Ladies and gentlemen, it is our pleasure to welcome you to the Lindt & Sprüngli half-year results conference call and webcast. My name is Martin Hug, and with me today is our Group CEO, Adalbert Lechner. The presentation and the transcript of our prepared comments will be uploaded to our website this morning. The presentation will take approximately 15-20 minutes. Following the presentation, we will hand over to the operator, who will then manage the question-and-answer session. The agenda points of the presentation can be seen on this chart and include a detailed review of the first half, an update on the key topics of sustainability, our expectations for the full year and the medium to long term, and a chance for you to ask questions. I would also like to refer you to the disclaimer at the end of this slide deck. I now hand over to our Group CEO, Adalbert Lechner, who will take you through the highlights and the sales analysis. Hello, also from my side. Despite the difficult global operating environment with stagnant global chocolate markets, sharply rising costs for cocoa, and the need to again implement price increases, Lindt & Sprüngli was able to continue its successful growth trajectory. Over the past years, we have continued to invest in projects that drive efficiency, especially in North America, but also in Europe and in the rest of the world. We can see the benefits of this work. Overall, we are pleased with our progress and are optimistic about our future prospects. I will now take you through a detailed review of these results, starting with an overview of our business performance. Overview, first half, 2024. Before I begin, I would like to point out the seasonal and gift-oriented nature of our premium chocolate business, which is skewed towards the second half of the year, with approximately 60% of sales in the second half. However, it is important to remember that first-half sales absorb roughly half of our annual fixed costs. As a result, sales, profitability, and free cash flow are always lower in the first half than the second. That said, the Lindt & Sprüngli Group has made a solid start to the year. Organic sales in the first six months achieved a growth rate of 7%. EBIT came in at CHF 292 million, delivering a record first-half EBIT margin of 13.5% after 12.2% in 2023. This margin was impacted by higher cocoa material costs, partially offset through efficiency gains in operating costs, and price increases to our customers. Also, as a result of a resolved legal dispute in North America, there was a positive one-time impact on other income improving EBIT. Net income was CHF 218 million, with a net income margin of 10.1%. Free cash flow reached CHF 70 million, or 3.3% of sales in the first six months, a decrease over the first half of 2023. The key driver of this decrease was increased net working capital needs and the higher CapEx to prepare for future volume growth and further improve the efficiency in the factories. Our net debt position, which includes a lease liability of around CHF 430 million, increased to CHF 1.28 billion. This is higher than a year ago when net debt was at CHF 939 million. The driver of this net debt increase was our CHF 1 billion share buyback program, which was completed a few months ago. Excluding the lease liability, our net debt position is at about CHF 850 million, compared to our EBITDA, which is expected to come in above CHF 1 billion in 2024. With a strong balance sheet, we will initiate a new buyback program of up to CHF 500 million. The buyback will start on August 2, 2024 and last until July 31st 2026 at the latest. Sales growth in Swiss francs. Total sales reached CHF 2.16 billion in the first half, which means that for the second time, we have achieved net sales of more than CHF 2 billion in the first half, with growth in Swiss francs of +3.5%. Organic sales growth. First-half sales grew by a solid 7% organically, despite tough comparable results after three consecutive years of double-digit growth. Cumulatively, we have grown more than +50% over the last four years in the first half. The global chocolate market continues to show its resilience with a positive value sales development. However, with strong price inflation, sales volumes in the global chocolate market have either stagnated or slightly declined, depending on the product category and market. Despite these market conditions, our brands show strength and resilience, growing market share in all key markets, and growth volume mix by a solid 0.9% in this challenging market environment. Sales analysis growth drivers. Price increases of +6.1% were in line with the mid-single-digit range communicated in March. Due to much higher input costs, pricing actions had to be taken in all markets over the last couple of years. Volume mix was solid with a positive growth of +0.9%. This is also in line with our expectations and with our external communication earlier this year. Positive channel mix impact was primarily driven by the success of our direct-to-consumer channels, which include retail and online stores. Also, travel retail grew double-digit. Reported sales in CHF rose by 3.5%. The currency effect had a negative impact of -3.5%, in particular due to the weakening of the U.S. dollar and the euro. I come now to the sales analysis segment information. On the following slide, I would like to give you an overview of the sales performance by segment. Europe. In the first half of 2024, the Europe segment, where we generate almost half of the group sales, saw an increase in organic sales by a strong +9.3% to more than CHF 1 billion. Consumer sentiment in Europe has significantly improved. Growth was most pronounced in France, the United Kingdom, Iberia, Austria, Benelux, and