Ladies and gentlemen, thank you for standing by, as I would like to welcome you to MHP's Fourth Quarter and Twelve Months 2024 Results Conference Call on the 28th of April 2025. At this time, all participant lines are in listen-only mode. The format of the call today will be a presentation and a question-and-answer session. Without further ado, I would like to pass the line to Anastasiya Sobotyuk. Please go ahead, ma'am. Thank you very much, dear stakeholders. Good afternoon and good morning. Thank you for joining us today at MHP's conference call dedicated to the fourth quarter and 2024 full-year results. I'm Anastasiya Sobotyuk, Director of Investor Relations, ESG Compliance and Reporting. Together with CFO of MHP, Viktoria Kapelyushnaya, we will discuss MHP's financial and operational results, as well as current operational environment and expectations in 2025, taking into account that the war in Ukraine continues. Today's call is based on a press release and financial statements released earlier today. However, during our call, we will discuss our projections and plans based on our assumptions, domestic and international trends, and projections. Please take it into account. We go on slide number four, sorry, three of the presentation. A few words about the macro environment. First of all, an update about the war as well. The war in Ukraine with intensive fighting in the south and east of the country and irregular but freaking severe and devastating rocket and drone attacks against civilian infrastructure across Ukraine continue. The bombing campaign shows no sign of abating, unfortunately. I'm sure we all follow the same news regarding ceasefire talks, which have intensified since January 2025. However, as of today, Ukraine and Ukrainians are still waiting for ceasefire and peace as soon as possible and hope it will be with us soon. Macroeconomic situation. Taking into account that many businesses have adjusted to the war operation environment, which remains unpredictably volatile, in 2024, GDP growth was at around 3%. Forecasted GDP growth in 2025 is expected to be around 4%. CPI. In 2024, Ukraine experienced a significant rise in inflation, with the Annual Consumer Price Index, CPI, reaching 12% by December, up from 11% in November 2024. This marked a notable increase from 5% in 2023 and almost 27% in 2022. The main drivers of inflation were food and energy costs. Looking ahead, the NBU project inflation to decrease to 8% by the end of 2025 and return to the 5% target in 2026, contingent on improved agricultural yields, energy sector stabilization, and continued international financial support effects. Starting from October 2023, the National Bank has been implementing managed exchange rate flexibility. MHP is highly volatile. Let me now proceed with the company results, and we go on slide number four of the presentation. Q4 2024 results in revenue, as you can see from this table, were stronger year on year, mainly driven by strong performance of poultry, agricultural operations, and operations of Perutnina Ptuj. Revenue increased by 8% year on year and reached around $785 million U.S. dollars. Q4 2024 adjusted EBITDA increased by 11% to $129 million, with stable EBITDA margin at 16%. 2024 revenue remained stable year on year since decrease in vegetable oil was offset by improved performance in agriculture and European operations and resulted in over $3 billion. Adjusted EBITDA increased by 27% to $566 million, with EBITDA margin increased to 19% from 15% in 2023. Let's move to the slide number five. Financial results by segment. As you can see from the slide and from the table, the biggest contributor to the company's revenue in 2024 was poultry and related operation segment, 54%, while the biggest contributor to EBITDA in 2024 was agricultural segment as a result of significant increase in grain prices in Ukraine and their alignment with international prices. As you can see from the diagram on the right, Adjusted EBITDA in 2024 was by 27% higher, which is actually around $120 million higher than in 2023, driven by a number of positive drivers such as grain prices. That was a significant impact. Poultry meat price increased, export market predominantly, and increased sales volumes at Perutnina Ptuj, following its growth strategy. At the same time, there was a number of adverse impacts which negatively affected 2024 financial results, amongst which were increased production costs for poultry meat, lower sales volumes in Ukraine and for exports, higher payroll, and war-related expenses. Let us have a closer look at each business segment. Here, I pass my word to Viktoria. Thank you, Anastasiya. Good afternoon, everyone. Let's have a precise look at poultry and related operation segment performance, slide number six. Despite challenging of the war in Ukraine, MHP performed good results in Q4 last year, which always in Q3, mainly due to the stable poultry price and increase in cost. Poultry cost in Q4 increased compared to the Q3 last