Ladies and gentlemen, welcome to Kofola's First Quarter of 2025 Results Conference Call. Martin Pisklák, the Group CFO, will present a summary of the results. This will be followed by a recording with Business Insights from Czechoslovakia, Adriatic, and Beers Insider segments, presented by countries' CEOs Daniel Buryš and Marián Šefčovič, and CFO Martin Pisklák. It will then be time for your questions. Dear Investors, good morning. Martin Pisklák speaking. After several quarters of growing results, first quarter of 2025, we are reporting declining results compared to first quarter of 2024, namely EBITDA decreased by approximately CZK 100 million. You will hear the recording of my colleagues who are explaining why the EBITDA is decreasing in the individual segments, but overall, on the group level, I can say that approximately one half of this decrease is related to sugar tax, which was imposed in Slovakia from the beginning of the year. The majority of this impact is related to pre-stocking of the customers in Slovakia in the last quarter of 2024. You may remember that our expectation was that our EBITDA for 2024 should be around CZK 1.8 billion. We exceeded this expectation, I would say, significantly, and the reason for such a result was basically the pre-stocking in Slovakia. Now the EBITDA, basically, which we realized in the last quarter of 2024, is missing in 2025. Approximately one quarter of the overall CZK 100 million effect is related to weather. Of course, weather is a very important aspect for us, and the winter was not good. It was not snowing. Spring was relatively cold, so that is why we see some kind of negative sentiment of the consumers due to the weather. The last quarter of the CZK 100 million difference is basically relating to timing differences in budgets. In first quarter 2025, we already prepared a lot of marketing campaigns and preparation for the main season, which is a slightly different situation compared to prior years, where we were waiting very strictly during the first quarter with the cost spendings, and we typically started rather in the second quarter. This year we started already at the beginning of the year, and this is visible in the results as well. Overall, we are still keeping our expected EBITDA targets for 2025. According to our budgets, the key period would be June to September. As usual, that is the main part of the year where we are realizing the major profits, and we believe that our targeted EBITDA, which is CZK 1.8 billion-CZK 2 billion, is still achievable. Please now follow the recordings of my colleague of the individual business segments. Thank you. Dear investors, here is Daniel speaking. Let me briefly comment on Q1 performance in Czechoslovak soft drink division. As we expected, Q1 was a very demanding period for us. We had to face four negative facts: CZK 75 million overstock of retailers from 24 hours due to sugar tax in Slovakia, 10% consumption decrease due to sugar tax implementation, better price versus negative consumer sentiment in both countries, and finally, cold and rainy spring months. Stop of complaints. We successfully launched key innovations, especially Targa Florio retail, and we replaced Rauch portfolio. We had to react to negative market development with an operational saving plan. We are very well prepared to top season, and we keep our EBITDA target for 2025. Thank you for your attention. Daniel. Hello everyone, this is Marián Šefčovič, CEO of Adriatic speaking. Fifth quarter of 2025 brought many challenges in the Adriatic region that are directly connected with regulatory changes of higher VAT on sugar non-alcoholic beverages in Slovenia and higher returnable packaging fee in the Croatian market. Both changes influenced on raising consumer prices. On the other side, in Croatia, we faced also with consumer boycott, which additionally influenced on lower sales volume. In Radenska Adriatic, this reflected through decreasing sales in Slovenia, minus 2%, as well as in Croatia, minus 4%. On the other hand, export markets show resilience with sales growth plus 4% comparing to the same period in the last year. Despite the headwinds, we stayed focused on commercial and marketing activities. We successfully launched a new flavor in the functional beverage category, functional collagen. We presented ourselves at two important trade fairs, FUDEX in Tokyo and GUST in Zagreb, where we strengthened our presence in international markets. At the production plant in Radenci, we successfully modernized the CAN filling line, which will enable even greater efficiency in production. We are particularly honored to have received the chosen month's sale for Radenska Naturel and scoring consumer trust in the quality of our mineral water. Furthermore, in collaboration with a business partner, we implemented a sustainable delivery solution using electric trucks for little warehouses, demonstrating our commitment to reducing our environmental footprint. Thank you, Marián. Dear investors, this is Martin Pisklák speaking, Finance Director of the Beer Segment. I am pleased to provide you with a brief update on our performance for the first quarter of 2025. We have implemented new pricing policy for both Czech and export markets after two years. New pricing policy, together with the late start of seasonal on-trade outlets due to colder weather compared to the previous year, have led to a mild decrease of revenues in the Czech market. Overall revenues dropped by 10%, mainly due to weaker output of export markets. Despite this, our results remain above the levels recorded in the first quarter of 2023. Cost structure, including raw materials and energy, is under