Eastern Europe, with double-digit growth. Italy, Germany, and Switzerland, also core markets, continued to show solid growth despite price-sensitive customers. North America. The North America segment showed organic sales growth of +3%. Lindt & Sprüngli USA, Ghirardelli, and Lindt & Sprüngli Canada outperformed the market, significantly gaining market share. However, this positive performance in the market is not reflected in our sales figures due to the shift of Easter orders into 2023, reflecting the earlier Easter date in 2024, and destocking by our major retail customers. Excluding those temporary effects, organic growth in North America would be around +6% in the first six months of the year. The North American segment is expected to accelerate growth in the second half of the year compared to the +3% in the first half. I come now to the rest of the world. In the rest of the world segment, we grew above the group average with +10%. Notably, the subsidiaries in Japan and Brazil recorded double-digit growth rates. The travel retail business, sales in duty-free shops at airports, has progressed strongly, growing double-digit as passenger numbers have returned to pre-COVID levels in most regions, and strong activations were executed. There are many large traditional chocolate markets within the rest of the world segment where we see significant premiumization potential for Lindt. As a result, we are convinced that we can maintain double-digit growth in the segment over the medium term. Let's move on now to the important topic of costs, category by category. For this part, I hand over to our Group CFO, Martin Hug. Thanks, Adalbert. For this part, I will start with material costs. Material costs, which have been adjusted for changes to inventories, came in at 31.6% of sales, 160 basis points higher than in 2023, but in line with 2022 and below 2021 and 2020. Although the higher cost of cocoa was partially offset through long-term contracts and efficiency gains, part of the cost was reflected in price increases and other revenue growth management measures. Strict cost management allows us to mitigate the impact of rising cocoa prices to a certain extent, but further price increases will be needed. Looking forward, we estimate that our total material costs will be slightly higher in 2024 compared to 2023, driven by cocoa. We expect cost inflation to continue as well into 2025, mainly driven by cocoa beans and cocoa butter. Let's take a quick dive into our most important commodity, cocoa. We have seen an unprecedented rally in the cocoa market in 2024, at least in recent history. The main reasons for the rally were our weak crops in Côte d’Ivoire and Ghana, driven by unfavorable weather on the one side and a virus called swollen shoot that affects the cocoa trees and makes them less productive. At the end of April, we reached a level of about $8,000 per metric ton for the month relevant to us in 2025. In the meanwhile, the market has dropped to about $5,000 for the March 2025 futures. One year ago, the market was at about $2,500, so it has basically doubled over the last 12 months. Our experts continue to monitor the market very closely to place ourselves in the best position possible, and we are doing our utmost to put in place the right strategies to provide future flexibility. Many market players expect a potential market correction once there is better visibility on the future crop sizes in Côte d’Ivoire and Ghana. Of course, it is quite difficult to predict where the futures market will go from here and how quickly we will see a further correction. The speed and the extent of the market correction will also depend a lot on the impact of the overall volume demand in the chocolate market. Many players in the industry will be forced to increase prices not only in 2024, but also in 2025, which may have an impact on the volume side of consumer demand. Despite the absolute increase of CHF 27 million personnel expenses, as a percentage of sales increased only slightly compared to the same period in 2023. Also, compared to 2021 and 2022, we can see economies of scale. The increase of the cost ratio in the first half of 2024 is mainly driven by our successful expansion in the global retail business, opening new stores in very promising locations. Operating expenses decreased by CHF 2 million, and the ratio decreased by 110 basis points, driven by lower logistics costs, decreased costs for energy, and also efficiencies in the factories, mainly in the area of maintenance. Secondly, in line with our high-growth strategy, we continued to increase advertising investments overproportionally compared to sales and to invest in our brands across all geographies. At CHF 292 million and 13.5% of sales, EBIT increased by 130 basis points compared to the first half of 2023. Higher material costs related to cocoa could be offset through efficiency gains in various areas and through price increases to customers. Further, we record a positive one-time impact on our other income as a result of a resolved legal dispute in North America. In North America, we continue to make solid progress on the various projects aimed at further leveraging the Russell Stover business and our overall streamlining for growth initiatives. These areas include production, merchandising, logistics, procurement, and IT. Bottom-line benefits had already started to materialize over the last two years, and this has continued into the first half of this year. We expect more benefits to come from these projects in the second half and over the coming years. As explained previously, part of the efficiency savings will be reinvested back into our brands to encourage future growth. Net income reached CHF 218 million, or 10.1% of