Good afternoon and good morning, ladies and gentlemen. My name is Mohammed Al-Joaid. On behalf of Riyad Capital, it's my pleasure to welcome you all to Almarai's second quarter, 2023 earnings call. At this point, I'd like to hand over the call to Mr. Mohammed Alkhaldi from Almarai's Investor Relations. Mohammed, please go ahead. Thank you, Mohammed. Welcome to Almarai Q2 Earnings Call. This is Mohammed Alkhaldi. I am here today with Almarai CFO, Danko Maras, and Ikram Ulhaque, the Head of Finance. First, I would like to thank Mohammed and the Riyad Capital for hosting and organizing our call today. As usual, I assume all of you have downloaded the earnings presentation. For those who haven't, please go to Almarai website, Investors Page, and you will find the document. Please, before we start today, please pay attention to the disclaimer on page two. Now, I will leave you with Danko to take us through the presentation. Danko? Thank you, Mohammed, good morning, good afternoon, and good evening to those of you who are listening in. I see we have about 60 participants. Let me go through the earnings presentation for you. As usual, on next page, please, we'll talk a little bit about market dynamics, the business performance and financial performance, and we'll leave some room for the questions and answers. I think the pages are going a little bit fast there. If you can go back to the dynamics, you can see from the slide a few of our new innovations, not disruptive ones, more brand extensions that you can see, but I strongly recommend the Marvello spreadable cheese you see there on the left side. It tastes well, and also some L'usine cake bars, choco, vanilla, strawberry, will do good in the afternoon if you take one or two. If we look at our market share development on page eight or page seven, my apologies. You can see that we continue to have strong development and maintaining our market shares in our respective categories. Not major movements in reality, with the exception of bakery. Sorry, on poultry, my apologies. On poultry, where you have seen a reflection of our increased production capacity also being reflected in the market share development. The fact that we are now producing more poultry, we are producing what we can, we are selling what we have, and that clearly has an effect in the market, which is great to see. We'll speak more about the brands as we go through the presentation later on. If we look at the snapshot of the Q2, the summary slide you see here, I think good to again highlight, I'm sure you're already aware, but the Ramadan impact that we have was giving us 13% growth in Q1, and if we normalize it for those 10 days that are in Q1 rather than in Q2, we have an underlying revenue growth of about 8%. The 4% you see there, SAR 182 million, is impacted by the Ramadan. The underlying one is about 8%. Our operating profit continues to increase slightly higher or a bit more higher than our revenue growth. That comes down to more stable global commodity costs. It's not that we are seeing significant declines like you might see on the Bloomberg screens. The reality is, with our high inventory levels, it takes a while for us to gradually see that coming down as we are having quite a lot of inventory at higher costs. We are seeing it coming down, and it's helping our operating profit. Our labor overheads and indirect are also well managed and disciplined, so the step up you see of 11% to SAR 719 million is a result of both a little bit of an ease of the pressure on commodity cost and good cost control. Our net income is just trickling down from the operating profit, with the exception of our increased interest costs, where the SAIBOR interest rate is affecting about half of our portfolio of debt. The other half is fixed, and the effective interest rate that we are seeing at the moment is about 5.2%. Working capital, a slight increase, if you can compare movement to movement. It's nothing alarming in that respect. We are selling more, and we are seeing some of the impacts for the fact that we are doing that at a higher cost. Our capital expenditure is increasing, if you just compare movement to movement. We are starting to see more spend in our announced poultry expansion plan, and even though they are still quite marginal, you will see that both on a half year basis and also going forward. It's a little bit of an alert to you that you will start seeing CapEx go up. It's still on single high digits compared to revenue. Our free cash flow is very good in the quarter, compared to last year. It's a little bit difficult to compare movements to movements. We are happy with the free cash flow that's generated with SAR 861 million. Let's talk about revenue a little bit and the composition of that in various forms. This is the type within revenue consisting of both positive volume and price. We continue to see positive development despite fairly ambitious price increases that we've done in the marketplace. We still have good development of volume and mix with 2% and 7%. Because of the Ramadan advancement, when we look at the underlying growth of 8%, the composition of that is really the 9% coming from price and volume. The other ones that you have there is an impact of our overseas farming, where we are exporting commodities, our alfalfa to China, which has taken a little bit of a halt. It doesn't really affect us in profitability. It's very low margin on commodities. I think we've mentioned that a few times, but it does have an impact on turnover. The reality is that it's actually accretive to the ratios if we're selling less. We're not too concerned about that in the context of our total revenue. The Ramadan advancement, as I said, is 4%, and what you will see now in the next coming charts are impacted by the Ramadan, so please keep that in mind. If we look at the country performance, we will look at this also on a full half-year basis, so you get a better idea without the distortion of Ramadan. Still good growth in KSA, Oman, UAE, Kuwait, and then you have the impact both in these countries, as in Jordan and Egypt, the implications of the Ramadan impact. If we look at it on a half-year basis, we only have Egypt in decline, and that's more due to the devaluation of the Egyptian Pound affecting us. The others are the overseas farming