control and according to our budget estimates. However, a decrease in revenues negatively impacted Q1 EBITDA. We have optimized the product portfolio to differentiate the positioning of all three brands, focus on proper target groups, and to improve operational efficiency. New Holba brand identity is being currently implemented to the Czech market, and Zuber will follow soon. Excellent reputation and quality of Zuber brand have been confirmed again by two silver medal awards on the most prestigious Czech tasting competition, Pivex. Upcoming season will challenge us to capitalize on effort invested in marketing campaigns for Holba and Zuber brand on the domestic market, and new product launches in the lager beer category and small but dynamic category of non-alcoholic flavored beer. Thank you for your continued support and attention. Wishing you a successful day ahead. Ladies and gentlemen, now it's time for your questions. If you wish to ask a question, please click on the raise hand icon on your participant panel. When prompted by the organizer, click on the unmute me icon. If you have no further questions, click on the lower hand icon. We have a first question from Mr. Bartek. Please go ahead. Good morning. Thank you for taking my questions. I would have two questions to the results and then a question to the guidance. First, in the results, I was relatively surprised that your percentage gross margin has declined year on year despite the quite favorable development in commodities. If you could elaborate on that, if it was due to some pricing pressures, I see lower revenues per liter in Czechia, or whether there were some one-offs or something else. Also, if you can elaborate a little bit on the high marketing costs in the first quarter, what revenue impact do you expect from those costs in the second half of this year? Regarding the guidance, if I calculate roughly, you would need to increase revenues and EBITDA by between 15-20% in the remainder of the year. Also looking at the still declining revenues in April and May, where do you expect to get such a solid growth in the rest of the year? Thank you. Thank you very much for your question, Peter. I would start with the beginning. Declining gross profit margin in the first quarter is rather a function of the fixed costs in production. As we saw, the lower volumes, that's why the fixed costs were basically not covered with some additional contribution. That's the very simple reason. As the revenues were lower than we expected, the share of the fixed costs is much higher, but the contribution was remaining approximately the same percentage-wise. We did not decrease the prices or whatsoever, so there were no like price wars on the market. It was really just the function of the missing revenues and high portion of the fixed costs in the first quarter. To your second question, if you can remind me what was your second question, please. The marketing costs, if you can elaborate a little bit more about that? Yeah. As usual, we are keeping marketing expenses approximately on the level of 5% of the revenues. The same situation will be also this year. Maybe a bit higher will be the marketing expenses in breweries. Typically, the most important question is timing of such costs. We already started with some campaign in the end of the last of the first quarter. The timing of the marketing expenses is slightly different. We had also quite a lot of innovations, for example, CureJ uices and so on. Also, that is why we have to promote much more early before the season to be sure that during the season consumers are fully aware of all the innovations we have on the market. Overall marketing costs should be not like significantly higher compared to previous years, but the timing is different. To your last question regarding the guidance for this year, yeah, we are calculating different timing of the EBITDA in the individual quarters compared to previous years. It's really important to say that really we still believe that the guidance is achievable. Of course, we need a strong summer. That's true. That's true. We believe that as the sun comes during the summer, then the sales will improve as well. In the meantime, we already implemented, especially in the Czech Republic and Slovakia, a number of cost-saving initiatives. We already freeze some budgets from the second half of the year. We are waiting how the season will start. If there will be some issues with the weather also during the seasons, we are prepared to react very actively on the cost side and adjust the plan, commercial activities, and other costs appropriately. Basically, at the moment, the truth is we do not have much provision to reach the announced targets. However, we still believe that the targets are achievable. Thank you. The next question is from Mr. Raška. Please go ahead. Good morning. I have a question. We see positive development of revenues in the first quarter. Despite your indications, we are showing decreasing volumes and value by 9%, respectively 8%. What is the main reason of this difference? If you can more elaborate for us. The biggest reason is most probably the fact that the breweries are included in the consolidated numbers from the, let's say, mid of March 2024. In 2025, compared to 2024, we have two and a half months of beer sales in our P&L. That's why you can see growing revenues. However, compared to the prior year, the sales in volumes are lower. Okay. Thank you. I have another question regarding Panama Coffee Farm. Did you acquire the whole 100% share in this family farm, or is the acquired share lower? No, we acquire 100% share in this farm, and we will operate this farm by