net sales. Last year, the tax rate in the first half was 18.3%, which was below our midterm guidance, driven by higher half-year profits in locations with tax rates below the group average. In the first half of 2024, the tax rate is at 24%, in line with our midterm guidance of 23%-25%. I would like to take you through the bridge of the main cash-relevant developments of the first half. In the period under review, we managed to generate positive free cash flows of around CHF 70 million. Capital expenditure came in at CHF 179 million in the first half, CHF 31 million higher than last year. This is in line with our revised plans, which postponed certain growth-related investments from the last few years. We continued the share buyback started in 2022 as planned, and to cater with our regular dividend payment, we turned almost CHF 500 million to the shareholders. At the end of the first half, net debt reached CHF 1.27 billion. When assessing our net debt, please also bear in mind the ongoing impact of IFRS 16 on our lease liability. There's a negative impact of around CHF 430 million. On a pure cash basis, net debt would be at around CHF 850 million. As Adalbert has already mentioned, we are launching a new share buyback program of CHF 500 million as we are positive about the free cash flow generation over the next years. We still plan for a net debt to EBITDA ratio of 0.5 to 1 in the midterm. I am now changing gears to give you a short update on our efforts in sustainability. The Lindt & Sprüngli Sustainability Plan is our pathway to becoming more sustainable along our entire value chain, demonstrating our commitment for a better tomorrow. This strategy addresses the sustainability issues that are impacted most through our business activities, both from a risk and opportunity perspective. We have targets or commitments for each focus area. Lindt & Sprüngli continues to make progress in implementing the sustainability plan. Our most important raw material, cocoa, and the farmers producing it are at the heart of this. In 2023, we increased cocoa volumes sourced through the Lindt & Sprüngli farming program or other sustainability programs to 72%, including 100% of cocoa beans. We remain committed to our aim of reaching 100% of cocoa products, including butter and fiber, by 2025, and to evolving our cocoa sustainability strategy through 2030. For example, we will launch a living income pilot program with 5,000 cocoa farming families with the aim to increase household income and resilience. One of the objectives of the farming program is to contribute to reducing the risk of child labor in our cocoa supply chain. Earlier this year, we joined the International Cocoa Initiative, which works to protect the rights of children in the cocoa sector in West Africa. Joining ICI enables us to exchange best practices and collaborate with other members to advance sector solutions. We also engaged them to review the effectiveness of our global child labor monitoring and remediation system. A major milestone reached in 2023 was the validation of our science-based climate targets for 2030 and 2050 by the Science Based Targets initiative. This will inform our business practices with the objectives of reaching net zero emissions. With these targets and actions to decarbonize our value chain, we are contributing to the goals of the Paris Agreement. In 2024, we have been working on translating our global decarbonization roadmap into actionable plans at each of our subsidiaries. We also advanced our efforts to protect biodiversity with a new deforestation policy launched in 2023. In light of the new EU Deforestation Regulation, we are working intensively on solutions to achieve compliance with the end of the year. Our responsible sourcing approach and our farming program, which uses satellite monitoring for cocoa traceability, provide a solid foundation. In our own operations, we strive to be an inclusive place for everyone. In 2024, we are rolling out actions across subsidiaries to further support awareness, provide employees with growth opportunities, build connected communities, and celebrate our differences. I am also pleased that women represented 35% of senior leadership roles in 2023, which is an increase of 2 percentage points compared to 2022. Women also represent a higher percentage of group management with the recent appointments of Nicole Urmeister and Ana Dominguez. We are also pleased to see external recognition of our sustainability efforts with the silver medal from EcoVadis, placing us among the top 8% of companies assessed in our industry in 2023. As you can see, we continue to build on our success. While beginning to set our future strategy and respond to ESG-related regulatory requirements, we will remain focused on achieving the targets of our sustainability plan through 2025. After this update on sustainability, I am now handing over to Adalbert, who will take you through the financial outlook for 2024 and beyond. Thank you, Martin. As I have already mentioned, we had a solid start to 2024 with very strong growth in Europe and the rest of the world segment. We had some one-off effects in North America, but the underlying business in this segment is also healthy with about +6% growth, excluding those one-time impacts. From a channel perspective, the direct-to-consumer channels and travel retail both experienced strong double-digit growth rates. In the second half, we are expecting accelerated growth in North America, driven in part by seasonality and in the rest of the world segment. Also, we expect growth in Europe to be slightly softer than the 9.3% in the first half. With strong plans and activations ahead, we are confident that we will reach the sales objective announced