning, Jon. Thank you for this. Let me address the hybrids and the capital increase. At the end it is one question. It is exactly the way I told just some minutes ago, we will address the hybrid and the coupons of the hybrids. There is no plan for a capital increase. There are other ideas around this. We will address this. This is still too early to give their solid and concrete agreed plan on this. The cost of these hybrids are high, and anyway, the financing costs for the company need to be addressed. This is work in progress. For the impairments, I would give the voice to Jonathan. Thank you. Good morning, Jon. Yes, your question around is there going to be an impairment. Basically, in terms of the accounting treatment, in holding the asset for sale, we then hold it at proceeds less cost of sale. In response to Jason's question, previously you would have heard there are some costs that are gonna come off the gross proceeds. I did mention in my presentation that we had a loss, a projected or provisional loss on disposal of EUR 62 million, approximately EUR 62 million. So to the extent that those are the numbers, that loss would get booked in this financial year. Just bear in mind as well is that the DCF, sorry, the carrying value is done on a five-year DCF, discounted cash flow. When that was done, obviously at the end of last July, that assumed 4+ years of no COVID. Obviously, COVID's been prolonged as we all know well. Secondly, the U.S. dollar has actually weakened by 7%. Sorry. The U.S. dollar has weakened by 7.6% since last year. That in itself is EUR 65 million, Jon. Thanks very much. Does that answer your question? Yep. Yep. Thank you. Your next question comes from the line of Faham Baig of Credit Suisse. Please ask your question. Morning, guys. Just a couple from me. Firstly, just for modeling purposes, could you give us any thoughts around full year working capital and debt to securitization? As well as any comments on interest charges and the potential tax payment that you're likely to incur for the full year. Secondly, more broadly, I just want to understand within Europe what you currently estimate your markets are growing by, what you think a reasonable run rate is on a post-COVID-19 basis. Do you think whether COVID-19 has had a net negative impact on the categories growth rate, medium- term or positive impact, or is the impact neutral? Just as you think about some of the impacts it is likely to have on our day-to-day activities, be it from a step up in online sales, be it a potential step up in how we view carbohydrates and baked goods from a health standpoint, be it how we source products and whether we're likely to do more in-home baking, etc. Just a broader question on the categories development going forward in Europe. Thank you. Thank you for this. I would answer the question first on Europe and on the trends and on the expectations, and would then hand over to Jonathan for the working capital securitization and tax question. Overall, the carbohydrate market is growing with the world population, which is flat or 1%. The convenience market we are in is growing between 3% and 5%. The convenience market is outgrowing. There were changes now and impacts by COVID. Overall, this growth will come back within, we guess, two years. Compared to the growth of the markets pre-COVID, we think the quick-serve restaurants will grow faster. They will pick up volume from independent customers. We think that food service will go back to a level of 90%, 85%, 90%, not more, due to the fact that customers in this part of the business just disappeared, are not being there anymore. You see that maybe pubs, restaurants, hotels are disappearing, catering disappearing, not being back. This volume then, most probably will or is already being picked up by QSR. Retail, I already described. The overall trend we see is clearly an increase in individualized products, in artisanal products, in sourdough products, in specialty products. This increase needs to be followed and addressed. Now, this is as well slightly different from region to region. Eastern European countries, they have a slightly different dynamic to France, for example, or to Germany, to the Nordics or to Southern European countries. Overall, these are the trends. We will address this, there's a lot of guesswork we do what could happen after COVID-19. The aim from our side is clearly to be prepared on the market side, on the commercial side, with this innovation power, with the flexibility, with the closeness to the customers, on a much lower cost base. I would give then the question about working capital securitization and tax to Jonathan. Thanks. Could I just follow up? Could I follow up just on your answer with regards to QSR picking up faster versus and picking up volumes from independents, etc? I believe your exposure to QSR in Europe is probably not even 10%, if I remember correctly. What do you think that exposure is for the market? Just for us to understand how heavily under index you are and where you're likely or could go to over the medium- term. Thanks. This is difficult to outline because there's always a discussion and the development plan with the individual customer. A first step we did in Eastern Europe, more steps are in discussion, not only in Europe, in Asia as well. It's difficult now to answer this question in that detail. Okay, sure. Thanks. Thank you. Your next question comes from the line of- Sorry, Tracy, I just want to answer the other part of Faham's question around working capital, Faham Baig. In terms of working capital, just one thing to say at the outset, we've normalized the working capital