Please note anyone who wishes to ask a question during the conference may press star and one from their touch-tone telephone. You will hear a tone to confirm that you're entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to choose only hands up and either turn up the volume from the webcast. Webcast viewers may type in their questions or comments in writing by the relative field. Please be reminded that the information in this call contains some forward-looking statements, which reflect our current knowledge while actual results may differ. Furthermore, we would like to inform you that this webcast is being recorded. This is our agenda for today. Peter will present to you the highlights of the half year, followed by an update on the financial results. Peter will then give his remarks on strategy and ESG before sharing the outlook. We will finish this webcast with a question- and- answer session. Please be reminded that to dial in by phone to ask a live question. You will get instructions from the operator once more at the end of this presentation. With that, I hand over to Peter. Thank you, Claudia. Good morning, ladies and gentlemen, and welcome to our Half-Year 2021-2022 Results Conference. Easter is around the corner, and as you know, it's a very busy time for many of our customers, but also of course, a great moment to talk about Cocoa and Chocolate. First and foremost, I'm happy to share a strong set of numbers for the first six months of the fiscal year. We are very pleased to see strong volume growth, solid profitability, and continued good cash generation. Sales volume increased by 8.7%, driven by an outstanding chocolate performance of 9.9%. Operating profits recurring of CHF 380 million shows a solid 8% increase. In the actual inflationary environment, this profit performance is of course a testimony to the strength of our cost-plus model. EBIT reported up 12.3% in local currencies, helped by a one-time Brazilian tax benefit. Last but not least, we continue to strengthen the balance sheet with an adjusted free cash flow of CHF 167 million. We'll share later in more detail on how we have achieved those strong results. Before I do that, I think it's right that we first take a little bit of time to reflect on the situation in Russia and Ukraine. Let me be clear. Like everyone, I have been profoundly impacted by the images of people having to leave behind their homes, family, and friends due to the war in Ukraine. We have put our first focus, rightfully so, on keeping our people safe and offering help to those who are forced to flee their homes. Of course, we can never ever do enough. I'm proud of how the Barry Callebaut community, my colleagues, and the executive committee is showing their heart there for those in despair. Some examples are mentioned on the slide. A question then, of course, is asked, and rightfully so, whether we should continue to stay in Russia. Question is raised by many, internally as well as externally. As CEO and also as an executive leadership team of Barry Callebaut, we are here first and foremost for our employees. They depend on us for their work and hence for taking care of their families. I love working for Barry Callebaut because it feels, as I've said many times before, it feels like working for a family. It works and it feels like a family company. This family also includes 500 colleagues in Russia. Supporting it is at the heart of Barry Callebaut. This is expressed on the one hand, through our efforts to support Ukrainian refugees, but also through our efforts to keep our factories running and the jobs of our colleagues secured in Russia. I cannot stress enough, the war in Ukraine by Russia was started by the Russian government, not by the Russian people. This is a distinction we have kept in mind in taking these difficult decisions. Moreover, we are a company that will support its customers. You know, customer focus is one of our values. Our customers bring daily food to consumers in all kinds of shapes and forms. It was called essential during the pandemic for a reason, and it's regarded as part of the daily diet for many. Pulling away from our customers and leaving them without a possibility to bring their products to consumers who have not asked for this war does not feel right to us. This is why we continue to be present in Russia. We have no direct presence in Ukraine and three factories in Russia, which are producing for the local Russian market. We have mainly a local-for-local operation. Exposure is in the low single- digits, so less than 5%. In a global company we are, therefore, an exposure we can manage. We have suspended new capital investment in Russia, and we are continuously checking our business partners to ensure we are compliant with international trade sanctions. Based on the increase of perceived default ratios, we have made an impairment of financial assets of CHF 5 million that is reflected in our results. We will continue to monitor closely and assess the situation as circumstances evolve. Let me close by saying, and I hope, I really hope so, that a peaceful settlement will soon be found. All right, let me go back then to our strong numbers for the first half. You are familiar with this graph. We are consistently showing it. You see, of course, reflected on this chart the volume development per quarter for Cocoa and Chocolate. We added one bar to really see the impact in the first half. Reflected in these bars is that you see our continuous strong volume growth, driven by an outstanding chocolate business growing 9.9% in the first half, 5x more than the underlying chocolate and confectionery market. We always say we have to grow faster than the market, 5x is a lot. Volume is surpassing the pre-pandemic levels of fiscal year 2018 and 2019. We're really, in that sense, are back and a bigger company than before the pandemic. In Global Cocoa, volume was back to positive growth of 4%. Let's have a closer look at our key growth drivers on the next slide, which all contributed to the good results. Outsourcing, and a very important one for us, increased at 7.3%. This time, mainly driven by the ramp-up of contracts in Eastern Europe. Volume growth of 8.7% in Emerging Markets is a good achievement, and driven by very important markets like Mexico, India and China. Thanks to our strong teams and a sharper business model for our gourmet business, our gourmet specialty business continued its strong volume growth far beyond the recovery and clearly above pre-COVID volume levels. You can see from this slide that we are not short of important milestones in the first six months. These illustrate the healthy growth path the group and we as a company are on. In October, we opened The Chocolate Box in Lokeren, Belgium, the world's largest and most sustainable chocolate distribution center. With this, we are further building our cost leadership and accelerating our customer service. We also enlarged our geographic and customer footprint in Serbia and Australia, extended two strategic supply agreements, and asserted ourselves as a long-term partner of choice for leading confectionery players like Hershey and Grupo Bimbo. I'm also extremely proud of Barry Callebaut being recognized by CDP as Global Climate Leader. Of course, special for me always is innovation, one of our four pillars of our strategy, and we continue to ride the waves which are out there and create waves if we think they are relevant for our customers and our consumers. We've heard about next, a range of dark and milky tasty chocolates for chefs and artisans. We cater to the growing consumer demand for plant-based alternatives. Next is exclusively produced in our first fully dairy-free chocolate factory in Norderstedt, close to Hamburg. Now, recent innovation, Elix and Evocao, which we have presented before, were both nominated for the World Innovation Award. I'm