year, mainly due to the significantly higher corn price and gas. We see the further upward trends in costs in the first half of 2025. However, increase in corn prices gave a positive effect on our agriculture segment results. Poultry prices in Q4, both on export and domestic markets, remain almost at the same level as in Q3. Commodity price risk is a common challenge for MHP. To mitigate this, MHP is focusing on production and sales of non-commodity products. This requires significant efforts from our team and investments to launch new products and grow our market share. We managed to increase in 2024 our volume of non-commodity products by 10% in Ukraine and by 45% on export markets. Total share of non-commodity products in our poultry sales is 20% in volume and 30% in EBITDA. We will continue to concentrate on selling non-commodity products with a focus on most marginal. A few words about our vegetable oil segment, slide number seven. In Q4 last year, our EBITDA for the vegetable oil operation decreased compared to Q3, as well as compared to 2023. The decline in vegetable oil results compared to last year was primarily due to the high sunflower and soybean price and low oil prices. Last year, oil prices experienced a downward trend, while sunflower price increased, resulting in reducing oil crushing margin. This was caused by low yields and increased crushing production capacity in Ukraine. We assume that the margin of the segment this year will decline further. Let's move to slide number eight, agriculture operations. In 2024, MHP harvested around 345,000 hectares of land in Ukraine and gathered around 2.1 million tons of crops, lower than last 2023, mainly driven by low corn and soybean yields. Lower yields of crops were due to unfavorable weather conditions. However, starting from September last year, there has been a significant increase in grain prices, which has increased our profit per one hectare. Grain price increased by 25% winter crops and around 50% spring crops. Segment revenue last year amounted to $381 million compared to the $227 million. The increase was mainly attributable to an increase in both sales volume and price of grains sold to external customers. EBITDA of agriculture operation segment, net IFRS 16 in 2024, was $264 million compared to $6 million previous year. This result was primarily driven by significantly higher grain and oil seed prices, but rather offset by lower yields. Let's proceed to slide number nine. Several words about the European operating segment. Last year, poultry meat sales of the European operating segment increased by 11% to 60,000 tons. Processed meat product sales were up by 4% to 49,000 tons. EBITDA of the European operating segment last year remained almost at the same level. EBITDA decline in the fourth quarter was driven mainly by one-off expenses related to previous quarters. Slide number ten. A few words about our cash flow and liquidity position. Cash flow operations before changes in working capital decreased to $343 million compared to the $377 million in 2023. Investment in working capital amounted to almost $100 million last year. This was mainly due to purchasing of corn, sunflower, and soybean from third parties for both internal consumption and trading purposes. Secondly, increase in advance to supply for energy resources and also high investment in breeders and broilers due to the rising cost of production and also a growth in recoverable VAT. Total CapEx last year amounted to $290 million, making a significant increase compared to 2023. This rise is primarily driven by extensive maintenance and modernization of existing facilities, construction of new bioenergy production facilities, investment in cost optimization and culinary strategy projects, and expansion and improvement of protein production facilities. During the 2024, the company made several acquisitions and investments in the amount of $29 million. They are related mainly to acquired grain storage facilities in Croatia and also a meat processing plant in Ukraine. In line with our expectation strategy in the EU market, during March-April this year, the group entered into a share purchase agreement with shareholders, representing around 92% of the share capital of the Spanish group, Uvesa. Representing equity value of approximately $270 million, enterprise value will be disclosed close to the deal closing date. The completion of this transaction is subject to obtaining regulatory approvals, including merger control and foreign subsidies clearance by the European Commission. Uvesa Group is one of the leaders in the food industry in Spain, thanks to its poultry, pig, and sheep manufacturing areas. One of the largest producers of chicken in Spain, with 15% market share in volume. The company's chicken production is about 150,000 tons and pork, 70,000 tons annually. Revenue is approximately EUR 600 million per year. MHP currently expects to finance a substantial part of the transaction by acquisition financing from commercial