export that we do to China. If we look at it by category, very strong delivery. As I was mentioning on the market share for poultry, you see 16% growth in the quarter. In this chart, the most affected categories due to Ramadan is fresh dairy, long-life dairy, essentially. They are deflated because of this impact. Otherwise, those who are relatively unaffected as poultry, bakery, and to some extent, also juice. There we see good delivery on the respective category. Channel, on the next page. We continue to see good growth in our business-to-business channel food service. Yet again, impacted by Ramadan, but 23% growth in food service is very good. In, I think 2017, we had no food service business. Today, it's over SAR 3 billion, and it's growing significantly and continues to grow. That's a great thing to see in terms of our channel distribution. Modern trade, traditional trade being very high. You see, even though it's fairly benign growth in traditional trade, it is still quite a lot, given our proportional size in our portfolio. The export business is, as I said, the overseas farming. With that, it gives you a good flare a little bit for the revenue. If I go to the net income bridge, we are back to what we consider the underlying growth with 15%. The reported growth you see is 7%, with SAR 37 million. We take out the one-off items for which there are two. One is the Ramadan impact that we have with about SAR 72 million, SAR 73 million, and the residual is a benefit of the food security support that we were announcing before. In total, in the first half year, we have received about SAR 108 million on a one-time benefit. That is not gonna come back. The majority of it has come out. The residual effect on the one-off items in net income is smaller. It's only SAR 41 million. Without that food security support, it would have impacted our income statement with almost SAR 72 million. Another trend that we can start seeing also is a reflection of the contribution and volume mix and others of SAR 26 million. Net pricing, additional SAR 302 million. That will start to taper off more and more as we start seeing comparators already including the price increases that we did last year. The pro rata impact becomes more and more like for like. We have done some price increases, as you know, in the 1st of January, but we don't plan to make any material price increases going forward. The advantage and the difference that you start seeing is that the cost of goods sold is less of a cost driver than it has been in the past. We are seeing this ease that is coming through with commodity costs. This red bar and the cost drivers that we have is coming down, but not as fast, as I mentioned before, as you see on OTC markets or in Bloomberg, because we are buying forward, and it takes a while before we can get those benefits. Our operational cost, those SAR 25 million, are actually marketing expenses that we have to support our brands for the pricing. Funding is really the interest cost, and then the one-off items are the impacts that I talked about on the Ramadan and the food security support. That's the underlying delivery on the H2 of the year, and I'll let Ikram talk a little bit more about the detailing of the composition, to give you some more insights. Ikram? Thank you very much, Danko. Good afternoon, ladies and gentlemen. If I look at the three areas on the financial performance, the revenue, operating profit, and net income. I think we've discussed revenue in detail, and Danko went through by product, by country, by channel. That showed that revenue went up by 4% on reported basis. 8% on normalized basis. I think I'll focus more on operating profit and net income to give some more color to what we already talked about. Operating profit went up by 11%. There are two or three major reasons for this. The number one reason we're seeing the growth in operating profit, which is higher than the growth in revenue, the number one reason coming through is, of course, the tapering off of purchase prices of key dairy and feed commodities. As Danko talked about, it will take some time. It will take at least two or three quarters to reflect the full impact of the benefit to come through. That's what's reflecting in the growth in operating profit. The one part which is not visible is very strong cost control exhibited by Almarai. With the volume growth that we're seeing in the numbers between 2%-4%, as we talked before, Almarai has kept very tight cost controls, and we have not let this spiral out. This is helping us greatly to report an operating profit, which is running in excess of the revenue growth. Lastly, the net income, something which is affected by our funding cost curve. It is becoming more like for like for the next two or three quarters. As we phase into that discussion, the impact of SAIBOR is still showing up on our interest costs, and that's reducing the net income growth to a slightly lower level, but still very healthy 7% growth on the bottom line. With that, I will move more towards our segment reporting, which is on slide number 17. The comparison on Q2 is fairly difficult, mainly because of the Ramadan phasing, as Danko talked about. Let me talk about the key segments, and I will focus more in detail in the second half segment result performance. I will focus on the middle of the page, and I will talk more about the growth factors, which will help you understand the performance of each segment. If you look at dairy and juice, it grew by 1%, which is a remarkable performance given all the pressure we've seen by moving 10 days of Ramadan. Even with that impact, we were able to report a positive growth number, which is excellent to see. Of course, the net profit, it was pretty much in line with revenue, so it was very decent performance, even after considering the 10 days of Ramadan were moved out, which mainly impact our fresh category, which is mainly dairy and juice. Virtually flat or slightly positive numbers, but that's considering 10 days of Ramadan were moved out. Let me now move to bakery. 