Barry Callebaut AG (BARN) Earnings Call Transcript & Summary

Good afternoon, everybody. thanks to the many of you who have joined us here in the room. And also, good afternoon or even good evening to those who have joined us online. My name is [ Christian Hansen ], and I'm the Head of Strategy at Barry Callebaut. It's really a pleasure to welcome you today to Barry Callebaut's Capital Markets Day and fiscal '22-'23 results announcement. Before I take you through the agenda, I have to do a little housekeeping. I'd like to remind you of the disclaimer on Page 2 around forward-looking statements and also remind that the event is being recorded. Following my introduction, I will invite Ben De Schryver on stage to provide the key takeaways of the fiscal '22-'23 results. Peter Feld will then join on stage to deliver the Capital Markets Day presentation and share more of the path to sustainable, profitable growth, higher cash flow generation and shareholder value creation going forward. That presentation will take around 90 minutes. And before we go to Q&A, I'd like to invite all of you to step outside for a 15- to 20-minute coffee and, of course, chocolate break. And then we'll come back in for Q&A before breaking to a reception, for which we hope all of you in the room can attend to give you a chance really to interact with some of the other BC leaders that we have in the audience. So let's get into it. Ben, if you'd like to join me on stage.

Thank you, Christian. Good afternoon, everyone. It's great to see so many of you here in person. Today, we will go through a much shorter results presentation than you are normally used to in order to allow us more time to focus on the BC Next Level. You will have opportunities to ask questions during the Q&A session later. Let's now take a look at the key developments within our full year results. This year, we experienced challenges in the aftermath of the Wieze factory incident and a weaker customer demand in a high market -- raw material market environment. However, we still delivered profitability higher than in prior year. Sales volume recovered in the final quarter at 3.9%, which helped limit the overall decline for the full year to minus 1%. Operating profit of CHF 659.4 million increased by 12.2% in local currencies, as did our net profits for the year, up 9.6%, supported by the performance in our Global Cocoa division. This year, our free cash flow was challenged due to higher raw material prices, and we ended the year with the adjusted free cash flow of CHF 251.8 million. I will now talk through the key metrics in more detail. In this fiscal year, all regions saw challenges related to demand in the high raw material market price environment. In region EMEA, volume in the first half of the year declined, but we saw a recovery of over 3% growth in the second half, which resulted in a broadly flat performance year-on-year. Food manufacturers volume in EMEA continued to improve in the fourth quarter due to stronger performance in local accounts and private label, and ended the year flat. Gourmet & Specialties also recovered slightly in Q4. EBIT was strong, up almost 25% in local currencies compared to the prior year recurring figure. In region Americas, volume remained challenged throughout the year in an overall weak market, down minus 4.6%. The region was impacted by a number of factors, including a poor ice cream season and weakness in local brands in Americas. That performance was positive in Latin America. In region Asia Pacific, volumes declined minus 2%. Weaker volumes were mainly attributable to the food manufacturers, which continue to suffer from softer demand, particularly in China. Gourmet & Specialties volumes growth was slightly positive, thanks to strong sales of gourmet brands in markets like India, China and Indonesia. Global Cocoa saw a 2.4% increase in volume and had a strong increase of 22% in EBIT. Moving on now to our EBIT performance. This year, we delivered EBIT of CHF 659 million, an increase of 12% in local currencies. As you can see, currency translation had a negative effect of around CHF 42 million. Performance improved in comparison to the prior -- softer prior years, which, as you are most likely aware, was heavily impacted by the Wieze incidents in the final fiscal quarter, which led to lower volumes and the related recurring EBIT. In addition, the strong improvements in profitability in the Global Cocoa business contributed to the year-on-year increase. Our EBIT per tonne improved to CHF 289 per metric tonne, up over 13%. Let's now take a look at our free cash flow. This year, adjusted free cash flow decreased to CHF 251.8 million compared to CHF 358.5 million in the prior year. Before the adjustments for cocoa bean inventories recorded as readily marketable inventories, cash flow generation declined to CHF 113 million compared to a strong prior year figure of CHF 266.2 million. Free cash flow was heavily impacted by the increases in raw material prices, particularly in cocoa, which strongly affected our net working capital, as well as higher interest and income tax. Now this concludes our results overview, very short result overview, but you will have the opportunity to ask questions later on. Thank you for your time, and I'm pleased now to hand back to Peter to begin our Capital Markets Day. Thank you.

