Good morning, everyone, and welcome to the Cabka H1 2026 Results C onference Call. With us today are CEO Alexander Masharov and CFO Mark Letterie. Alex and Mark will both make a short presentation, after which we will go to Q&A. For those of you following the call via the webcast, you will be able to submit your question via the Q&A module. You can find a copy of this presentation online at investors.cabka.com. At this time, all participants joining via conference call are in a listen-only mode. To ask a question during the Q&A session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference call is being recorded. As is standard, this presentation is subject to the usual disclaimers regarding accuracy, completeness, and forward-looking statements. You can also find more details of these disclaimers on the investors section of our website. I would now like to hand over to Alex, who will take you through our operational highlights for the first half of the year 2026. Good morning to everyone joining us, and welcome to our H1 results presentation. In the first six months of this year, we delivered revenue growth, materially stronger profitability, and a return to a positive net result. Most importantly, operational EBITDA grew significantly faster than revenue. This demonstrates the operating leverage within Cabka business model and the impact of our improved product mix, disciplined execution, and the structural cost measures implemented through our SHIFT program. These results were only possible because of the commitment and hard work of our people across the company. As such, I would like to take this opportunity to thank all Cabka employees for their resilience, dedication, and continued focus through the first half of the year. We achieved this performance against a volatile market backdrop. Geopolitical disruptions in the Gulf created significant movements in energy and raw material markets and contributed to longer customer decision cycles towards the end of the second quarter. More recently, raw material prices have eased from their peaks, and we are seeing early signs of customer and tender activity picking up. I will return to the market environment and our outlook later in the presentation. Our priorities remain clear: disciplined execution, sharper customer and product focus, and innovation that creates measurable value for our customers. These priorities are the foundation for sustainable growth, stronger profitability, and improved cash generation. Turning now to the numbers themselves. Revenue increased by 6% to EUR 95.5 million, with Europe being the principal driver of growth and positive development across all major product lines. Reported revenue in the U.S. declined by 7%. However, on a constant currency basis, the underlying performance was broadly stable, supported by continuing progress in contract manufacturing. The most important number on this slide is operational EBITDA. It increased by 50% to EUR 13.6 million, while the operational EBITDA margin improved by 410 basis points from 10.1% to 14.2%. This improvement was not driven by a single factor. It reflects the combination of higher revenue, a stronger product mix, disciplined cost management, and the benefits of the SHIFT measures implemented over the past 18 months. More importantly, this improvement also reached the bottom line. As such, Cabka recorded a net profit of EUR 1.2 million, compared with a net loss of EUR 4.7 million in the first half of 2025. Let me also spend a moment to emphasize that 83% of our raw material intake now comes from recycled material. Not only is this in excess of our 80% target, but it also gives us a real advantage relative to our competitors given the recent volatility that we have seen in the virgin plastic prices as a result of the war in the Gulf. In Europe, we showed strong progress with 18% growth in revenues. The growth was broad-based across portfolio, customized solutions, and contract manufacturing. Customized solutions was the stronger contributor, up 41%, supported by a broader customer base and the addition of new product programs. Over the past 18 months, we have dedicated significant attention to the SHIFT program. The main structural measures have now been implemented, and their impact is visible in the H1 results. This does not mean that our work on productivity and costs are finished. We will maintain strict operating discipline with progressively shifting more management attention toward the disciplined and profitable growth. In the U.S., as already mentioned, the underlying constant currency performance was broadly stable with continuing progress in contract manufacturing. We have also strengthened our commercial leadership and market coverage. Our new U.S. managing director started on 1st July, and we have reinforced the sales organization. Our objective is clear: stronger commercial execution, better customer proximity, and improved utilization of our U.S. capabilities. We will provide a further update on the development of the U.S. business at our capital market update on 24th of November. On sustainability, PPWR legislation on sustainable packaging in the EU was