Kofola CeskoSlovensko a.s. (KOFOL) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to Kofola's Second Quarter of 2026 Results Conference Call. Martin Pisklak, the Group CFO, will present a summary of the results. This will be followed by recording with business insights from CzechoSlovakia, Adriatic and Beers and Ciders segments presented by country CEOs, Daniel Burys, and Marian Sefcovic; and CFO, Martin Rosypal.

Good morning to everyone. Before I hand over the word to my colleagues, who will give you more business insight, I will very generally comment on the first 6 months of 2026. As you most probably already studied in our presentation, you see that first 6 months are basically according to our expectation. We are very glad that we are keeping the growing pattern of our profitability, and we are managing the impact on raw materials. Also, it's visible from our presentation that revenues in the main season in July and August were very strong, again, according to our expectations. . So, so far, we are very confident with 2026, and I hope that we will continue in this trend also in Q3 and Q4 and now I'm handling my words to my colleagues. Thank you.

Dear Kofola lovers, here is Daniel speaking. Let me comment first half year in Kofola Czechoslovakia soft drink division, very positive development on sales level in all formats and both countries, more than 5% compared to last year. June reported second best monthly sales in our history. We successfully launched all innovation, leading with Nulka, no sugar Kofola and Rajec 321 Fountain Water. We were safe on cost side till April. Unfortunately, Iran crisis impact from May is still reality. Full year effect less than CZK 100 million. We are ready to deliver target profitability due to higher sales and flexibility on cost side. July, August sales were 12% above last year. That's unbelievable story. Top season performance was excellent, not only due to sunny weather, but positive consumer sentiment helped us too. We successfully closed BHMW acquisition in last days. Now we focus on integration and Healing Waters portfolio development. Thank you for your attention and take a break in your favorite garden restaurant, Daniel.

Hello, everyone. This is Marian Sefcovic, CEO of Adriatic speaking. In Q2, the Adriatic consumers environment stabilized as decelerating inflation transitioned growth drivers from pricing to unit volume expansion and favorable mix. This top line momentum was further supported by early season tourism inflows across Slovenia and Croatia, which expanded the addressable market and accelerate overall volume consumption. In the second quarter of 2026, sales revenue increased in Slovenia by 4% and in Croatia by about 3%, while export markets are in line compared to the same period last year. HoReCa channel revenue surged plus 5% year-on-year, outperforming retail plus 3 shifting product mix toward higher-margin single-serve packaging and driving overall profitability. In second quarter, we successfully organized the 43 marathons, which once again brought together numerous runners and sports enthusiasts in Radenci. After almost 20 years, the record for the 42-kilometer marathon course was broken. Another major success was achieved by Radenska Naturelle, our still natural mineral water, which won the prestigious Grand Gold award at the Monde Selection Quality Evaluation, the highest recognition in the water and nonalcoholic beverage category. Additionally, the Studena brand won 6 gold awards at the international dining festival, confirming its authentic in marketing communications. To mark the 60th anniversary of the Ora brand, we designed new packaging and new logo. We also exploited the Radenska Adriatic portfolio with 2 brands from the Kofola portfolio, Boceta and Curiosa. Thank you, Marian.

Dear investors and analysts, this is Martin Rosypal, Finance Director of the Beer segment. I'd like to walk you through our operational results for the second quarter of 2026. Q2 traditionally represents roughly 30% of our annual revenue, about same as Q3. Compared to the second quarter of last year, total gross revenue remained essentially flat, both in value and volume terms. In our domestic market here in the Czech Republic, gross revenue grew by almost 3% year-over-year, maintaining the solid momentum from Q1. In terms of packaging mix, cans once again delivered the strongest performance. In exports, while results improved compared to Q1, we still saw a year-over-year decline of roughly 10% in the second quarter. However, this positive recovery momentum continued to gather pace throughout July and August. On the commercial side, we are still steadily advancing the modernization and rebranding of our pub network. We successfully secured several prime new locations, effectively expanding our market footprint and bringing our brands closer to customers. Alongside these on-trade activities, we sustained strong marketing support for our portfolio, rolling out active campaigns across television, digital platforms and outdoor media. During Q1, we focused heavily on preparing for the crucial summer season and for example, expanding the distribution and availability of our summer specials, specifically our cherry lager and wheat beer. With the peak holiday period now behind us, early Q3 results look very promising and give us confidence in supporting our full year performance. I look forward to sharing more details on this during our next call. Thank you for your time and support. I wish you a successful rest of the day.