Thank you, Ben. Thank you for taking us through the '22-'23 numbers. And I really look forward already next week working with you on the North America growth opportunities as you're going into North America as our new President for the North America business. So with that, a good day to everybody here in the room. Good day to everybody online. Thank you very much for joining us on our Capital Markets presentation today, and thank you for giving me the opportunity to speak to you about our upcoming journey, be that here in this room, but also as I look forward to the many one-on-one meetings that we have already scheduled with you in Zurich, in Frankfurt, in London, as well as in New York over the next days. Barry Callebaut is a fantastic company, and we have ample opportunity to unlock the next level of growth and disproportionate market share growth for our business going into the future. We have the key elements that we need to really win in this game. The first one is we are operating in a great market, and I will take you through that later on. The second one is we already have a significant stronghold in the market space. We have a great position in the marketplace as we stand here today. And then thirdly, we now have the funding for our Next Level program established and set course already on really unlocking that next opportunity for us. Fourth, there is clearly headwinds for our customers, especially also through the increasing regulatory requirements that will drive disproportionate business to Barry Callebaut. So we have the mix in our hands to really take this business to unlock the next level of growth, and that's exactly what we're doing. I'm happy to say that we're well underway. We're starting into our Next Level program. And the Next Level program will build a stronger cash- and EBIT-generating machine for the future that will benefit our customers, but importantly, also our shareholders around the world. We've already started on this journey. After the announcement in September, we have already gone and established the executive leadership team that will be guiding us through the next decade. And we also have already met with the top 200 leaders around the world, be that from the commercial side all the way to the plant managers and the enabling functions, where we spent 3 days working in Warsaw and deploying our Next Level operating model and outlining to them what are those key changes that we will do and what are the things we will hold on to that made us so strong, as we are already having such a strong business today. So well underway with doing that. But in my mind, there's 3 or 4 things that are really important for you to remember is we are a strong business already today and have clear leadership positions in the market. The market will regain growth. We clearly have an opportunity now with the investments into Next Level, and we think that there is a disproportionate opportunity to grow market share as our customers' lives are getting more difficult and they look for the chocolate specialist to help them actually in the next decades going forward. So with that, I would like to take you through a few of my colleagues that are joining today. Ben, you've already seen. But I'm also pleased that Steven Retzlaff is here. Steven has built the #1 -- just maybe stand up or wave your hand quickly, that would be great -- has built the stronghold of our cocoa business, which is the #1 cocoa business in the world that is so complementary to the chocolate business that we have globally. But he also has established the Cocoa Leadership program, which drove significant profitability to the business and really delivered outstanding results with that. When you think about the next step, as Steven also in addition to cocoa has global accountability for sustainability, we do feel -- and I think we join in that belief or purpose -- we both believe that BC owes it to the society to unlock the future farming opportunity, and that's what we will be doing going forward. So I really look forward to doing that with Steven in the next steps. Vamsi Mohan Thati, Vamsi is our President for APAC and recently also added the accountability for Middle East and Africa. Vamsi has significant CPG operating experience across all of the key markets in APAC. He led complex turnarounds and acquisitions during the time working with Coca-Cola Company on very different projects, and recently has been the global leader for Coca-Cola in Greater China. Clemens Woehrle, who is heading up our global supply and development organization, Clemens and I met a long time ago in Beiersdorf, where Clemens has just completed an end-to-end supply chain transformation. So going from a very dispersed setup to an end-to-end supply chain design and organization, which is, frankly, exactly what we will be doing in Barry Callebaut going forward. So really glad to have Clemens here on board. After that, joined to WMF, where he gained additional experience next to the B2C world in a B2B environment with the professional coffee machine side. And then last but not least, Peter Vanneste, very happy that you're here for your first day today. So you will hear from him in half a year from now more. But I hope you understand that as this is the first day, I'm very happy that you're here joining us today. Peter obviously brings a wealth of experience running global as well as private companies, has been the CFO of Ontex before and then the CFO of JDE, which is very complementary to what we obviously do with our natural ingredients, cocoa, as he's been working so much on the coffee side. So really glad to have you as we go forward. So what you see is that we're adding to our leadership team and to the competencies we have inside Barry Callebaut, an important element of transformation expertise and expertise, how to win the game globally tomorrow. And with that, we are feeling very comfortable that we can take up the next journey, and we will deliver this next journey as we go into Next Level for BC. So with that, let me just summarize a few key messages here for you. We are about creating the best chocolate solutions. When I meet our customers, people are still confused and say, "Are you actually competing with me?" No, we're not. We're here as a service provider for the industry, and that's exactly what we reiterate with our customers as we meet them and as we make sure that they see us as their partner of choice in the supply chain and in the whole sustainability journey that they have to unlock for their consumers as we go forward. So we are creating the world's best chocolate solutions. We're already leading with global scale, deep capabilities, and we do have fantastic partnerships with our customers around the world, from the very big ones to the very small ones. We're operating in attractive markets, and I will be speaking to that later on. The chocolate market has increased over the past 50 years. There were disruptions in the market, but the market has continuously grown 2.5%, and we'll see that in a minute. And I want to tell you that as we are obviously seeing that we have such a strong footprint already in Barry Callebaut, we also recognized clear missteps that we had in the company, and we are recognizing the opportunities where we can improve as we go forward into this next life cycle of Barry Callebaut, then talk to a few things of that. And it was, for us, a wake-up call, what happened last year, and I think a great opportunity that also led to the creation of the Next Level program. So we firmly believe that with Next Level in Barry Callebaut, we will unlock the next phase of sustainable profitable growth, creating value for our customers and creating value for our shareholders. Just as a reminder, and you've seen, hopefully, some of the products outside. And if you couldn't taste or try them yet after the lunch, you should try later in the break. I am -- continue to be surprised about the many solutions that our chefs are creating, and then on the other side, what we're creating on an industrial scale for our large customers. Barry Callebaut serves the entire customer segments, from the large FMCGs all the way to the little bakery in France. And that is incredibly robust when you think about the business model because, obviously, there will always be some markets that will be behind, and we have a great diversified customer segment where we actually can serve our customers in different ways. But then importantly, we deliver the solutions in chocolates across all of those customer segments that matter to them. And that goes from the very big industrial solutions where you literally talk about tanker trucks of liquid chocolates, all the way to the little declarations and inclusions that go into the ice cream or into a dessert at a restaurant. So it is an incredible stronghold that we have here already established that is unparalleled in the way of chocolate ingredients. Second element, the chocolate ingredient market provides significant opportunity for growth, and we are convinced and our research with the market intelligence firms that we have been working with clearly shows that the market will rebound back into growth. We think that we see 3% to 4% growth, topped by another percent on the value side through pricing and mix that is coming up. So very clearly, we see the market rebounding here. BC, let me say, only has 16% value share in that market. There is significant runway for us to go after, and that is what we will unlock. Already today, as I mentioned, we are a partner of choice to the global fast moving consumer goods due to the scale and the footprint we have with factories all the way from Chile to China. There's no other player in the world that has that comprehensive footprint today. Our relative market share is 3x to 4x bigger than the next follower in this industry. And we're leading across the global gourmet market, where we have various #1 positions, and our relative market share is 2x to 3x bigger than the next follower. What I'm personally most excited about, and I mentioned that earlier when I was speaking about Steven and the contribution that the Cocoa team has done over the past years, is this combined strength that we have with cocoa and chocolate. And for us, as sustainability becomes more and more important, that combined capability is fundamentally important to make sure we understand traceability and also, where expected, can go into segregation as we move into the future and really drive game-changing differentiation with the sustainability capabilities we have for Barry Callebaut. The third element that we actually have in our mix after the big FMCG opportunity, the gourmet market presence that we have and the cocoa -- actually the fourth one, the cocoa that we have is clearly the specialty solutions that we're offering to the market. And that is across the specialty chocolate solutions, be that in free-from versions like dairy-free or nut-free; the religious elements that we're providing to our customers on global scale; the sustainability aspects where we have traceability sustainable from origin or organic; nutrition with added nutritions and vegan products, and then the indulgence side that you have seen probably outside with the Ruby solutions, but also our whole fruit and the second-generation proposals that we have. Vast portfolio of high value-generating specialty chocolate solutions that we offer at scale, combined with what I would call the [ formats ], which is the inclusions and the decorations part that are also sought after from our customers, be that the chocolate sprinklers, all the way to the chocolate inclusions in the market. So that is a portfolio that is enriching, and frankly, enhancing our margins, and it's a great business to operate in. As I said earlier to you, we are recognizing and acting decisively upon key challenges that we have seen over the last year. But -- and I had the discussion before in the room, is this an investment that is fixing the issues of the past? It's clearly not. It is setting sales for the next decade of growth. That's really what we're investing in. But what has happened with some of these missteps is that we started to think about, is BC set up well to really conquer the next 10, 15 years of market share growth and take a disproportionate share of that market growth as we go into the future? Our commitment to our customers has never wavered, but we have clearly recognized that the quality issues are not acceptable to our customers, the service levels is an opportunity for us to actually smoothen the way that we collaborate with customers and take it to the Next Level. And certainly, internal complexity, given the historic setup that we had in BC, is making life difficult for us as an organization to perform. We also did not respond fast enough to some of the challenges that our customers have seen in the post-COVID, high inflationary environment. We could have been more agile to fight against that. Ben will show in North America. That's maybe an area where we were a bit slow in reacting on our market strategies. We could have done things differently. And it got us thinking about, okay, how do we rewire the company to make sure that we really go aggressively after the commercial opportunities while being more agile to responding to some of those changes that our customers are seeing? But all in all, and I think that is the key message I want to leave with you, we have the right assets to take significant future market share with Barry Callebaut as we're going on to this next life cycle for our company. We have global leadership and global scale. We are leading in innovation. We have multichannel, multi-segment resilience. We are vertically integrated, as I was mentioning before, between chocolate and cocoa. And we're the #1 leader in chocolate and recognized as the #1 sustainability leader. So very strong position, and now with the investment program in Next Level, we can unlock that opportunity of disproportionate market share gains going into the future. So as you've seen this morning, we're delivering attractive profitable growth, and our long-term objective will be a low-single-digit plus to mid-single-digit volume growth and a mid-single-digit plus to high-single-digit EBIT growth. All in all, with a step function -- I will speak to that a little bit later as we see the synergies from our Next Level program come to the bottom line -- we have mentioned this morning that 75% will fall to the bottom line -- we think that we can embark into a 10% EBIT margin as we go forward. So how is this going to be unfolding over the next weeks? And in the introduction here outside, I spoke to a few people who said, "Well, this is like a 2-year -- we need to wait for a 2-year period." No, it's not. We're already working on it. We expect some of the synergies, some of the initial synergies to fall to the bottom line this fiscal year '23/'24. We think that there will be an acceleration in growth in '24/'25, combined with a significant drop to the bottom line of our EBIT contribution and coming from the synergies of our Next Level program in '24/'25. And then that will continue to go on in '25/'26, however, with a stronger EBIT margin contributing machine, as well as with a better cash generation going forward because we scale better, and we will be better able to drive cash generation as we go forward. So let me unpack that a little bit for you. We have, over the last week, spent significant time to analyze the market to be certain that it's worth investing into the company. And it clearly is. So the chocolate ingredient markets, and that's all the evidence we're getting, is reaccelerating. You see that already happening in some of the announcements of our customers in the last quarter, where they see a bit of rebounds, which is great. And it will be the beginning of a resettlement that we see. But it was interesting for me to see this 50-year curve. And you can see that over a 50-year period of time, 2.5% CAGR continuous growth. Through war times, through financial crisis, through energy crisis, chocolate consumption kept on going up. And Vamsi will speak later about the 2.5 billion consumers in APAC that today already can afford chocolate products, which will continue that growth going into the next 50 years. So we clearly see that the market will be getting back to growth. It's driven literally by 3 things: the growing global demand for chocolates; increasing customer reliance on the established, large outsourcing partners; and increasing consumer demand for products that are good for you and the planet. And that's exactly where we come in. So we see this market grow 3% to 4% in volume, plus another percent point in actually value growth and mix. So you ask yourself the question, where is this coming from? Well, first, the underlying market growth is supported by changing consumer behaviors. The share of consumers who snack has increased by 8% points. The average number of snack per day has increased by 6% points. The chocolate is increasingly -- and that is, of course, obviously important for Barry Callebaut -- chocolate is increasingly the snack of choice, up 5% points. So the chocolate is tracking on an increasing share of the growing consumer markets. Second, chocolate is increasingly an application of choice. And you can see that across the different product categories that we're showing you, sweets, cakes, pastries, breakfast cereal, ice cream, cereals and energy bars. And you see that various customers are actually creating new products that actually contain chocolate products. We have a few examples here on the screen. On average, you see that sweets and biscuits, cakes, breakfast cereals all up 6%, 7% in ice cream, 14% in cereals and energy bars. That's great news for us. And as I mentioned before, we have a clear underlying growth opportunity in front of us, and Vamsi will speak to that later in the APAC section, where we have today already 2.5 billion consumers that can afford chocolate products. They may be small. They may be at kiosks in India or other places. But there's people there that can afford those products and it will continue to drive, with the growing middle class, consumption for chocolate in those areas. And it's also exciting to see that while it is low, there is increased consumption per capita in those markets. So that is also -- and you have seen that in some of the announcements of our customers, a clear strategic growth opportunity for our large CPG customers. We obviously want to be there helping them to expand into those markets. We do have the footprint in those markets, and that's what we are tacking. We also see that there is new entrants that are growing the category value. I hope that you've tried a few outside with Tony's and some other solutions that we have put outside. But our customers that are entering new into this industry face very difficult situations as they try to position their brands to new consumers in new countries, and at the same point in time, establish a complicated supply chain, and at the same point in time, deliver against the sustainability expectations. That is very difficult. And frankly, that is driving business to Barry Callebaut because they know that we, as a competent cocoa to chocolates integrated supply chain that is caring so much about sustainability, can really help them be successful with their new market entrants. Chocolate is clearly premiumizing. We see that, be it the vegan products, gluten-free, lower no-sugar solutions, the naturals are all up. And you can see that they command a 20% to 30% premium over the normal solutions. That is really good news for us. It's good news for our customers. And as I mapped out earlier, we have a breadth of opportunity here to take our specialty solutions to our customers. Now I had a lot of discussions with one of my predecessors where we discussed about innovation versus sustainability. For me, it's pretty clear. The battleground that we have in front of us is about sustainability. People care about it, regulatory bodies care about it. We need to do the right thing, and we've been doing that over the past decade. And for us, it is a clear mission to carry that forward. But it's great to see that 6 out of 10 consumers are actively seeking sustainable product solutions. They actually drive increased share of sustainable cocoa production, globally up 20% points. And a higher share of product launches, 2.6x up, that actually have a sustainability claim. And they come with a price premium, which is great, again, for us. We have to put effort into it. But on the other side, we will also be rewarded because consumers are actually paying 2x to 3x price premium for chocolate solutions that come from sustainably sourced products. So all in all, to sum this up, we clearly see that the market is getting back to growth. We see a 3% to 4% volume growth coming from increased outsourcing and important, an underlying demand growth, topped with another premiumization in value growth and mix. So what does that mean for us in Barry Callebaut? Well, we have already talked about growth opportunities over the past years. But I think with BC Next Level, we will have a very different way to unlock these opportunities, and that is what I will explain to you going forward. The slide that I share here to you is key for me to share with you so that you're clear about our ambition in the markets. But it is also important for our organization so that everybody in BC knows what we're fighting for. We, with deep outsourcing partnerships, aim to get 2 out of 3 volume deals for Barry Callebaut. In Gourmet, we want to double the underlying market growth in gourmet. In Specialties, the business I described before, we want to double the business of our core specialties business in Barry Callebaut. And then we use the term fair share for APAC, which basically means that we're behind our average share globally, and we need to get up to fair share also in APAC as we're tapping into this 2.5 billion consumer base in APAC. That will double the size of our business in APAC. Now the way that we want to unlock that is that we obviously carry on with the good work we've been doing in Barry Callebaut while we're creating an agile, tech-enabled organization to really unlock that future growth, combined with the sustainability getting better every day. So what does that mean, best and deeper outsourcing partnerships? Well, you may say we're already big in that sector today. We're actually not. When I met my -- the top customer CEOs, I was frankly surprised as I onboarded into Barry Callebaut, while we say we are the heart in the engine, it felt to me that actually here, we're not yet having a fair share of their supply chain when you think it through. And you can see on the right-hand side, we actually have a significant runway of opportunity to take more share of the supply chain of our large customers as we go forward. We do about short of 15% between cocoa and chocolate. And in some of those, as you can see, we don't have any business yet. So that is a clear opportunity for us as our customers are shifting into new territories, that we can actually take a bigger share in that outsourcing partnership opportunity for our customers. 2/3 of the deals, that's what we're aiming at. And we believe that we can unlock that probably today better than any time before. And I say that because of the complex regulations that our customers are facing. I've had discussions with some of my top CEOs on the customer side who say, "Peter, we've made significant commitments to the Street on sustainability. How can you help us deliver against those commitments that we've been making?" That is a fantastic question that I get from those CEOs. As the pressures are increasing with new entrants, with regulatory forces, it was exciting for me to see how fast they responded, invited me for a one-to-one meeting and asked and seeked help on how we can actually help as Barry Callebaut to unlock that opportunity. That's exactly where we want to be. And that's what we're fighting for. Now in working with our global FMCGs, we are creating value for them and we're creating value for us, and hence, we're creating value for our shareholders. There's clear opportunities in the partnerships to co-create innovation at scale, collaborate on productivity. As we are jointly discussing how we combine our supply chain and we create in BC a customer-driven supply network, we'll enable our sustainability commitments and localize our customer supply chains. With that, we're focusing on 4 things: best value for our customers, best service for our customers, best sustainability and best quality. That's the battlegrounds that we're going after. On the other side, it will create value for Barry Callebaut. We will see high return business leveraging the scale that we have in those large deals. It will drive durable recurring growth, support right to win across all market segments, and we'll unlock a platform for a full portfolio of innovative and sustainable offerings. With that, we're creating stickiness and relevance for our customers. We just had some discussions outside where people were saying, "Can people really walk away from Barry Callebaut?" Yes, they will do that if we're not delivering the best value, the best service, the best sustainability and the best food safety, but that is what we're fighting for and that's what we will do for our customers. And hence, we firmly believe that we have an opportunity to step up the stickiness and relevance with the industry leaders. We've done that already. And you can see the Tony's Chocolonely, which has gone through a phenomenal growth over the past 10 years, and Barry Callebaut has literally enabled that growth opportunity, up 73x versus the starting point in 2013. And we're very happy, and I'll share that later that we have already agreed on the next outsourcing agreement with Tony's as they go globally, especially into the U.S. Now the way that we will unlock our strategic partnerships is embedded in our Next Level program: closer to markets, simplify and digitize. So here it's closer to markets, have the right portfolio that really matters for our customers, and unlock the opportunity with an agile, tech-enabled organization. We need to start on the top-to-top. We have, in the first discussions that I had with my organization, clearly seen that we're having too many transactional discussions with the chief procurement officers of our customers. But they may not know where the CEO of our customers want to take the company. They may not know if they want to have cash investments going into confectionery or into another category in that big group that we're working with. And they do not know if the CEO wants to build more factories or maybe even divest a business segment. So for me and for us, it is fundamentally important that we have top-to-top engagements, that we understand what is the long-term strategy is 3 years out, 5 years out of our customers so we can tailor our solutions and our response in the right way to that customer. We have recently won a few large agreements that are fundamental, and it shows that even despite the missteps that we had with Wieze, we see that customers come back to Barry Callebaut, and we're very happy about that, but it also makes us think because we can't have that happen again. That's very obvious. But it is very nice to see that we could renew our agreements with Unilever, with Tony's, as I mentioned, with -- including the global expansion -- with Mars, as well as with Mondelez as we sit here. So it's great to see that we have 4 large trajectories. And I can tell you there's many more regional ones that we actually rewon back and that we expanded coming out of the Wieze incidents last year. Gourmet is literally the second chapter for us. So let me talk you through that. Again, here -- oh, the chart somehow doesn't show the graph. Gourmet market fundamentals are very attractive for us. We also see here 3% to 4% growth that we see in the market. It's driven by 3 things: premiumization, increased use of chocolate in end products and the growth of out-of-home consumption. It's a great opportunity for us as we're already #1 around many markets in the world. However, we're not #1 in all of the markets. And so there's a great opportunity to really catch up. And these are smaller markets, but importantly, also very big markets where we're not #1 yet. And that is where we will focus on. We obviously have just quantified here where we have #3 or less market positions. There's a 120,000 metric tonne opportunity just going from the lower ranks to a #1 market position in those markets, great opportunity for us to grab. And that is combined with the aspect that we're not playing across all of the price tiers by respective markets. And that will be explained later. When we talk about the Next Level strategy going closer to the markets, we have to really understand where do we operate, are we having all the price tiers filled in the right way to be able to capture the #1 leading market positions in the future in the gourmet market. Again, the strategy is in place to unlock the market growth opportunity here, getting closer to markets. I will explain that later with the country cluster focus that we have. We will push the decision-making to the country cluster leaders to define their go-to-market strategy locally. Belgium is very different in the gourmet market versus Italy versus the Nordics versus Spain, very obvious. So we have to really understand that, and the local leaders have to define their go-to-market strategy, understand the competitive set in the market to drive growth for BC. We also look at our portfolio. Do we have the right portfolio that aspires to our customers? And do we have the right brand propositions that aspire to our customers? So we took time over the last 5 months to step back and think through how can we propose a portfolio that really matters to the local needs, that matters to our customers to unlock that growth opportunity. Last but not least, direct-to-customer. There's a great opportunity to unlock a digital opportunity as we can connect with the end customer rather than going only through distributors, great opportunity for us to unlock value and to unlock for especially the value creation that we do for the end customer rather than talking to distributors. Third element of our growth strategy is scaling up Specialties. It's great to see that across the FM market as well as the global gourmet market, we see that there's increasingly a need for specialty products. All of these specialty products are outgrowing the overall chocolate markets. They're sold at a premium and they're becoming important to brand differentiation for our customers. With that, we think we can double the size of our core Specialty business going into the future. Now we are the only company globally that has, on one side, the customer access from FM all the way to the little bakery around the corner, but then on top of that has the breadth of a portfolio of specialties on hand that can deliver to those markets on a global level. So for us, that is unmatched core specialty chocolate portfolio underpinned by the sustainability that we're delivering to our customers, but then also with the global scale, where we have manufacturing operations that can deliver those specialty products and formats to our customers. Great opportunity to co-create and to game-change innovations for our customers from the very big ones to the very small ones. And we're investing into that opportunity. One example is our new Brantford, Canada facility. You can see that. That is a recent shot as the factory is coming out of the ground. We're investing about CHF 100 million in a new factory, 50,000 metric tonnes specialty facility in Canada. Again, we're applying the strategy of the Next Level program: closer to markets, simplify and digitize our portfolio. So very clear that as we're trying to scale the size of the Specialty business, we have to think through our really enabling that cross- and upsell into the established accounts. And when we did the analysis just recently, you would be surprised to find that we're only incentivizing some of our sales teams at a very low level, single digit in their bonus for cross- and upselling the specialty portfolio into the large deals. That's obviously a massive opportunity. You have to have the right sales incentivation to ensure that we cross- and upselling into those accounts that we already have business with, just one example. And then Vamsi, I would like for you to come forward and maybe talk a bit about APAC and the opportunity that we have there.