very happy to share that Evocao, which is a unique chocolate made from 100% pure cacao fruit, brought home the trophy in the end for Best Artisan Product. Do not miss the opportunity to taste some of the creations with Evocao after the presentation. With that, I hand over to Ben, who will introduce you to key figures. Thank you, Peter. Good morning, ladies and gentlemen. It is my pleasure to walk you through the financial review. Let me explain to you first the non-recurring part of our this half year results. In the following slides, I will always refer to the recurring results. The recent decision by the Supreme Federal Court, which was applicable to all taxpayers, led to a positive effect related to the recovery of indirect tax credits for prior fiscal year periods, impacting our operating profit, EBIT, in Global Cocoa, region Americas, as well as our group's net profits for the period. Our recurring numbers, therefore, excludes the positive effect of CHF 12.8 million on EBIT and CHF 12.7 million on net profits. Please note that the negative effect of the impairment of financial assets is part of the recurring results. Now, let's have a look at the details. As highlighted by Peter before, we achieved a strong volume growth of 8.7%. Our sales revenue amounted to CHF 4 billion, up 16.5% in local currencies. The increase was impacted by the overall inflation environment, which we managed through our cost-plus pricing model for the majority of our business. We reported a solid operating profit, EBIT, recurring of CHF 381.1 million, up 8% in local currencies. As indicated by Peter, the amount was achieved despite the impairment of financial assets. Excluding this negative effect, EBIT growth in local currencies would have been above our volume growth. Net profit for the period amounted to CHF 212.1 million of 3.6% in local currencies. We saw our continued good cash generation with an adjusted free cash flow of CHF 167 million. We will get into more details in the coming slides. First, let's have a look at the regional performance on slide 13. Our strong volume growth was broad-based in the regions and ahead of the underlying chocolate confectionery markets. Region EMEA reports strong volume growth of 11.6% or excluding the first time consolidation of ECC of 10.3% organic, substantially ahead of a flat underlying chocolate confectionery market on IRI. Food manufacturers reported healthy growth in Western Europe and a strong ramp-up of outsourcing in broader EMEA. Gourmet & Specialties volumes continue to be overall strong. Our EBIT in local currencies growing in line with volume growth reflects a sound profitability despite the impairment of the financial assets in Russia and investment for future growth. Region Americas reported accelerated volume growth of 6.3%, twice as fast as the underlying market. The strong growth was supported by both food manufacturers and gourmet across this region. The good growth, in particular with specialty chocolates products and gourmet, is also reflected in the strong profitability with an EBIT recurring up 14% in local currencies, testimony to our acceleration at the value level. The vibrant volume growth continued in region Asia Pacific with 13.7%. The underlying markets growth according to Nielsen shows a similar growth number. However, this does not include the Australian market, which was still suffering from COVID-19 restrictions. Our food manufacturers business continued to grow double- digits, supported by key markets like China, India, and Japan. Vibrant volume growth continues also there in Gourmet & Specialties. Due to upfront investments in growth, mainly in Australia, EBIT growth remains behind volume growth in the first six months under review. However, the regional profitability remains well ahead of the group average. Volume growth in Global Cocoa normalized during the second quarter, leading to a 4% increase in the first six months. While operating profits recurring declined 16.5% as anticipated, the impact of the imbalanced cocoa market has bottomed out, which is reflected in the EBIT per ton, which is at a stable level compared to the second half of prior year. Going back at group level now, and let's have a look at the gross profit bridge. We are pleased with the positive contribution from volume and mix. As expected, cocoa had a negative impact, and we accounted for an impairment of financial assets in Russia related to an increase of perceived default ratios. Overall, our gross profits increased by CHF 41 million or 7.2% in local currencies. The Cocoa combined ratio shows, as you know, the relationship between market prices of Cocoa Butter and Powder in relation to the underlying cocoa bean price. This is a forward-looking coarse result normally seen over a six to nine months period. This is also the European ratio, which is the most relevant. We run a global business and as you know, the combined ratio is only a broad communication of industry's profitability, but it does not reflect some important variables, such as entry differentials and living income differentials. This effects of COVID-19 led to an imbalanced cocoa market, which however seems to have bottomed out, reflected in a stable combined ratio of CHF 3.3-CHF 3.4. The smart growth execution and our improved position, thanks to the Cocoa Leadership Project, helps us absorb market fluctuations better while we are of course not immune to it. Next slide, please. Let's move on to the operating profits bridge on slide 16. As just explained, thanks to the positive volume and mix effect, gross profits contributed to an additional CHF 41 million, including the aforementioned impairment of financial assets. As business activities further normalize post COVID-19, SG&A costs increased by CHF 17 million in the first half of 2021-2022. However, in line or even at a slower pace than volume growth attributed to sound cost management. This resulted in an operating profit EBIT recurring increase of 8% in local currencies. Currencies only had a minor impact, leading to an EBIT recurring of CHF 318.1 million. The group's EBIT amounted to CHF 330.9 million. The next page shows you the development from EBITDA to net profits according to the half year. Financial items increased to CHF 59 million on the back of higher benchmark interest rates and impairments on cash in emerging markets, mainly Russia. Income taxes amounted to CHF 47.1 million, corresponding to a stable effective tax rate of 17.4%. The recurring tax rate, i.e., excluding the positive effect of the indirect tax credit recovery in Brazil, was at 17.7% in line with our expectations, resulting in a net profit recurring increase of 3.6% to CHF 213 million. On slide 18, you can see the long-term development of our key raw materials. Thanks to our cost-plus model used in the majority of our business, fluctuations of raw materials are passed to and do not have an effect on our profitability. However, it has an impact on our working capital. During the first six months of 2021-2022, the terminal market price of cocoa beans fluctuated between GBP 636-GBP 877 per ton and closed at GBP 692. This corresponds to a small increase of 2.9% compared to prior year period average price. Sugar prices in Europe increased on average by 31.6% in the period under review, mainly due to historically low stocks and the resumption of demand. The world market price for sugar increased on average by 23.3% on the back of substantially lower Brazilian crop and a macro environment driven by high energy prices and record freight costs. The strongest increase was recorded for dairy prices, up 36% compared to the average price in the prior year period. While demand remained dynamic, global milk supply declined sharply as rising inflation squeezed farmer profits, which resulted in a strong price rally. I'm pleased with the continued strong cash