for the full year 2024. Accordingly, sales are expected to grow organically in the range of 6%-8%, driven by a positive first half, and despite headwinds coming from the higher costs for cocoa, the EBIT margin is expected to deliver towards the upper end of the 20 to 40 basis points range compared to the previous year. As mentioned earlier, we plan capital expenditure in the region of 7% of sales in 2024. The group remains confident for 2025 and over the mid to long term in achieving its goal of an organic sales growth between 6%-8%. In 2025 and thereafter, we expect to deliver an average annual increase in EBIT margin of 20 to 40 basis points. For the next few years, annual CapEx should be around 6% of sales. Tax rate is expected at about 23%-25% in the medium term, while the cash tax rate is forecasted to come in approximately 2 percentage points lower. Thank you for listening to our presentation, and I will now hand over to the operator who will manage the question and answer session. We ask you to limit yourselves to a maximum of two questions so everyone can participate. Please note that written questions asked via the web will be answered by email after the webcast. We will now begin the question and answer session. Anyone who wishes to ask a question or make a comment may press star and one on the touch-tone telephone. You will hear a tone to confirm that you have entered a queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only hands while asking a question. Webcast viewers may submit their questions or comments in writing via the relative field. Anyone with a question may press Star and 1 at this time. Our first question comes from Jørn Iffert from UBS. Please go ahead. Yes, good morning. Thanks for taking my questions. The first one would be please amid the cocoa bean price increases and the pricing actions you have to take for 2025. What really gives you confidence that you can reach the 6%-8% organic sales and at least +20 basis points EBIT margin improvements? Do you already get indications on more shelf space? Do you open more shops? Do you have a cost takeout program? So maybe some more clarity would be appreciated. And then the second question, a quick one. Can you give us the first indications how the pre-orders for Christmas are looking for this year? Thank you. Okay, thank you, Mr. Iffert. I will take these questions. So, as Martin has mentioned, we expect that for 2025, with these soaring cocoa prices, we have to go out to our retail partners with price increases like we have done in the recent years. The magnitude of these price increases is not yet determined. We are clearly waiting for the very last moment to announce these price increases, as we all expect. And when I say all, I mean most of the experts, the traders, the analysts in the cocoa business, that with the visibility of the main crop in West Africa, there might be a clear decrease in the cocoa price. And once we see this, we will calculate the required price increases. If we go out with the required price increases to protect our margins, and that's the clear goal, we have seen in the past years that our price elasticity is rather limited. Therefore, we expect that the combination of price increase and volume mix will lead again to the 6%-8% growth that we have targeted. In addition to your mentioned points, of course, we plan to open 30-40 stores globally, especially as the profitability of our direct-to-consumer business has improved significantly and is in line with the wholesale business. We have a scalable business here and want to extend this. In addition, our investments into brand support have been ramped up substantially and will be ramped up also this year. This altogether makes us confident that also in 2025, we will deliver against our targets. First indications for the Christmas business, they are good, but as mentioned in Europe, I don't think that we will see the 9% for the full year, but we have positive signals also in the U.S., so that our promise that we will accelerate in North America is underlined by the pre-orders that we see in the books. Maybe just an additional comment to the question about the cost takeout program. As you remember, we started a big project in the U.S. in 2021, more or less, where we started to outsource merchandising, where we have put a lot of energy into logistics, being more efficient in logistics. The U.S. also comes from a relatively low EBIT margin, and we have always communicated in the U.S., we want to increase the EBIT margin by 50-100 basis points. So, at least in the last two or three years, we have announced that, and we have achieved it. And so, there's still some room in the U.S. or in North America to increase our profit, right? So, we are very confident that we will deliver that profit enhancement in the U.S., driven by efficiency programs, and therefore, also the 20-40 basis points is something we are quite confident about in 2025. Thank you very much. The next question from Patrik Schwendimann from ZKB. Please go ahead. Yeah, Patrick Schwendimann, ZKB. Good morning, Mr. Lechner. Hi, Martin. I have a question again regarding North America. You're not the only company which has weaker sales growth in North America. You have mentioned the reasons, and you're now quite bullish for the second half of the year. Are you more bullish just for your own products, or do you also expect an improvement of the environment in the U.S.? That's my first question. By the way, I mean, you have quite—I mean, you have mentioned as a reason earlier Easter, but so you have benefited back in November, December last year. So, I mean, the basis is quite high probably for November and December. Can you comment on that one? That's my first question. And