Hello, and welcome to the B&S Group for half-year 2024 results. My name is Caroline, and I'll be your coordinator for today's event. Please note this call is being recorded, and for the duration of the call, your lines will be on listen-only mode. However, you'll have an opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your questions. If you require assistance at any point, please press star zero and you'll be connected to an operator. I will now hand over the call to your host, Peter van Mierlo, the CEO, to begin today's conference. Thank you. Thank you. Good morning, everybody. And thank you for dialing in and attending, the conference call. Yeah, first of all, I'd like to say that we are happy with the first year or the half — first half year results. We will go through them in detail, as you would expect from us. And hopefully that will lead to a, an interesting, question and answers. If I move to, the strategy, as we've discussed and presented to you during our Capital Markets Day in November, I must say, we're on the right course. We are executing the strategy that we've communicated to you, on Capital Markets Day. And we are working on the professionalization of the group, further professionalization of the group, and, and focusing on operational excellence. Operational excellence around topics like management information, cost control, as you have seen in the numbers, but also budget control and risk awareness within the group. As you may have noticed in the press release, it was also communicated that we will publish our annual report over 2024 in March, which is approximately a month earlier than last year, so we're almost back as where we should be as a listed fund. Digitization, digitizing of operational processes, but also back-office processes, is ongoing, as you would expect from a company like B&S. We're focusing on culture and governance, as we've promised you to do so. We rolled out a way of working, we rolled out the people engagement with favorable results compared to last year. It's gotta be an ongoing process. I mean, it is the strength of this company. It's its entrepreneurial spirit, and that's what we are aiming for, to be part of that culture, and at the same moment in time, making sure that that we mitigate the risks that we should mitigate. Value creation, well, you've seen the numbers, speaks for itself, I hope. Strategic options, yeah, we're always looking at strategic options in the markets, also within the company, to make sure that we do maximize value creation during the process. If we look at sustainability, which, well, as you, as we all know, will become more important, especially in the reporting field, we're on track with our corporate sustainability reporting, and to adhere to the directive. We, we talked about science-based targets in the past, and, and I guess you've all noticed that they're changing the goalposts a little bit in that field, so we will rethink that promise. But don't get me wrong, we're still committed to the sets of targets that we've communicated to you earlier. So that's, that's what I wanted to share with you around our progress and strategy. If I look at the financial highlights, then, well, we grew, we grew to a number of 4.2%. Three segments grew by EUR 20 million: Beauty, Food, and Personal Care. Travel Retail definitely grew as well with EUR 12 million. Health, EUR 3.5 million. Please bear in mind that Health is our smallest segment. Liquors in the first half year decreased by EUR 36 million. Please, do note that the decrease in the first quarter was approximately EUR 3.5 million, and there was a relatively small decrease in Q2 around Liquors on the field turnover. EBITDA, the growth of the EBITDA, is—t he different segments contributed to that, to that growth of EUR 10 million. Beauty did, Food did, Health did, Travel Retail, as well as Personal Care, who took the major part of that growth. Cash flow, well, you must have noticed that we did invest in our inventory. Due to market circumstances, we thought that was a wise thing to do, so we did. If I look at the operating segments, I will go into the details in the different segments on the next pages. Acquisitive growth. Yeah, there's no acquisitive growth because we are consolidating the Tastemakers figures as from—a nd I'm looking to my CFO now. June 30th. Yeah, on June 30th onward, so there was no acquisitive growth in that regard in the first half year. If I look at Beauty. Then Beauty is has three business units, as you are probably aware of. It's B2R. B2R is the business of selling our products through different networks that are present in the internet world. So that is B2R. Then we've got B2B, that's business to business. That's a global business. And then we've got B2C, in which we sell in shops, but definitely also through our websites, our products to consumers. The first and the latter actually contributed to the growth. B2C, especially in the U.S., is moving forward strongly, but B2R is also definitely has a robust development, so that's good. B2B actually