generation, which resulted in a strong adjusted free cash flow of under CHF 67 million. Let's look at the details in this note. Working capital increased, however, at a slower pace than the group's volume growth. Receivables increased in line with the regained business momentum. Amidst the global supply chain constraints, inventory was higher to ensure product availability. These effects, however, were largely offset by higher payables. Interest and income taxes paid amounted to CHF 68 million, up CHF 39 million in the prior year period, due to the higher benchmark interest rates. We continue to invest in our capabilities, which enables our future growth. CapEx of CHF 104 million was lower compared to prior years, which included the greenfield investments of Serbia and India. The impact of free cash flow amounted to CHF -133 million, adjusted for the effect of what has been regarded as readily marketable inventories, RMI. The adjusted free cash flow was as strong as in the prior year period at CHF 167 million. Our net debt was further reduced by CHF 159 million. Considering the focus in inventory as readily marketable inventories, RMI, the adjusted net debt decreased by CHF 101 million to CHF 561 million at the end of February 2022. The good progress on debt reduction is even more obvious when separating the portion of debt related to IFRS 16 leases, which have increased in the first half year, mainly due to the opening of our further distribution centers in Lokeren. At the end of the financial review, let's have a look at the key balance sheet numbers and ratios on slide 21. Our net working capital only slightly increased to CHF 1,599 million from CHF 1,579 million in February 2021, thanks to overall good working capital management. Our ROIC and ROE substantially increased, with ROIC up 250 basis points to 11.7%, and ROE up 280 basis points to 15.6% compared to February 2021. As mentioned before, net debt was further reduced, leading to a low adjusted net debt to EBITDA ratio of 0.7 x compared to 1.1 x in the prior year. With that, I hand over back to you, Peter. Thank you, Ben. Let's now have a look at our long-term strategy and how we want to continue on a healthy and, I think, exciting growth path. You've seen this slide already several times, and today will not be my last time, I'm afraid. It's a solid strategy. It brought us a lot, and we are consistently executing this. We've talked about have been and will be consistent with our long-term strategy. We continue to focus on the four strategic pillars: expansion, innovation, cost leadership, and sustainability with a smart execution and focus on return on cash generation. As shared with you before, the general direction is on accelerating up the value ladder. It's smart growth that we believe there's a huge opportunity to further accelerate up the value ladder and see us make a good progression on that. It gives me a lot of confidence. If you look at the different pillars on expansion, let's start there. In Gourmet, we have sharpened our business more by broadening our customer footprint, both in segment and geography. We see Africa. Africa often displayed in previous times as an origin for cocoa. It's now also markets which we are opening for our Gourmet business, which is very, very exciting. Innovation. We will continue to leverage our global scale and roll out innovation solutions from intense indulgences like caramel and dark to healthy indulgence like sugar reduced. As the largest producer of sugar-reduced chocolate products in the world, we can offer our customers a wide range of exciting solutions. Cost leadership. We will continue to improve our operational efficiency as always, and invest in the modernization of our factory footprint. As it exemplifies the recent decision to start a consultation on the potential closure of our Moreton factory in the U.K. As you know, sustainability is at the heart of our long-term strategy. It is great to see that the management of our environmental, social, and governance risks is appreciated by the market. To illustrate, since 2017, we have been consistently rated AA by MSCI and AAA by Sustainalytics since 2019. Great to have this third-party appreciation, but rest assured, we will not become complacent and continue to make sustainable chocolate the norm as we have captured and expressed in Forever Chocolate. Ladies and gentlemen, let me summarize. We have a solid strategy that we execute successfully with a world-class team of over 30,000 employees and colleagues around the globe. This makes us confident that we can deliver on our mid-term guidance. Finally, I look forward to see some of you again in as little as a month at our new headquarters office here in Zurich on May 11th for Capital Market Day. With this, ladies and gentlemen, I conclude this presentation, and I would like to open up the floor for questions. Good morning. I would have two questions. Maybe first on Cocoa. Profitability was clearly low last year. Could you elaborate a little bit on the Cocoa business mix effects? Also what you mean by this bottoming out of the market. A second one, on general costs. I can imagine costs everywhere goes through the roof. How much is it in your cost-plus model, and what do you expect looking forward? On the Cocoa side, what we mean by bottomed out. When you look at our profitability of second half of last year, it was quite affected, and then you look also at the profitability per metric ton. It has bottomed out, so our profitability is now in line with our second half of last year. Of course, when you compare it to the first half of last year, you will see a dilutive effect. Why was that? This is the effects that we have been talking about before. The imbalance of the cocoa market supply and demand, so ahead of us, that the depression in the Cocoa Butter prices, Cocoa Powder prices were quite stable. Cocoa Butter prices were quite low because they are mainly consumed in Western Europe and in North America. There was a demand that was affected, supply was there. That created some more pricing pressure. In the meantime, also the transport costs went up in the second half of last year as well. That's now bottomed out. That's where we feel very confident that we have hit the bottom levels while focusing on premium Cocoa Powders, that we have seen the worst of that storm. Of course, you see it also in the chocolate numbers. Chocolate numbers are increasing, so you see it in the milk numbers as well. Which is a normalization then of the imbalance that we have seen before as well. In Cocoa that's the situation. We mentioned that a little bit in the last quarter as well, that here we are, we are not out of the storm yet, but it was already normalizing then. We look at overall inflation side. First of all, indeed, our cost-plus is protecting us very well. On the inflation side, I feel very proud on the efforts that the teams have done. You see that very clearly is that our revenue went up, of course, much faster at the 16.55%. You see the costs being reflected there so of dairy prices and just general market energy prices we're passing it on to our customers. In that sense, when you look at overall costs, more than 70% is in raw materials. That is quite normal. You see increases, you see decreases. Our customers are quite used to it. Then you have the second part of it, which is about 10% is on the freight costs. That's something you saw last fiscal year. There's certainly a strong increase. It took us some time to pass it on, because you especially when you have contracts where you have CIF or DDP freight rates that is already negotiated. Of course, it takes some time. That has already taken into effect. That's quite stable with the freight costs. They have not decreased significantly, but they have not increased further as well. Then the last part, which is also less than 10%, we're