Good afternoon. Welcome to Eurocash half year and second quarter financial results presentation. Magdalena Kupiec speaking. I'm the head of Investor Relations at Grupa Eurocash. Today with me, two board members. As always, Jacek Owczarek. Hello, everybody. Our CFO Group, and Pedro Martinho, Board Member. Good afternoon. We start with standard presentation of financial results. Jacek going to present us our statement for half year, and then we're going to move to special presentation about FMCG market forecast and some inspirations about it. Pedro gonna say this part. We're gonna move to Q&A. Gentlemen, the floor is yours. Thank you, Magda. Welcome officially on our half-year conference. Let me summarize briefly what was really highlights of the year. Generally speaking, we just finished the half-year, and as you know already as communicated before, that was the quarter, which was, generally speaking, in hands of discounters in a sense that based on all data available, the fact is that our addressable market was still under pressure, as we were mentioning before. However, we're seeing some pickup in bigger stores happening in the second half of Q2, especially in June, mostly in Eurocash Distribution. Still over the whole Q2, the small stores, so mainly clients of Cash & Carry, they were under negative trends. That's on the wholesale side. As a result, drop in the result in Cash & Carry was really fully compensated in other segments, like Distribution, which I mentioned before, tobacco business or Gastronomia. On the other hand, the big event of the year, of course, it's again, as we're mentioning to the market, before the closure of the stores. We decided to close 59 own stores of Delikatesy Centrum. I will familiarize you with the performance of the partnership stores and franchise stores versus own stores. You will see, as we were reporting before, the issue with the own stores. As a result, the annualized impact of this closure is, so the provision we provided for it's around PLN 80 million. Out of this PLN 80 million, around PLN 20 million is connected with the write-off of fixed assets. The rest of the amount is connected with the lease agreements, asset from the lease agreements, so impact of IFRS 16. Altogether, if you are reading our financial statement, you will find the number in the other operating costs. The economic impact of this write-off is that these stores were at annual basis selling around PLN 200 million. Annual EBITDA of the stores was around PLN 17 million, 17. Altogether, that's the annualized impact we are expecting for the future. The fact is that we are going to close all of these stores till year-end. Maybe one more factor worth to mention, due to fact that we're bearing the losses in segment of Retail, mostly in own stores of Delikatesy Centrum, we didn't provide it for any deferred tax asset this year. Those of you who are calculating our effective tax rate probably already spot that it's higher. Please note that, or maybe refer yourself to the cash flow statement. You will see that from the cash flow perspective, actually nothing is happening there. That's accounting movement between the current taxation and deferred taxation. Then the project, of course, the project is Frisco. We are continuing to enter into new cities. We can probably a little bit tell you in advance that next month we are entering another big city in Poland. The Frisco is going to be already in the four places. The growth rates are quite satisfactory. Year-on-year basis, we're growing more than 30%, like for the six months in comparison with last year, it's 22%. The future, I think it's in e-commerce, like we're discussing very many times with all of you. At the end, let me tell you that from the cash flow perspective, that was quite good quarter. We generated around PLN 100 million operational cash flow. Also, we paid dividend on 7th of July. The fact is that also it happened during, just after the quarter end. Even taking into all of this into consideration, we are at very secure and safe levels from the bank covenant perspective. Also maybe I should mention to you that this kind of the write-offs, like providing for the closure of the stores, it's taken out from the calculation of any bank covenants based on our agreement with the banks. Let's go maybe a few more words regarding the macroeconomy, of course. If you are following Polish market, the fact is that the economy was bouncing back quite strongly from the perspective of GDP growth and growth of retail sales, total retail sales, not food only. The inflation was around 5%. However, I would try to show you also the inflation in different categories in our addressable market, so 0 to 500 sq m stores. As I mentioned before, these six months is very in terms of discounters, so they were growing 6.5%. Except them, the rest of the market is flat or negative. With the hypermarkets constantly negative. Supermarkets are quite stable and our addressable market, as you can see on the top of the slide, on the right-hand side. The small stores, as I was mentioning, so again, clients of Cash & Carry, mostly they were suffering during this quarter with the negative trend of -5.5%. What's worth to mention, it is also at the bottom of the slide, it is different research agencies called CMR. If you are comparing number of average transactions in a week per month, year-on-year basis, you can see on the slides comparing June to June that the number of transactions was quite flat year-on-year and also quite flat in terms of the average basket. However, that was the first really month with this kind of the performance, as you can see, and also as we were discussing when releasing financial statements for Q1, that was not the case at