second question, if we add the extraordinary profit from the legal case, at least according to estimates, then the full-year margin would increase by roughly 60 basis points. You're now increasing your guidance by maybe roughly 20 basis points. Does this mean that you're increasing your marketing spend in H2 to compensate for this extraordinary profit? Thank you. Thank you, Mr. Schwendimann. To your question, North America, we are mainly bullish for our own businesses. As we have seen also in the first half, we are gaining market share. We are gaining market share substantially with Lindt and with Ghirardelli, also with Lindt Canada. We are keeping market share stable with Russell Stover. So, we see that we perform better as the market. That's also what we expect for the remainder of the year. We have, as mentioned, some pre-orders, Valentine's Day, Christmas, etc. Yes, you are right. We have to absorb this positive effect of the pre-orders Easter in 2023, which we will not see in 2024. But the bigger impact was the destocking of our retail partners, and we clearly see that this has leveled out, so we will not be repeated in the second half. So, we are confident that we will see this acceleration in North America. The legal case, yes, you are right. If we would fully attribute this money into profit, we would show a stronger growth. But we are here also trying to mitigate any negative volume effects by the price increases, and therefore, we decided to increase the brand support, and I think this is more beneficial in the long term. Patrick, I should also add, in general, we have lots of negative run-offs and some positive run-offs every year. And while other companies choose to disclose that separately, we have always kind of shown the EBIT margin as it is, right? So, obviously, to really compare run-offs, we would have to now do a full exercise where we show all run-offs in 2023, where we show all run-offs in 2024, negative and positive, and then we could really compare it. We have never done it. We have never used it as an excuse because, of course, run-offs tend to be negative. So, from that viewpoint, I think we should also look at the entire business as such. Thanks, Mr. Lechner, and thanks, Martin. See you tomorrow. Thank you. The next question, Jon Cox from Kepler Cheuvreux, please go ahead. Yes, good morning, guys. A couple of questions on my side. Just on the CapEx side of the equation, 7% of revenues is a pretty chunky number, and 6% is also a pretty chunky number for the medium term. I wanted to just talk through your thoughts on that, given the fact that volumes are going to be probably subdued this year and next with potential price increases. And then back to the price increases, based on the price being where it is now, which is roughly double, and then assuming that remains as it is, you would probably have to increase prices 10%, maybe 15% over the next 24 months or so. Is that a good guess just based on where cocoa prices are today and the fact that typically the cocoa and cocoa butter costs are about 10% of group revenue? Thank you. I mean, I can maybe start with the CapEx. I mean, part of CapEx is, let's say, linked to the factories. And on that side, we have kind of had actually much lower CapEx than we even had expected ourselves over the last 2-3 years because of the lower volume. We have pushed a few investments back, right? You may remember that we normally announced around CHF 280, and we came in at CHF 230-CHF 250 in the last 2-3 years, with the exception of last year. And so, we can see some of those investments coming in now in 2023 and also 2024. For example, the expansion in the U.S. as one. In Stratham, the Lindt factory that we expanded, that one is for sure one. We have also embarked on a big ERP project, SAP project, which we last over the next actually 4-6 years, and where we are rolling out the ERP system in all the countries. We are building it now, so a lot of the CapEx is happening now. So that is the other contributor, and that is probably around 1% of sales or so, the SAP piece. So if you exclude that, then we will be down to 6% also this year. Yeah, so it's postponement. It's being bullish about the future with regards to volume needs. We need new Lindt O lines. We need new Ghirardelli Squares lines, etc., in the U.S. And secondly, it is not only assets in the factories. It's also a new ERP system. Then I would take your question on price increase, Mr. Koch. Yes, if the cocoa price, and especially also the cocoa butter ratio, would stay at the levels where they are, the ballpark figures that you have indicated or the threshold is right. So, we, of course, calculate with different scenarios. This is one of the scenarios, and there are other scenarios that especially cocoa butter ratio might come down. So, it will all depend on the first indications of the main crop in West Africa. Then it could lead to lower price increases. So, we will do our proper calculations, then go out to our retail partners, and then inform you about the price increases that we will take. I wonder if I can just have a follow-up on that volume CapEx question. You've typically grown volume mix around two-thirds of that 6%-8% growth, and you've said that probably for the next couple of years, given cocoa prices, it's probably going to be the other way around for a good couple of years. You seem to be changing your tune a bit. Is it just because cocoa prices have come down, you're now more confident on volume to announce this sort of bigger CapEx program today, or are you just being prudent, thinking long-term? Yeah. Look, the company is getting bigger. We have to prepare ourselves for the future. And if you build a new line, it's normally not just a new line. If