applicable as of yesterday. Cabka's reusable transport packaging already meets the criteria with 83%, as mentioned, of our intake coming from recycled material. This positions us well ahead of our peers and is reflected in our EcoVadis gold score, placing us in the top 5% of companies assessed worldwide. I would now like to spend a moment on the development of raw material and energy markets during the first half. As known, geopolitical disruption in the Gulf created significant volatility in oil, energy, and raw polymer markets. Towards the end of the second quarter, this uncertainty contributed to longer customer decision cycles and affected the timing of new orders and tenders. This is reflected in our outlook and will influence the phasing of business into the third quarter. More recently, virgin material prices have eased from their earlier peaks, and we have seen encouraging signs of tender activity returning. We nevertheless remain prudent regarding the timing between renewed customer activity, confirmed orders, and recognized revenue. With recycled materials representing 83% of our raw material intake, Cabka has lower direct exposure to virgin plastic prices movements than our competitors who rely predominantly on virgin materials. However, recycled material costs are not completely insulated from movement in energy, transport, and broader polymer markets. We therefore continue to manage procurement and customer pricing with discipline in accordance with contract mechanism and current market conditions. Our priority is to protect long-term customer relationships while maintaining appropriate margins. Energy costs also remain elevated and volatile. We are taking active measures through procurement, consumption management, and targeted operational initiatives to mitigate their impact. With that, I will hand over to Mark, who will take you through financial performance in more detail. I will return afterwards to discuss our outlook and priorities for the remainder of the year. Thank you, Alex, and good morning, everyone. I am pleased with the progress that we have made in the year since I joined Cabka. The group's performance has seen 6% growth in sales converted into 50% more EBITDA and a significant jump in profit to a positive net result, while we have maintained a stable cost base and stable net debt since the start of this year. Alex has already given you some headlines on our sales growth. Before I go into more detail in the coming slides, I would like to focus on the EBITDA performance. Our operational EBITDA has improved to EUR 13.6 million, representing a 14.2% margin. This is a considerable year-on-year improvement and puts us firmly on track to reach our 15% target. Our higher EBITDA is also a function of improved product mix. For example, our CabCube range, which we launched last year, has contributed to the margin improvement, and this is a product where we see potential for future growth moving forward. You will note that our working capital has been under some pressure, which is in part due to higher material costs. However, we will continue to focus on further reducing our debt from current levels in the second half of the year. Net income from operations came in at EUR 1.2 million, which is a EUR 5.3 million improvement compared to the first half of last year. Turning now to our product segments. I would like to flag that our growth has been largely volume driven with only a limited impact from pricing. The portfolio segment as a whole has seen modest growth in comparison to customized solutions and contract manufacturing and is not yet where we would like to see it. As such, this remains an area of focus for new products. In saying that, within both our portfolio and customized solution segments, we have a strong footprint in mobility-based products, bringing in EUR 2.8 million in revenues in each category. In contract manufacturing, Alex already mentioned we have seen a strong performance in the U.S., and we also see a big improvement in Europe. This growth in both Europe and U.S. contract manufacturing sales is the result of a conscious decision to use contract manufacturing to improve our capacity utilization. Looking at our performance in Eco, revenues have been broadly flat. However, the segment is more profitable and better managed. Here we can look in more detail at the performance in the U.S. Although the headline figure for the U.S. shows a negative performance, I would like to flag that in local currency terms, overall performance was broadly in line, actually growing slightly compared to the first half of 2025. As already mentioned, our focus in the first half has been on improving our capacity utilization and profitability via growing our contract manufacturing business. This has been a successful strategy, and we will continue to target this as a lever for future growth, coupled with an increased focus on customized solutions and portfolio as our new head of U.S. sales looks to boost commercial momentum in the region. Having covered the regional and segment-level sales performance, let me now take you through how this translated into the overall income statement. As