the beginning of the year. July is still below the previous year in number of transactions. Also, if you ask us to comment shorter performance, the fact is that July is quite similar like June was. July was quite similar like June. The fact is that still the small stores are suffering and on the other hand, clients of ECD were growing quite nicely over July. If you are double-clicking this store 0 to 500 square meters, and then we have some inflation discussion here. You can see that the food inflation, it's quite meaningless, I would say, around 0. What's more important, it's on the next slide, as you know, we are presenting here the main categories. We are selling tobacco. It's mostly driven by excise tax or prices of the producer. I think it's less relevant. The alcohol is probably more interesting from your perspective. Also it's more interesting from our perspective because as you know, for example, beer, it's traditionally sold through Cash & Carry. As you can see, that's the flat market in beer over the year, although we have quite strong summer and comparable in terms of the temperature and weather with the last year. That's also a little bit signal and explains, I think, what was happening in Cash & Carry over the last quarter. The rest of the categories, except non-alcoholic beverages, which are driven mostly by the sugar tax, which was introduced at the beginning of the year, are quite flat and comparable with last year. Let's go to the wholesale market. Few other items. Number of franchises working with us on the wholesale side reached 14,700. It's growing quite steadily, as you can see, both on the side of the franchises cooperating with Eurocash Distribution, like also with ABC franchises cooperating directly with Cash & Carry. The very important factor which we are mentioning regularly on our calls is connected with eurocash.pl. Our effort to digitalize our relationship with the clients. Currently, we have almost 26,000 users. Around 36% of total sales is already done through this platform. As we are discussing with the release of Q1 results, we had here Tomek Polanski, who was explaining to you how it's working and from his perspective, how it's helping him to sell more to the same client base. From the results perspective, as I said, it's visible on the sales evolution side that Cash & Carry was negative because that's the size of the drop, and as I said, it's fully compensated by service in terms of the sales. From the perspective of economical result, it's much more ECD contributing to this offset and also Gastronomia. Last year, Gastronomia was fully closed, so of course, it was having some big losses, and right now, this year, it's the base effect that we are improving results on that side. The volume is not yet there. I think around 60%-70% volume came back to Gastronomia before COVID, but for sure, not fully. The Retail segment, that's the result for the full year. The partner stores were growing 3.7%. Franchise stores are negative, but please remember that we're reporting in Q1 negative trend in franchise stores, -4.4%. In fact, it means that second quarter was around zero. Of course, we have this concentrated problem of own stores, which we decided out of this 429 to close around 59. All of these numbers are for all stores. We are not recalculating here, something which is already after closures, but we will report it accordingly with the pace of the closures. Economically, the result in this segment is much weaker year-on-year, and as I said, mostly driven by Delikatesy Centrum own stores' performance. The project, as I said, around 200 increase year-on-year in total size. Mostly, the size was growing in Warsaw, so on our current and historical market, but also entry to Wrocław was quite successful. We entered end of 2020. Poznań is end of the Q2 quarter, the size here, it is quite slowly picking up as of now. As I said, you should expect for us to opening next warehouses, the next one actually in the next months. The second point, which usually we ask for, it is Duży Ben. Duży Ben like-for-like set up double digits, 13.3%. We reach 158 stores opened. The network, it's opening quite steadily, I would say. From that perspective, you can see that we are keeping quite similar investment year-on-year basis. Right now, the most of the investment is really devoted to Frisco. In summary, the group grew around 2% top line. Again, just to remind all of you, this 2%-3% growth of top line means that probably at the end, we'll increase our market share around 1% because we operate on quite stable market on the wholesale side. At the same time, due to underperformance of retail, the net margin is lower than last year, and result is lower than last year. From that perspective also, as we mentioned in our current reporting, we are expecting that still Q3 is going to be below last year for Delikatesy Centrum, and we are expecting some kind of the stable result year-on-year in Q4. Cash conversion, it's quite similar like in previous quarters. As I said, we delivered around PLN 100 million additional cash flow from operations. Net debt, as I said, for the calculation of net debt based on our agreements, we are not counting this PLN 80 million write-off, which is treated as a one-off. It's quite stable, as you can see, and the company is in secure position. That's all on my side. Of course, we can come back to any issue is of your interest during Q&A. Let me pass to Pedro. Thank you. This time, we decided to share with you a little bit on how we see the world and what we think is happening today that can impact our industry and Eurocash. Also to give you some insight about the way we are thinking and why we are doing certain investments and thinking that our