Lotus Bakeries NV (LOTB) Earnings Call Transcript & Summary

Good morning, everyone. Welcome to the Lotus Bakeries call presenting our Annual Results for '24. I am Jan Boone, and I'm joined today by Isabelle Maes, our Chief Marketing Officer and CEO of Lotus Natural Foods; and Mike Cuvelier, our CFO. And we are all here in Lambeger. We will start with the presentation highlighting '24 and along with management comments on our annual results. And Isabelle will then delve deeper into the strategy for Lotus Natural Foods. Following these presentations, we will open the floor for questions. And our call is scheduled to maximum 1 hour. Firstly, I'd like to express my gratitudes, my gratitude to are 3,364 colleagues for their incredible contributions, contributions helping us to achieve another outstanding set of results in '24. We recorded an impressive top line growth of 16%, driven almost entirely by volume growth. And this broad amounts to EUR 150 million, and that's EUR 150 million is really a record for our company. This growth was achieved across multiple countries and spent our 3 strategic pillars. Also I would like to highlight our strong cash flow conversion with an EBITDA -- underlying EBITDA margin of 19.7% of sales, and that enabled us to invest over EUR 200 million in the past 2 years primarily in expansion to CapEx. We are pleased to report a further reduction in our net debt to 0.5x EBITDA. And this strong performance sees our net results rising by 18%, allowing us to propose a dividend of EUR 76 per share, and that's an increase by EUR 18 per share and also reflects our solid performance and healthy balance sheet. And finally, our emissions reduction road map has been submitted to the science-based targets initiative in accordance with the time line we anticipate. Going to the next slide now. And on this next slide, we can see the impressive track records and growth of our company over the last 15 years. During this period, revenue increased by nearly EUR 1 Billion and that represents a compound annual growth rate of 11.6%. On the next slide, we have summarized some of our milestones we achieved in '24. We celebrated the launch of our first in-house naked production in South Africa. In March, we proudly joined about 20 index, and in June, we strengthened our strategic direction with a partnership with Mondelez, which I'll discuss shortly. In the second half of '24, the construction phase of our greenfield plant in Thailand was in full force. And today, I'm thrilled to announce our outstanding annual results for '24. On the next slide, this point here -- on this next slide, our focused strategy is based on 3 pillars, has always been based on these 3 pillars and that has remained consistently this way. Both Lotus Biscoff and Lotus Natural Foods continued their remarkable expansion, growing by 21% and 16%, respectively. And additionally, our local Hero segment saw a 5% growth rate, outperforming against historical growth rates. We've updated our strategic ambition for Lotus Natural Foods to become a leader in a better-for-you standing segments, and Isabelle will elaborate on this later on. Once again, we've experienced broad-based growth across all geographical segments, Continental Europe, and U.K. now accounts for 71% of our sales, and they continue to show potential to double digits growths. Biscoff now. Lotus Biscoff grew at '24 again by more than 20%, adding EUR 100 million of incremental sales to surpass the EUR 600 million revenue mark. This growth outpaces the performance of the sweet biscuits category and further strengthens the top 5 position in the long -- in the global cookie brands ranking. It underpins the company's longer-term vision to become a top 3 cookie brands with Lotus Biscoff. And I'd like to add also that Biscoff has become a love brand and is more popular than ever among young people as evidenced by viral posts on social media. Biscoff growth strategy puts a clear focus on building penetration first for later of products. And here, products are Biscoff cookies, Biscoff spreads. Concepts that have clearly produce and momentum. It also drives another year of geographically broad-based growth across many countries and in all countries. This is the case in North America, where both in the U.S. and Canada, household penetration for Lotus Biscoff cookies continued to grow. In Europe, significant sales increases were realized in several larger consumer markets like Spain and also Germany, both moving up in the top 10 and top 6 country positions for Biscoff. And specific mention also for Australia, realizing strong growth and continued household penetration gains. Lotus Bakeries is currently investing in Thailand, Chonburi in a new greenfield production facility for Lotus Biscoff to further support its growth ambition in the Asia Pacific region. The Greenfield is anticipated to be completed in the second quarter of '26 and the project capital expenditure is estimated in the range of EUR 160 million. Lotus Biscoff cost production planning and outputs need to be diligently balanced with the evolution and mix of global demand. In 2025, the available capacity for Biscoff regional cookies based on a representative format mix allows for a volume increase of not more than 10%. And that's without any Thailand production volumes. In June, we announced a strategic partnership with Mondelez and that's exciting for both companies. This partnership has 2 primary objectives: firstly, to expand and grow the Biscoff cookie brands in India. Secondly, to create new chocolate products that blend the distinctive caramelized crunchy Biscoff taste with Mondelez's iconic chocolate brands like Cadbury and Milka across Europe. Since the announcement of the deal, several cross-company project teams have started working together. For the Biscoff biscuit license in India, teams have been working diligently to define the ideal product portfolio while ensuring the same high-quality Biscoff experience for the Indian markets. Our global chocolate license teams have been hard at work, developing co-branded chocolate products that combine Mondelez's iconic brands like Cadbury, Milka and Côte d'Or with our unique and crunchy Biscoff cookies. The first cadbury co-branded chocolate bars will hit the U.K. shelves in March of this year with Milka co-branded bars expected to launch in several European markets soon after. And now I will hand over to Isabelle, who will elaborate on the natural food strategy and ambitions.