Thank you, Peter. Peter spoke about doubling the size of our APAC business. Achieving that objective will get us to a share number which is in line with the share we enjoy in the rest of the world. Achieving the doubling goal will also get us to ensure that APAC plays its rightful and proportionate role for BC globally. I joined BC just 7 months ago. But I have worked all my career in Asia Pacific and enjoyed the dynamism and the growth possibilities within this region. Also learned over the years how digital application and how digital can be used to propel the growth ambitions of corporates in Asia Pacific. Peter spoke about this large consumer base. It's a very evident point. Everyone knows Asia Pacific has got a very large population. It's got also a large population which can afford chocolate products. But the problem is low per capita consumption. The per capita consumption of chocolates in Asia Pacific in the bigger emerging markets like India, China and Indonesia is only a fraction of what you see in Europe and in North America. Can you imagine when those populations start consuming chocolate at the consumption rates in the developed markets? You will double, triple, quadruple company sizes, not just for us, but most companies think of Asia Pacific that way. The interesting thing is, there's a very strong correlation to rising per capita income levels with chocolate consumption. And everyone knows that Asia per capita incomes are rising fast, the fastest in the world. And as that income levels grow, the per capita consumption of chocolates also grow. So there's a good tailwind there from a consumption perspective. And the proof of the pudding is that our customers are also prioritizing on APAC as a growth -- cluster growth markets. And we are a B2B company. We humbly follow our customers. And we stay behind them, gently supporting their growth aspirations. And if you do that well, we'll gain share. In Asia Pacific, we are #1, but that's because we aggregate the #2 positions across various countries and then that gets us to a mathematical number one. The relative market share that we enjoy in the rest of the world in other geographies and channels is not what we have in Asia Pacific. But that's clearly an area which we want to grow by focusing on a few important markets, which are mentioned on the chart. The other way we will try to gain share is to play in different price tiers in Asia Pacific. Take the gourmet market as an example. There's a premium segment, which is imported gourmet products from Europe with a Belgian claim, but there's a very large mainstream and mass premium segment in these markets, call it an affordable luxury, which grows very fast. Our traditional focus has been in the premium space, and we have not played in the mainstream space. And as we consolidate our brand portfolios, we have the brands to range versus different price tiers in the market and to grow every price tier in Asia Pacific. That's an opportunity for us. Chocolate is a very geographic business. You need to be closer to customers. Peter mentioned, one of the biggest principles for Next Level is being closer to the market and closer to customers. So take this example from India. We have already 2 factories in India. And we are now opening up, next year, a third factory in India, which will double the capacity of India. That will help us double the India business as well. So we are putting our money where our mouth is in terms of investment, investing behind manufacturing footprint. If you take a look at Asia Pacific, across the continent, both for cocoa and for chocolate, we are very close to our customers, in many places, right next to them or a short drive away. So as our customers grow their Asia Pacific business, we are right behind them, right next to them, supporting their growth aspiration. And to wrap it all up, again, staying true to BC Next Level principles, we want to be closer to the markets. I've given you the manufacturing example. But the other way we are trying to get closer to our customers is by adding more salespeople. You might be wondering what's different in this APAC plan versus before. This is one of the differences. We probably were not too good on investing behind sales resources in the past. But now, we are adding to sales resources, account managers. Global corporate accounts have a big presence in Asia Pacific. We already have account managers servicing them. But the new account managers we are hiring will go after the opportunities in the large local and regional key accounts, which are a significant segment in Asia Pacific. That's how we will get closer and break into the business which the large local and regional customers offer us. The other way we will try to get closer to our gourmet customers is to delayer a complicated distribution system. As we delayer our distribution system, we get to them faster and in a broader way in this vast geography. Peter spoke about portfolio. We have the portfolio to go across and service the needs of all the price tiers in the market. But I also want to talk to you about compound in Asia Pacific. There could be an impression that compound is low value. Asia Pacific needs compound for a few reasons. One is temperature, compound holds better. But also it affords affordable chocolate solutions. But that's not where the story ends. Compound is what? Lends our product to show up in -- across different products of our customers. Peter showed a chart which showed about -- talked about bakery, ice cream, cereals. Compound chocolate is what lends itself to this broad range of applications. It is because of compound that chocolate can show up in so many product formats. And that provides the customers a chance to differentiate their product versus their competitors. And that gives us the entry because we have deep capability in compound oils and fats. And to wrap it up, Asia Pacific is an extremely large geography. We can have manufacturing facilities across the geography, we can put in a lot of salespeople. But unless we deploy digital, we won't be extending BC's reach into this vast geography, using digital marketing to market to the chefs around Asia Pacific, using digital route to market to make sure that we are amplifying the reach provided by our salespeople, but also using the large and proliferating digital commerce channels in Asia Pacific. We also want to leverage digital internally to put digital in the hands of our account managers so that they can get pricing and chocolate solutions in front of the customers right there in the first meeting or the second meeting to provide quick service to customers. So net-net, Asia Pacific has got a lot of tailwinds. Our customers are focusing on Asia Pacific as a priority. There is an increasing push towards outsourcing. Peter explained those reasons well. So there's external tailwinds for us pushing towards Asia Pacific and the growth possibilities. But internally, we realize that we need to change a few things. Peter mentioned a few. I mentioned a few just now, which is about how we execute in Asia Pacific will be different this time. Thank you. Now Peter will speak about sustainability.