9% growth for the quarter and then 12% growth coming through in the net income. Bakery continues to go from strength to strength. The on-the-spot purchase, single serve, continues to have very strong contribution to the top line, and they're assisting greatly on the bottom line as it helps us leverage economies of scale in this category. The third point, which relates straight into the market share gain that Danko talked about, as we announced in Q1 2023, that we were targeting nearly 250 million birds, or let's say, close to 10%-11% more capacity. This is now starting to reflect in our volume as well as in our pricing. 15%, very decent growth for poultry, reflects the added capacity that we have on board, and we expect to have this growth for the rest of the year, mainly driven by capacity. Of course, the benefit on the top line is shown in the bottom line at an even greater level, which is at 31%. Again, that reflects back to normalcy profit ratio. You can see for the second quarter, the net income profit ratio for poultry was a very healthy 12% of net income. Let me now move to the first half presentation. With that, I would like to request Danko to take us through the key highlights of the first half, 2023. Danko, over to you. Thank you, Ikram. Here you forget about any Ramadan implications. The food security support is included in here. That's the only sort of anomaly in sort of the underlying performance. Revenue growth now, first half year, 8%, SAR 745 million, we're up to almost SAR 10 billion turnover in the first half of the year. Makes it fairly straightforward to extrapolate full year basis. I think operating profit growing 27%. Without the food security support, we would have grown 15% underlying. It's still very good. The SAR 1.5 billion you see in operating profit is yielding a good margin. I'll come back to that. The net income growing the same, you would expect that to grow a little bit less given that we have the interest costs coming up. In our comparators, we had not the full consolidation of our IDJ business, International Dairy and Juice, last year, but we are doing it today. Both Jordan and Egypt, despite their challenges on top line, are delivering profit. We're now consolidating that in, and that's offsetting part of the interest cost. With that, we also have a like-for-like development down in the net income level, and SAR 1.192 is our net income for the first six months. I'm not talking too much about working capital. It's the same trend. CapEx, you see a little bit more coming up compared to what you've seen in the past. That's the poultry reflection and the $1.1 billion free cash flow is a good indication, basically steaming out of better business performance, trickling down to the cash at the end, for which we are very happy. I said, I think the revenue, you see a nice sort of allocation of 6% price and 3% volume and mix. Happy to see both volume and mix growing in 2022 and also continuing now in 2023. The other share is entirely related to this export business in overseas farming to China. If we start looking at by country, a little bit of a different picture here is more relevant. You see strong growth in all countries, essentially, and the only one where you have an impact. Although Egypt is growing in underlying currency, it's not growing in SAR, a SAR 91 million impact there. The SAR 75 million you see there is the export business. Those two are the one that deflates the turnover, but they are still, and as I said before, delivering good profits. That becomes the 8%, as you see here. On categories, it's still very strong growth, and poultry. Poultry is in the lead with 25% growth, sorry, 22% growth, on about the 25% growth last year. We are very pleased to see SAR 300 million coming in through in poultry. Here, a little bit better picture on fresh dairy and long-life dairy still being a little bit impacted on long-life dairy for business performance issues, but we are confident that we will come in and essentially drive market share leading position in long-life dairy. Very good also for foods, bakery, fruit juice. We are pleased to see the delivery across our portfolio diversity, that they're all delivering both good growth and good margins, and Ikram will show that to you later on. Channel is the same, 22% that you saw in Q2. On food service, very strong growth continuing, as I mentioned before, but also good growth coming from traditional trade, modern trade, and others in exports. Good contribution, essentially, both from countries, categories, and channel. I would say the composition is also healthy to see both growth and volume and price. The net income bridge, the same trend here. Maybe start with the reported growth that you've seen, 27%. We are, of course, very pleased with the SAR 251 million, but we want to be transparent with the food security support that you see there on others. Our underlying growth is 15%, SAR 143 million, steaming out a positive contribution in volume mix, and then SAR 580 million of pricing, offset by SAR 430 million of cost of goods sold, which is this inflationary pressure we were referring to so many times. Starting to see that taper off a little bit as we go forward, and that's a good thing. Operational costs, the same. We are investing in marketing, but we're also having some cost increases due to diesel, et cetera, but not materially impacting us. We feel we have good control of operational costs, and the funding in others is the interest cost increase that we've seen. With that, maybe bring it down a little bit further, Ikram, so that they can see the segment profitability. Sure. I think on slide 26, ladies and gentlemen, I think Danko has talked in detail about it anyway. As Danko said, let me go straight to the results by segments, which are more of interest at the halfway mark. If you look at the key numbers, again, I will focus more in the middle of the page, let me go through numbers one by one. If you look at the revenue, which on the top of the page, on top of net profit margin by segments at the bottom of the page. Dairy and juice segment, the biggest segment for Almarai. It's growing at 6% on a like-to-like basis, which is a very decent growth, considering also the virtually most of the impact coming from Egypt, the evaluation is impacted in there. Almarai Group is still steaming ahead at 6%, which is very decent on the top line for dairy and juice. At the bottom line, the growth is at 19%. We are at a stage where we are having the benefit of strong cost control, more balanced commodity costs, this