I'm very proud to share with you today not only our results, but also the key principles of our new natural foods growth model. And our ambition is clear. We want to become a leader in the better-for-you snacking segment. As you know, we have 5 unique brands in our portfolio, which enables us to offer the perfect better-for-you snack for every occasion for every consumers for every age. All 5 brands realized double-digit growth in 2024, and combined, we grew by 16% to end the year with a turnover of EUR 250 million. And this is not a one-off because since we entered the [indiscernible] snacking segment in 2015, our compound annual growth rate has been 17%. Now we do operate in big categories that are growing strongly, but we managed to outperform the growth rates on these different categories with a CAGR that is over recent years more than double than the category one, which gives us a lot of confidence for its future. Now if we want to meet our ambitious targets, we will need to focus and that is exactly what our updated strategy is all about. The growth model has been developed by Bain & Company, our Executive Committee and our global brand team jointly together. And the good thing about Bain is that they are, on the one hand, very data driven, but on the other hand, they offered us a unique outside-in perspective. And specifically for natural foods, the outside-in perspective are the learnings of successful insertion brands in the U.S. Which brands did manage to go from 50 million to 150 million turnover and what can be learned from that. Successful insurgent brands based their strategy on their brands' DNA, and that guides everything they do, but also and especially what not to do. The brand DNA will define how we will communicate, what the innovations look like and what our sales strategy is. Everything starts with the brand purpose. And for BEAR, the purpose is pretty clear. BEAR wants to make healthy snacking, easier for parents and a lot more focus. And this purpose is already recognized by consumers from a survey done in the U.K. and the U.S. The words that come to mind if we ask people what they think about this, it's healthy, tasty, fruity and firm. But part of the brand DNA are also the Brand Guardrails. The guidance on what to do and how to stay true to our purpose. Brand Guardrails has 3 components: First, the core consumers. For BEAR, kids are at the heart of everything we do, yet we also loved and needed by parents. However, if we would develop new products and kids don't like it, we will not launch it because kids are at our core. Secondly, product specifications. Our products are 100% foods, have no other sugars, preserve fruit fibers, and they should, of course, be tasty. Again, if we develop a new product, these are our boundaries. And our biggest brand assets is of course our BEAR. He's fun, friendly and of course, obsessed by foods. Second part of the growth strategy is the where to play of our strategic ambition by country and by [indiscernible]. Very different from Biscoff, where we have the ambition to concur products. For Lotus Natural Foods, we have clearly defined per brands what our priority markets are. And we've known that by deciding for every brand where we want to be active by focusing on 2 things: first, the market's attractiveness and secondly, Lotus ability to win. Market attractiveness is about what's the absolute market size of the category, how fast is the category growing in a certain market, what's the average consumption per capita? Lotus ability to win is about what's our current market share, what's the historical performance of Lotus in that markets and what makes our brands and profits different from competition. This strategic ambition per country defines then our priorities in terms of resource allocation and investments. Amplify and accelerate markets are highly attractive markets with a high chance of success. So we will allocate the biggest part of our resources to these markets. also the biggest part of our investments. We will develop innovations only for these markets, the same principle will apply to media. Actively pursue markets are markets that are a little less attractive but with high chances of success. Local stewardship countries, this certainty of success is even smaller. The third part of our strategy are the activation levers for the tools we have to transform our strategy into more concrete actions and guidelines. And all guidelines we give for these different levers are focused on building strong rotations because that is the basis of our growth. And this rotation led growth strategy is fundamentally different from Biscoff because the brands are clearly at a different stage. Our categories and consumers are different. Cookies are consumed everywhere and by everyone. Whereas our natural foods categories are skewed towards certain markets and also towards consumers that are more affluent and health conscious. The brands are also different. With Biscoff, we have a straightforward for a new proposition, whereas the natural food brands are more premium brands that require more education. For Biscoff, we have the right to win everywhere. So we have a penetration-led growth model aiming for mass penetration. For natural foods, we have a rotation led growth model, where we aim for strong rotations in the right markets and in the right types of stores first, before extending distribution furnish. The natural foods enablers are exactly the same ones as for Biscoff growth model where we want to have strong data management, revenue growth management and media teams to help out the local marketing teams based on KPIs, global earnings and tools. And I would like to end with our new BEAR commercial that just went live this month in the U.K. and the U.S., fully aligned with our brand DNA and obsession for real food. [Presentation]