discussed, sales increased by 6% to EUR 95.5 million. More importantly, gross profit grew faster than revenue, increasing by 11% to EUR 49.5 million. This lifted our gross profit margin by 220 basis points to 51.9%. Operating expenses remained broadly stable at EUR 36 million, despite the growth in sales. This combination of a higher gross margin and disciplined cost management drove the improvement in operational EBITDA to EUR 13.6 million. After depreciation and amortization of EUR 9.3 million, operating income improved to a positive EUR 4.2 million, compared with a net loss of EUR 0.6 million in the first half of last year. The net financial result also improved from a cost of EUR 2.9 million to EUR 2.3 million. Bottom line, this resulted in a positive net result of EUR 1.2 million, representing a year-on-year improvement of EUR 5.3 million. Turning to net debt, the strong EBITDA performance generated EUR 6.8 million of operating cash flow after correcting for the impact of working capital, taxes, and non-cash adjustments. This cash generation was offset by our net investments as well as interest and financing outflows. As a result, net debt remained broadly stable at EUR 62.8 million, compared with EUR 62.6 million at the end of 2025. As mentioned earlier, reducing or rather managing debt remains a priority to help improve our leverage position, which is net debt over EBITDA. Unfortunately, our net working capital increased somewhat in the first half. Much of the increase was related to the sharp increases in raw materials prices, which we discussed before. As a result of this, inventory and prepayment of suppliers rose. We have also seen some increase in trade receivables, partly as a consequence of higher sales. Going forward into the second half of the year and beyond, we expect to see an improvement in the trade payables number. Turning now to our CapEx. We have maintained our disciplined approach to CapEx spend that we initiated under the SHIFT program. We have also changed our focus from upgrades and capitalizable projects to more routine preventive repair and maintenance spend, which obviously is directly expensed rather than being part of actual CapEx spend. What this means is that two-thirds of our CapEx is now dedicated to investments in our growth. In addition, we realized EUR 3 million in proceeds from asset disposals during the first half. This related to sale and leaseback transactions, which allows us to allocate capital more efficiently. I am happy to answer any questions that you may have, but first let me hand back to Alex, who will talk about our outlook and guidance for the second half of the year. Thank you, Mark. As we look to the second half of 2026, I can tell you with confidence that Cabka's performance is on track with our stated goals. Our first half has delivered on top line growth, increased profitability, and cash flow generation, which reinforces our confidence in our full year ambitions. For the second half, we continue to expect an improvement in revenues and a higher EBITDA margin than in 2025. We intend to hold a virtual capital markets update on 24th of November, at which we will share more detail on our strategic roadmap, progress towards targets, and commercial insights. Thank you for your attention. I would like to hand over to our moderator who will open up the lines for questions. Thank you. We will now begin the question and answer session. If you wish to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. If you wish to ask a question via the webcast, please type it into the box and click submit. We will take our first question. The question comes from the line of Ellis Acklin from First Berlin. Please go ahead. Your line is open. Yes. Good morning, gentlemen. Thanks for the presentation and the opportunity to speak this morning. I will kick things off with two topics for right now. Firstly, I will ask one at a time. Just your comments on Q3 and demand. I understand you are now expecting a softer Q3, but at the same time, you are talking about a slight pickup since the end of the first half of the year. Does that suggest that maybe this is more of a timing issue, or are you seeing any sort of underlying demand destruction there? Thank you for your question. Let me tackle that one. When we say Q3 softer than the first two quarters. H1 was close to EUR 48 million of revenue per quarter. We do not expect Q3 too much that. We maintain our guidance for the full year because we operate in a seasonal business, and in every year, Q3 is a bit weaker than other quarters. That is just the way business is. So, yes, to your question regarding softer Q3, it is a bit softer comparison to what we had in the first half, but the guideline for the full year is still the same. Okay, very good. Regarding the cash conversion, the working capital, I understand you had some pricing headwinds, particularly related to the inventory. Would it be fair to say that the inventory is strictly related to that, or is there some buildup there as well? Can we maybe expect, is there any room for reversal of that effect in the second half of the year? That ties in to whether or not we might be