you have to really expand the capacity of a factory, for example, in North America, it's not a 1-year project. It's normally a 3- to 5-year project. So, you have to start early. If you, for example, think in 2026, 2027, 2028, you need more volume. You have to start early to build that capacity, right? So, it's more linked to that, that actually the moment where you build out the capacity and the moment that you get this additional volume is not at the same point in time. You do this beforehand. So, it's really linked to that. And as I said before, that we have also postponed. If you go back to the last 3, 4 years, especially 2021, 2022, we had significantly lower CapEx numbers than we had anticipated because we really pushed a lot of those North American expansion projects. We tried to do the project a bit slower, right? But of course, now it's coming, right? It's coming in 2024. It's coming in 2025 because we need the volumes in the future. I mean, we are growing in Lindt, for example. We'll be growing Lindt, so we need new Lindt O lines as an example. So, it's more like the timing has changed a little bit. The phasing has changed. So, you still see relatively subdued volume then for this year and next? I mean, this year we have, as we mentioned, 1%. Next year, as Adalbert has mentioned, we expect the price increase again. So, I would not expect 5% or 6% volume growth next year, which is the normal number, as you mentioned. But then I think 2026, 2027, 2028, the picture will change. Thank you. The next question, Bruno Monteyn from Bernstein. Please go ahead. Hi, good morning. Just thinking about the share buyback program of CHF 500 million, clearly it's a bit less than the CHF 1 billion it was before, but then you said it was a stop-start on the buyback program. Would it be fair to expect that the new level of CHF 500 million is something you'd be able to do on a continuous basis rather than the previous bigger but start-stop buyback programs? The second question is, if I remember, in the second half of last year, you invested quite a bit of the sort of extra profit and more A&P in the rest of the world to accelerate growth. Now, looking at the way growth is in the first half, do you feel you get sufficient bang for buck on the growth investments you made in the rest of the world at the end of last year? Thank you. I can maybe start with the share buyback. I think your question was if we do more like start-stop. Look, we assess the situation every day or every month, and then we decide what is the volume we buy back. I mean, there was not such a huge, let's say, discrepancy between the different months with regards to the volumes we bought back on this CHF 1 billion program, right? We were permanently buying back. Of course, if the share price was lower, we tended to increase the volumes a little bit. If the share price was a bit higher, we tended to decrease the volumes a little bit. That was more like trying to take some opportunities. But in the past, whenever we went out to the market with a share buyback, we have been constantly out there with some volumes, right? So, I would not necessarily expect a stop-start type share buyback. And as you said, because it's CHF 500 million and because we have still a very healthy cash position, I'm not too worried about it with regards to having to stop it or something. Then I would like to comment on rest of the world brand support. The answer is clearly no. Of course, we expected a higher return for our investment, and the reason is the biggest part of rest of the world is Australia. In Australia, we have for several months, or we experience now for several months, some frictions with our biggest customer there who doesn't want to accept our price increase. We are very strict and very clear on this. We do not compromise here, so we insist on accepting the full price increase. First of all, it's needed. Secondly, it's also a question of fairness with other customers. Therefore, we were sacrificing sales there. We have a negative development, Australia, in the first half. It seems that this dispute is solved now. For the second half, we should also see an acceleration there. But would we have a friction-free business? Of course, we would also harvest stronger growth in this region. Thank you. The next question from Antoine Prévost from Bank of America. Please go ahead. Hi, Adalbert. Hi, Martin. Thank you for taking my questions. I have two. First one, in terms of cocoa cost, as you often say, it's about 10% of sales. But within that, how much is cocoa butter, considering how much it has cost allocated compared to beans? And second one, within your direct-to-consumer business, could you give the contribution from new open stores compared to the underlying like-for-like stores within the growth? Thank you. I take the first question because it's easy. We don't disclose it. So, Bert will talk about the retail, I think. Yeah. Also, this we don't disclose in detail, but I can give an indication. So, the major part of the growth is like-for-like growth. You can imagine we run 530 stores, and we will open this year 40 stores. We grew 15.8% in the first half. These 40 stores don't have a full-year impact. Normally, you can say an average half-year impact. You can see already that the like-for-like growth is the key driver of the growth, and these store expansions come in addition. Only the like-for-like growth would be in the area of 6%-8%, which is our guidance for the total company. Thank you. I will just quiz another one then. Just on the other income, anything to flag for 2H within the kind of like one-offs? Look, we got a lot of questions already early this morning about that, and I understand it as well. Look, we have a settlement