Thank you, Isabelle. I will start with an update on the implementation of the European Corporate Sustainability Reporting Directive, mainly to assure that Lotus Bakeries will be ready to report the new sustainability statements in our annual report of 2024. And also the mandatory wallets is progressing according to plan. In the past 12 months and before, a lot of work was put in the implementation of the so-called CSRD legislation. We finalized the Double mandreality assessments. We mapped the stakeholders' material risk inputs and we defined 5 applicable European sustainability reporting standards. These 5 standards actually leads to the future reporting of more than 600 nonfinancial KPIs, both quantitative and qualitative. Under the umbrella of our longtime and well-known sustainability program care for today and expect for tomorrow, we map these 5 standards. And you can see them lined up here from left to right. On the social side, we have the S4 and consumers and the S1 workforce. On the environmental component, we have the climate change and the E5 resource use and circularity and then finally, the G1 governance. We translated these legal standards into our 5 more engaging guiding principles, a balanced portfolio of great taste, one [indiscernible] family, the road to net zero, sustainable sourcing and ethical business practices. You can consider this short update as a teaser and an invitation to the annual report and the sustainability statements and KPIs that will be issued at the end of March. And now let's dive into the financials. We delivered again a strong set of annual results. Revenue was up by 16%, underlying EBITDA is up by 17% and free cash flow before expansion CapEx is up by 15%, all of which give us the possibility to invest more than EUR 120 million, mainly in expansion CapEx this year and at the same time, reduce the net financial debt further to less than 0.5x EBITDA. The strong performance of the group and the strong balance sheet allow us also to propose an increase in dividend of EUR 18 per share to EUR 76. As already mentioned, we realized a record volume growth in 2024, a record in terms of percentage, 14%, record in terms of absolute value, EUR 150 million. As you can see on the slide, in 2022 and 2023, the volume and price components of the growth were more evenly balanced making indeed 2024 an exceptional year in terms of volume growth. Then we go into the detailed profit statement and the evolution of cost by nature. I will go to the next slide, and we'll then return to the income statement. The combined cash costs of the 3 main buckets of costs by nature on the slides here are exactly at 80% of sales, which is a slight 10 to 20 basis points lower than the previous 2 years. This means with the exception of chocolate, the input and production costs for raw materials, packaging, co-manufacturing, utilities and labor have on aggregated level, stabilized year-over-year. The factories, especially for the production of Biscoff and BEAR have been capable to deliver the additional output needed to fulfill market demand and contributed to positive operational leverage. The bid allows us to continue to invest in strengthening the organization and to upscale the promotion and media investments, all key to sustain continued growth. These latter investments are visiblein the uptick on the line services% other and e t's goods 26.9%. Returning to the previous slide. Besides the 3 main cash cost lines, the appreciation increases with 7%, of course, driven by the expansion CapEx program being rolled out and amounts today to 3% of sales. Underlying EBIT increased by almost 20% to EUR 207 million or 16.8% of sales and underlying EBITDA increased more than 17% to EUR 243 million or represents 19.7% on sales. The non-underlying items of minus EUR 5.2 million consist mainly of start-up costs related to the capacity expansion and the greenfield site in Chonburi Thailand. The financial result of minus EUR 2.2 million consists mainly of interest expenses, net of cash deposit income and bank charges. The tax expense amounts to almost EUR 47 million or 23.5% of profit before tax. This effective tax rate is slightly higher than in the past and is in part also linked to the increase of the corporate income tax rate in the U.K. from 19% to 25%. Net profit increases by EUR 23.2 million compared to 2023 and amounts to EUR 152.5 million or 12.4% of the revenue. Earnings per share increased by 18% to EUR 188 per share. Underlying net profit amounts to EUR 156.3 million or 12.7% on the revenue. On this slide, you can see, again, a high level of expansion CapEx in 2024, EUR 105 million, with maintenance CapEx remaining well below the 2% of sales. As already mentioned, the new greenfield plant for Biscoff in Thailand is anticipated to be completed and fully operational in the second quarter of 2026. The CapEx forecast of 2025 is in the range of EUR 155 million, which aligns with the EUR 275 million forecast for 2024 and 2025 combined, which we announced in August. This slide shows the strong cash flow conversion in 2024. Cash conversion before expansion CapEx is again in the 90% range, allowing the EUR 105 million of expansion CapEx to be largely auto financed and decrease, of course, the net financial debt further. And we see this net financial debt indeed decreasing to EUR 110 million, excluding the IFRS 16 lease obligations and currently at a 2-year row, representing less than 0.5x EBITDA. The balance sheet is stronger than ever, with increased long-term investments alongside increased equity. Net working capital remains under control at approximately 2% of sales and the reported net financial debt further reduces to EUR 130 million. The evolution of the earnings per share is showing a 16.5% CAGR over the recent years. And this, together with the strong balance sheet allows for the 24th consecutive year to propose a dividend increase this time to EUR 76 per share. This concludes the presentations, and we will now open the call for questions.