ourselves. Basically, maybe just like one comment to this farm. The farm is approximately 45 hectares of the coffee. It's a specialty coffee. It's a kind of coffee which is not basically meant for the classical espresso, but rather for the modern type of coffee consumption, like filter coffee and so on. Basically, we planned that full production of this farm, so everything what will be produced in this farm will be taken over by Leros, and Leros will then distribute this coffee in the Czech and Slovak market. Thank you. The third question, what is CAPEX development in the first quarter? If you can elaborate. Basically, the first quarter is typically a bit more CAPEX-intensive. If I have a look very quickly on the numbers, CAPEX, we have. I'm sorry, I cannot find the number at the moment in front of me. Generally, in 2025, the planned CAPEX is more than CZK 1 billion, which is really a lot. We believe that we need to do this investment. Investment, and also that's why we are targeting very, like, we are targeting ambitious EBITDA target. That's a must to keep the leverage in the amount of approximately 2.1-2.2 times EBITDA in the end of 2025, in case that we are not, like, doing some major acquisition in 2025. In the first quarter, the CAPEX was approximately CZK 240 million. I found a number. Approximately one quarter of the full year guidance was spent during the first quarter. Perfect. Thank you. Thank you. Next question is from Mr. Bartek. Yeah. Thank you. Follow-up question to the CAPEX. You mentioned that this includes some M&A costs already. Does this include the acquisition in Slovakia? No, no, no. CAPEX, I mean like CAPEX really just the investment into the fixed assets, not the M&A activities. So investment in Slovakia is out of this number. The expected closing of the investment in Slovakia of ASO Vending, I expect during the summer holidays that the Antitrust Office in Slovakia can decide, and then basically immediately we are going to proceed with the closing. Maybe one more question to that. First, is this acquisition of this company already included in the revenue and EBITDA guidance? No, no, no. No, it's not. It's not. Revenue and EBITDA guidance as well as net debt to EBITDA guidance are without acquisitions. Because, yeah, because the acquisition is not certain. Of course, Antitrust Office can theoretically reject, for example, this acquisition. Basically, we are not including the planned acquisition into the guidance. Guidance is based on the actual structure of the group. Last year, we did an exception because we acquired breweries, which was a very significant investment for us. You can remember then last year we published guidance a bit more detailed. This was like guidance of the current Kofola Group and guidance including the potential acquisition. What we did last year was kind of exception because of the size of the brewery business. This year, we have rather smaller acquisition in the pipeline. That's why we are projecting only the Kofola Group as it is now. Yeah. Thank you. Last question. In Q1, there was quite a visible increase in net debt. So to me, it suggests that there was some increase in working capital. Is that correct? Yeah. Partially yes, because the sales were a bit lower than we expected, especially due to the weather. The warehouses are relatively full of our products. We are really prepared for the sun at the moment. We had these CAPEX investments and so on. Basically, that's the main reason. The second fact is that also as the EBITDA in the first quarter decreased by CZK 100 million. Basically, you are dividing the debt by the lower EBITDA. That's why this has also some, like, I think, like two or three decimal points effect on the, some 0.1-0.3 times EBITDA effect on the overall indebtedness or leverage. Sorry. Yeah. Thank you a lot. We have another question from Mr. Raška. Please go ahead. I have one question. In your presentation, you presented acquisition of Krondorf. If you can elaborate this for us. Yeah. Basically, Krondorf is a company which was basically seated in the middle of our production plant in Korunní or next to our production plant in Korunní. We agreed with the previous owners that we bought this company. Basically, we bought the assets. So basically, what we bought were like the water sources of the Krondorf and also some land and some minor equipment. For us, this was not kind of like acquisition of the current business. It was acquisition of the assets of the company because this acquisition is allowing us to work, let's say, more independently in the Korunní production plants. Yeah. The situation was not very good or not very good. The situation was kind of problematic for us because there were like two subjects which had like water permission for the mineral water. Also, all the discussions, for example, if you would like to have some new water wells, it was really complicated. Now we are the only operator of the area, and everything should be much easier. At the moment, we are not producing Krondorf mineral water. Let's see if we return to this production in the future. At the moment, we are not producing Krondorf. The acquisition was basically based on the value of the assets of the Krondorf company, not on the business. Thank you. Perfect. Ladies and gentlemen, as a reminder, if you wish to ask a question, please click on the reset icon on your participant panel. Mr. Raška, do you have another question? Okay. No. No. Thank you. So as there are no more questions, this concludes today's conference call. Thank you for your participation. A recording of today's call will be available on our webpage. You may disconnect now. Thank you and have a nice day.