banks and with its own funds. Regarding debt, at the end of the period, the company's total debt was nearly $1.7 billion and net debt about $1.2 billion. The liquidity position at the end of Q4 was $350 million in cash, around 70% of which was held by group subsidiaries outside Ukraine. As of the 31st of December of 2024, the group's leverage ratio decreased to 2.8, below the defined limit of 3.3 compared to the 2.5 as by the end of 2023. With regard to 2026 bonds, this is our crucial item on our agenda, and we understand the importance for investors. Ukrainian capital control and regulatory that are out by the National Bank of Ukraine dictate that foreign currency processes generated from exports but originated in Ukraine must be brought back to Ukraine with specific time frames, 120-180 days, which in principle limits our ability to utilize the short cash for debt repayment. MHP is capable of servicing an existing loan portfolio and bonds from Ukraine. Repayment of principal remains prohibited by the National Bank of Ukraine. We would also like to highlight, however, the uncertainties and difficulties in the operating environment that MHP continues to face amid the ongoing war. We are mindful of the fact that the notes are maturing in approximately 12 months from now and will intend to address the maturity appropriated in due course. Once again, we are very grateful for all the support extended to us by investors since the 21st of February 2022 and are keen to continue our fruitful cooperation going forward. I give the floor to Anastasiya for updates and outlook. Thank you very much, Viktoria. Let me actually conclude the presentation because you have provided our stakeholders with lots of interesting and detailed information. I think we are ready for discussion and, of course, questions. Thank you very much for your cooperation in advance. We are ready for your questions. Thank you. Thank you very much for this presentation. We'll now move to the question and answer section of the call. If you would like to ask a question and you're connected via the telephone, please press star two on your phone and wait for your name to be prompted. If you're dialed in by the web, you can type your question in the box provided or request to ask a voice question. We'll just wait a moment or two for the questions to come in. Okay. We see our first voice question from Stella Cridge from Barclays. Please go ahead. Your line is now open. Hi there, everyone. Many thanks for all the updates today. I was wondering if I could ask on a couple of areas. The first was on the Spain acquisition. Could you just talk a little bit more about why you find this acquisition interesting, what your plans would be for that business? It would be great to get the EBITDA for that business if you had it, in addition to the revenue. On the financing, of course, you said the value would be disclosed towards closing. Do you have an idea at this stage about how much debt you would be looking to raise and how much you would be contributing out of bond funds? That would be great. That's my first question, please. Thank you for your question. Thank you for your question. Why is it so interesting to provide this acquisition in Europe? Because we have very good trade records. Just five years ago, we bought Perutnina. It is a leader in the Balkan region. Only, three years, only five years ago when we bought Perutnina, Perutnina was a company with approximately EUR 350 million revenue and around less than EUR 40 million EBITDA. Today, we have the company in Perutnina. Today, the company which increased almost, regarding EBITDA, almost in three times. Today, Perutnina generated, last year, generated more than EUR 95 million, around EUR 95 million EBITDA. We understand that we understand how to improve and how to provide growth in Europe, not just in Ukraine. The question regarding why is it so interesting to buy. Regarding financing this transaction, as I told during the presentation, now we attract acquisition finance from European banks, and we try and we will finance this transaction mostly. Yeah, the biggest part, yeah, financing from acquisition financing loan. Regarding total our enterprise value, and we will disclose all information about this company when we will close our deal because now we are in process. We are continuing to wait for some permission from Antitrust and with the European Commission. Thank you. Thank you for that. That's much appreciated. If I could also just ask on the current business as well, could you talk a little bit just about the financial cash flow outlook for next year? You obviously mentioned that the oil segment's going to be a bit weaker. What's your expectation in the grain segment and also for poultry in Ukraine? That would be great. Do you have a number in mind for CapEx at this stage as well, please? Thank you for the question. You know that we always try to be very conservative at the beginning of the year and completely the same we did during