agreement with the counterpart in the U.S., and we agreed not to disclose the amount, so we can really not comment on this. The only thing that I can comment on that is also published, apart from the legal one-off, there are also other positions in this other income line which are higher than usual. One example, self-constructed assets, which in other words is SAP. On the IFRS, all the people that work on the SAP, the internal people, you can see the personnel expenses in the personnel expenses line, but then we reverse it because we capitalize it. We reverse it, and this reversal you can actually see in other income. So, that is also an amount that is significant. I cannot disclose it either because then I would indirectly disclose the legal piece. We have also royalty income in there. We have some royalty income. We have always had some royalty income, for example, on the Ghirardelli brand. Then there's rental income in there, and then it's also the liquidation of Lindt & Sprüngli Russia in there. So, don't just take that amount this year minus the amount last year, and assume that this is the one-off. That would be wrong. So, that would be far too high. So, that's the only thing we can say. Unfortunately, we cannot disclose the amount. All right. Thank you. The next question from Andreas von Arx from Baader Helvea. Please go ahead. Yeah, good morning. My first question is on net working capital. That's up roughly 25% after half-year on my calculations. Does that reflect cocoa prices? I guess not. So, are we going to see another 25% increase until year-end? Is that roughly realistic? Then my second question is, let's say if we would look at some markets that are maybe a bit more price-sensitive, I'm thinking here about Eastern Europe, could you comment on the development you have seen there? Was that equally strong as overall Europe, or have there been differences? Thank you very much. Yes. I mean, on net working capital, you can see in the balance sheet that one of the key drivers of that was actually accrued liability. So, our payments to the trade for, for example, if you have a retro promotion that you kind of pay after the event, like scandals, that you pay after the event, the phasing of those payments, also accrued liabilities, accrued liabilities, the change there, you can see that the phasing has changed. That does not mean that by end of year we will see the same change again. We're actually still quite confident that for the full-year free cash flow to sales will be in the region of 10%. That's still our target. So, we are not expecting a similar change for the full year. To your question about Eastern Europe, we see strong growth, overproportional growth in Eastern Europe. We address Eastern Europe partly with our own organization. It's called CEE, where we operate in four different countries: Poland, Czech, Slovakia, and Hungary. And then we address it via distributors, and both areas show strong growth. Thank you very much. As a reminder, if you wish to register for a question, please press star followed by one. The next question comes from Samantha Darbyshire from Berenberg. Please go ahead. Morning. Thank you. I just have a couple of follow-ons on the EBIT margins. I know you've got a lot of moving parts on the one-off. It's not just the legal dispute in North America, but I think you also had some inventory revaluation as well from the cocoa bean price. I'm just wondering if you can help us to understand what the underlying H1 EBIT margins are just for us to look forward to next year because I know there were one-offs last year as well. Because then when we kind of think about 2025 with the 20-40 basis point margin expansion, it looks very difficult to do that without, I mean, I don't know what cost savings you have coming through, but with not much volume leverage coming if we assume cocoa prices stay elevated. I'm just wondering where the confidence comes from on that 20-40 basis point expansion as well next year. And then also, I was just wondering, could you give a bit more detail around how you're working to comply with the EU deforestation regulations? Are you doing all of that internally, or are you relying on external partners to help ensure that you're compliant by the deadline at the end of this year? Thank you. Maybe I start. Yes. The EBIT margin in the first half over the last three years, the evolution has been 9.3% in 2022, 12.2% in 2023, and 13.5% now. The big gap or the big step was from 9.3% to 12.2% in 2023. The main driver of that was the fact that we actually did early-on price increases in 2023, while actually we had a massive amount of inventory of cocoa beans and finished goods that we carried into 2023 from 2022, which we produced and purchased at much lower volumes from an accounting perspective. We had this very positive impact on the 1st of January 2023 because you kind of revalued the inventories. We had a positive impact. And we also increased prices because we knew that overall, actually, cost of goods will go up. So, we increased prices early on as well. That's why there was probably an overdelivery from an EBIT margin perspective in 2023. And yes, the evolution now in 2024 is very positive because we had this one-off impact. That's correct. What I would say overall, again, it's very difficult for me to disclose because I really have the settlement agreement, and I really don't want to disclose, and I cannot disclose because I don't want to put at risk this kind of overall agreement or the settlement amount. What I can say, I would not read too much into the H1 profit numbers. I mean, we don't give guidance on H1. I mean, at the end of the day, the important thing is that we deliver the 20-40 basis points for the full