And we have a first question of Alexander Craeymeersch, Kepler Cheuvreux.

[Interpreted] [indiscernible] Speaking here. Yes. So I'm just -- first off, congratulations to the nice results, it's really started to see guys on such a growth track. So yes. Two questions on my side. One is you mentioned you maximize the output. But in a couple of sentences later, you said the 10% additional volumes is possible for 2025. So could you explain where the additional capacity comes from versus H2 this year? And that 10% is that also until the Thai facility is built in the second quarter of 2026. And then the second question would be on cost yes, of course, looking at the raw material cost, which has come off somewhat from the peaks in 2022. I was wondering whether we can see this as a stable cost versus sales in 2025? Or should we expect an increase due to a bit of higher gas prices or potential tariffs? I know you hedge some of that gas prices. So just wondering that. And then maybe related to that cost question as well would be the higher administrative costs. It has somewhat peaked in 2024 Just wondering how much of that is related to expansion and how much of that is related to that sustainability reporting that you just mentioned.

Okay. Too long questions. Thank you for that. [indiscernible] more than the sorry. No, but thank you for the good questions. In respect of capacity, you're referring to the Biscoff capacity. In '24, we did realize a volume growth of 20% in this half, which was also higher than we had expected and which was also higher than our provisions and our provisions are for the mid, long term that we want to grow high single digits with Biscoff. And hence, we will make sure that we organize ourselves to realize that goal and the goal of high single-digit growth to Biscoff. For '25, again, we can realize that goal. We just want to indicate that the maximum output of Biscoff Cookies will be 10%. 10% we take into account evenly spread commercial output, which means that -- and to just give you an example, if everybody all of a sudden wants 2P Biscoff cookies, then yes, then you have a faster constraint on certain lines, but we calculated what we have as prognosis or we think we will sell in the different markets per SKU per line per plant that there will be more -- more or less a maximum of 10%. Also based on the efficiencies that we think we will realize. For '26, we expect the plant of Thailand to be fully operational that means that the 10% we have mentioned for '25 does not include any volumes of the Thai plants. For '26, the Thai plant will be operational, will be fully operational in the second quarter. And that will give us, again, additional capacity which we will need to realize the goal to grow the high single digit on Biscoff. So I hope this answers your first question. In respect of raw materials, the inflation in '24 is quite limited. You have seen in our figures. Everything or almost all growth can be linked to volume growth. And for '25, it will be quite similar, a slight inflation. This being said, chocolate is a watch out. As you all know, chocolate to Kakao prices went through the roof. Luckily, we may sell cookies without any chocolates. But still, if a raw material increases so significantly, it has also an impact on our cost prices. And that means that we need higher prices for our -- for example,, our [indiscernible] with chocolates for [indiscernible] with chocolate. So many there is an impact on the local Heroes. There, we will need a higher price increase than the other products like Biscoff or Natural Foods.

And maybe just still on that last part on the administrative front.

Yes.

Of course, you're an expansion mode. So if you just could describe how much of the, let's say, 2% increase that we saw in the last 2 years is related to that expansion and maybe is related to that sustainability reporting, which, of course, also has a cost?

I think you're referring to the services and other goods line as a percentage of revenue.

Yes.