struggled from the market circumstances that are just still present, in the industry of beauty products. If I go to Food, then Food had a good half, the first half year, definitely on the back of the growth of the maritime industry, especially the cruise business, that has been growing, well, maybe not rapidly, but definitely strongly, if I may use that word. B2B also grew, but it was also hit by availability of products, and as a result, a decrease in gross margin. Our tax-free business within Food has developed well and is close to budget, and it's developing well in the course of the total segment. So definitely a strong performance in the first half year. If you look at Health, Health has been growing, not surprisingly, because they've always been focused on this, but the whole corona situation has influenced the vaccine business across the world. It's getting back on track. There's definitely demands, and there's also supply, and, as you can see, especially in percentage-wise, they've done extremely well, as a segment, and there is no reason to believe why that would decrease. Liquors, as I explained, it's bottomed out in terms of turnover decrease, so to say, in the Q2 compared to Q1. We've revisited the strategy together with the management of the segments. We decided to further integrate, the European wholesale business, which will lead to logistical synergies and, and a better position to actually bring the different products that we have to the different markets and clients that we service. In terms of global trade, excuse me, I'm sure you're aware that Liquors is global trade, B2B, very strongly B2B, as well as wholesale in Europe. The integration of the logistical processes relates to the wholesale business of Europe. Global trade, we also looked at commitments into the future, commercial relationships, and we decided to focus on those products that can serve different markets across the globe and are less unique for different markets. We believe this will decrease the risk profile, as well as the need for working capital investments in the global trade activities. Personal Care, again, a strong performance, definitely also strategically focusing on the private label businesses, and that's an, that's a very interesting part of the market, and they're just doing, doing very well. I do like to draw your attention that the growth since Q3, Q4 last year were already very strong quarters, so you need to interpret that the growth level with caution if you look at the total forecast. Travel Retail, last but not least, grew by 26%. It's also expecting to continue that growth in the second half of this year. Passengers are still below the pre-corona levels, especially the business travelers. If I remember well, we're talking about 90% level, so there is still room for growth in terms of that regard. It definitely benefited. Travel Retail definitely benefited the full-year effects of different new stores, and it's not only the full-year effects. In some places, it just takes two years for a Travel Retail shop to get to a sort of the base level where they should be, so to say. So it's growth level around new stores. We are so we are confident that this segment will improve further in the coming years. This is where I wanted to take you in terms of the operating segment performances around the first six months, and now I'd like to turn to Mark for the financial review. Yes, thank you, Peter. So I'll now guide you in some more details to our key figures for the first half of 2024. As indicated, our overall turnover increased by 4.2%, and gross profit increased by 5.2%. As a percentage of turnover, reported gross profit was 15.1% as compared to the 14.9% of year 2023. Turnover growth during the second quarter was stronger as compared to Q1, as Peter also previously indicated. So in Q2, our turnover increased by 7.7%, where, as a reminder, our consolidated turnover growth in Q1 was limited to 0.8%. Our Q1 2024 top-line performance was already characterized by strong performance of all segments, except for Liquor. The challenging market circumstances, as reported in previous quarters, continued for the Liquor segments during the second quarter. As a result, the global Liquor trade purchasing model was revisited, leading to a decrease in the future risk profile of certain product categories, for which we incurred a one-off cancellation fee of approximately EUR 2.8 million. On the other hand, we reported a one-off profit for the Retail segment, stemming from the sale of the former office building located in Hoofddorp, which resulted in a profit of EUR 2.1 million. As a reminder, in the first half of 2023, we reported one-off advisory costs for the group after the governance-related issues reported and provisions for doubtful debtors in our Liquor segment. In order to better understand and follow the underlying trends, we have normalized the impact of these items in the normalized columns. As such, it can be noted that the normalized EBITDA margin increased from 4.5% last year to 4.8% in the