is helping us to achieve our net income, which is at SAR 791 million or at 12% of our revenues. We're coming back to our old normalcy, we'll talk more about it when Danko will touch on the return of the growth to the EBIT and EBITDA percentages later on in the presentation. Second is bakery growth at 9%. Very similar numbers that you've seen in Q2 as well. Very consistent performance for bakery. Again, at the bottom line, the growth in the profit is 20%. Again, I would like to focus more on the net income percentage. As a segment, bakery is giving us 14% net income, at the halfway mark, which is again, a very good result coming through after we saw the decline in this segment in the COVID years. Lastly, the major growth engine for Almarai, which is poultry, at the halfway mark and running at SAR 1.7 billion of net revenues. As you can extrapolate, we are looking very well to exceed SAR 3 billion for the full year, and the growth for the first half is 22%, driven mainly by the capacity expansion, which is becoming available. The net income growth was even more better, but that's driven again, this extra volume growth and is assisting us in the top line growth, and that's the reason the profitability growth is even more decent. The key part in our poultry is that we are generating SAR 237 million of net income, or the net income percentage at 14%, which is very healthy in the last few quarters. Let me now go through some of the other key trends before I'll pass on to Danko on our EBIT and EBITDA trend percentage. Working capital, as we talked about, we are back to normal. Given our current business model, we are very likely to be in the same range of 20%+ and - 1%. We will continue to exercise caution to make sure we bring it down, but sometimes as we add on safety stock, the ratio keeps on changing up and down. Please keep in mind, if you're doing any modeling on a working capital, 20% is what we're running at on a long-term basis. How is that affecting our capital investment? You would see that we were deleveraging our investments for the last three, four years, but as we go through further in the last one or two years. We are in a stable mode, and on top of it, we are starting to spend a bit more money, as Danko talked about on the poultry CapEx. We are now looking at CapEx at 9% of revenue. If you look at the right-hand side of the screen, expect that number to slightly go up in the H2 as well as we speed up the poultry investments. Free cash flow bridge, and that's a rolling 12 months, so it's coming back. It's a very good chart to talk about. Almarai, as an ongoing basis, generates nearly SAR 5 billion in operating cash flow, and you can see this on the big green bar and the working capital adjustments. Our OCF is very decent, SAR 5 billion coming on board. We are spending around SAR 2.3 billion on our fixed assets and our cows, and our free cash flow, therefore, is about SAR 2.6 billion, which includes a little bit of CapEx for the poultry as well. Our free cash flow is running between SAR 2.5 billion-SAR 3 billion on an ongoing basis. Where is this money going? It is going towards debt payments and interest payments, and that's where the SAR 1 billion is for. Half, if you see on the right-hand side of the chart, half of the SAR 1 billion is for interest payments, and half is for debt retirement. You look at the SAR 1 billion for dividends, and lastly, the SAR 0.3 billion is for the IDJ purchase that happened in Q1 2023. That's a very consistent cash flow bridge you've seen for the last few quarters, and expect that to continue in the future as well. Our free cash flow is coming back to normalcy. We're running between 18%-20%. Expect that number to come back towards that range in the next few quarters. With that said, I would like to request Jaakko to take us through our EBITDA and EBIT margins and how they're affecting the net debts. Over to you, Danko. I think just from. Thank you, Ikram. From a business point of view, I think our reflections of Almarai's strength in the market is evidenced through both revenue, bottom line, and cash flow. If we look at the net debt trend that has consistently reduced, its composition of two factors. One is obviously the debt level, the other one is the EBITDA, which is increasing significantly. Because of those are moving in the right direction, we're now down to 2.1x net debt-EBITDA ratio, for which we have given a benchmark indication that we should be somewhere around 2.5 x. The leverage continues to come down, which is very good for us, good for everyone. It gives us opportunity to do things that we believe can add additional value, and we feel very comfortable with our cash-generating capability and our debt portfolio. I'll talk a little bit more on that in a second. What's even more sort of pleasing to see is the question we received from you equity investors over time here, that when is it bottoming out? When is it actually going to improve the margins? As we wanted to preserve absolute profit delivery in very, very severe inflationary environment, we saw a decline in ratios from the 26% and 16% on EBITDA and EBIT down to 21%. What you're seeing now is a little bit of an upturn. These are rolling 12 months numbers that you see, so that EBITDA margin at 22%, is good, EBIT margin at 13% is good. What perhaps even more interesting is that if we just look at the first half year, our EBITDA margin is now at 24%, and our EBIT margin is 15%. Of course, we use the rolling 12 months to indicate the trend and avoid short-term disruptions. Somehow we are moving out slowly, gradually, but steadily, I would say, as our business strategy is delivering the results that we want. We are confident about also seeing our H2 of the year and also beginning of next year, that the ease of pressure is coming out. You're always exposed to geopolitical situations, so you know that better than we do in a way, when you look at the different categories and segments and industries, that if something happens in the world, we get exposed to it as well. Assuming things are the way they are today, we feel optimism about the future despite the pressure we are having on costs. The next page also is, I think, an interesting one. For those of you who are following Almarai, both from debt and equity, we went out to the market