business has a future when we identify the trends that we can see today that are being created and being developed all over the time. I would like to focus in four areas, two of them which relate to the consumer, the impact of COVID in the consumer, but also the impact of new generations coming to the marketplace and starting to build their own families. What this will impact commerce, grocery commerce in Poland. The third one relates to digital transformation that we can see and the kind of company that needs to be adapted to this transformation, how this company should be created and the different structure it needs to have from a traditional one. The fourth point, it's the technology and the effect of technology that we can see. Some of it, we think that it's hype. It's really not something that is important. Some of this, it has the potential to be quite interesting for the development of grocery business. If I start with COVID, there is no doubt that the COVID made a strong change in the way people shop and people react to the environment and behave. We are still not sure what of these things are stable and are here to stay, what of these things that are more imposed by the restrictions, but when the restrictions disappear, they will come back to previous habits. Uncertainty that people have about their jobs, about their qualifications, about all the situation, psychological also, of being uncertain about the future and its own health, made people be more risk-averse. Being risk-averse means that price is more important. We can see this clearly, and that is one of the reasons why discounts have grown under these last months. We have some doubts. Is this going to continue, or people on the other way will rebound into more joyful way of finally getting over the restrictions and starting to spend again? This is something that we'll be monitoring in the near future. There is no doubt that stronger price policies are important in this moment. The other thing that we can see is that stores have to evolve into providing customers with a one-stop shop. This is important because people want to spend less time shopping, and they want to go to fewer places than they were going before. They see shopping much more today as a place to go quickly, to get everything that they need, and to go home. We think that Delikatesy Centrum, for instance, is a format that's very well-prepared to cater to these increased needs. Obviously, smaller stores, really small stores that were being in Eurocash Cash & Carry, they have more problem with this. That is why also we see this effect on the last months. On the other side, we expect some rebound on this, starting now from September, since children will come back to school. In fact, we will see a coming back of more impulse buying. We also expect that people start more to travel between work and home. We can see that in Warsaw today with the traffic situation. It is possible that we come back to some spontaneity in the purchases, which, as we know, it's quite important for the kind of stores that we manage. Another trend that it was a little bit changed by COVID, it's about sustainability and about locality. We believe that this change is going to help strongly the stores that are local, because local started to be not only local products, but also buying locally and living and shopping around the place where people live. Taking care also, more importance about taking care about the place where I live. Not only the big themes of sustainability like global warming or other, poverty, but also what is happening in my neighborhood are important for people. This is a very big plus for local entrepreneurship. Another trend that we see, or a fact that is happening, is that new generations are entering the marketplace. People that are digital natives, people that imagine the world in a different way. Also interesting, what we see is that elder consumers are also changing, and they are more digital than they were before. COVID here helped a lot because people had the need to come online, to do more things online because they missed the social interaction that they had before. We can see that also suburbanization, which was a big effect on COVID, that people were trying to leave from big cities, from small apartments, going to the suburbs where they could have some more space to play, to be outside when there is restrictions. This is a factor that can help also smaller stores that are located in these new regions. Obviously, there is here a challenge, which is, these are new neighborhoods. We have to open stores there. Expansions is an important point to take advantage of this trend. What is really important is that convenience is a value for everyone, for seniors, for younger people, for people that are working, for kids that are at school. Convenience is a trend that is here to stay. We expect things to be delivered fast. We expect to make our purchase quickly. We don't want to spend too much time looking. We think that it's possible for everything to be really fast, simple. This is very important for the formats that we have, which generally they are more elastic than bigger ones, and they can adapt to the changing needs of the consumer and also to the location where the stores are. The fact is that a suburb of Warsaw, it's completely different from a mid-size town in Podlaskie, for instance. These changes which we see, we can also identify another trend, quite interesting, in fact, that will counteract the need for one-stop purchase. We have much more households of one person, and these are expected to grow over the next years, meaning that people probably will change from buying ingredients into buying meals, into buying solutions. They want these