Thank you, Vamsi. I think -- what you can see is that we are -- be more focused on our growth priorities with the outsourcing partnerships, Gourmet 2.0, double down on the specialty and APAC. But we're changing a lot in how we actually address those opportunities, and I'll go to that as we unfold the opportunity with Next Level in the next chapter. Before I do that, I would like to say that none of those 4 growth priorities, in my mind, would really matter if we'll not continue to do the great work and actually accelerate forward the great work that the teams have done in Barry Callebaut and sustainability already. And over the past years, the team has done tremendous improvements, going from very early stage to where we are today to become a recognized leader in sustainability. We're deploying capabilities with global FMCGs through all the different programs and take that forward and really be an irreplaceable partner to our customers in this journey. In fact, they consider us as a thought leader for sustainability, and that's great. But most importantly, we are creating an impact to the society here. 270,000 cocoa farmers lifted out of poverty, 81% of farmers sourced from are empowered to protect children's rights. We have an 18% reduction in carbon intensity per tonne since 2016, and nearly half of all our products are fully sustainable products. So we are really unlocking and creating an impact to the society here. And that's what we ought to be doing, and that's what we're doing and we'll take forward. For us, this is getting better every day. This is a never-stopping story. We learn more about it. We see new opportunities in the different regions that we operate in. We understand better the challenges of the farming, growing population. And we find ways to better create an impact. And that's what we will continue doing going forward. So when you think about, we'll continue to advance end-to-end traceability as one of the key pillars in the Next Level program to make sure that people understand what is actually my chocolate that I have here on the table. Where is it coming from? It's something that is, I would say, normal in the pharmaceutical industry when you think about how they trace ingredients that go in the final product. And it ought to be normal in our industry, and that's what we're investing against. We will deliver on our sustainability targets that we have set ourselves and that we're working on with our customers. And we will -- and that is an important aspect, I mentioned that earlier, power, the future of sustainability where we know so much about it already. We have a massive opportunity to inspire modern cocoa farming practices. As you will know, we have a pilot farm in Ecuador with about 600 hectare. We have learned how to quadruple the yield in that farm compared to what is happening on our core sourcing countries in Western Africa. And so for us, that is a great opportunity and an obligation to do much more with that knowledge. Don't want to be farmers, but we can inspire modern farming, and you will hear more about that as we go forward with Steven. So all in all, in my mind, it is very clear. This is a battleground we will win. It's a clear priority for us that we embed in all of our game plans as we go forward, combine traceability with sustainability, deliver sustainability impact. Those 2 things have come together. We produce sustainability, we don't buy sustainability. And that's a key promise that we give to our customers and to ourselves and to the society that we have. Now technology will unlock that opportunity, and that's what we are convinced about and that's why we're investing into Next Level. So I've now taken you, and we've taken you with Vamsi through our growth priorities underpinned by sustainability. But when we look back, coming out of the Wieze incidents and going through last year, it was very clear that what got us here may not be good enough to unlock the full potential for Barry Callebaut. And so we were looking at our entire value chain to think through where can we improve, what are the things we need to propel forward and what are the things that maybe we need to stop doing. And that's what we've done with about 50 leaders around the world since May, leading up to the announcement of Next Level program in September. So we worked with them intensively on our portfolio, on our go-to-market strategy, on the way we operate internally, and it became very clear that we have an opportunity to set up, invest in new capabilities while holding on and propelling the existing good capabilities to actually take us on the next life cycle with Barry Callebaut. We're operating in a very attractive market. And then it's also great to see that we have great pockets of excellence. We do things really well in one place of the world. But because of the setup that we had with some of the regions and fully embedded organizations in the regions, we didn't scale that opportunity into another place. We may have done a great innovation in Brazil that never reached China. That's something that obviously we want to change as we establish our end-to-end supply and development organization. So we're creating, with the investment program Next Level, the platform to unlock the full potential of Barry Callebaut at a higher margin and cash contribution going forward. And as Vamsi was mentioning earlier, it's really simple about 2 things: getting closer to the markets, which is, in fact, where Barry Callebaut was coming from. Really close to the markets and the customers, food is local. But on the other side, simplify and digitize Barry Callebaut's machine, if you want, so our operating room. And we do that with various steps. So closer to markets and customers, strengthen our focus on the country cluster, elevate gourmet and specialties from start-ups to the general mix. What does that mean? That means that in any country cluster, we would like our general managers to actually offer all of the portfolio of Barry Callebaut to the various customers we have in this country clusters. That's what we mean with that. Food is local. The gourmet distribution strategy has got to be different in Poland versus in China versus in other places. That's why we take that out of a centralized setup that we had before into a very local setup. And on the other side, we want to scale faster the innovation as well as our costs. And hence, we have created our global supply and development organization under Clemens Woehrle to really take up that opportunity to scale cost better and scale innovation faster to our customers. And then on the other side, simplify and digitize BC. We will eliminate complexity that does not matter to our customers. That may be brands, that may be SKUs, that may be things that are not so close to our core chocolate and chocolate compound solutions that we really would like to operate in. We will reset our manufacturing footprint for best-in-class service and quality and establish digital platforms that boost speed to market and the connectivity with our customers. So let me unpack that a little bit more. So country clusters in the future will operate, and we did not have that before. We had it in some regions, but again, we did not scale it globally, and we know it actually creates an impact because food is so local. We will continue really with a focus on local excellence and ask our general managers by country cluster to develop their go-to-market strategy that serves them best to gain exponential market share growth in their respective countries across all of BC's solutions. But we're combining that with what we call a global commercial excellence organization. There's the scaling aspect of really understanding how to do [indiscernible] contracts, understanding how to put SLAs into service contracts with customers, how do we actually drive pricing at a global level in the right way, and how do we drive portfolio choices on a global level in the right way. So we're combining the local go-to-market with a commercial excellence unit, by the way, that is run by one of our legacy GMs, Paul Halliwell, who has just been leading over the past 4 to 5 years, I think, our Latin America business. He has been in Asia before and has run businesses in Europe before. So an expert from within the company that knows how to put best practice at work commercially, and that's what we will be doing there. But then we're combining it, to Vamsi's point, with modern marketing concepts. We need to move to lead marketing, which we're not applying in BC. It's something that's very standard in the B2B industry, and we'll obviously attack that space aggressively going forward. On Clemens' area, we will scale globally with the customer supply and development organization in order to truly optimize our capital asset allocation globally so that we really understand where to put capacity, where we built the respective solutions that we have to have by factory to really meet our customer needs. We will step change our service levels as we go into this and put a new planning organization in place globally, accelerate speed to market of customer-relevant innovation, and we literally do that in 2 streams, and I'll speak to that in a minute. But for us, this establishment on one side of going closer to markets on the commercial side, but scaling innovation faster to our customers globally is a massive opportunity that we will unlock with our global customer supply and development organization. Now already in May, we started to put technology to work to figure out where should we have capacity for the customers that we have in a certain region, which production lines should we have for those customers in a certain place, and we're obviously finding that we can optimize our manufacturing footprint on a global level. It's very obvious. We haven't done that in the past because we had regional setups where the regions would oversee the manufacturing sites. And as one example, we're shipping today from [ Lodz ] in Poland to Pakistan, right, which obviously is a great opportunity for us when you think about how we leverage global platform and manufacturing platforms and scale the assets that we have invested in certain places for a global business footprint. It will, of course, improve our safety and quality, but it will also allow us to really get going with end-to-end traceability that is so important for the sustainability expectations of our customers. So we are clear that we will see operational improvements that will be significant coming out of the global end-to-end customer supply and development organizations. We will double-digit improvements on our on-time and full delivery. We will double digit decreases on our cost per tonne. We see double-digit run rate CapEx reductions as we go to a better footprint and scale capital investments more effectively. And we see, through continuous improvement, mid-single-digit cost-out per annum actually come to the bottom line. Better scalability, better delivery, clearer accountabilities and fewer duplications. On the innovation side, we're thinking about 2 things. As I mentioned before, we invent great things in Brazil, but we'll never tell China that we've invented something great in Brazil. So there's a great opportunity by product segment to think about global product leadership that makes sure that what we have invented in one place comes to another place. And then on the other side, we need to be very close with what we will call our technical services organization to be, by region, available for our customers to apply chocolate, our chocolate, more effective on their production lines. And that's the 2 trajectories that we see with our global customer innovation organization as we scale innovation faster globally across the product segments, but we're local with our technical services teams to help our customers run our chocolate more effectively on their production lines. Technology, again, will play a huge role here. Today, and I'll speak to that later, we're lacking opportunity to visualize the capabilities we have across BC, and that obviously is an investment element in our Next Level investment program. In that, we'll focus on the portfolio that matter most for our customers. And as I mentioned today, we have a very vast historically-grown portfolio of SKUs and brands across BC, where some customers actually struggle to find the differentiation points. What is the price tier? What are the benefits? We have a great opportunity to make that more transparent to them. And that's what we're doing in 2 steps. First, in a bit of a house cleaning exercise where we just look at our portfolio and we let go of the portfolios and SKUs that do not matter to our customers today. But then more importantly, create a product life cycle model that allows us to develop those innovations at scale and make sure we drive the right portfolio for our customers by local market. Another element in our Next Level program will be our Global Business Services. So as we have -- and I want to maybe give that one example, Steven, we have great initiatives underway where, for example, we establish a great operating process in cocoa that then isn't scaled into chocolate. That doesn't make sense. If we know that there's a good process to be standardized and digitized and we have best practice process already in one place of BC, we should scale that. That's exactly the purpose behind Global Business Services. We will standardize and then automate the business processes that we know are best practices in one size -- in one part of the world and do that -- make that the global standard for BC globally. It will clearly open up much better service for our customers, but also smoothen the way how we operate inside of Barry Callebaut, and obviously take a ton of cost out. Last but not least, the BC Next Level program will not work if we don't work with our organization. We have a great company and great talent in our business. We really know how to make great chocolate. And I'm really excited to see that. But we need to become tech-enabled and agile. And I think that's the opportunity going forward, and that's a journey we'll take our organization on over the next years. There is technology at scale. All of our employees are using technology as private consumers, if you want so. We should put that at work as we go forward with the organization, and that's what we will be doing across the world. I must tell you, I don't think we have yet understood the opportunity that data management will reflect for Barry Callebaut, but we're going after that as we speak. So to really unlock our understanding from the beans and the farms all the way to the customer and the other way around is, in my mind, an untapped opportunity that we haven't even articulated to you today. But we think that, that is a massive opportunity for us to go after, and we will do that as we start into our Next Level program. So with that, let me open the next chapter for our discussion here. What is the financial journey that we're actually going into? So you've seen already the announcements this morning. And what I want to do is take you through this curve of development that you see on the right-hand side. So literally, as we're starting to embark into this fiscal year, as we've told you, we're already starting with the investments in our Next Level program to get closer to markets and simplify and digitize Barry Callebaut. We will already, in this fiscal year, see the first benefits falling to the bottom line of that activity. We will then go into '24/'25, where we see an acceleration of growth as we have now our leadership team in place. The country managers are in place. They put their organization at work as we go into a local customer management. And then really, we see that unlocking growth as we go into '24/'25, but more so see significant EBIT contribution from the Next Level synergy product falling through to the bottom line. That will carry on as we go into '25,'26, both with a higher growth rate, but importantly also there, still seeing contribution from that growth to the bottom line as we have created a better scalable engine, but on the other side, also having this onetime impact of the fall-through of our cost synergies. As we've explained this morning, 75% of our synergies, we're expecting to fall to the bottom line over that period so that we will see a significant step-up that takes us in the direction of a 10% EBIT margin business. That's the journey that we're on. As we mentioned to you during the transition period, our dividend per share will not be lower than the prior year. We're giving you guidance for next year because obviously, it's a bit depending on what are the things happening over the next years. Also with the social dialogue that we have already started with our European works council, obviously, very important as we unlock our manufacturing footprint and as we're getting ready to shift roles into the global shared service center and automate and digitize those opportunities. But for next year, we are guiding to a flat volume growth. And the underlying growth actually in there is net of actions taken part of the Next Level program. So we're already here anticipating a reduction of growth because we take SKUs out as we're streamlining our portfolio and see some slight underlying growth already coming into the business in this fiscal year. More importantly, we see bottom line impacts already coming through the activities in Next Level program falling to the bottom line this fiscal year. Next, we are on the EBIT side clearly also seeing that we have benefits coming there, and we are aiming to push forward to see some of these benefits that are, despite the headwinds of SKU rationalization, allowing us to already see a good contribution on EBIT for our Next Level program here. That is, excluding the onetime expenses that we have, obviously, with the Next Level program, we anticipate OpEx expenses of about CHF 110 million to CHF 130 million to go into this fiscal year, and then obviously, followed into '24 with further investments. And we think that on the CapEx side on our standard burn rate of CHF 280 million, we anticipate roughly CHF [ 90 million ] to CHF 210 million additional CapEx as we're resetting our factories to really make sure they are fit for quality, but also we are realigning our manufacturing following the network study that we have done. So with all of that post-transition, we will deliver attractive, profitable long-term growth objectives of low single-digit plus to mid-single-digits on the volume growth side and mid-single-digit plus to high single-digit on the EBIT side. So we're building a stronger cash-generating and EBIT contributing machine versus what we had before, but we also have this onetime step-up in the transition period. And that will lead us to the 10% margin ambition that we have set out for the company to go after as we're pushing forward over the next years here. Now to just give you that background again, the CHF 250 million of cost synergies represents about 15% of our cost, excluding raw materials. That's roughly the range that we're talking about. We will invest significantly in areas that matter most to our customers, but the cost savings will come from reduced cost to serve by streamlining our factories and improving our performance; second, by eliminating complexity in our supply chain; and then third, streamlining our SG&A, strongly leverage our global business service and automating and digitizing our workflows. That's the 3 areas where we see the cost savings actually coming through. 80% of those synergies, we would like to hardwire by March 2025. For me, that is very important, not just for you, for the financial interested community, but also for my organization. I think it is key that people see an end of this journey. They need to understand that we would like to get this work done to the largest degree by March 2025. The synergies will then roll into the bank later, but we need to make sure that we have announced the factory changes that we do, that we have found all the agreements with the European Works Councils, that we found all the necessary steps and capabilities so that we can really roll these savings in from there on. But we want to hardwire them to 80% by March 2025. We're investing CHF 500 million in this business. That is an unseen number that we are investing into Barry Callebaut's future. And again, as I had discussions outside in the room here, this is not to fix issues from the past. This is to set sales for the next life cycle of growth journey of Barry Callebaut. That's what we're investing against. We'll do that decisively in areas that are most important for our customers. And the things that you see here is about 290 in OpEx, and we will have net capital investments of 210 in areas that are most important, be that the IT programs that we push forward, reset of the manufacturing optimization and upgrades, digitizing BC and traceability and segmentation, so that the net investment is CHF 500 million as we go forward. So in that, we can see that we have [ OpEx ] expenses to CHF 90 million, net capital investment of CHF 500 million capital investments, partially offset by CHF 280 million in capital benefits. And what you can see there is that the majority of the CHF 280 million in capital benefits are driven by working capital improvements. As we're creating a better end-to-end supply chain, we have better visibility on our planning. That will obviously unlock a massive opportunity as we go forward. The operational step-up drives capital benefit significantly, and they come from 4 areas: improved planning, lower cost to serve, lower capital needs and driving continuous improvements. And that will support about CHF 280 million that we expect from better capital efficiency rolling into the [ bend ] with this onetime program that we're running with BC Next Level. So to wrap it up, we will go in a journey with you, and we will come back in April to give you an update on what we have achieved in the next 6 months. But we're already well underway. We have already put our executive leadership team in place. We've already deployed the Next Level program to our top 200 leaders globally. We're working now to announce our new organization to get life down to Level 3 by January 1, and we will then cascade further into '23/'24 to execute on our Next Level investment program and unlock the opportunity as we push into '24/'25, where we see return back to growth and significant EBIT contribution coming to the bottom line. That will carry on in '25/'26 as we will deliver on our long-term growth objectives. So I want to stop where I started. We have a clear opportunity for disproportional growth, to grab significant market share in the future in the chocolate ingredients markets. We have the right assets and global scale in Barry Callebaut. We are now funded with our Next Level program, and we now have also the leadership capabilities, as I was introducing the colleagues, to really build a more scalable and tech-enabled platform for Barry Callebaut for our customers, but also internally. And we see clear tailwinds for growth and drive stickiness and relevance for our customers, as many of our customers are suffering from some of the regulatory requirements that are put to them to unlock a chocolate ingredients opportunity. They do look for that global scale of Barry Callebaut to help them navigate through this more complex regulatory environment and actually drive disproportionate market share growth for us. So with that, thank you very much. We'll do a short break, as Christian was mentioning earlier. And very much looking forward to your questions, both from the room as well as online after that. Thank you. [Break]