[Operator Instructions] We have the first question from Mr. Bartek. Mr. Bartek, please click on the unmute me icon as we cannot hear you talk.

Can you hear me now?

Yes, we can go. Good morning, Petr.

Sorry, again, technical problems. Yes, I would like to ask about the latest acquisition of the mineral waters producer in Czechia. If you can share some financials, what revenues, EBITDA the company should have? When do you start to consolidate it? If you can confirm the purchase price of CZK 440 million, which was in Czech Media and in the court decision justification and what synergies with these new brands you expect? . And also the acquisition in Slovakia, the acquisition of a transportation company, if you can share a little bit about the price paid and the maybe cost savings for you or the benefits? And thirdly, you have repeated in the presentation, the dividend policy to pay out CZK 300 million annually. I know that's a repeated policy, but still, does that mean that you will come back with the dividends from CZK 21 back to CZK 13, CZK 14. Or is that a kind of floor for you?

Thank you for your question. I will start with the dividend policy, this CZK 300 million kind of floor, I would say. The truth is that we did not update the latest dividend policy, but my expectation is that in the case that we continue in the profitability with EBITDA above CZK 1.8 billion, CZK 1.9 billion, also the dividend has no reason to decrease compared to prior year. So we will keep it rather on the higher level. But the discussion regarding some -- at least midterm dividend policy, we did not publish the new version. That's true, and that's something which we should do definitely in the close future. Regarding the latest acquisition, yes, I can confirm that the price was CZK 440 million as it was announced. For us, it's important acquisition in the segment of functional healing mineral waters, that segment which is growing a lot, not only in Czech Republic, but also in other countries in Europe. So that's definitely something we would like to participate in. Generally, we took over the company on Tuesday on the 1st of September. I mean, currently, you can see already the changes in the business register. You see that. So we will consolidate the result of this entity starting from 1st of September. So some impact will be already visible in last quarter, definitely. In regards of the financial numbers of this mineral water, basically, this mineral water is coming through some kind of reorganization. In our opinion, the EBITDA based on the current sales performance in past 12 months should be somewhere around, let's say, CZK 40 million, which is bringing us to a multiple of approximately 11x. But given the fact that this is kind of a very strategic asset because basically, there are no other functional healing waters on the market. We believe this multiple is okay, and this acquisition will be successful for us. In terms of integration to our structure, this company will become a part of the Czechoslovak nonalcoholic beverages cluster. So Daniel Burys will take care about this and his team will take care about this acquisition. Basically, our plan is obviously to make out of this company kind of production -- another production plant in Kofola Group. Definitely, the sales functions, administrative functions and so on will be provided from Kofola CZ. So there should be synergies on this level. Also sales through the pharma channel, we should help ourselves with our colleagues from Leros, which are very strong in the pharma sales channel with herbal teas. So in general, this is the approach which we are currently taking. The acquisition itself was quite new for us because it was the first time when we participate or in Czech Republic in this kind of like insolvency proceeding. So quite an intensive work for our lawyers. But as I said, we are very glad and we are looking forward to have these brands in our portfolio. With regards to Slovakia transportation company, this transportation company was working with us very closely for a lot of years, basically, also basically, the base of this company was in our production plant in Rajecka Lesna and Kofola was the main -- or the most significant customer of this company. And because of some generation exchange, basically, we agreed with the previous owner that we took over this company and integrated to our structure. Basically, our transportation company in Czech Republic is in charge of managing this company. And basically, nothing is changing. We do not expect any synergies basically from this acquisition. We basically take over the company to secure the logistics way in Slovakia by ourselves. So that's maybe answers to all of your questions or do you have some more.