talking about manufacturing costs. Manufacturing costs, labor costs, energy costs as well. There we see, of course, also big increases. Of course, when you look at the overall cost, that's less than 10% of our overall cost base. There, the name of the game is making sure that we pass it on as fast as we can to our clients as well. Also having foresight on inflation rates going forth, especially when you're pricing to your chocolate business out the next three months or next six months. You need to make sure that you take that into account. I can tell you that it is in our cost-plus model as well. Overall, it is a very good business to be in, a good model to be in a very high inflationary environment. Having said this, pricing is not the only thing. Of course, we, as a CFO and the finance community, need to make sure that prices are done. We, of course, have to help our customers as well. Pricing chocolate is only one thing. The total costs is always very important, making sure that chocolate is available close to our customers. Having a global footprint, of course, helps us tremendously as well, that we don't have to ship it around the world. We are very close to our customers. We are, of course, helping our customers as well in terms of making sure that there is also innovation. Innovation not always in the sense to the outside world, but innovation also in terms of the cost of use, making sure that they can use chocolate in the most efficient way. Also reformulations and so on as well. We are helping for sure our B2B customers to be successful in the market as well. No, you're right, Ben. It's not the first time we see inflation. We have both worked in markets where there's a lot of inflation as well. Yes, the cost-plus model helps us, but at the same moment, we partner with our customers. We try, of course, to support them managing the impact on their business. Okay. This is from Reuters. You mentioned you'd give us some update on Russia, and you mentioned internal and external pressures to maybe withdraw from Russia or take further steps. Can you say a bit more about that? I was wondering who is putting pressure on you? Is it maybe investors? Is it staff? Is it customers? Can you say just anything else? Even my [crosstalk]. Of course, there is a discussion which we all are in, and these are the right questions to raise. Therefore, we have me, Peter, as CEO of Barry Callebaut, but also as an executive committee. We just have reflected what is the best thing for us to respond to this situation. For us, as I reflected before, we have traded off just what the company we are, and we are the company that wants to stay with its employees, want to support its customers. We believe that's the best decision to take at this moment. If you talk about pressures where you see other companies taking other decisions, that's their trade-off. In that sense, we can only look at our situation and what is the best for us and our people and our customers in it. From Steve, good morning. A few questions from myself. Coming back, the combined ratio, if I look at the chart you show in your presentation, I see that the combined ratio stabilized, but not really improved by much. I mean, you mentioned an improvement for the profitability in H2, but based on this combined ratio, it doesn't look like we should expect much of a tailwind, or did I miss it completely? My second question on Russia, do you face there any supply chain issues? We also read in the newspaper that other companies face problems to source inputs into the country because they cannot manage the logistics. Insurance companies are not willing to insure the transportation. Any comment on this? Also on your business outlook, I mean, you confirm time and time again your confidence into reaching the midterm targets. However, now the situation in Russia changed. It's less than 5% of your volumes, but it clearly should have an impact on your volumes. What is your best guess here also for the next financial year? Thank you. Okay. Let me answer first on the combined ratio as well. Yeah, indeed, it has stabilized. By the way, when you look at the historical graph and form, it's not like it's stabilized at the lowest level as well. The one part of it that is still affected at the moment is the Cocoa Butter. You see the Cocoa Butter has taken quite a bit. It took some time for the Cocoa Powder to normalize as well, but the two are communicating vessels. You have one product, cocoa beans, that are then being transformed into powder, into butter. Now you see the demand of Cocoa Powder is still very strong. Cocoa Powder goes into a lot of applications as well. As the butter was under pressure. It took some time, but the powder has caught up. That is helping, of course, our confidence in the future as well. As you know, we keep on focusing coming out of our Cocoa Leadership on the premium Cocoa products. That's really where we want to be. We want to add value on the product side with our Bensdorp brand. Already one-fourth of our overall powder volumes is actually premium Cocoa Powders. That's something that we want to focus on. That's why we are more confident as well. That's where we can add value. That's where we want to be in as well. Of course, when you sell cocoa powder, you also have to sell Cocoa Butter as well. That's something that we have, of course, as an integrated players, compared to pure processors. We have, of course, a big outlet in our chocolate business as well. Cocoa Butter being at a lower end does help our chocolate business to grow as well. Cocoa Butter being affordable means that the chocolate overall is still quite affordable from the cocoa component as well. That keeps everything in balance as well. I always refer, Pascal, to the past. All of our business units have to work very closely with each other. No cocoa, no chocolate as well. Here you see it as well, that actually our Chocolate business is benefiting from that Cocoa Butter price at this moment. You take the second, Ben. Let me reflect on the question on Russia. Of course, a lot of disturbance of supply chains. In general, we have flows coming also from abroad. But as you know, the food system is not sanctioned, so those flows still can come in. In the first couple of weeks, we saw a lot of problems to get the transport. At this moment, that pressure is a little bit less. At this moment, we can still support our local for local business and keep our three factories running. We have seen in the last couple of years quite some issues with supply chains. It requires a lot of flexibility. We have a daily crisis management. Just, we are reviewing every day how we will make this happen. At the end of the day, that operation is still running as it should. If you then look at the outlook, as I said, low single-digit, that's the kind of exposure we have of Russia. At first, let's see. We cannot predict how this will pan out, but we look at that day by day. The beauty, of course, of a global business is in the end that we through our portfolio of markets are a little bit protected, and therefore, we are still confident. Otherwise, we have carefully chosen that word. Broadly, indeed, just to confirm again our midterm guidance of 5%-7%. Overall, Russia is there, and we know there's a risk. That's always also why there's the impairment taken for defaulting customers as a risk. Hey, we believe on our total business that we can manage. To be honest, I didn't see any half in my 10 years at Barry Callebaut that we didn't have markets going down or businesses going down. In that sense, we are used to it. Joern from UBS, thanks for taking my questions. The first one would be, please, on your gourmet business. Do you currently see the benefits of the return of consumer street traffic, or is it more a balance between the different channels you have run in the last 12 months if there