I was speaking too much. So that's why I keep my water glass. I hope that's okay for you. Very happy to take questions from you here in the broader audience as we go forward, and my colleagues will also help to support me in that. We will coordinate the questions that we get from the people online -- that are online and also make sure that we have a fair share of participation from within the group and in the international audience. But maybe we start here in group -- in the room so that you can ask your question, whatever you have on your mind. Please, [ Jonathan ].

Just a question on the -- you're saying the market growth outlook is 4% to 5% if you include the 1 point of -- and then plus maybe 1 point of premiumization. So I'm just wondering why your guidance then is really for this low single plus, which seems would be lower than that.

I think the thing that we want to articulate there is that wherever the market goes, we always want to outgrow the market. That's really what we're saying here, right? BC, and that's a mission I give to my organization internally, is about value market share growth. This is what we are aiming at. In my mind, it's driven by 4 KPIs that you could think about it later on, and we need to develop that as we go into the next year, which is a Net Promoter Score to make sure that our customers are satisfied with the value they're getting, the service they're getting, sustainability and quality. And then it's obviously EBIT, it's obviously free cash flow and it's employee engagement. But that sort of feeds the value market share growth that we ought to be playing at. And that's what we're trying to do with the long-term objectives that we put out there.

And in terms of the market share gains, you're talking about disproportionate. Is that -- should we think 1 point? Should we think 0.5 point? What are you thinking? I'm sure you have an idea.

See, I think that we've given you a lot of information today on how we think about the business, right, where we're actually building a more effective and scalable engine with our Next Level investment program that will unlock growth but also disproportionate EBIT contribution and cash generation. That's really what we're playing at. We don't want to overdo that. We clearly have learned our lesson also that we have to guide you in a way that we rebuild trust. That's what we're trying to do here. But the objective that we have is outgrow the market growth.

Okay. And then just maybe a technical question on your guidance for this current year, FY '24. You're saying that EBIT will be flat, but you're saying that the first part of the cost savings will flow into that. And then you're saying there's a CHF 30 million headwind.

Correct. On a constant base, it will be flat. That's why we're saying that. And we're actually saying that we keep the EBIT flat despite the fact that we're taking out portfolio that we know is redundant. So with a 30% SKU reduction, we already have activated. As an example, last week, I think Clemens -- 800 SKUs or so that we took out of the portfolio. As I mentioned to some colleagues, we're advising our commercial teams about the other SKUs that are very close to what we have taken out so they can go back to the customer and resell that SKU, but we will have an impact and a timing impact. That's why we're saying we will see benefits coming in from Next Level, but we probably have to offset some of the SKU that has a timing impact we will see this fiscal year.