year. And because, as Adalbert Lechner said in his presentation, because actually in the first half, we have, what, 50% of the fixed cost, but we don't have the entire sales. If you grow a little bit more, if you grow a little bit less on the top line, you can have quite a big impact on the profit margin as well. That's why I would not read too much into that one, or I don't want to give you now an exact number for H1. Why are we confident about 20-40 basis points for next year? We are determined to defend our gross profit margin overall, right, if it's not possible in one year or two years. We have seen that as well. If you look now at the material cost ratio to sales in the last four years, I mean, we have been able to keep it quite flat or even improve it in some years. As a premium chocolate company with a premium brand, we are convinced that we can do the price increases that are necessary. If we do the price increases that are necessary, coupled with the efficiency projects like the ones in North America, that will lead to a positive result at the end of the day. That is where the confidence is coming from, that we can actually price in the market the necessary; we can do the necessary steps in the market. EUDR. EUDR, yes. Yes, we are. Your question was if we do this internally, externally. It's a combination. We have set up the project internally. We have also, we are working with some consultants as well, and we have also kind of temporary contracts, so it's kind of semi-internal, semi-external to manage this project. We are supervising that, Adalbert and I, in the steering committee. The project is complicated, yes, but we will be ready, as ready as we can be and as ready as everybody else is. I mean, it's not very clear yet always what you have to do. So, sometimes we have to talk to our peer companies and interpret a lot. But look, we will be as ready as we can be. We have had our Lindt & Sprüngli farming program for many years. So, we have a full traceability up to the gates of our factories, which is very positive. That gives some advantages that we know exactly where the cocoa beans are coming from. That's very helpful. Thank you. The next question, Tom Sykes from Deutsche Bank. Please go ahead. Yeah. Morning, everybody. Thank you. I just wanted to explore the point on gifting versus non-gifting sales, please, and particularly on the volume growth. I appreciate it's a kind of maybe in some respects a gray area between when one becomes gifting versus non-gifting. Can you maybe say what the percentage of sales coming from gifting is, what the volume growth, so the differential is between gifting and non-gifting, and whether that gap is widening at all? And does that skew lead you to necessarily have more promotions due to the nature of that business, please? And then another question is just, is there any part of your business where you're selling in a different currency to that which you're calculating the organic growth? Just where at all, perhaps in travel retail, but where your effect changes would also affect the organic growth, please? Okay. I'm happy to take the first part of your question. We roughly split our business 50/50 between gifting and self-consumption. Let's say the line is blurred, of course, because on the one side, we have seasonal products which are clearly earmarked as gifts, like our Gold Bunny or Santas or teddies or gift boxes, etc. But on the other side, we also know from market research that even a 300-gram tablet or a 100-gram or 500-gram of Lind or is sold partly as a gift and sold partly for sharing or self-consumption. Altogether, we say 50/50 is the split. The difference in volume growth is that we see that in gifting, price elasticity is lower. When it comes to self-consumption, people are more price-sensitive, are prepared to shift to private label, prepared to shift to different brands because price plays a major role. When it comes to gifting, we see that we are more resilient because people want to make a statement, and they do not necessarily shift here to a private label brand when they are invited and want to show their appreciation. So, this is why we also see lower price elasticity on Lindt, where this gifting share is very high, as we are perceived as a gifting brand. And I think this is also why we are maneuvering at the moment through these price increases and inflationary environment with solid results. Then you asked if there is any part with different currencies which has an impact on the organic growth. I hand over to Martin. There is. It's not substantial or material. I mean, we have so-called distributor markets where we sell from Switzerland to all the distributors in countries where we don't have a subsidiary and own subsidiary. That's many countries. It's an important and fast-growing business for us, let's say, internally, because we see a lot of potential in those markets. It's not that significant yet as a percent of sales. But in those markets, and also travel retail, actually, in those two kind of divisions, if you want to call it like that, we do sell most of it in Swiss francs and part of it in euros. So, there we have a little bit of this impact, but it's not material, let's say, for the overall results to come. Okay. Thank you. Ladies and gentlemen, that was the last question on the phone. I would like to turn the conference back over to Mr. Martin Hug. Please go ahead. Okay. So, we have a couple of questions through the web. And as we said in the beginning, we'll answer those ones after the call in writing. So, from my side, a big thank you to everyone. Very interesting questions, as usual. And yes, thank you very much. Also from my side, yeah. See you latest in March next year at our press conference.