maybe is less traffic at QSR, going now more to the restaurants, to the classical restaurants? To just get a feeling about the gourmet momentum going to the second half if there's a benefit from the opening. The second question would be, please, you also highlighted, that you want to go into many new regions, to drive your business, not only in gourmet, also in outsourcing. At the same time, your marketing expense in the first half were down around CHF 7 million versus 2020. Do you have new sources, new channels for marketing, which is making this more efficient structurally, or should we expect a ramping up of the SG&A cost base in the next 12 months? The last question if I may ask, on the outsourcing trend, do you see by clarity and visibility that the cost pressure many consumer companies have at the moment, that the interest for outsourcing and capacity to sign more deals is really increasing or not? Thank you. Thank you. Let me take the question on Gourmet. Hey, you have seen, of course, already for quite some months and quarters good growth in gourmet. Of course, we came from far because the pandemic had definitely its impact and broke down some of our channels where we were selling our Gourmet products. It also helped us to reflect on our route to market and to identify opportunities in channels which we were not that strong in in the past. I've referred to bakery as a segment. We were much more focused on confectionery, on pastry. The kind of bakery segment, which held itself pretty strong through the pandemic, was clearly an area where we were underrepresented, where we could fight for more share. Therefore, we have been driving our route to market in those areas. QSR is another where we normally are not very strong. If you see the strong results in Gourmet & Specialties, I believe yes, there's absolutely still markets coming back. Hey, there's even markets that are still on lockdown, as you know. But it's really a structural kind of we are penetrating the market, getting more reach, getting more end users, reaching them, and therefore I think it's a very healthy and stable and sustainable way to drive the Gourmet business. We hope that and we expect that this kind of strong momentum will continue in the second half. I will take the question about the spend for marketing. It's not like we are less focused on marketing. Actually, on the contrary. You do see a shift a bit in terms of where marketing is being spent. Much more now on the digital front, which is of course quite a bit in our CapEx spend, expenditure as well. You see it in our G&A costs, more in IM&IT, where we're spending more money as well. We still want to do a lot of physical events. Of course, in the first six months, not all physical events were still happening yet as well. For example, when you look at Asia Pacific, not that people could not travel freely between the different countries, so we did not do a lot of efforts in terms of trade shows. But we did focus quite a bit on the use of Salesforce and our digital push and pull that is actually going to help us out tremendously in the future. Actually, this is going to be further intensified over the coming years as well. That physical presence together with the digital presence, that's actually our way of working going forward. Yeah, we always reported the amount of kind of people we train on an annual basis. You saw through the pandemic enormous rise of people we reached. Instead of the 120, 130 thousand, 150 thousand a year, we suddenly went to 340,000. That is the power of digital because we have learned that we can create that pool. To really get end users pulling our products through the distribution, we can activate it very well in a digital way. The tools available in that respect are only getting more powerful. On outsourcing, we love outsourcing, as you know. Our growth has been driven for a significant part over the years through outsourcing. We still have a kind of 30,000-40,000 tons per annum, which we want to add in that way. Half of the market is still captive. We believe there are many opportunities still out there. We will go after them. It's always a little bit unpredictable when they've come through. What produces, of course, a lot of confidence is that Bimbo and Hershey both renewed their contracts. That shows that the model is right, that economically it's interesting to work with us, partner with us, to outsource to us. It sometimes is more an emotional decision, and it takes time for a lot of customers. We therefore always say it will come. A crisis actually is a moment to reevaluate outsourcing again for our customers, and I therefore expect more opportunities to come, and we can present in the years to come. Hi. I'd like to know about the price increases from inflation are a major worry for the consumers. What I'd like to know is if the price of sugar increased by 31.6% and dairy by 46%, how much of that extra does that represent for your customers? While in the short term, the cost-plus model protects you against the inflation, will that be an impact in your view on the volumes down the line? My second question would be on your projections for raw materials. At the moment, much of the focus of the markets are on grains, but there could be some other potential side effects on the price of animal feed or. What are your, h ow do you see the potential impact of the war in Ukraine on your raw material input to see what are the impact on dairy and sugar? Well, yeah. First of all, I don't have the exact formula because different chocolate recipes, different percentages of sugars, different percentages of dairy as well. Of course, dark chocolate, white chocolate, milk chocolate as well. Sugar is the cheapest ingredient overall in chocolate. It's between 40%-50% of the overall recipe. Even if the price goes up to 30%, it's not going to drive hugely the chocolate price up as well. The same actually for dairy, because dairy has a lower percentage in the overall product. Depends on how milky it is as well. It does have an impact, and that's the beauty of, like you alluded to as well here, our customers, we are in the first place pass it along to our B2B customers. Indeed, over time, as well, is chocolate becoming too expensive? I don't think so, to be honest. 'Cause when you look at the basket of products, so when you go to the supermarket as well, because of the cocoa prices, which is the biggest impact on the price, actually chocolate that you see at other products in your basket, they have gone up much higher than the chocolate item. As such, it's. Yes, it's becoming more expensive, but it's not like what we have seen in the past when there was a crisis on the cocoa bean, when there was cocoa beans which doubled in price at a certain point because of a civil war in Ivory Coast. That was only linked to the chocolate price. Even then we saw products still being consumed, and we didn't see a decrease in the market. Overall, I'm very confident. Second proof that I want to bring, even though the underlying market itself is not growing or is muted growth, Barry Callebaut has a very strong track record in beating those numbers. You saw it in the chocolate result in the first six months, 9.9% chocolate growth, underlying confectionery market 10%. We have been always beating that market as well. There's plenty of applications that we can sell our products in. But it's not only Chocolate Confectionery, could be Chocolate in Ice Cream, Chocolate in Bakery items and so on as well, which reflect of course the price in a less way than a full chocolate bar. Overall, as such, I feel very strong that we will continue to see growth numbers. Again, as Peter mentioned, more than 50% of the market is still captive. There are more customers of Barry Callebaut yet, and that's a target that we set ourself for our team as well. I want to stress again the