So just to confirm, constant currency, flat. So CHF 660 million if the currency stays the same. You're saying not, it's CHF 30 million worse. So we should be thinking of CHF 630 million.

Right. If you compare that on the constant currency, that's exactly right.

I just have a question around the outsourcing contracts. In the past, that's been a key driver for sentiment, and you're saying you want to win 2/3 of the ones that come to market. How many do you expect to come to market? Do you expect the growth opportunities to stay the same as they were previously or [indiscernible]?

No, I think they will accelerate. I firmly believe they will accelerate for the reasons that I mentioned. There's clear trends that make the life of our customers more complicated. Sustainability is one. But then our customers, and obviously, that matters by customer, have different investment objectives. They may have to reposition their brands to more healthy snacks. They may go from a wheat biscuit to a whole nut bar, still wrapped with chocolate, which is great for us, but they have to reposition their brands as they go forward. Some other customers reposition their entire portfolio. Think about Mars, right? They're putting significant investments into pet clinics and obviously have less to invest in the chocolate side. That's a great opportunity for us. So we see clearly that there's various reasons. As I mapped out earlier, the requirements on sustainability, repositioning their portfolio, new entrants are coming to market like Tony's, as we've given you, but there's many others that actually want to just position themselves as a consumer brand, but don't want to deal with the complexity of the supply chain on a global footprint where we can help. We literally think we are the tipping point that will drive disproportionate market share to us, if we get our Net Promoter Score things right fast, and that's what we're working on.

Okay. So I think in the past, you kind of guided to around 30,000 to 40,000 tonnes on average per year. You say accelerate past that?

Yes. We think that should be 50,000.

Two questions for me, please. I think the guidance refers this year to reducing some prices in Gourmet. Can you elaborate on why and where there's a need for that? And I guess more broadly on Gourmet, how do you balance the synergy opportunity against the potential risk of integrating it into the regional setup, given I imagine quite different sales force requirements and customer needs? That would be the first one. And just on the second one, just going back to the 2.5% end market growth. How confident are you that history can be a guide to the future here? Obviously, over the last 50 years, we've also had quite a big rise in obesity, diabetes. We're seeing GLP-1s as a response to that. So have you factored that into the [indiscernible]?

Yes, absolutely. I think we'll see a bit of a shift in the dynamics. So let me first speak to the latter part of your question. I think there's a shift in the dynamic, right? Vamsi was talking about the 2.5 billion emerging consumers in APAC that are already now increasing chocolate consumption and that are available to afford the chocolate solutions in a given country. That's great news for us. We now have to take that strength we already have in APAC and double down on it. That's very clearly one of the things. As I said before, there's a clear shift in how chocolate is consumed, more healthy versus the wheat-based bar that is inside of the product but still wrapped in chocolate. So we believe and we clearly see that in the market research, chocolate consumption and more use of chocolate products and solutions actually goes up. So that's helping our market to grow. On the question on Gourmet, we have literally run Gourmet more from a centralistic way, and that was good for the past, right? We had to get going on it. And frankly, we have established many #1 market positions around the world. But not as you've seen in other places where we are lagging behind, and we believe firmly that we need to have a better understanding of how we operate in those markets. Vamsi was talking about the different price tiers that we have to actually go after to unlock a #1 position. And we, on the other side, from the center, need to make sure that we create a portfolio that is very simple and that customers can understand and navigate in a very simple way, have a value brand that may be a local brand and then have a flagship brand that actually offers a good, better, best proposition. That's not existing today. It's very basic to do that. We do have the products that actually could cater for that, but we don't apply it and we don't put it to work yet. So it's a great upside opportunity for us as we go forward.

Could you maybe talk a bit more about the footprint rightsizing that you touched on, I guess, in terms of if there's any particular number of factories that you might be closing or capacity reductions, but then also about where you're thinking about growing ahead of the market? Are there new areas that you'll be growing your capacity?

So maybe let me explain a bit more background on why we are where we are. Up until the announcement of Next Level, we literally had our chocolate business organized by 3 regions, as you will remember. They were literally fully integrated. So one region would just come out, I need a new product capacity somewhere and installed at capacity, not knowing that next door, literally, there's an opportunity to also service another region. So we clearly see with the network study that we have opportunities to optimize our footprint and actually better allocate our capital assets as we go forward. That is true for our current footprint as well as for any future expansion that we're doing. So it's important for us that we're not just having that as a one-off exercise, but we now have the software that will do that continuously. That's one thing. The second thing in there is that we really segregate in the new organizational model engineering and manufacturing. So we're running engineering globally and we run manufacturing globally. So we have one person under Clemens Woehrle that heads up all of engineering and all of the capital investments on a global level to make sure that we deploy CapEx to the biggest opportunity and the best growth opportunity for the company and for the shareholders in the future. And on the other side, we have one person that oversees all of the factories that we have across the network to make sure that we run them properly and that the engineers are building the right things for them to actually run it effectively. That whole dimension of creating checks and balances in the company is probably what we're thoroughly doing with the implementation of our new operating model, not just under the supply chain organization that Clemens is leading, but across the entire company. Did I answer all the questions or -- okay.

My first question is you seem to be -- or you reiterate your confidence in outperforming the market. I appreciate that. I see your points. But I mean that we have heard from Barry over the last, let's say, years. And at some point, it stopped, right? So there are reasons, maybe you can elaborate shortly on that, but also maybe a little bit on the fact on how long you expect that nonoutperformance you expect to continue and at what point you believe you have the setup to really accelerate and outperform the market again.

So first and foremost, we're already winning those deals. I've shown that to you. I think that was for me important. I remember when we had the discussion September 6, many of you were asking, are you reconnecting to outsourcing deals after the Wieze incident? We do. So I think that's the first evidence that customers are coming back and we have impact for our customers on a global level. That's the first thing. But the second thing is that we firmly believe that with our 5 regions that we have established and with the push into the country clusters, we get much closer also to the regional customers to unlock growth. Vamsi, maybe you speak about China and some of the discussions we had there about customers that we hadn't seen before? So...

Yes. Thank you. Obviously, global...

Can you take a mic? Because otherwise -- okay.

Is this working? Yes. So global customers have a large presence in Asia Pacific. But the regional local customers as a total, as an aggregate, are bigger actually in terms of opportunity. And they are also looking for outsourcing solutions. So the tailwinds Peter talks about, which are relevant for global customers, are also relevant for slightly different reasons to local and regional customers as well. That's in the food manufacturer space. There's another very interesting thing happening in some of these emerging markets, which is what I call the industrialization of gourmet. The image we have of gourmet being a chef and making up fine pastries and cakes is one thing. Yes, it is there. But in a market like China, for example, most gourmet customers, the foodservice channel has actually outsourced the manufacturing of their gourmet products to large kitchens. They've got like sizes that lines -- that run -- stretch into 200 meters. As gourmet gets industrialized, it plays into our space because we are an industrial manufacturer of chocolate. So not only is the benefit going to come from outsourcing deals from local and regional customers in the food manufacturing space, but it's also the industrialization of gourmet in a place like China primarily and also now increasingly India, which plays to our advantage.

Second question on APAC. You said you want to have a fair market share and that would doubling your current business. But as APAC, the whole market should also, I think, grow ahead of the rest of the world, probably it should translate in more than doubling your current business, right, because if you double the market share.

Again, we prefer to underpromise and overdeliver. So that's why we are where we are. I think maybe, Vamsi, speak to the top 3 growth markets and the top 3 developed markets.

So Asia Pacific, interestingly, has got some Europe inside Asia Pacific as well, if you take Australia, Japan and Korea. Well, the profit pools which is offered by Japan, Australia and New Zealand and Korea is as much as the profit pool generated by the emerging markets as well. So there is a revenue play, a value play and a volume play in Asia Pacific, which is a little more balanced. So therefore -- like if you look at Asia Pacific, the emerging variety, what you say is true. But there's also the European component in Asia Pacific, which has large per capita consumption, mature markets, profitable as well. So that's the balance. But again, like Peter mentioned, no one will be happier than us to reach that goal faster. But it's about doing the right things first and setting the platform and foundations.

Right now, we're staffing up. I think that's the first thing on the commercial side.

And maybe one third question, if I may. On the cocoa side of the business, I mean, we are now in the second harvest of -- with a deficit. And with El Niño coming in, the situation probably doesn't get easier. What I have the feeling, it is kind of -- it has become quite a tight market with increasing cocoa prices, speculation also probably driving the prices. And of course, that urges food manufacturer to increase price for the consumer even more. Now I think there are also structural reasons for that, right, with the whole yield situation in Western Africa with aging trees and so forth. Do you believe that the whole market and Barry does enough in order to offset those challenges in the future? Because I mean, that, in my view, clearly points a lot of headwinds to the overall consumption going forward if prices increase and increase.

Steven, do you want to say something to that?

Sure. Yes. Yes. So can you hear me?

Yes.

Okay. So first of all, I think that, yes, clearly, we've seen a significant price increase. We're at a very high level right now. High prices cure high prices over time, okay? And if you look at some of the large producers, there's a lot of potential actually for them to increase their production output. If you -- and Peter mentioned that the yields per hectare that you have in Cote d'Ivoire or in Ghana, those yields are a fraction of what the yields that you might have in a more industrialized farm. So as those higher prices kick in, those farmers have more money. They can invest more in their farms, and that tends to cure higher prices. The other thing is the effort in terms of the harvest is going to be greater. The last pods are going to be harvested as well. Now you also alluded to the fact that hedge funds play a role in this as well. So they have an influence on the price. But over time, we will see, I think, that the price correction will take place. Will the price go up first and then decline? Or will it be the other way around? That remains to be seen. But I think that what's important to note is that we are very well positioned on the ground. In the origin countries, we have our own market intelligence in terms of how crops are developing. This is not the first time we've seen a higher price. I've been with the company for 27 years, so it's not the first time. And the benefit that we have is our origin presence and our ability to flex our origin presence around the world.

What does a higher price mean for Barry in terms of profitability in Global Cocoa?

So I don't think you can draw a straight correlation. It's not a linear relationship between higher prices and profitability. You definitely cannot draw that correlation because as you have higher prices, obviously, it has an impact on the competitive landscape. And typically, higher prices benefit those that are financially stronger.

Which we are.

Which we are. Thank you, Peter.

Shall we go to the international audience for maybe a change and then we come back to the room?

Yes. We have a question here from Jörn from UBS. He has 3 questions. The first one is, would you please split the cost savings of CHF 250 million into headcount, procurement/reducing supply chain complexity and others?