first half of 2024. Staff costs increased by 4.8% to an amount of EUR 83.3 million. Staff costs were impacted by both inflation and the tight labor market. Our other operating expenses decreased by EUR 3 million to EUR 33 million in total. Please bear in mind that approximately EUR 2 million stemmed from the one-off advisory just mentioned again. As such, OpEx more aligned in this with the same period last year, with slight variances across categories. As mentioned, normalized EBITDA came in at EUR 53.4 million, an increase of approximately 12% as compared to the EUR 47.8 million indicated for last year. Depreciation and amortization for the period amounted to EUR 18.6 million, which is more or less in line with both first half and second half of 2023. Net profit amounts to EUR 16.4 million, and earnings per share have increased from EUR 0.08 to EUR 0.16 as a result of both the underlying performance and the investing activities for buying out minority shareholders within the segments. The return on invested working capital is still below our targeted 25% for the group as a whole, but the underlying trend is positive, which we aim to continue throughout the second half of the year. Our net debt-to-EBITDA leverage ratio stands at 3.4 when calculated in accordance with the definition used by our banks for the determination of our covenants, and our Interest Coverage Ratio came in at 4.4 over the period, both within our covenants. Our working capital management and market interest rates are closely monitored with regard to our Interest Coverage Ratio, as we are operating relatively close to our banking covenants, then zooming in on our turnover, development during the second quarter. In Q2, as indicated, our turnover increased by 7.7%, and as such, our turnover growth during the second quarter is indicated stronger as compared to Q1. Growth during Q2 was driven by strong performance across our segments. For practical reasons, the Tastemakers acquisition in the Personal Care segments, which was closed late May, has been consolidated as from June 13 onwards, and as such, as Peter also indicated, no acquisitive growth in turnover has been reported. In Q2, the Forex developments had a positive impact of EUR 2.3 million on reported turnover, and as such, 0.5% of reported growth on a constant currency basis. All in all, for the first six months of 2024, our turnover increased by 4.2% to EUR 1.1 billion. Then let me zoom in on our net debt development. Looking at our net debt development from late December 31st last year towards June 30, 2024, our net debt position increased to EUR 425 million. As compared to Q2 last year, net debt increased from EUR 349 million to EUR 425 million again. The negative operating cash flow increased our net debt by EUR 44 million, mainly following the increase in inventory of EUR 89 million during the first six months of the year. Investing activities for acquisitions and other investments increased our net debt position by EUR 56 million, and these investing activities are related to the following items, so first, the acquisition of an additional stake of 24% in the Personal Care segment, for which the first portion of the purchase price, amounting to EUR 23.5 million, was paid early Q1 2024. Secondly, we have acquired government and defense contracts for an amount of EUR 17.6 million. In addition, the acquisition of Tastemakers was completed in the first half of 2024, for which the purchase price was EUR 7 million on a debt and cash-free basis. The remaining other investments are more or less regular CapEx items, like improvements of our warehouses and shops. With the lease payments and lease changes and dividend paid out to minority shareholders, the net debt position amounted to the indicated EUR 425 million as per the end of Q2. With the investing and buyout of minorities, with both the 12.5% buyout of FragranceNet late last year and the acquisition of the additional 24.2% of Topbrands earlier this year, the remaining minority interest as per today are included here, for your reference. That brings me to, our working capital or the capital, development. So working capital and working capital in days both increased when compared to the same period last year. We will continue our focus on further working capital. Inventory increased by approximately EUR 53 million as compared to the same period last year, and stood at EUR 509 million. Although inventory positions, as Peter also indicated, increased across segments, the most notable investments in our inventory positions were noted in the Personal Care and Food segments, where inventory increased by respectively EUR 19 million and EUR 16 million. Trade receivables increased by approximately 13% from EUR 175 million last year to just below EUR 200 million this year, and as such, outpacing our turnover growth, which was mainly the result of the turnover compilation. All in all, working capital increased from EUR 467 million last year to EUR 528 million this year, the combined effect of the earlier indicated items. So that