on Monday to contemplate a large international Sukuk, SAR 750 million, because if you look at the debt maturity profile here, there's fairly large component maturing in one year's time, about SAR 3.6 billion. We wanted to see if there was an interest in the market at the right price. We are very pleased today to be able to manage that. Within a day, our order book went up to about $ 5.8 billion, and we had to do some pretty tough allocations to come down to SAR 750 million. The pricing we received was a US Treasury bill, plus a spread of 145 points. From all of you more debt investors, I know the majority of you are not, but very pleased to see the trust we have in the international market. A very good distribution of international investors as well. This is promising for future launches, if we want to do so. We are landing very well into. settling this, it has been announced this morning that we are done, basically. What it does to our debt maturity profile is it takes away this liquidity or event risk that you have within the year completely, our debt maturity profile will now be over five years. Our strategy here is to ensure that we have approximately the capability to internally generate the cash that equates the amortizations that we have year by year. This profile looks for us very good because we're actually able, if something were to happen in the market, we don't need to borrow. We can actually repay from our internally generated cash. With that, I think I'll stop. I think next page is about dividend. I'm not going to talk about that. Nothing has changed. I think it's better to perhaps open up for questions and answers. Thank you, gentlemen, for the presentation. We'll now move to the Q&A session. If you'd like to ask a question, please use the raise hand button on your screen. As a reminder, please keep your questions to two at the most, because there are a lot of questions in line. We want to give everybody a chance to ask a question. We'll move to the first question, which is from Sultan Al-Sha'lan. Sultan, please go ahead. Please go ahead, Sultan. We cannot hear anything. We can't hear you, Sultan. Maybe we can take the next question, and we'll come back to Sultan later. We'll go to the next question, which is from Nada. Please go ahead, Nada. I have two questions. My 1st question is in. Can you please speak a little bit louder? It's difficult to hear you, Nada. Yeah, sorry. Perfect. Okay, now? Thank you. Yeah. I have two questions. The first question in terms of dairy market, I just want to understand the market size better. Can you share with us how much of your top line from the fresh dairy in Saudi Arabia contribute to your top line? Sorry. Yeah, I think you can see that on the segment reporting. It's about 60% of total turnover. If you can go to that slide, Ikram. Yeah, 60% of the fresh dairy is coming from Saudi Arabia. Saudi Arabia? Yeah. I think we talked about in total, I think it's slightly higher in Saudi Arabia. Maybe you have that number, Ikram? I just want to understand the market size in Saudi Arabia for fresh dairy. Fresh dairy, we have 65% market share in Saudi Arabia. Well, please feel free to go ahead, Ikram, if you want to. I think you're right. I mean, yeah, this gives away the market share in Laban and fresh milk and Zabadi as well, within Saudi. You're right. Actually. In Saudi Arabia. Yeah. Yeah. How much from your top line? Is it fresh dairy in Saudi Arabia? How much is it? This is my question. Is it possible to share? Look, it. Our annualized fresh dairy in Saudi should be close to SAR 5 billion. SAR 5 billion? Yep. Thanks. My 2nd question. You said, just you mentioned that dairy, sorry, not dairy, poultry. You said that the poultry segment didn't get impacted from Ramadan, and that's obviously, we can see it in quarterly results from the top line. I just want to understand the market situation when it comes to supply and demand. Is it that used to be the case? Dairy, sorry, poultry doesn't have a huge impact or did not get impacted from Ramadan season? I see the top line is flat, or there is something else. For example, imported poultry is higher, so we have higher supply. That's why we are not seeing poultry moving with the Ramadan season. Yeah, I, Nada, I think poultry for us, we can sell more if we can produce more. I think it relates to the fact that we have a strong brand in the market with ALYOUM, and also Al Khushai for that matter. The premium brand, ALYOUM, is really a product that our consumer wants to buy. The category is growing. I think on the top line, it was not flat. I don't know what you were referring to that, we were growing significantly in poultry in the first half year, and we continued to grow as the universe of poultry is fairly large. You have a lot of competition in the poultry category for sure. We know there are a lot of players. We differentiate ourselves by having... quality that you can trust, and we also have a broader brand for, how should I put it? Mass market on Algoshire. The reality is that, the restriction we had on top-line growth has not been because of a lack of demand. It had really been the capacity constraint. We used to be able to produce about 200 million birds, and I think we have announced a few times that we've done. Before the actual poultry expansion plan, we announced plans to expand that, production capacity to about 250 million birds. The poultry expansion plan on, the investment that we do will add it up to about 450 million birds. What you're seeing is a stepwise improvement from those 200 million-250 million birds that we are able to sell in the market today, and that will continue to come as you compare yourself to periods last year where we didn't have that capacity. I think, it's an interesting category because we feel there's still some fierce competition among all our colleagues out there in the market. There is room for everyone to play. The universe is very big because the category is also growing. We feel confident about our strategic choice of moving into poultry, to stay there, and become an indisputable leader in this segment. Even though we are growing in line with our ambition for the 450 million birds, there is also, as you know, a Saudi Vision 2030 to increase consumption of good proteins in the kingdom, and we are right on