solutions to be near their home. We can see that the size of apartments is decreasing in Poland, which is something that no one predicted a few years ago, which is quite interesting. The reason why this is happening is that kitchens are being reduced, replaced by kitchenettes. People are not anymore cooking at home or in the new neighborhoods, let's say. Which is quite interesting for as convenience stores like Delikatesy Centrum, which can present food solutions, which can present meal solutions, and are located near people's homes, so that they can bring this to their houses quite conveniently. We also see that social responsibility, it's here to stay. It's interesting how it is developing. In fact, many people, especially young people, what they expect is to outsource their social responsibility. Meaning that they are not so much willing to do themselves certain acts, but they expect companies to do that for them, and they want with their pocket, with their money, to make this kind of decisions. "I will make purchases with companies that are more socially responsible." In fact, we have to do this job for them. On this aspect, local entrepreneurship is very interesting because entrepreneurship means that not only the CO2 footprint is less, because local products sourced locally, sold locally, means that we have less transport, means that we have less packaging, and that is one point. There is another big point, which is we create jobs in the local place, so we create profit in the local place. We buy from local producers, and there is a much more fair and equity distribution of wealth if we divide by several entrepreneurs instead of just one or two shareholders of big companies. This, I think it's an important message that relates with younger people that want to live in a more fairer world, a world that is more balanced, and they also want their locality, the place of their living to develop more. We think that these are things that we can explore in the future, and we can reinforce entrepreneurship as a social value and as a big focus of the social responsibility of small stores. On the other end, the third point that I would like to make is that a company that will survive and that will have success in this situation that we have today, which is very uncertain, it's changing all the time, it's full of ups and downs. Technology is disrupting in many situations from unexpected places, where you can get competitors every day coming from places where you were not expecting. It's a company that has to be hyper-resilient. This is against big companies. This is more a fact that is saying that small companies, entrepreneurial companies that are prepared to be more elastic, prepared to absorb shocks and take profit of them and adapt, they can be much more adapted to this situation. One example that we have clearly within Eurocash, it's the way our best franchisees are reacting to this situation. We have very interesting growth in the companies that are more willing to react, adapt, and to change to the existing situation that we have. We believe that, in fact, today, our model with much more decentralized decision, with much more smaller stores, even smaller warehouses, but located near people houses, that is more capable of changing the assortment, the pricing, the promotions, and everything that we do, works better than one model that is more focused on efficiency, on repetitive tasks, and expecting that the future will look like the past. There is a need here to have some slack, to have some capacity to be able to be more elastic. That is very important. Finally, technology, which we can see that there are many things happening. One is for sure that the future of retail, it's personalization, even hyper-personalization. I think that our customers, they understood that many years ago, and they established personal relationships with shoppers. Now what we are doing, for instance, like with Delikarta, is giving them tools for them to continue with this relationship. While in other retailers, this might come now and they don't have the enough experience to personalize relationships, and they do not have business models or operating models, rather, that enable for this personalization. We have completely prepared franchisees and small store owners. Personalization, they have made it for all their lives. What we give them now, it's new tools, how to do this, it's loyalty programs, it's mobile apps, it's different ways of knowing the customer, but they know how to implement these things. This is very interesting. Also, another interesting aspect is that we know that AI will become an important part of the business. We know that digital analytics and digital processes have the potential to reduce work, and increase productivity. This is great news for small stores, because if we look at what is the share of labor costs that we have against the ones of, for instance, discounters, it's obvious that a decrease in labor or increase in productivity made by digital technologies will have much bigger impact in small format than in discounts, because the weight of the costs is much bigger here. We see this as promising, and we see this as a way to go forward to make our customers even more competitive than what they are today. Everyone is talking about B2B marketplaces and how they are growing and are predicted to grow. We know that because for many years we have developed eurocash.pl, and we have a big business digital already. It is a fact that the B2B market digital in Poland is much bigger than the B2C. Which as we know, the leader is Frisco, but the fact is that it's not more than 1% of the retail grocery sales. While in B2B, it's much more than that. We still see a lot of potential