brings me to the end of my presentation, and I will now hand over to you, Peter, to guide us through the outlook of the remainder of the year. Yes. So, the way we've written this down in our press release is that we actually commit to the to the outlook that we've communicated with you previously. We believe that we are well positioned to meet the targets of 5%-7% growth in our top line, as well as our EBITDA margin in the range of 5%-6%. And again, that's completely in line with what we've presented during Capital Markets Day last November. So that concludes our presentation. I do hope that— and I'm certain some of you will share your questions based on what we've communicated so far in the press release. So, let's open up for questions. Thank you. As a reminder, if you would like to ask a question, please signal by pressing star one on your telephone keypad. We will take the first question from line, Tijs Hollestelle from ING. The line is open now. Please go ahead. Thanks, operator. Morning, gentlemen. Yeah, the first question I have is about the increase in debt and the cash flow. I appreciate the detailed components you're already giving, but let's say, the way I look at the key trade working capital components, there was also about EUR 20 million cash outflow for all kinds of all our short-term liabilities, like tax payments. Do you have any visibility on, let's say, these kind of line items in the second half? Yeah, you want to go through them one by one, Tijs? Okay. So, yeah, of course, looking at our total balance sheet, I would say, gives a clear indicator of what we are expecting for the remainder of the year. I think as you are aware, so our working capital decrease, and as such, the deleveraging towards the end of the year, is historically strong as per the Q3, especially Q4, sorry, with the build up in the further build up in Q3. And as such, the operating working capital, so the cash flow from operating activities, historically strong, as per the second half of the year. Yeah, I get that. And I mean, the movements in creditors, debtors, and inventory, yeah, that is also related to the business. But in the first half, I think that there was also about 20 million cash outflow for other provisions, short-term payments you have to make. So your view as management on these line items in the second half, so that we don't have, let's say, another negative surprise on the cash flow from these items. Is it possible to give any information about that? Yeah, I would be very reluctant in giving very specific guidance. I would say it's more or less in line with previous years, guys. Yeah, so no special payments pending within B&S. It's all more or less, what you see in front of you is more business related. Beautiful, special. Everything that we have pending, Tijs, has been either communicated directly towards yourselves already or included indeed in our financials previously for the items which we are aware of. Yeah. Okay, We're fully, we fully communicate towards the market all these potential items coming towards us. Yeah, so normal, let's say, business seasonality we can expect in the trade working capital movements in the second half of this year? Yes. At least that's what I'm expecting here, Tijs. Yeah. Okay. That's always—b ecause I think that the market is still a bit concerned about the debt and those movements in trade working capital, but okay. Yeah, then another question about your remark in the press release. Yeah, the investments you made in the B2C last year. You mentioned that it slowly started to contribute to an improvement in the operating results. Can you give us a bit more concrete example of what's going on here and what you also expect for, let's say, the coming quarters, this trend? Yeah. That is very much. That's not very much, that's completely Beauty- related. So we invested in new warehouses in, especially in U.S. Fully automated warehouses that will drive efficiency, and will also make sure that we decrease our operating expenses as well as the staff costs in those warehouses. And they became fully operational in Q1, in terms of. So the warehouse was already up and running in 2023, but the full benefit of fully automated processes is being achieved during this year. And so it is already contributing to increased efficiency, but we do believe that there's still much to gain in that respect. Okay. That's helpful, and that's then helping you on the cost, but also on the working capital. Yeah. Yeah, both are very true. Yeah. Okay. Tijs, let me quickly get back to you. One item on the operating cash flow. So it was indicated to me that in the half year financial report, which we published, there's one line item in the operational cash flow, which flipped places. So there are two numbers in the operating cash flow, which jumped the line, which need to be corrected. So the total amounts are fully correct, but one item flipped the line, which will be corrected and published shortly after this call, an updated version of the financial report over the first six months