enormous power, a little bit more on your second question, the enormous power we have in R&D, in reformulation. It's important just to help our customers out how to deal with inflation and how to deal with the increasing prices. It also helps with when some of the raw materials are under pressure. You know, Lecithin oils are a lot used in our compounds. Some of them will be less available, but our R&D teams have already worked on replacing them and making sure it will therefore have a limited impact on our business. Thank you. As Chris Gladwin pointed, I just wanted to come back on this, cost-plus model. Actually, you mentioned that, you know, the majority of your business is actually protected that way, no? Could you maybe discuss what is not sold under the cost-plus model in your business? It's part of our Gourmet business that is on price list being sold, but even there on price list, we do it sort of cost-plus as well. It's of course the price list is a little bit of a time lag. We do it a six -month pricing as well. There we of course want to always price ahead of increases as well. When we have first sight, we of course want to price it in as well. In terms of the majority of our volume is food manufacturers. It's critical. That's all on a contract basis. Part of our Gourmet business is on price list. That's where you have a slightly different way of working, but at the end the result is the same. Just on the food manufacturing business now, is this basically kind of a real time pass on of the cost or is there also some time lag in there? No, there's a real time pass on, first of all on the raw materials, what I said is more than 70% of the cost. On the freight there could be a little bit of time lag. This only has an effect when suddenly you see a spike of freight rates going up very high, which you saw in the second half of last year or last fiscal year. Of course, if you already have negotiated a chocolate contract for the next three months delivery that is on delivered terms, you of course have to eat that increase. Now that's being priced in. The prices of freight have stabilized, so that's already now of course priced in. I'm an optimistic person. At the end, when it goes down, it should be positively affected in the future as well. Great. Thank you. Hello. Thanks for taking my questions. A follow-up from Exane BNP. First, very recent topic, of course for you it's already almost over the Easter business, but can you talk a little bit about if you see a lot of recovery effects there, and just how the Easter business is going in general? I would also like to know if you could give more information about these impairment losses in emerging markets, in particular in Russia. Can you quantify them and give a little bit more information about it? The factory in the U.K. that you are planning to maybe close. Can you just give an overall view of your business in the U.K.? How many factories do you have total, and how many employees? What's the exposure there? Thank you. Okay. Let me start with the Easter season. I think we are getting more and more out of lockdowns, so I hope people can really come together with their families, with their friends and that leads to a good chocolate consumption. In the end, still out of all the products our customers have already made two, three months ago. If there's still an Easter effect, it should be in the early months of this first half, because we really often get the products four, five months in advance. My sense is I still see a lot of customers. I've seen many eggs over the last couple of weeks, and I really hope therefore it is a good Easter for our customers. I will take the second question on impairment loss or some more details there. The impairment first of all on above EBIT, the impact, it's linked to Russia. It's about CHF 5 million. Why? That is a perceived default ratio of our clients. This is basically the counterparty risk. Of course, when the war started, the perceived default ratios have increased. It's in terms of good accounting practices, we need to make sure that we reflect that in an impairment as well. I want to stress it. It's not of course a cash item as such. It's the fact that customers have defaulted, but it's just about a good accounting practice to reflect it in your results. CHF 5 million is above EBIT. There are financial items that are also some more aspects as well. It's more related to the cash balances in ruble and so on as well. It is broader than just Russia. Of course you have other countries like Turkey and so on as well that are affected. I don't have a specific number on that, but on EBIT it is a CHF 5 million impact. All right. On Moreton. We have three sites in the U.K. Our biggest site is Banbury. We had the outsourcing deal signed three years ago. Of course, hey, that was a great deal, good business for us. The Moreton site only has 45 people. What we just in the last three years found out is that it's suboptimal to keep producing out of that site, and we better integrate that volume into our site in Banbury. As you know, we have started the consultation process. It still will take a little bit of time. We want to take good care of our colleagues and bring that hopefully to a closure in the future. We are still in the middle of the consultation. Does this also mean that you would also your goal to take the employees into another factory? Yeah, Moreton is close to Liverpool, and that is 200 km away from Banbury. We look at all options and I hope, hopefully, you know, as we really care for our people, and we will also take good care of our colleagues in Moreton. At times, it's painful, but at times, it's just we need to be competitive. We need to look continuously as it's one of our pillars of cost leadership. We need to look at that we are efficiently set up, and in that sense, scale helps in factories. We also have questions on the phone and on the chat. I suggest we take one from the phone lines, please, operator. First question from the phone comes from Jon Cox from Kepler. Please go ahead. Yeah. Good morning, guys. Ben, Peter, Claudia, congratulations on the strong figures we saw this morning on the top line, certainly. Just questions around Russia again. Am I right to assume that profitability in Russia is actually below the group, given, I guess, you're probably more exposed either into Cocoa and less exposed into the Gourmet business? That's the first question. Second question, just wondering where the assets are in Russia, i.e., what's the book value of the net assets left in Russia? Just a rough figure. I presume it's less than CHF 100 million, but if you could confirm that would be pretty useful. Then maybe one for Peter. Obviously, with the Capital Market Day coming up, the big strategy. You seem to think today we don't expect any change in the strategy in terms of the smart growth. Just wondering on the top line, because obviously you have this sort of step-up to 5%-7% volume growth, EBIT growth, post-COVID, reflecting the sort of rebound, which obviously is coming through in various parts of your business. Just wondering after the FY 2024, whether you assume then it would be more prudent to go back to your previous 4%-6%, or do you think momentum is so strong with the business, this sort of 5%-7% range can be sustained for a couple more years? Thank you. Thank you. Thanks, Jon. On the first question, in terms of Russian profitability, first, the bigger picture is less than 5% of our overall because of volume. On the profitability side, it is not that materially different compared to a typical mix what we see in emerging markets as well. There is nothing to read through. Of course, in these markets with this, it's not only chocolate, but we also sell quite a bit of compounds for our products that is going in a lot of biscuits and ice cream and so on as well. I will not read too