So when you think about the savings that we will generate, right, I mean, we don't want to spell that out because, obviously, we're engaging in a social dialogue here with our employee representatives. We have already done that literally last week. Because -- we take that social dialogue very seriously as a company. We are setting sales to build the next life cycle for our business, and that's why we have this detailed discussion with our workers' council and the unions, especially in Western Europe, as we go into this. So that's why I'm asking you for a bit of leeway here. We've told you that 15% of the synergies -- that our synergies of CHF 250 million represent about CHF 250 million cost savings, which is ex the raw materials that is actually in our cost base. But as you can see, the savings are clearly coming from the SG&A where we take literally work that is currently handled in countries and in regional headquarters into shared service center and GBS on a 24/7 operation. The second thing is, as we discussed just with the footprint, obviously, coming from an optimized footprint and then a general reduction on some of the duplication that we had between the regions. So that is sort of where we're heading with our cost savings. What was the second question?

The second question is would you please give us a practical use case example of how the go-to-market strategy for a key customer will change.

Yes. So I think what matters most is when you think especially -- I mean, take Europe as an example. When I had my onboarding in France, people were literally trying to figure out who to bring to the table because we didn't have a general manager running France. Now France is a CHF 600 million revenue business for Barry Callebaut. That's a massive opportunity for us to have a general manager to run that business, and any other company would have a general manager run that business to be closer to customers and really understand how do you unlock the opportunities with your FM, the industrial customers, with the chains that Vamsi was talking about. I was just thinking about lack in coffee, for example, in China, right? Massive opportunity that probably we wouldn't think about from the headquarters, but it's a massive opportunity into the chain that has exploded over the past years. But back on France, we also have to think about our distributor strategy. We currently have 450 distributors that are going to France. That probably doesn't make sense. So there's a clear opportunity to focus on things that make sense on a local go-to-market strategy, and that's what we're expecting the general managers to do, to unlock the growth opportunity for our customers locally as well as scaling the opportunity globally.

And Jörn's last question is you talk about 10% EBIT margins and not EBIT per tonne anymore. Will the cost-plus model change somewhat towards a more service/value add?

No, I wouldn't say that. I wouldn't say that we're walking away from the cost-plus model that has served us very well. But as I mentioned earlier, we will speak about the Net Promoter Score more effective. We're in the B2B business. So we ought to be able to talk about our customers valuing the service they're getting from Barry Callebaut. And that is across the 4 dimensions I mentioned earlier, which is, are we creating value for them? Are we actually delivering the service that they want to have? Are we delivering the sustainability and the quality? It's the 4 things. Let me unpack value. When I talk about value, I think it is driven by 2 things. A fair price. We need to be cheaper than that our customers produce the products themselves. But we also want to leverage our scale benefits that we have as a company that has that footprint internationally. When you think about service, it is about the service levels. That's classical, the on-time, in-full delivery, but it's also speed to market. Are we responding fast enough when we get a request to implement a dairy-free production opportunity in a given place? So in my mind, it will not change on the pricing model, but it is key for me that we thought much more about how we're delivering service to our customers because we are the world's best chocolate solution company. But we also have to make sure that we're delivering it in the right way to our customers to continue to see the growth coming to Barry Callebaut.

We'll take one now from Andreas von Arx from Baader-Helvea. 1/3 of your profitability is Gourmet & Specialties. That is mainly food service. Many restaurants move away from chocolate desserts to using more healthy and local ingredients. Do you not see a risk that the HoReCa market for chocolate products could decline in mature markets?

No, I mean, as we've seen in the research, and that was confirmed by the market intelligence that we've done, we clearly see that there's more consumption for chocolate products. But it needs to be the right way. I mean, I think in my mind, and I've said that before, we are right now assessing our portfolio of what do we actually have in our portfolio? What are the things that really matter for our customers that are healthy? Chocolate is healthy. We all know that. But on the other side, there's other ingredients that we probably shouldn't have like sugar decorations or other things. And that's certainly what we're assessing with the SKU pruning and the cleanup that we're currently going through.

We'll take one now from Jean-Philippe from Vontobel. So winning 2/3 of outsourced volume coming to the market, does that mean you're chasing volume rather than profitable volume that would create value?

No, we need to have the right balance, but we are convinced that -- and that's why we call it partnerships. We do not want to be transactional in our large partnership agreements with our customers. We need to create value for them in the way that we drive innovation, in the way that we cross and upsell the specialty solutions like the vegan products that can go into some of those large agreements and hence, enhance the deals that we actually have with our global customers. We firmly believe that we want to be the heart and the engine, as it was set from the very beginning in this company, for our industry. And with that, we think that we will create value for our customers, but we also deserve to see value come back to us, and that's what we can see as we're improving margins with all of the deals that we're taking forward. It is -- it goes without saying that a large-scale agreement will have a totally different profitability than a small gourmet project. I think that's very obvious.

Second question from Jean-Philippe. You gave a 10% margin ambition. Can you share with us what your ambition is for ROIC?

So we are currently assessing how we do that. As I said before, with the work we're doing on a footprint study, with the work we're doing on really driving our capital effectiveness going forward, we know that we will create a more effective machine. But we're somewhat lukewarm in committing to a ROIC at this point in time because we believe that there's an opportunity to unlock disproportional growth for the business. And as that is happening, we need to make sure that we also grab those opportunities when they come. So we will go through that as we go forward, as Peter is joining us, to have a more precise answer on that, but we don't want to be hold back with having such a healthy balance sheet to grab disproportionate market share in the industry.

And last one from Jean-Philippe. How do you make sure to embark all employees on your journey considering the past months' turmoil and the upcoming rightsizing? What incentives have you put in place?

Vamsi, do you want to talk about what you do in Asia? And then I will comment on globally.

I think first, the ELT, the executive leadership team, has been announced. And we are now moving to the next level of appointments around the ELT minus one. And as we progress through the organization designed through various phases, we are looping in and involving more and more people in the organization. Some parts of the organization has already better form like the customer supply development organization. The commercial structures are also rapidly coming into place. The country clusters and the salespeople we're going to additionally hire in a few places, they're also coming through. So I think as we pursue this journey in waves, we are going to get involved more and more people in the journey. And then the Warsaw meeting, which Peter referred to earlier, was extremely useful in engaging the hearts and minds of the top 150, 200 leaders. And they went back and they all communicated change management workshops and they're all communicating back to their teams. And then as this journey progresses, this will pick up more momentum.

And to build on that, let me just say -- because it's a great question. And I would say it's 50% of our journey. If we're not taking the company along on this journey, we will not succeed. And when I say the company, there's 9,500 blue-collar and the rest is white-collar. So we also have to make sure we cater for those different groups in the company in the right way. So we're doing that in a way that we also measure our organizational health with a survey that we will do already next month, which will be the first zero setting of where the morale is in the company, and we'll do that every quarter as we go forward. But we're obviously augmenting that with significant communication program, both from me globally. That goes through top-down discussions, but that also involves, for example, breakfast sessions with employees in any place that I visit, but it also goes with Vamsi going into -- where did you go last time?

Japan.

In Japan where you had a session there and you engaged with the teams there. It's fundamentally important that we need to take our organization on the journey, especially as we put technology at work. So as we see more and more digital solutions coming into the world, we obviously need to really make sure that the organization gets trained, that they appreciate that and take that forward. Maybe one last word on the blue-collar side. We have great pockets of success where our line operators really drive game-changing improvement projects. But they are unfortunately only pockets of success, and that should become the norm rather than having people for continuous improvement sitting in office trying to do improvements for production line. So there's a shared belief that Clemens and I have where we need to really put our line operators and empower those people because they know best about how to optimize the efficiency and the capacity utilization of the equipment that they operate.

And maybe one more here from the web. Would you please provide your perspective on the GLP-1 and other weight loss management drugs?

Yes. We are following that closely, that development. And I can just say, I mean, obviously, I have my personal opinion on it. But I do think that there's always ups and downs in the industry, and we will see how this will unfold. I was part when P&G launched olestra for Pringles potato snacks. That didn't work out at all. And we will see how the drug actually will evolve, and we will follow that closely. We believe that chocolate is an indulgent moment for our consumers that will stay here. And as we've seen the 2.5% growth of consumption on the CAGR over the past 50 years, we're convinced that, that will happen going forward. I can hardly see you because of the lamp there, the light. But...

I have a couple of questions. The first one is on the 10% margin target. I mean you mentioned you don't want to walk away from the cost-plus model. Gourmet is higher margins, so that can drive part of the mix. But is it enough to get you from 8% to kind of 10%?

Yes. So when you think about that, we say that 75% of our synergies will fall to the bottom line. That's obviously a significant amount of money, right? So when you then combine that with us building a better engine, right, so through technology, any business that comes additionally to the company will contribute stronger, both to the EBIT as well as to the cash generation of the company, we are pretty confident that we will actually deliver that. But there's obviously this onetime improvement that we see as we're optimizing our footprint and we go away from the regional setup that we had historically to streamline our organization globally while investing in the local country clusters to really unlock the growth opportunity.

And my second question is on the technology side. Can you give us examples of processes today that you think are very manual and how through technology you can [indiscernible]?

Yes, absolutely. So when -- I mean, I used to go to a customer meeting, like when I meet Mark Schneider at Nestlé, and I would look at my app at Salesforce and figure out who of my company has talked to Nestlé over the last week. We don't have that today. We're one of the largest -- of the oldest users of Salesforce, but we don't have adoption in the company. So there's a clear opportunity here to really leverage the technology we already have, but then also create technology, for example, for pricing, where we have a lot of manual processes underway in the company that should be, frankly, a lights out, one-touch solution. So with that, we believe that we have very practical things where we just take off-the-shelf technology and drive adoption in the company. But on the other side, we also believe that we haven't really understood yet the data opportunity we have in Barry Callebaut. Steven and his organization knows so much about beans, the origins, how the beans are aging as when they sit in the warehouse, what that actually means to the formulation that we are creating and how we then do innovation for our customers. And all the way from the customer side backwards, we are still surprised by finding out that the weather is bad and we can sell ice cream products, right? So there's obviously technology today to connect that. And so for us, as we're embarking on this journey to also unlock a data opportunity in BC, we think we haven't really understood yet what the upside opportunity and benefits will be. But we think it will be significant.

Maybe I could ask a question just on that 75% drop-through on the synergies. Could you give us a bit of color as to why you thought that was the right number as opposed to 65% or 85%? And then just the second one. Can you remind us, Russia, how that fits into the strategy from here and how big that is in the base?