cycle in ARYZTA now. I think historically, you might have seen some peaks and troughs around reporting period ends. That's been normalized now, so we're off that treadmill. You asked about H2. If we look at the cash conversion cycle, working capital, I mentioned in my presentation that we reduced it by five days from what it was at the end of last financial year. We're currently sitting on a CCC of about 13 days. I think that would be a fair number going forward. I think where there perhaps is opportunity is under inventory, DIO. DIO is currently sitting mid-30s. I think it has to start with a two. I think there's opportunity in inventory going forward. In terms of securitization, utilization was EUR 105 million at the end of January. We have a EUR 220 million program with Rabobank, certainly more to be had there. What you saw in quarter two was obviously with the slower performance in Europe due to COVID, less of utilization in securitization. I think last year it was sitting about EUR 120 million at the end of January. I think a normalized number would be EUR 120 million-EUR 125 million as well. There's probably another EUR 20 million that you can get from the securitization program. In terms of tax, it's a bit difficult because with the loss making, the ETR is all over the place. I think a normalized ETR for this business would be somewhere between 20%-25%. Yeah. Then in terms of borrowing costs, I think you mentioned about borrowing costs. Average borrowing costs is 3.3% for the company. If you look at the bank debt, that's obviously a lot lower. That's about 180 basis points. Then as Urs mentioned, the hybrids are a bit more expensive. That's just coming under the 500 basis points. Average borrowing cost, weighted average is 3.3%. Does that answer your question? I'm getting some takeoff alarm. Thank you. Your next question comes from Tina Tu of AWP. Please ask your question. Good morning. Thank you for taking my question. In the presentation, you mentioned that you want to grow also via sensible M&A. Can you outline a bit what the timeline there might be and the scope? Okay. There are a lot of restructurings looming in the European market. There are several protagonists, companies, being very well placed and positioned in the market. At a certain point of time, we will look into this to strengthen the core business we have. A timeline around this I can't give you for the moment. All right. Thank you. Thank you. Your next question comes from Antonio Casari of Northlight. Please ask your question. Hi. Thank you very much for taking my question. Most of my question has actually been answered. A couple of follow-ups. In terms of the disposal, you already are above the lower end of your EUR 600 million-EUR 800 million proceeds. I was trying to understand what was the expected contribution of Brazil in the initial plan, and what's the timeline and how the timeline is impacted by what you characterize as the quite heavy impact of COVID on the Brazil business. What's the impact in terms of the timeline for the disposal to happen? The second question is more technical in terms of when you show your net debt includes leases, is there a portion of that leases that is part of the North American business? When we consider the pro forma net debt, once the transaction is closed, shall we assume proceeds and a reduction in amount of leases because they remain with North America? Are they part of the consideration? Lastly, can you please confirm the target leverage pro forma for the disposal of North America once the company reaches its normalized or target capital structure? Thank you. Thank you, Antonio. For the disposal, you know that we mentioned always the EUR 600 million-EUR 800 million for the ANA and the Latam disposal. We don't disclose the target or the frame we have for the Brazilian business. As I told before, it's in normalized times, a very nice, a very well-performing business. We also agreed that we wouldn't go for any fire sales, which we didn't, and we don't have to. We really bring the Brazilian business in these COVID times to the targeted level, and then we will see what the business brings, but I can't give you now concrete numbers on this. Okay. Just with respect, Antonio, in respect of the leases. There's no further adjustment for the leases for the U.S. business out of the proceeds, right? There won't be any adjustment for leases. In terms of your question around long-term leverage goal, we haven't set a specific timeline or target at this point, Antonio. We don't have that. We haven't got one at this point. Okay. Just coming back for leases. Out of the overall amount of leases that you currently report on a group level, is there a portion that refers to the North American business and that will be transferred as a result of the disposal? Yes. Can you give us a sense of the size? I can get it to you offline. I don't have the detail with me, Antonio, at the moment. Okay. I'll follow up. Certainly. I'll follow up line. No worries. Yeah, we can get that for you. Okay. Thank you. Thank you overall. We would head to the last question in the round and would then close afterwards the Q&A session. There are no further questions on the line, sir. Perfect. Thank you so far. Thank you for taking time to be with us today morning. More to follow. We work on the outlined plan. We are restricted by the COVID-19 impact. We will reduce the cost base in order to be ready and well preferred for time post-COVID. Stay healthy and have a good morning. Thank you and goodbye. Thank you. That does conclude our conference for today. Thank you all for participating. You may all disconnect.