track with that. All in all, poultry for us is a very healthy segment that also generates, what I would say, very healthy margins. And we can do that because we believe we have the strong brand equity that ALYOUM represents to the consumer. Thank you very much. We'll move to the next question from Pratik Khandelwal. Pratik, please go ahead, Pratik. The first is, probably you would have answered it, but I got confused. Is there any other poultry. I mean, is there any further poultry expansion coming in 2023? That's the first question. The second is that, you know, we have seen that the Ukraine, Russia, bulk grain deal is sort of, not going the way we want it to. Let's say, we, you know, we are in a scenario where the corn and soya again, starts going up, even the other, agro commodities. Should we assume that, you know, it will be passed on to the customers as you have been doing it for the last one and a half years? Just wanted to know your thoughts on this. Thank you. Pratik, I think here on poultry, we don't have more capacity yet. Now we are moving into, let's say, the large scale investment plan of expanding to 450 million birds, that will take some time. To get to the run rate of the 250 million birds, we might be able to produce a little bit more. What you'll see is a growth on a comparative basis, but we're not able to produce more capacity until we have both farms and processing units in place. That's a journey that hopefully doesn't take too long, but these sort of things do take may between two years - 3 years before you have the full capacity in place. 250 million birds is our guidance on a full run rate, 12 months going forward, and you're seeing that. That's it for this, for this year. On corn and soy, it's interesting, and I think nobody really knows for sure what impacts the trade agreement that has been broken now between Russia and Ukraine, and the UN and Turkey, if it impacts the corn prices or not. I think it would be conservative for us to say that it could. At the same time, we see prices being down to not pre-COVID levels, but very close to. There are significant declines if you look at the forward curves for those. I just know by experience that that could very quickly change if geopolitical circumstances were to change, and then we will be impacted in the long run, if that is the case, just like we've been in 2022. Again, we don't buy a lot from Ukraine or Russia. It's the world market price that affects us. We don't have a supply dependency in that part of the world. It's more the availability in the traded markets for buying that. On alfalfa, we are more comfortable and that looks to be steadily coming down, but the concern I have would probably be more in the corn area than the soy area. Okay? Yeah. Thank you very much. Let's move on to Tahir Safiuddin. Tahir, please go ahead. for the call. Two questions from my side. I think, the first question is really on the margins. I mean, you know, you've increased your product prices. We're starting to see consistent margin improvement year-over-year when it comes to the gross and the EBIT level, Danko. I guess the question is, with the next couple of quarters, maybe you realizing the benefits of higher, lower commodity costs. I mean, how should we think about the margin profile? I mean, is it fair to assume that, you know, we go back to 17%-18% EBIT margin? If you wanna talk EBIT margins or maybe go back to the gross margin levels that we've seen, somewhere closer to 36%. You know, I just wanna understand what's the magnitude if, you know, the forward curves are indicating, you know, significant drop in commodity costs, and you've already increased your prices. I mean, how significant is the upside when it comes to operating margins, assuming everything else, you know, remains as is no geopolitics, events of any sort? This is my first question. Well, on that question, I think the answer I can give you, we don't give you an objective on EBITDA margin or EBIT margin. The reality is that it's all interlinked. You are absolutely right that we are seeing commodity costs coming down. I made a reference to the first half year. We're at 15% EBIT margin or 24% EBITDA margin. We should be there at ±1-2%. In that range, I think is a global benchmark for FMCG. I think we can become a little bit better. We have some insights because we are purchasing large quantities, so we know the pricing going forward. Given the size of Almarai, we also can see how we are dispatching our inventory at what average cost that will be for us. Yes, to the point that we see an ease on the pressure on cost. The dynamic and why it's interlinked is that pricing is not static either. We have to look at how to uphold that pricing and ensure that we also are competitive in the marketplace. There are many stakeholders, as you know, when it comes to pricing, to make sure that we can do so. We have every intent to retain that and restore our margin. We were faced with, I would say, a commodity cost plus structural cost increase of over SAR 3 billion in the last three years. That's an enormous amount of cost that came our way, that we have, in one way or another, passed to the consumer. You have to be mindful about the pricing, and maybe we'll do more promotional activities because pricing itself doesn't help us longer term, it's volume. We need to make sure we get that volume growth over time that is sustainable for our kind of business. If you ask me, am I giving guidance on margins? No. I think the levels you see in the first half year should hold, and they could potentially go up even 1% or 2% more. Whether we can hold that in the next five years, it's difficult to say. You come to this interlink between your top line and bottom line and how to optimize branded consumer goods in a market that has fairly strong purchasing power. The region is not as affected of inflation as rest of the world, and that is a benefit for us. We don't see a very, very strong recovery that you might see elsewhere in the world. The reality is that we have indirect inflation from suppliers in those regions, that also is impacting us. I think we can actually be cautiously optimistic about our ability to restore margins, but as you know, we don't give any firm commitments to that at this point. Okay. All right, now that's clear. I