of 2024. Okay. Yeah, that's helpful. I haven't looked at it, whether it's adding up, but maybe that was what I was noticing in the cash flow, but I will have a look at that after the call. Thanks for that. Yeah. It's quite an important line item. It concerns the financial expenses, which now states are practically zero, which are just below eleven million cash out during the first six months. So that line item jumped. So total numbers are fully correct. Cash flow statement does not change in the total, but that line item slipped one place. Yeah. Okay. Okay. Yeah, then I had one other, for now, and then I hand over to someone else. What was it? Oh, yeah. You also mentioned in the press release that, the financial governance improved a little bit year, so that allowed B&S to invest in inventory for, some of the key segments, Personal Care, Food, and Beauty. So that's m y interpretation, that's positive, so you, let's say, yeah, able to add a lot of products, and also you probably will sell that in the short and near term. But there's also a line in which you say, stronger focus on trade working capital needed. So what is— what do you mean exactly? Because I think that companies always need to focus on trade working capital. So what do you mean by that remark? As you perfectly indicate, so, as a trading company, we buy inventory to be able to sell them at a profit. So that's indeed the aim for the second half in the coming periods. But nonetheless, And that's what I wanted to indicate, looking at our Interest Coverage Ratio, we need to be keen on developments and the indicated deleveraging and decrease of working capital towards the fourth quarter. We need to be very keen that we are able to do so, as we did over the past years, as we are acting quite close or relatively close to our banking covenant, the Interest Coverage Ratio. That's why I wanted to indicate this towards yourselves as well. Yeah. Okay. Yeah, just to be sure. Okay, thank you. Right, farewell. Thank you. As a reminder, if you would like to ask a question, please signal by pressing star one on your telephone keypad. We will take the next question from line, Maarten Verbeek from the IDEA! The line is open now, please go ahead. Good morning, it's Maarten Verbeek of the IDEA! Couple of questions from my side. Firstly, again, on the working capital, you mentioned that you're gonna take a couple of actions to get a better grip on that item. You discussed one concerning the Liquor business. What other kinds of actions are you planning to implement? Sorry, I think we're mentioning that we will have that we will continue to have a focus on our working capital developments, which is part of our monthly discussions with the different segments, where we analyze the working capital. The quality of those analysis, I do believe, are improving. But nonetheless, we feel confident that that our inventories are very healthy and will contribute to the development of the remainder of the year. So, so that, that's our current, that's the way we view what is needed around working capital. In terms of Liquors, you're right, we are thinking about integrating warehouses. Integrating warehouses is, will, will result into lower working capital needs, so we believe that's a sensible thing to do. Also the action we took in global trade, and as a result, we focus more on products that we can sell in different markets will also decrease the working capital needs. That is our current thinking, but maybe you can deepen your question slightly if that doesn't comfort you. For the moment, it's, it's fine. Thank you. Then secondly, want to get a better grip on the relationship between the G&D contracts and your Food segment. How much of your organic growth in Food is related to these new contracts, the G&D contracts? In terms of turnover, zero. The result of those contracts are accounted for. Maybe I should leave this to Mark on the line. Other income, he will correct me if I'm wrong. It's completely right. That's actually the only place where you see anything from those contracts in the profit and loss account. So t he increase in turnover in Food is mostly related to the cruise business, and also partly related to the export business, the B2B business. Okay. We have tried, Maarten. We've tried to indicate this in the disclosure on the other financial assets in the report, just to give you a better understanding how these contracts are measured at fair value, which go, and the movements go through profit and loss through the other income line item. I do understand that the G&D contracts are not consolidated, except for the result, which flows into just above the operating income. But again, to confirm, there was no relationship in sales that certain— No. The sales of G&D are being supplied from your Food division, that's Food segment. That's not the case? No, no. Okay. That's immaterial, so to say. Okay. Yeah. And then, concerning your Travel Retail, we have now seen a couple of quarters, very good revenue growth, also on the back of new store openings. But