much in terms of the, is it more dilutive or not. On the asset side, you called out a number. Very good that you mentioned CHF 100 million, indeed less than CHF 100 million in terms of assets when you add everything up from what you've seen from the past as well, the investments we have done. That's a fair assessment on the overall case. Hey, at the moment, we are operating as a strategic entity. That's not even a question at this point. Yeah, when you look at the bigger picture and so on, that's the overall asset value. Okay. John, I hope to see you pick up a little market there, of course. We have enough time here to go more into depth about how we look at our market and our position. I don't expect from me right now to give you a kind of new guidance. That's not the time yet. Yes, I'm quite optimistic about the demand. We see a lot of customers who are eager to work with us. Our third pillar strategy is clearly what differentiates us well in this market. Therefore, we also need to take into consideration how much can you execute. If you just look at this first half, we do 93,000 tons of product in addition or on top of last year. You just need to try to pile 93 million kilo of product. That's a lot to execute. In that sense, that's what we have to start to trade off in going into the detail. What is the right guidance going forward? This absolutely what is the demand, but also what can we execute? Because in our business, a promise is a promise, and we need to make sure that we keep our execution in excellent state. Maybe just a bit of an add-on in terms of momentum then going into the second half in the short term. You know, clearly you're very strong print. I think it was you know over 10% when just looking at your chocolate business in Q2. You know, your guidance is on average 5%-7%, but you would imagine it is not impossible to think that maybe your volume growth this year will be above that 7% because of the momentum we've seen in H1, notwithstanding, of course, the comparables get a little bit difficult in H2. What are your thoughts on that? Yeah, of course, there we cannot say too much. We don't give a half year or annual kind of guidance. You just hear in my words, but also in what we have put out this morning the confidence that we will deliver. You know that in the first periods we're a little bit below that guidance. We need to see an acceleration. We see that luckily in this first half of this year we see good momentum in the business and therefore with confidence we are confirming just the midterm guidance. Great. Congratulations again. Thank you. The next question comes from Andreas von Arx from Baader Helvea. Please go ahead. Can you hear me? Sorry. Hello? Yes, we can hear you. Great. Thank you. First, I have quick ones for Ben. Could you elaborate in the cash flow statement on the other non-cash items which have moved from +15 to -23? Just wondering what is that, apart from the CHF 5 million you mentioned, what is the other drivers here of the -23. The CapEx also looks a bit low compared to the trend. Just a timing issue or is there a change in what to expect, let's say, for midterm? I have a question for Peter. If I look at the half year, I mean, in the half year, your volume growth was faster than the recurring EBIT growth. Of course, you know, no talking guidance says. Are you confident enough to say that this will turn in the second half so that we can now finally see a faster profitability growth, maybe also given, you know, the recovery is being less. If you would have to name three main drivers or elements that will be the key drivers of your smart growth going forward. I mean, it's just practical examples that you're rolling out in the company. What could be that three elements that are driving the faster profitability growth and volume growth midterm? Thank you very much. Thank you, Andreas. First of all, I don't have the exact data here in front of me what you're referring to, but I can definitely get back on it. First of all, on the free cash flow, I feel very strong about that this results. First of all, on the adjusted free cash flow, it's about the same level as last year. We have grown our business significantly. We have grown our value-added business significantly as well. We have actually, when you look at our revenue as well, the revenue went up by 16.5%. That's something that you carry more on your balance sheet as well. Our invoice prices went up on our cost plus as well. I feel very strong about the results, because when you look at that our payables have really compensated for that part and our overall net working capital actually did not increase that much. Take into account as well that the raw material prices have increased as well on average. When we talk about sugar, we talk about dairy prices. Cocoa itself has been quite okay, but still a small increase as well. That's also on your balance sheet as well. Despite of that, we actually generated some quite good adjusted free cash flow. When you look at the profit, it's even stronger. I don't want you to focus too much on that, as well, because we have to be fair. Cocoa beans, I think the purest sense of cash flow you heard me before, it's when you have more of the cocoa beans in stock and the crop is a little bit earlier or a little bit later, you will see that effect of course, passing through our balance sheets quite nicely. That's something you see very clearly in our reported cash flow. Crops started a little bit later, so price impact was slightly negative. Overall, where we have benefited from this first year, the first half year. Second half of the year, that could be slightly different. Again, these are the purest sense of cash flow. You can always turn that immediately to cash when you turn it to the stock market, as well. Overall, I don't agree with the view that there was a weak performance. Actually, it was a very strong performance in the first half. All right. On smart growth, absolutely is what we are driving, and I see it across our business. Of course, sometimes it doesn't fully come out in the overall numbers. We've always talked about Cocoa business. You see that business, of course, has been impacted by the downside in that market out there, and therefore the performance is dragging down a little bit the overall profit numbers. If you go to the regions, the chocolate regions, you see smart growth coming through very successfully. You see it of course, very strongly in Americas, but you see it also in EMEA, because there you should remember that we took an impairment for financial assets in Russia. We took CHF 5 million out of our recurring results. If you would bring that back into the EMEA business, you will also see a very good growth of profits or EBIT over their volume growth. How are we going to drive smart growth examples? First and foremost, we talk a lot about EMEA. Driving customer mix is always, we know that smaller customers will have a higher profitability than the bigger customers. Managing your customer mix, seeing the acceleration now in EMEA is absolutely one of the way to drive smart growth. Me personally, just you know, I started as head of innovation in Callebaut about 10 years ago. I have a big heart there, and I'm very happy to see that specialty compounds, specialty chocolates are a huge driver of the smart growth. You see our Callebaut Next, which is launched here in Europe. You see a huge kind of exploration of sugar reduced, sugar-free, plant-based all these kind of solutions driving the numbers in Americas and in Europe. If you look at Asia is a little bit that's an emerging market. That's where we are investing a lot, but sometimes where we still have to make sure that we invest into our footprint. To claim market leadership, to be the heart and engine of the cocoa and chocolate industry in the future. As we have reported, we did the