think just the second question. This is very clear. Thank you. Is on the long life dairy? I mean, you've been talking about potentially, you know, becoming a market leader in that space. We know your, you know, your direct competitor is there at number one, solid number one. You are actually, again, a number two player. Looking at the H1 revenue growth, -3%, I mean, is it market share losses? Is it maybe the overall market is shrinking? Because, you know, we've been seeing, and you've been talking about maybe substitution from fresh to long life. You know, price increases have happened across both categories. Maybe just a better clarity on, you know, what is driving really this decline, in that category, and how should we think about your strategy in long life dairy, maybe over the next two years? Well, to start with, I think of us aiming for number one market share position in long life dairy. That's unconditional on our end. Now, you saw a somewhat weak delivery on long life dairy if you look at the first half year. Although I don't like to do it, but a lot of it refers to Egypt, and a lot of our proportion of long life dairy is in Egypt, and that has been impacted by the business over there. If we strip that out, it is a question about gaining market share and positioning in GCC and in particular in KSA. There we have a strong, well-respected competitor, has done really well, but they steam out of long life dairy and UHT. We steam out of fresh dairy, and our residual product has been long life dairy. Now, things are changing. We see absolutely no reason not to aim for market leadership in a category that we feel belongs to us. Internally, our ambition is definitely to grow the segment, to grow it profitably. Also, thinking about it more longer term. We are not afraid of maybe affecting our profitability levels for the expense of market share over time. It's a big initiative on our end. We see no reason to be number two in this segment. We should be number one. Okay. All right, this is very clear. Thank you. You're welcome, Tahir. Thank you very much. Our next question is from Muhammad Usama Siddiqui. Please go ahead, Muhammad Usman Siddiqui. Hello, can you hear me? Yes, we can hear you. Yeah. I have just two questions. One is on the net income flow chart that you guys showed us. In the past two, three quarters, we used to see that the net pricing impact what used to be exactly equal to the negative impact that came from the commodity pricing piece. Now for the past one or two quarters, we are seeing that the positive impact from the pricing piece is higher than the negative impact from the commodity cost increase. Moving forward, as we move to the second half of this year, I don't think so there is a much of the positive impact that we could expect from the pricing, because most of the price impact that was done in the second half in the last year has now been covered. How can we see the trend as we go to the second half of this year? Is there any positive impact from pricing that is yet to come? I think you're answering your own question in a way, but I'm confirming it to you. we still have a tapering, as I call it. There are still pro rata effects as we did price increases throughout the year. you're absolutely right that you will see less and less of pricing coming through. I call it commodity pricing, and you will see more and more of the volume component being the composition of our growth. that in itself is, I would say, a given that we are expected and, you know, we are not planning to do more pricing. What you will see that is accretive to the margin that continues, for which we have some visibility because of our inventory level, is an ease on the cost of goods sold or the fact that you have the other component of the margin, easing more. That gives us a potential benefit for the future. If we can uphold the pricing levels as they are, it varies by category. Some categories are stable, others, where there's very tough competition and pressure on pricing, we have to sometimes do promotional activities. We get good volumes coming out of that. It might be that we have to do discounts and promotional activities where it's fierce competition. I would see those being more short term than long term. Over time, our positioning is firm, that we want to retain the pricing levels that we are having at the moment, because they effectively allow us to restore the profitability decline that we've had due to structural cost and commodity cost. It's still an unprecedented increase that we have in our income statement if we look at it over the last two years. That's why it's important for us to preserve our pricing position. Benefit comes through lower costs, if that makes sense to you. Yeah. Thank you very much. My next question is on the revenue growth part. I think most of it is coming from pricing and the 3%-4% is coming from volume and mix increase. How much of that volume increase is attributed to poultry and bakery, and how much is the volumetric growth is attributed to the fresh dairy segment? I think we have been a bit restrictive in providing individual details by categories, but clearly a lot of volume is coming through. First of all, in our line of business, to have 3%-4% or 5% growth on volume, I think is very good. We've had an accelerator on our top line because of significant pricing, for which we want at the cost. It's not strategic pricing. If you think about a price PM on the market, where you have premium pricing or mass market or low, low pricing, there are no strategic efforts to drive significant revenue growth through strategic pricing in that respect. It's more about making sure that it's accretive to our bottom line. For sure, you're in a fairly mature market when it comes to dairy, and juice, while we are taking a lot of share in poultry because of our capacity increase. The composition of price and volume in poultry is that I can tell you, is the highest that we have, both on volume and price. For the rest, I'm not sure that we are disclosing more indeed then. As we are seeing population growth, more experts coming in, so don't you think the impact of higher volume has to come in dairy as well? Yeah, I mean, dairy is a fairly benign, not because of GCC, but because of Egypt. There, I think this is sort of a