all our history. Last year, I remember that we told that our last year, the same period of last year, we talked about our EBITDA for 2024. It seems to me we told that our EBITDA maybe would be $450 million, but if you see from our presentation, from our financial report, last year we generated more than $550 million. Now, based on our budget, based on current trade, our expectation for next year is around $500 million. Oh, dollars, sorry, sorry, dollars. Anyway, we try always to be very conservative. Our CapEx for next year is approximately $220-$240 because it mostly consists of maintaining CapEx. Yeah. And to get that, the positive cash flow, yeah. You said $300 for EBITDA? $300? No, no, no, $500, $500. Oh, $500. Around $500, yeah. Okay. Thank you so much. Okay. Thanks for answering the questions. Appreciate that. Okay. Thank you. Thank you very much. We will be now moving to the next voice question from Brit Ivera from Goldman Sachs. Please go ahead. Your line is now open. Hi. Congrats on the results, and thanks for the information. I just wanted to ask a little bit more about the Uvesa acquisition, where this asset will lie, and will it be part of the bond coverage? If not, then is there a plan to use money from the Ukrainian entity to sort of fund this acquisition? Thank you. As I told previously, when we close the deal, we will present more detail. We will present all more information about Uvesa. Right now we are in process, yeah. Yeah, I told you this company is one of the biggest players of the chicken and spinach market with revenue around EUR 600 million. Yes, we will finance this transaction from acquisition financing, not from Ukraine. Yeah, because, yeah, as you know, that we have some prohibited, and we cannot pay any, how to say, any dividends from Ukraine, and we have the very capital control. Yeah, that is why, yes, we will attract the special financing for this transaction. Thank you. Maybe just one more question on the poultry business. I saw that the margins in terms of the cash EBITDA, which is excluding the effect of the IAS adjustment, but excluding that, it seems like margins have declined for the poultry business. For 2025, do you see any impact of the tariff war ongoing? Will that have a positive or a negative impact for poultry in Europe? Your question about the EBITDA margin in poultry in European, our segment, and you asked me European segment, yeah? Is it a separate segment in European segment? Yes. The European segment as well as the export that happens from Ukraine. Yeah. European segment, it is not, it is our businesses in the Balkan region. It's the Perutnina businesses. Our expectation, the EBITDA margin will remain, yeah, I told that in the first quarter, we have the one-off, yeah, one-on-one expenses. Generally, we expect that EBITDA margin in European, our segment, will remain at the same level as the whole of 2024. Regarding export, yeah, from Ukraine, it is included business, including our segment poultry and related operations. Our quantity, yeah, we expect that EBITDA margin will remain at the same level. Yeah. Got it. Thank you. Thank you. Okay. Thank you very much. We are now moving to the next question from Dmitry Ivanov from JFS International. Please go ahead. Your line is now open. Thank you very much. Can you hear me? I was just. Yes, yes. Interview you. Yes, yes, yes. Yes. Thank you for the presentation. I have a few questions, if I may. Maybe the first question on your leverage. You already shared guidance on EBITDA with us, like $500 million. Basically, there will be some decrease in EBITDA. I'm trying to understand your current leverage is 2.1. Given you expect to acquire Uvesa, which also will add some leverage, I'm just trying to understand how you see your net leverage developing in 2025, given reduction in EBITDA from the existing business and the additional debt which will be acquired through this acquisition of Uvesa. Should we expect net leverage to go to 3-3.5? Any color on your leverage in 2025 would be much appreciated. My first question, basically. Based on our current forecast about EBITDA for next year, so 2025, around $500 million. Together with acquisition, we expect that our leverage will be around 2.8, 2.7-2.8. 2.7, 2.8. Okay. Okay. In terms of the timeline, you mentioned you are waiting, certainly, approvals to go ahead with acquisition. Should we expect Q3, Q4? What kind of timeline are you expecting for this transaction, the completion of the transaction? Yeah. It's a very good question. Anyway, our expectation, it would be maybe in the second half of the year. Maybe we expect that maybe it would happen in Q3, but we cannot guarantee, maybe in Q4. Yeah. This number, 2.7. It's a project. That's like, yeah. Together, it is a pro forma together with this acquisition. If this acquisition happens in the second half of the year. That's very helpful. This is pro forma 2.7, 2.8. My second question, basically, on working capital dynamic. You already provided some color on the