in our B2B marketplace, in our B2B digital solutions with Hipera and other solutions in the development of eurocash.pl. We think that this is a trend also because our customers are becoming much more digital than they were before, and we see that we can derive value from the data, from analytics, and from providing them with great service. We think that we have that experience all over time since we developed eurocash.pl, and so we can learn faster than others. In terms of logistics, we think that there are very interesting trends, which go into the way of micro-fulfillment, which go in the way of having smaller warehouses that are near consumers, which in fact it's what we always believed. Our places, they are not so big as our competition. We believe that we should be near where people are. We are much more prepared for this trend, which is delivering fast to consumers, delivering fast to stores, be quick to respond, and this is something that we can see all over the world. Fortunately, technology is helping because the price of technology for these automated warehouses or other automated solutions, if not the full warehouse, at least part of the solutions is going down. We see this as a big opportunity also for Frisco, but not only, also for our wholesale business. These are opportunities that we can see clearly to be near customer to reduce costs, especially personal costs. There are other technologies which we think that they are more like hype. We really don't think it's the right moment yet for autonomous stores, for instance. We still believe that this is a market niche, maybe for big cities where there is traffic during 24 hours. Generally, that is not the case in Poland, in most of the cities where people live. We'll be watching all these trends very carefully, and we'll be monitoring if they develop into something that can be more sustainable as a business model, and then we will take our proper decisions. For sure, we will not go just for the technology for technology's sake, but we believe that some of these, they have the potential to disrupt and to really help our customers in their businesses, and in this case, we are there to help. One thing that is now very clear in the whole world is that there is a big opportunity in co-creation. There was industrial logic before, which meant that a company had to produce its products by itself. Today, it's not like that. Today, the value is in the partnerships. The ecosystems that we can create, the know-how, the innovation that you can get from others, even the platforms and the assets from others that you can put to your service. We really believe that as Eurocash, we are very prepared for this world because partnerships is what we do for 25 years. We understand partnerships, we understand franchising, we understand what is to cooperate between suppliers, franchisees, other entities, how to reach the consumer. The world as a partnership, it's something that is not strange for us. We really believe that we can derive value from the innovation that we can see today in several startups, in new ideas that are being formed, that this can help us, and our experience in M&A, in partnerships, can really help us in this new world. We think we are well-positioned for this. This is what I would like to share with you, a little bit of how we see the world, how we start to think, what drives our investments, and why we think that the market of small stores, of convenience, of proximity, but also the market for digital, for e-commerce, has a future, and why we think we are very well-positioned to take profit of these trends. Thank you. Thank you very much, Pedro. Now we can go to the Q&A session. Please enter your question in the place. You can see it on your screen, and then I will publish it. The first question comes from Adrian Burnicki from BDM. Unfortunately, he had some technical issues, and he sent me via SMS, so I will read right now. Yeah, the question for you, was the 2Q 2021 the worst quarter for Eurocash, and what about third quarter expectations? First of all, I think we have one isolated problem called own stores in reality, and also performance slightly of segment of Retail. Generally speaking, I don't think that it was very bad on the wholesale side. As you are covering us for quite a while, you know that sometimes one segment is going better, another one is going worse. This time, Cash & Carry is weaker, but on the other hand, we have strong rebound of distribution business. I would not count it as a structural weakness or structural change, rather than something which we are trying to show you here, based on the market trends, temporary phenomenon, which also Pedro was mentioning here. The fact is that on the retail side, as I said during my speech, the fact is that still we are expecting the Q3 is going to be below last year, and we want really to stabilize the picture here being stable year-on-year in Q4. I don't think that short-term, you should expect big changes here. On the wholesale side as you can see, we are keep growing something like around 3%-5% at EBITDA level, which I don't think is going to change in coming quarters. Okay. Next question about inflation impact on our basket. Could you comment, Jacek? Yeah. The fact is that you have some lag in inflation in our basket, and also please remember that also we are buying in different prices. Usually when we are comparing, and I think you do the same in the analyst world, the inflation between us and, for example, modern trades like Discounters segment, the fact is that our inflation is usually lower. There is some natural gap here, and I don't think that it's going to one-to-one to our growth. As you remember on our slides, and you have this