distortion that, the risk is that we spend a little bit too much time talking about Egypt when it's such a residual component, so maybe we should look at disclosing a little bit more for you on GCC. We see scope for increases in, long life dairy in particular, also in dairy product, fresh dairy. Long life dairies, there's so much more we can do on volume there. Dairy food products, the same, ambition to grow on volume in that aspect. If you ask, the split, you can see that... for sure, you have a more mature market in, in dairy compared to the growth that we've seen in poultry, but also in bakery. You've seen a lot of good volume growth, which, in all fairness, is also a recovery from what I still see as post-pandemic knock-on effects that I kept talking about single serves. That segment was completely down to zero for a while when it was closed down here. We have a lot of products on single serves in bakery, also in dairy and juice, but in particular in dairy, that are now recovering very well. As tourism, population increases comes, the organization increases, also will the convenience moments and on the go, and the impulse trades are increasing, and that fits very well into the bakery segment on single serves. Which was not the case, if you look at it a year and a half ago, where it was more restricted. All right. All right. Thank you very much. Thank you. Thank you. Our next question comes from Mohammed Arif. Please go ahead, Mohammed. One-off expense in the second quarter revenue bridge. Can you please elaborate on the one-off expense that you've incurred? Are you meaning the revenue or the profit? In the profitability, in the quarterly net income bridge, not the. Okay. Not the yearly. There are two offsetting factors in here. One is the Ramadan impact, the 4% growth that you are not seeing in Q2 because they were reported in Q1. In Q1, we reported 13% revenue growth, of which 4% came from Q2 because of those 10 days. That profit, let me give you the exact numbers so that I'm not confusing anyone here, was SAR 76 million. We lost SAR 76 million in Q2 that we showed in Q1, that's the negative. An offset to that was approximately SAR 35 million of food security support that we have phased in line with our matching principle for dispatch of inventory to the income statement, just pure accounting. We had a benefit of SAR 35 million of a one-off allowance, you might say, that is not gonna come back. It's not a subsidy that we have for poultry and for alfalfa. The net between the two is SAR 41 million. If we would not have received this food security support and faced it, right, you would have seen a negative of SAR 76 million there. Did I explain that well enough for you? basically, sorry. You're saying that this is the net of these food security and the movement into the first quarter? Exactly. That's why we say take those out and look at the underlying growth of SAR 78 million. It's about 15% growth in the quarter. All right. My second question is related to the poultry capacity. What kind of CapExes are you expecting over the next two to three years? We have announced, and hopefully, you have been able to pick it up, about SAR 6.6 billion is what we're going to spend to increase capacity to 450 million birds. That's not gonna come in one go. Given that we're building up, buying land, building farms, and drilling the wells, and building the processing facilities, and all of that is going to be phased out. You can take the SAR 6.6 billion and essentially, to make it easy, just split it out by three, four years, and you will have the incremental spend over our replacement CapEx that we are having ongoing over the years. In total, SAR 6.6 billion, somewhere around SAR 2 billion-SAR 2.3 billion per year extra. You won't see it this year because we are in the beginning of the phase, but we will do so, hopping off, I would say you really see the spend coming through in 2024 onwards. You'll see a little bit more in the second half of the year, but to really pace it up, it's a significant investment, but it's also a significant number of poultry birds that we are going to produce. It's basically doubling our capacity. Finally, these, issuance that, was. Sorry, can I request we should restrict the questions to two per person. Oh, sorry about it. We got a lot of complaints last time from other investors, so yeah. All right. Apologies for that. No problem. That's okay. You're most welcome. As long as you buy our share, you can ask as many questions you want. Please go ahead. We'll have a few more minutes. I just wanted to understand the concept behind, because this is. I'm new to the, you know, this sector, this segment. I saw this issuance. Why this issuance and not debt? What is the underlying, you know, idea? You mean the international Sukuk? Yeah. It is debt. Essentially, it is securing our structural debt portfolio over time. We have entirely refinancing purposes. We launched the Sukuk today. We have a half a billion dollar Sukuk maturing in March 2024, which is part of this SAR 3.6 billion that Ikram is showing here. We're just refinancing it and making sure that we have a sensible debt maturity profile going forward, because SAR 3.6 billion is quite a lot, even for Almarai, and we want to have more even distribution of debt over time. That's why we made a 10-year Sukuk, so that the maturity will be in 10 years' time. That allows us to have a more balanced maturity profile. We also took advantage of an inverted yield curve. If you borrow today at SAIBOR, you, company like ourselves, it will cost us 6%-6.5%, and the all-in cost for us on the international Sukuk is 5.2%. You have an inverted yield curve, so that makes a lot of sense to us to do as well. Exactly. Thank you. Thank you so much. You're welcome. A few more questions we can take, Ikram. We don't have any more questions, and we've reached the end of. Okay. I'll hand it over again, Mohammed Alkhaldi, for any ending or final comments. Thank you, Mohammed. Please, if you have any questions, please contact the IR team. We will be more than happy to answer your questions. Thank you for participating in our call today. See you again in Q3 in this call. Thank you. Thank you very much, everyone, and have a good afternoon and a good holiday for those of you who have that ahead of you. Bye-bye.