able to expect any meaningful deleveraging by the end of the year. I'll let Mark add to whatever comments I have. Look, for us, inventory is a strategic decision to make sure we know how to supply our customers. I think last year we fell short a little bit into the supply over the demand we had because we had insufficient inventory. We control inventory very strictly. It was a constant decision to have slightly more inventory this year to get more revenues and to have our top line higher, because then we can serve more customers. Can we always change this? Yes, we can, but we make those decisions on a weekly, monthly basis, and it very much depends on the demand. That's how we move. Okay. So if I understand you correctly, there is some buildup in there as well. It's not strictly pricing related. Of course, there is a price relation as well. Sorry, I've not mentioned yet, but yes, of course, raw material prices have increased, specifically virgin one, which is not affecting us so much. But of course, part of it is the raw material prices, even in the recycled materials, they went up. Yes, there is a percentage there. To be honest, I don't want to disclose that percentage to the call here. No, that's fair enough. That's very helpful in and of itself. Yeah. Thank you on that one. Let me also add to what Alex explained. You asked about the deleveraging. That process is ongoing. That's why I specifically mentioned that we manage our debt position. But of course, the leverage is a combination of the EBITDA and the net debt position. While we were not able to reduce the debt position by much, our leverage position improved quite a bit because we improved our EBITDA. We'll continue to focus on deleveraging and managing our net working capital is definitely an important lever there. Okay, great. That's helpful. If I can sneak in just one more real quick, I'll hand it over to the floor again. Regarding the U.S. RTP development, you mentioned there were some currency headwinds there that sort of distorted the overall performance. Then there was also something about some one-off effects maybe in the sales. Is there any way you could quantify those more specifically to give us a cleaner read on the actual results adjusted? Can you repeat the second point? The first one, yes, you are right. In dollars, our U.S. business was flat. The reported decline in translation, the euro strengthened around 6% between the two periods. This is an underlying adjusting for a revenue item in the prior year base. Yeah. Okay. Alex, I was curious if you would be willing to quantify what those effects were so we can get a cleaner read on the actual results when they are adjusted for those. Yeah. Ellis, let me jump in here. That was around $1 million where we had a positive headwind in 2025 that was not repeated in 2026. Okay. That is just from the FX then. Okay. All right. Well, good. Thank you very much. That was- I'll hop back in the queue and let someone else go. No, just to clarify, that was an accounting correction in 2025. Next to that, we also had headwinds from FX. Got you. Thank you. Once again, if you wish to ask a question, please press star one one on your telephone. We will take our next question, and the question comes from Luuk Van Beek from Degroof Petercam. Please go ahead. Your line is open. Yes, good morning. A couple of questions from my side. First of all, can you expand a bit on the mix improvements? You mentioned the CabCube that is driving more high-margin revenues. Do you have other products that also grow well with high margins? Also, can you indicate if there are still a lot of low-margin products that you are phasing out. The second question for now is on the cost savings, which are going very well. You indicated that you expect further cost savings to continue. Do you expect those to be sufficient to offset the cost inflation, or should we expect cost to move up with a lower percentage than inflation going forward? Hi, Luuk, thanks for the question. Let me— The mix effects, yes, we mentioned CabCubes. It also means that we utilize our low-pressure machines in a high percentage that contributes to the margins as well. There are more products that are more profitable that we have produced in H1 and also will continue to do in H2. There are more products to come in H2 that I wouldn't like to share here due to competition and competitivity reasons. Yes, we are constantly working on improving our margins and bringing more profitable products into our product mix. It's part of what you see in H1, and that's just an ongoing business. I am quite proud to say we do not have low-margin products in our portfolio. We stabilize that all the products that are produced have a certain margin. It differs from one to another. The answer is yes, there are more products than just CabCubes that contribute to that. The second question was regarding the cost measure. Luuk, we are in the SHIFT program already 18 months, and I think we have been very successful into stabilizing those costs to the percentage into the right size for our company. We don't have intentions to cut those costs more and more. We try to be more operationally