Yes. So let me just speak to the last one right away. You know that we have a strategy on Russia where we continue to serve our customers that are there. We stop investing in the country, obviously. And let me actually say first and foremost, we denounce the war that is going on. This is completely unacceptable. And it's beyond where we are on this. But we continue to serve the customers that we have in the country. So that's the position that we have on Russia. What was the other one?

Why is 75%...

They're 75% because we obviously want to invest in technology as we go forward. So we're clear that we have to pay license fees that in a SaaS environment are now not capitalized anymore. It will fall to the bottom line, which is why we don't show the 100%. So there's a reinvestment, but it's also reinvestment in the growth opportunities on the commercial side as Vamsi is staffing up the organizations in places where we see growth opportunities going forward.

We can take one more from the online community, Daniel Bürki from ZKB. Could you give a few concrete examples of how you can reduce net working capital and explain a bit the CHF 280 million of capital benefits?

Yes, absolutely. So when you think about the planning that we currently have, then our teams try to do a great job in planning what we actually produce on the next day. But because of the structure we have, often enough, that supply planning gets disrupted by a last call from any salesperson in the company to change the schedule. And that's not good for our customers because our OTIFs are really bad. And as you may know, we operate roughly at a 75% OTIF today. That's obviously far away from where we ought to be, not even conceivable in a B2C environment. And that will unlock significant opportunities in order to have the right products in the right moment at the right place. That's the first thing. The second thing is the complexity reduction that we're doing as we sift through our portfolio, take out 30% of SKUs. It's very clear that we are currently retaining packaging material, raw materials. We have to actually have studies for sustainability for certain products that if you don't have those SKUs, you don't have to do. So there's a massive opportunity to unlock working capital, and that's where we see the benefits coming in. That obviously is also in the raw material side of our products, which is a significantly higher number, and that's why that number is big.

So just thinking about maybe more of a near-term view in terms of the chocolate market next year. Obviously, we're seeing all these cocoa inflation, potentially, need for more shelf pricing with chocolate next year. Kind of how do you think about kind of the volume of the market next year? I know in the targets that you have for next year, you talked about some underlying volume growth. But do you think there's a risk there to that underlying volume growth? And then my second point, just kind of more on the midterm view in terms of your growth potential by region, so volume growth by region. It looks like you're obviously focusing quite a lot on APAC. Are there any kind of cultural or dietary reasons why the per capita consumption might not increase? And kind of what are your expectations around that, I guess?

Yes. So maybe with the last one first. I do -- we really firmly believe there's a massive opportunity in APAC. That's very clear, right? As 2.5 billion consumers come into the market, and they obviously -- that's the first signs we see from the market intelligence, they're increasing per capita consumption already. So that's a great sign for us. That's why we will double down on APAC. The other question was more on the short-term market outlook. I've been asked that already in September, and I think that it will take probably another 6 months for the FMCG companies to cycle through the high price that they have taken a year ago and the downsizing that they went through at the same point in time. You probably know that I've run a market intelligence company before this role. I would probably have to advise them differently. I think the companies went too far, too aggressive. They were obviously getting a lot of feedback from the retailers that, that is unacceptable, despite the inflation that is in the markets. But in order to change the pricing, the pack sizes agreed at with the retailers, that is not an overnight decision, right, which is why we're saying we will see the market coming back into slow growth as from 2024, and it will take time, depending on the region and the customer relations for them to actually chew through. The positive thing is that we see some of our customers now, for the first time, come back with positive volume growth.

Sorry. And just on the other regions other than APAC, kind of how to think about the growth...

Yes. There's different pockets of reasons why we grow in different areas. So when you think about North America, maybe, Ben, do you want to speak to that for...

Yes. So Lauren -- so North America, of course, is going to be a different growth trajectory than APAC. We're not going to double our business in North America. But even there, there are pockets of growth as well. We talked about outsourcing partnerships as well. We're still doing -- there is still a lot of potential in that market as well. So North America includes Mexico as well. We have already a fair share there, but we can grow better by having better solutions as well. Everything what's going on in terms of specialties as well. You know that the U.S. market -- it's where a lot of these trends started, in butter-free chocolate, sugar-free, sugar-reduced as well. These trends are going to continue. And this is where we play very much, where we have a solution where we're building a dedicated factory where we can make those items at scale. Because if you're making it yourself, it's very complicated because you have to cut in through your schedules, you have to suddenly make sugar-free or vegan products and so on. If we combine different customers in a dedicated facility, we can do it at scale at better cost as well. So that's what we're doing in North America, but of course, higher base, but of course, not doubling at all.

I should maybe add to that, that there are certain large accounts where we have an underproportional market share, and we're aggressively going after that. Same is true for Europe. We're strong in certain countries. But then in Germany, we certainly don't have fair share. So that's a great opportunity. We have a new leader joining today to actually head up Germany, Austria and Switzerland. I don't know if it was announced already, but probably because she's already there today. And so we're looking forward to have impact there because we see growth opportunities. Similar in Turkey, I think I mentioned that 5% share in Turkey. Why is that not 15%? Well, probably because we didn't stab it. So there's an opportunity for us to reallocate resources to the biggest opportunities, and that's what we will be doing.

So why do you underindex in APAC mass market? Is it because you're less cost competitive in the region?

I think -- I mean, Vamsi and I have a lot of discussion in really understanding the local consumer. And when you just think about China, there's no China consumer, right? I mean you have, what, 7 kitchens in China that have very different taste profiles, very different thinking, and we just need to be close to the market to really unlock that opportunity. That's one thing. The second thing is staffing up for the opportunity. The biggest region got the biggest support because they were the largest. So we had EMEA that was nearly half of the company. And you can imagine the influence that EMEA had while the growth opportunity was emerging somewhere else. So we're changing the game here with going to 5 regions and focusing much more on the country clusters. That's literally what we're doing. Can I get a glass of water? I'm drying out here.

Two questions from me. So the first one, I think previously, when I think about APAC and Gourmet and maybe other areas, part of the growth had been about bolt-on M&A as a way to capture some of that market potential. I'm not sure if I get the sense that, that's still the case. So is it? Yes, that's my first question for now.

Thanks for the question. I mean right now, I think we have all the assets in our hands to outgrow the market as we are. Thank you very much, Vamsi. As -- to outgrow the market as we are. So for us, M&A is, at this point in time, not a priority. We think that we can scale our business significantly. We think we can win disproportionate market share putting the things at work that are in our control.

And then just my second question is on sustainability and, I guess, more to do with the impending, sort of upcoming regulation at the end of 2024. I guess, firstly, do you think that your supply chain system will be ready in Europe? But also from a potential supply shock perspective for the overall market, how are you insulated from that in your current business model?

Where do you think the supply shock comes from?

So if you've got a reduction in the cocoa available that you can send into Europe.

So I mean, first, to the first question, we have a fundamentally big program underway for traceability, and that includes the deforestation prep or readiness or preparation. So that is well established. I think as you know, the new regulation came in place and actually didn't talk to any of the players in the industry. So the players are all engaging with the EU Commission to lobby for a transition period, which has been done also in the SDA industry, in the small domestic appliance industry, as they were going through the recyclability aspects, right? So we believe that on one side, we need to make sure that the EU Commission understands what is possible in a certain market because this is an 18-month supply chain you're talking about, right? That's the first thing. But I can reassure you that we have a fundamental program underway led by Steven and his organization that will actually establish traceability and deforestation readiness for the time that we have. Now the other question on disruption that we had there, what was that again? What -- supply disruption because of?

Yes. If you have less cocoa available to go into Europe.

Right. Steven, do you want to take that?

So maybe just to add to what Peter was saying. So when you go back in time and you look at what the EU is doing, you look at the 7 different commodities that this regulation applies to, cocoa has been front and center for the EU for quite some time now on this topic. And the reason for that is because Europe is -- when you look at cocoa, Europe is the market that consumes the most cocoa in the world. This is the one commodity where we believe they want to make sure they get it right, okay? And so there's -- I think there's a very high level of engagement between the EU and the origin-producing countries. The origin-producing countries have their programs currently underway along with the industry. So what I think is positive about all of this is actually the stars are aligning when you look at regulatory origin programs and industry programs coming together. So I have every reason to believe that this is going to be worked through in a proper way.

But also to the other question maybe, I mean, our scale...

Yes. So just in terms of the scale, obviously, with our origin presence that we have and looking what we have in place today and looking at the programs that the governments are putting in place, I think that those are very important factors for insulating us in this regard.

So maybe with that, just to sort of take a time check, we have -- maybe we'll take one more question here. But then I would just sort of invite everybody to also then join us outside, and we look forward to many more discussions, and I'm sure Peter will say a closing remark.

I'd like to squeeze in a couple of questions. The first one is on the...

Can we switch on the phone? That's -- I can't hear the phone yet.

The first one is on the SKU reduction of 30%. Have you worked out how much of the profits that represents? And what type of customer feedback do you expect? I mean isn't that going against the specialty trend, the fact that customers probably want more and more small batches?

So let me give you the answer that I gave to our new President for Central and Eastern Europe. He will have 5,000 SKUs still in their hand at least to operate in the market. We, for sure, and that's an effort that we decisively take, have put a program in place to make sure that our commercial teams have the SKUs in their hands that are so close to the SKUs we're taking out to avoid having a commercial impact. Now there's a time gap, which I explained already for the impact in '23, '24. We anticipate that we have to have some discussions with customers to get them to the new SKUs, but we for sure still will have ample opportunities to give the customers the differentiated solutions that they are looking for that are in line with what they're looking for. It's -- a lot of it, again, has been ignited by the different pillars and silos of regions in Barry Callebaut as the regions have created their own SKU set, if you want so.

Okay. And the second question is, how should we think about cash flow going into 2024, given all the moving parts, investments?

Say that again? I couldn't...

How should we think about cash flow going into 2024, given all the spend, OpEx and CapEx?

So as Steven was saying, obviously, we see higher bean prices coming through. We also, as I mentioned earlier here in the presentation, see -- let me go to the page where we see how much we put in, in '24. So in '24, we obviously have a significant cash out as we're seeing in '23, '24, we see a first investment in OpEx that comes on top of what we're actually doing of roughly CHF 110 million to CHF 130 million of operating expenses as we're setting up the program. And we also anticipate a CapEx investment of CHF 90 million to CHF 100 million on top of the normal run rate that we have. Now all of that, we think we can manage within existing financial vehicles given the strong balance sheet position that we have. Great. Thank you very much for your questions. That was really great. Thank you for the engaged discussion. I do look forward seeing you later. And for the people online, I do look forward to meeting many of you over the next 2 weeks, be that in Zurich, in Frankfurt, in London or in New York. Thank you very much for your attention, and look forward to seeing you soon. Thank you.