still, it's not profitable. At what kind of level, revenue level, do you expect this business to become profitable? Now, I think it's. I would say it's difficult to pinpoint an exact turnover level at this stage, because that depends on if all outlets are developing in the same upside, I would say. But nonetheless, it's fair to say that we have monthly meetings with our local management, also to discuss both the operating performance as well as the net results contributing within the segment, for the short-term period, but also for the expectation for the remainder of both the year and next year to come. Because development is, I would say, still worrying. We are looking at this very strictly in order to make sure that we get back to the break-even situation, for this segment as well. And then, lastly, for the moment, you mentioned that you are still keen to look for opportunities in M&A, but at the same time, you're close to your leverage. Also, your interest coverage ratio was at the high end. How should I link those two? Because you have not actually no real war chest to make acquisitions. Well, we are obviously connected to our markets, and we can't during a— I mean, you're right. I mean, to do any acquisition which would lead to a restructuring case or whatsoever, that's not what we're into. That's definitely impossible. At least this year and next year, probably this will change up, okay? That's also true. So that's the way, but it goes without saying that we will not act on anything which is not healthy for this company. Okay, thank you very much. Thank you. As a reminder, if you would like to ask a question, please signal by pressing star one on your telephone keypad. We will take the next question from line, Patrick Roquas from Kepler Cheuvreux. The line is open now, please go ahead. Thank you, operator. So good morning, gentlemen. I've got a question on the Liquor segment. So over the years, organic sales growth, EBITDA, have been pretty volatile here, and I'm aware of the tough market conditions since 2023. My question is, to what extent has this market structurally changed for you? And to what extent are previous levels of, for example, EBITDA still realistic, or should we assume a structural, structurally lower EBITDA going forward? Important to say is that the Liquor segment divvies up into the European wholesale business and the global trade business, right? The European wholesale business is relatively stable. It does move a little bit, but it's a stable business. Global trade, if you look at the last decade or whatever timeframe you want to look at, it's—y ou're completely right. It's a volatile business, so whether this market has truly changed, given the size of our global trade business to that whole market, I would argue that that's difficult to substantiate, to be honest. It is a game of availability, demand, and but also how much the sourcing channels have been actually filled across the globe. That has definitely, that needs time to correct, apparently. That has been the case in the past as well, and it would be strange if they would not recover. That's also something that would be. That's not something that you can expect logically. I know that there are liquor companies suffering in terms of the development, as you must also be able to see at a different list of liquor companies. But that is, that's very much related to economic cycles, I believe. But then again, if I would know this all for certain, then life are different. But this is our impression. Yes, we do expect it to recover. Like most things in life, it could also become more volatile. But that is really difficult to predict. Predictions are always difficult, but when they're about the future, they're even more difficult. Yeah. Okay, that's clear. Thank you for that. And then a question on M&A. You might have touched upon that during the Capital Markets Day, but just wanted to go into it again. So, I mean, the former team did quite some M&A with, let's say, at relatively attractive multiples, buying, not a 100% stake, giving, let's say, the company acquired some room to benefit from, let's say, shared synergies. Is that something that you would continue to do? Or would you say, if we do an acquisition, we simply want to have 100%, preferably? I would say, I think that fully depends on the situation at hand and the opportunity which we will then be looking at. So it's situational dependent, I would say. Okay. All right. Thank you. Those, those were my questions. Thank you. As a reminder, if you would like to ask a question, please signal by pressing star one on your telephone keypad. There appears no further question at this time. I'll hand it back over to your host for closing remarks. Thank you, thank you for being here and asking the right questions. I do hope that our answers actually helped in understanding the business. We're on the right track. We're delivering—w e're expected to deliver on our promises, and that's what we're here for. Thank you. Thanks for joining today's call. You may now disconnect.