effective and create more efficiency within our processes. There is no intention to have radical cost restructuring or things like this. I'm quite happy with where the costs are today. I think it's challenging enough in the environment we live in. With inflation, we have to maintain those percentages and those costs. To go further will probably halt our business. What we should do is be more effective, but this is an ongoing every time. Hope that answers the question. Yes, I have two follow-ups, if I may. One is on the U.S., where you sounded a bit more optimistic earlier this year. It looks like you are winning customers, but they are a bit reluctant to already place orders, basically. Is that indeed the case? Do you see a widening of your customer base that does not immediately translate into revenues, and can you indicate when you expect that to start? The second follow-up question is on the maintenance CapEx. You mentioned there is a shift from, say, the investments to the P&L. But if you look at the P&L, the increase is relatively modest compared to the savings you record in your cash flow statement. Is that level sustainable, or should we expect a different pattern going forward? Let me take the first part of the question, then Mark will answer the second. Regarding the U.S., we are in a transition period in the U.S. A new managing director has just started, and we have reinforced our sales or commercial team in the U.S. with two more people. We already see that there is a better outlook for the future. I would not like to say more about it. There is a lot of focus around the U.S. business. There are a lot of opportunities as we see them. But every change takes a bit of time. People need to get to know the business. I would not like to elaborate more on that. I will let Mark answer you on the CapEx. Yeah. Thank you, Alex. Thank you for your question, Luuk. I think an important message that we want to bring is that we are focusing our CapEx on growth, and we are more disciplined as regards to preemptive repair and maintenance expenditure. In our view, that is sustainable. We are currently investing below depreciation deliberately, and that was the case since the SHIFT program started. Our asset base was built for higher volumes, and we try to fill that now with a better mix. Foreseeing additional investments in machines. Okay, that is clear. That's it for now. Thank you. Thank you, Luuk. Thank you. We will take our next question. The next question comes from the line of Usama Tariq from ABN AMRO-ODDO BHF. Please go ahead. Your line is open. Hi. Good morning, team. Thank you for the opportunity. I have two small add-on questions. Firstly, related to the dividend, could you please kindly remind me, is from next year the dividend payment again on, or how is the structure going to be going forward? I believe this year there is a hold on it. My second question would be more in general, with regards to new product development. I believe last update was with regards to the Tosca, and Cabka launch of a new circular pallet. Has there been new launches, with regards to new product? If you could just elaborate on that front, that would be really nice. Thank you. Thank you, Usama. Let me take both questions up. Dividends, I think it's a little bit premature for us to speak about it. I would like to see our results come in line with our expectations by the end of the year. We will make that decision together with the board, I guess towards the end of the year when we will understand the full year results. It's always an open question if the results are good and it's part of the decision making. I'm sorry, cannot say at this moment of time. We want to see strong results by the end of 2026. On your question regarding product development, this is what we live and breathe every day. Yes, correct, we saw Tosca and cooperation with Tosca starting, and we also had a mutual press conference in October. There are more projects like this in the pipeline. I hope in November, in our commercial market update, we can reveal more of those. This is something we constantly do. This is our customer development program. I cannot share more details, sorry, Usama, because it's just very sensitive from a competition standpoint. Thank you. That would be all. Thank you. We will take our next question. Your next question comes from the line of Luuk Van Beek from Degroof Petercam. Please go ahead. Your line is open. Yes. I have a couple of further follow-on questions. One is on the widening gap between the virgin materials and the recycled materials. Do you see that that leads to more competition for the raw material, so the plastic waste? Does it impact your tipping fees? Secondly, can you give a rough indication of the revenue growth split by price and volume in H1? Finally, you mentioned that the PPWR has started yesterday. Customers have postponed preparing for that well, until now, I guess. Do you see that they are now starting to move now that it is really in effect? Well, let me start from the last question very simply. PPWR kicked in yesterday. Of course, there is a timeline to that. If we see immediately a commercial