kind of factors behind some increase in working capital in 2024. How should we look at the working capital in 2025? Should we kind of expect the working capital neutral position, some release, build-up working capital? Any kind of guidance would be much appreciated on working capital. Thank you for your question. Yes, exactly. Last year, unfortunately, we have investment in working capital, and I explained why it was happened. For this year, we do not expect any investment in working capital. Maybe we will provide some action, and maybe we will have some release of working capital. Neutral or potentially. Neutral or positive. Yeah. Or maybe. Yeah. Yeah. As a conservative approach, yeah, neutral. We have some reserve, yeah, even for release. Understood. Understood. If possible, could you please remind us about your available trade facilities that are still on drone, and you can use it? I guess this is mainly trade facilities, right, available. Can you just share a few colors on this? Yeah. Yeah. Okay. For now, yeah, now it is around $200 million. This is mainly for different working capital items. Basically, this is not for CapEx. It's mainly to finance this transaction. No, no. Yeah, yeah. yeah. Some of them for working capital, some of them for CapEx. Understood. If possible, can you share the latest cash balance after December, the current cash balance? Current cash balance almost at the same level that we had at the beginning of the year, around $350 million. Got it. Thank you very much. I appreciate the color. Thank you. Thank you. Thank you. Okay. Thank you very much. We'll be now moving to the next voice question from Erica Ive from MetLife. Please go ahead. Your line is now open. Good afternoon. Can I ask you? I do not know if you have already said it, but if so, I have not really understood. What is the EBITDA that Uvesa generates? Yeah. As I told previously, we will discover, how to say, open this information. Yeah. Disclose. Disclose this information on closing date. Yeah. Because, yeah, it will happen when. Yeah. Sorry. Yeah. Could you provide at least a range in terms of EBITDA margin? EBITDA margin is European companies. Usually, European company, EBITDA margin around from 5% until 15%. Yeah. And Uvesa, yeah, in this framework. Okay. You said between 5% and 15%? Yeah. Okay. Thank you. In terms of debt, the net debt that Uvesa is carrying on, could you disclose that or give a sense of it? Yeah. I told, yeah, after closing this transaction, when it will happen, we will open all information. We disclose all information about this company. Now we're in the process, and transaction, unfortunately, has not finished. Yeah. After that, we will organize maybe even the special conference call or introduce everybody with our new acquisition. Okay. Understood. Thank you. Thank you. Okay. Thank you. Thank you very much. Just a reminder before I move to the next question. If you are connected via the telephone and you would like to ask a voice question, please press star two on your keypad. If you are connected via the web, you may send us a text question or also ask a voice question. Our next question is a text question from Anna Kuchina, T. Rowe Price. Does your CapEx guidance of $220-$240 million include cash component of acquisition purchase price for Uvesa? No, no, no. No. This is our CapEx, which includes mostly maintenance CapEx and CapEx slightly for expansion in Perutnina. No, it is not without any cash components regarding Uvesa. Okay. I see Anna also wants to ask a voice question. Anna, your line is now open. Please go ahead. Thank you very much for the presentation. I just wanted to ask about SALIC, SALIC Strategic Investment in MHP, what progress has been done in Saudi Arabia. Maybe you can shed light on some of the priorities or things you are planning to do with SALIC or in Saudi Arabia, or if there is any potential injection or strategic suggestions coming from SALIC for cooperation in Saudi Arabia. Thank you. Yeah. SALIC now is one of our shareholders today, but right now, we don't see any project with SALIC. Yeah. No, we don't consider any project, any injection from SALIC. Yeah. SALIC are our shareholders. Thank you. Okay. Thank you. Thank you very much. We have next question, a text question from Vicky Chan from IVA Capital Partners. Could you please disclose the cash at European PP level? For For the undrawn facilities, what are the maturities? Thank you. If you question what amount of cash we have in Perutnina, yeah, today, it is around EUR 50 million, EUR 50 million in cash in Perutnina. Okay. At this point, we are seeing no further questions. I would like to pass the line back to the MHP team for their closing remarks. Thank you very much for a call. Thank you, dear stakeholders, for all your questions. Please take into account that we remain at your disposal in case you have any further questions or would like to clarify something. Thank you very much, and have a lovely day. Bye-bye. Thank you. Thank you. Bye. Thanks.