presentation on our website, the inflation reported by GUS was around 4% or 5%, when in reality, in the segment of 0 to 500 sq meters store, it was much lower, around 1%, which I was presenting during the presentation. There is a gap, and there's no such a strong direct correlation. Maybe Pedro, you can add point here as well. Yes, we had a situation in the beginning of the year which was exceptional. Which was the increase of taxes for the sugar tax and also the tobacco one. Small volume vodka. Yeah, the small volume vodka. For now, that was one-off. Now it's going to stabilize, and we don't see a big inflationary pressures in the categories that are the most significant for our sales. Now, which are, like Jacek told, they are quite different from the ones of modern trade, and that is why this difference in mix provokes this difference in inflation. Thank you. Next question from two analysts, in fact. When you release the results of strategic options review? As we said, we are running this project and, of course, we're releasing the information to the market based on the development, so I don't have any new developments to tell here except the fact that the process is running. I can answer due time. Okay, thank you. Question from Tomasz, could you explain second consecutive quarter with negative like-for-like in Cash & Carry? As I was showing during the presentation, the impact, the smallest stores were decreasing. I can't remember right now exactly the number for the Q1, it was around 7%. Right now, it's a little bit slowed down to around 5%, if I'm recalling, 4%, 5%, if I'm recalling correctly. The fact is that unfortunately, you cannot, or you can go against the market trend only up to a certain point of time, especially in the small clients who are missing sales of impulse, which also Pedro was mentioning that the fact is that during pre-holiday, I would say, period, we are missing, and even during the holiday period, if you are not running the shop, which is seaside or in mountains, probably in the smaller or bigger cities, simply part of your regular consumers are actually out of the city. The fact is that you don't have here the traffic yet, and I think it's really proven in all of this data which we are having right now. Even as I said, we don't see the big change in July. It was exactly the same trend still in the small stores. Okay, next question about Kontigo. What are your plans regarding Kontigo? The chain is far below break-even point of 50 stores, and its development is not progressing. Yes. I think we discussed in one of the quarters Kontigo issue. The fact is that at the time when, during the first COVID wave, so probably it was quite long ago, so let me just come back to the starting point. The fact was that when the shopping malls were closed, our strategy before the COVID was really opening flagship store in the big shopping malls and prominent shopping malls, and after trying to go through online. What we announced during that time and what we reviewed as a strategy for Kontigo last year, and we are still keeping and trying to do it, is to shift sales to online channel from offline channel. In fact, Kontigo is decreasing offline and increasing in the online, so it's happening. From the perspective of big global numbers, this change is too slow. Generally speaking, the like-for-like in online are not yet satisfactory, I would say. On the other hand, also what we did, we closed unprofitable stores in the last six months. It's quite similar stage like in Delikatesy Centrum. What I would expect is really this shift, and maybe we can commit here with Magda that we'll try to split for you for the next quarter, how it goes both online and offline. Yes, exactly. Next question I think we already answered. How do you see like-for-like in cash-and-carry in coming quarters? Yeah. I can repeat myself. The next question, how did EBITDA look like in Cash & Carry alone in the second quarter 2021 and half year 2021? We do not publish such. No, we're not publishing forecast regarding 2020. It's below last year because as I said, it's compensated by other clients in different subsegments of wholesale. I even can't remember the number. The fact is that cash-and-carry is still quite profitable, more than PLN 100 million. It's lower, but I don't think it's very tragic situation. Okay. We've got no further questions right now. Guys, we are waiting for your questions on the chat. Okay. If we don't have any other questions, of course you know the email address and the telephone number for Magda, so we can take it offline or try to meet on the other occasions. Thank you for your time you spent with us. We're trying to have a little bit different discussion right now, not only about numbers, but as every quarter, to bring something new. In past we were discussing eurocash.pl, or we were discussing Frisco. I think also the trend, especially this post-COVID situation on the markets regarding what's going to happen with consumer, is probably of interest of all of us, and that's probably the topic we'll be able to follow in the coming quarters. If we don't have any other questions. We have one. We have one. The answer is quite short. Do you see possibility of further closures of retail stores? No. As of now, we closed some stores which are below the certain internal KPIs, and as we announced with Q1 results, we're doing this review for a while, from December last year. We don't have any other plans currently to do whatever with the next stores. Okay, no further questions. Thank you very much. Thank you very much also from my side. All the best. Thank you, gentlemen. If you have any further questions, please contact me via mail or via mobile phone. Thank you very much. Bye bye. Bye.