effect, people jumping on orders? No, unfortunately not. I think companies are in the process, preparing, executing. As I said, it helps us, but it is not something that we believe is going to affect massively H2, for example, or the coming even year. It is a progress. It is something that we do, and we support all our customers through the journey. To your first question regarding recycled materials and raw materials, we do not have any effect from the tipping fee standpoint. We do have slightly, people who are dependent on virgin products, they do postpone part of the decision-making due to the Gulf war. Products that are more recycled content. We have not seen a big effect due to the raw material pricing. There was a price increase. We were quite fair with our customers, when those raw materials went up, whether virgin or we went with pricing up. But when the prices went down, we went down. We were very open and we were very transparent. The second question, I think, Mark, if you can jump in and answer. Alex, that is on the pricing? Yeah. Price volume. Yeah. As Alex mentioned, we did change our pricing once we saw a significant impact on the material cost, but we also changed it back down. Actually, the timing of our price increase was at the start of May. The orders that were coming in in the first half of the year, they are not a significant part of the results yet. But there will be a little bit more effect from that in Q3. So on the half year results, there is a very limited effect from pricing. Okay. Can you give a rough indication of the price increases in May, how much it was? Yes. We actually did a price increase on material, where for the virgin materials, we had a more significant increase of around EUR 6 per ton or a little bit more actually. On the recycled materials, we had a much smaller increase. Actually the virgin material surcharges, we were able to reverse because the material cost had stabilized and had normalized. So we have still a small increase on the virgin material side, but no longer on the recycled material side, but no longer on the virgin material. Okay. Thank you. Thank you. There seems to be no further questions from the audio. I would like to hand back to the room for the webcast questions. Thank you. I'll read them out. We have a few questions that I see. Number one is, recyclers have reportedly been more competitive lately due to higher fossil virgin prices. Why doesn't that seem to apply to Cabka? Well, yes, we do see that relative advantage. Virgin polymer prices rose much more sharply than recycled grades. With 83% of our raw material intake coming from recycled material, Cabka was comparatively better insulated. There is an important distinction. We are not selling recycled resin. We sell reusable transport packaging, often through project tender-based or some customer decision. So even if the relative economics of recycled material improve, that doesn't translate immediately into higher orders. That's the main issue. In Q2, the broader uncertainty actually caused some customers to delay the investments because even if price increases are in the virgin material, they usually translate slightly later into recycled materials, so everyone was a bit more cautious. So the material advantage is there. The timing of when that translates into revenue is slightly different, and I hope that answers the question. Yes, we have one more question. Am I correct that you managed to hire a new CEO in the U.S. and a new chief commercial officer? Can you elaborate on their background? Yes, great question. So just one clarification first. In the U.S., we appointed a new managing director. She started on July 1st, and we have also strengthened the commercial organization and sales leadership. The profile of our new MD is deliberately more commercially oriented. She comes from a big business. We are in a turnaround phase there in the U.S., and what we need now is stronger customer proximity. This is why the new managing director was hired. She has better commercial execution and improved utilization of the business we are in from her past, and that's what we are looking for. The same logic applies to the additions on the commercial side we have done. We want people who can build the pipeline, convert those opportunities into growth, both in our core portfolio and customized solutions. So yes, we have added two more FTEs with a very strong commercial background to add. It is still early days, but we are encouraged by the direction, and we will give a more detailed update on U.S. at our capital market update in November. I think we'll have sufficient information by then. Yes, and they did start their employment. Sorry, that was another. I don't see any more questions coming from our webcast. Am I right? All right. With this, I would like to thank you all for joining in and listening in for our update. If there are no more further questions, we'll end up this session, and we're looking forward to share with you more information on our capital market update in November. Thank you. Back to the operator. This concludes today's conference call. Thank you for participating. You may now disconnect.