GKC acquisition in Australia just to put a footprint there. We had a plan. I have to be honest, also through supply chains, through suppliers, we can't always deliver the equipment exactly at the moment that you need it. You had a little bit of delay, and that has brought the numbers down for Australia, and therefore dragged the profit numbers also a little bit down for Asia. In general, even in Asia, we always say, "Hey, try to look at your customer and try to look at your product mix." Hey, you asked for three, Andreas, so let me give a third one. The moment you are done selling specialty chocolates and compounds, it's often for our salespeople an easier thing to do. You of course say, "Hey, guys, this is just the start of the discussion." You talk to ice cream players, you talk to bakeries, you talk to pastry chefs. A chocolate is just one, or compounds or cocoa powder. It's just one of the ingredients for them to start, innovate and respond to market trends. Actually our whole decorations and inclusions business, which is significant, which I think we can still do much more in rolling all those solutions out across our network and into our customers, is another driver of our smart growth. Is there still a lot of work? Absolutely. Do I see us having success with the model? I think yes, and therefore I'm pretty confident that you will see structurally an acceleration of the level of value add over the coming years. I hope that answers your questions, Andreas. Yeah. Just quickly. Last question. Just quickly on the CapEx, I mean, which was a bit lower. There's nothing here to be, you know, to have a deeper look at that or? No, no. CapEx indeed was a little bit lower, but it's more related to the timing. We had some big greenfield investments in last year. There will be always a timing difference quarter to quarter as well. There is still plenty of opportunities to invest in. You've seen us doing quite good in terms of doing the right trade-offs between inorganic growth and organic growth. We see plenty of growth, organic growth, opportunities still going forward. We will put CapEx against it as well. We're not afraid of doing it. It's the right thing to do. We're always very careful look at how much cost do we have to pay for a company. Over and over, we come to the conclusion that for our core business, it does make sense to invest organically. Having said this, when there is an opportunity in terms of inorganic growth, also in terms of adjacencies, specs and backgrounds, so like what we've seen with PCC, La Morella, D'Orsogna in the past as well. Hershey's Park in the U.S. We will do that as well because as Peter mentioned, that's exactly adding to our portfolio, to our power and what we can sell to our customers as well. Of course, inorganic growth will make a lot of sense. Having said this, at the end, we will look at everything that's out there, and we will put it through our own internal thresholds, making sure that we're doing the right investment choices. Okay. Thank you very much. Thank you, Andreas. The next question comes from Alex Sloane from Barclays. Please go ahead. Yeah. Hi. Morning, all. Thanks for taking the questions. Two quick ones from me. Just going back to the Asia Pacific profitability. Thanks for the color there. I mean, is it fair to assume that you know, sort of upfront cost impact in Australia is now sort of largely in the base, and from here we should see volume and EBITDA growth kind of growing more in line? Or could there be some residual impact in the second half as the first time? The second, just on the combined ratio, obviously Cocoa Butter you know, has come down through the pandemic. I mean, I'm slightly struck by the fact that over that period, you know, vegetable oils, there's been really very significant inflation. I'm wondering how that dynamic works. I mean, could this move up in vegetable oils ultimately create some incremental demand for Cocoa Butter from reformulation, maybe using more butter rather than palm oil? Are the price differentials still such that that reformulation doesn't really happen? Thanks. The first thing I think, knowing a little bit about Asia in my past as well. I would say here indeed, as Peter mentioned, pretty much a color on the acquisition of a small company, GKC, which was still the right choice because we needed to create a footprint. For years we have been supplying Australia, but not really being locally present. There was a huge part of the market that we're not addressing. In there we've invested in more capabilities. Indeed, there were some delays there as well. We expect now in the second half, but that's behind us as well. I'm optimistic about the Australian market as well. It was very restricted still in terms of COVID. There was no visitors allowed. There was no tourism there. That affected also our gourmet business. We have a very vibrant gourmet scene there as well, which is partly counting on tourism as well. That gives me quite a bit of confidence on the Australian market as such. When you look at the overall Asian market, I'm even more optimistic there. That's still going to be the growth driver across for the next years to come. You see us still consistently reaching double digits growth numbers there. You see the appetite for chocolates and products still growing in every single market. India, we made a conscious decision to put a greenfield factory there. It's going very well, and it will continue to grow. I don't think that we will stop investing in Asia. Our footprint there as well is also not complete. When you look at the geography, look at the distances, you're just hoping to be practical. Out of one factory in China to supply the whole market is of course something that would not be wise to do for a longer term as well. India as well, out of two factories there, say, in Western India. The name of the game there is about acceleration. We want to also in the liquid market be first. Be first also with gourmet items, then doing outsourcing, then with advanced systems as well. A lot of them to implementing in Asia-Pacific, yeah. You raised an interesting question, Alex, on combined ratio. Absolutely. We see butter ratios being still low, powder ratios, which is also good for us, of course, being higher. Please remember, butter ratios are particularly low in Asia. If you look at butter ratios in Europe and North America, they are already much better. To reflect on your question, indeed, vegetable oils and Cocoa Butter are getting quite close, which we don't see so often. We are global leaders in compounds. We are global leaders in chocolate, but still we are a chocolate company. You can maybe see some pressure on the Cocoa Butter prices because vegetable oil prices are very high. We also look at it in a different way. Hey, this is the moment to convert compound buyers into chocolate. Because the prices are now so close that we see customers being interested. They say, "Hey, now it doesn't make such a difference anymore. Could we buy chocolate as well?" I don't think this is a long-term trend. It's just very specific. It's coming out of the imbalance of the cocoa market, where it was very difficult to ship the Cocoa Butter out of Asia. There will be a moment, and we see already the rate of containers going down. There is a moment that we get out of it, and I think you will see Cocoa Butter restoring itself again. Very helpful. Thanks. Thanks, Alex. I think that was the last question. Okay. Hey, thanks for being here. Thanks to those on the line for listening to the presentation of the half-year results. This is a strong set of numbers, but of course, we are fully focused now on closing the year and being back here in a couple of months. Thank you. Wish you a good day, and hopefully we can see you downstairs for the apéro. Thank you. Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.