Yes. I think that increase is mainly related to 2 things. First of all, in general, not specifically related to administration, but more to sales organization. expansion because we do have to obviously continue to follow that growth on the one hand. And then on the other hand, what we also mentioned is that we are increasing in the recent, let's say, 18 months to 2 years, the promotion, but especially also the marketing investments for Biscoff after we've been quite modest in terms of marketing support in the years before. So that's mainly related to those 2 elements, sales organization to follow the growth and marketing, not so much or not very specifically sustainability. Second question, Antoine Prevot from Bank of America.

Two on my side. So first on natural food. I think there is probably a quite a sequential slowdown, let's say, in the second half of the year. Probably, I mean, markets, excluding U.K., where I mean, in H1, I think you are talking about 30%. Now you talk about 20% for the full year. So probably like H2 around 10%. So anything to flag maybe on the deceleration for like market ex-U.K., especially because -- I mean, when they look at the U.S. data on SMEs, I mean, it's pretty good for BEAR. So I mean, anything else maybe to flag? O is it also maybe the U.K. is slowing down? I mean, any comments here would be super insightful. And also a quick question on the Biscoff I mean, amazing growth. But do you think that is benefiting a bit from the inflation in chocolate and confectionery in general, so your competition has to put more price yourself with Biscoff doesn't really have to. So you're quite competitive. Do you think you have some of like a benefit from you or just like the brand equity strength and the rollout globally.

Yes. Thank you. Natural Foods, second part of the year, second semester, no slowdown, double-digit growth. So no significant difference with the first semester. U.K. is doing really well, continues to grow. Beer in the U.S. is really increasing strongly. So we don't see any slowdown in the Natural Foods business unit. Your second question is, if I understand it well, other products, other competitive products need to increase prices, certainly in confectionery, and we don't have to increase that much that we will create a competitive advantage. I think that's your question. I think we have always strived to be affordable in all markets. And we want to be there for all the families. And so if we increase prices, we calculate it diligently. We make sure that our factories are efficient, and we bring it as affordable as possible to the consumers. And then, of course, you can see other products going up or going down. And nowadays, chocolate will increase. We have not noted any significant moves to the cookie category recently. So yes, let's see what happens in '25.

Guy Sips from KBC Securities.

I have 2 questions as well. First is -- and both are on the Thailand side. Can you give us a color how big this site is compared to, for instance, the U.S. production capacity? Is it similar? Or what is -- if you compare it to the U.S., how big is the Thai plant or will be the Thai plant? And the second question is also related to that plant. Out of the 600 million today, you gave the split country by country. How much is -- of this EUR 600 million is today located in countries that will be served from that Thailand plant?

Okay. Thank you. But we will have indeed 3 different is offer sites as from '26. The good thing is that on all 3 sites, we have land where we can build more plants and add lights. So as well in the plant in Belgium as one in the U.S. as also the Thai plants. So that gives us ample opportunity to grow capacity. At the moment, we say that the plant in Thailand will be operational, fully operational with all lines in the second quarter, means that the capacity will be a little bit less than the U.S. plant today. And we will indeed ship to Asia, Australia, Zealand. And you have to take into account that the Thai plant provide 10% to 15% of all Biscoff cookie sales.

Next question comes from Maxime Stranart from ING.

Two questions from my end. Firstly, if I'm not mistaken, you have left out the sandwich cookies out of the volume guidance. So I just wanted to make sure you don't have any capacity constraints there. And -- just want to inquire if you have any plan for capacity expansion on this one. Secondly, to come back on pricing. If I understand you correctly, Jan, you -- or Mike, I don't recall my bad, you basically expect a flat impact compared to '24, so roughly 2%. Just to clarify, is this including FX potentially headwinds in the U.S. or not? Just want to be clear on that.

Sandwich cookies are produced in our Belgium plant, and there are also capacity constraints there. And back end of this year, that will be partially resolved. So we will increase capacity on sandwich back end of this year. So as we speak, there is also a capacity constraint. Your second question was in respect of inflation and how we foresee prices, our prices and consumer prices to evolve in '25. So there, we're talking about low single-digit increases in prices. So quite similar to last year. But you have to take into account that for our own markets, we have quite some chocolate-related products being France and Belgium mainly. And there, the inflation will be somewhat higher. But overall, if you look at group-wise, it's low single-digit increase of the prices from us towards our customers. Next question Kris Kippers from Banque Degroof Petercam.

A couple of them remaining. Just the first one, you just indeed elaborated on the fact that the sandwich cookies are still being produced in Belgium. Given the new administration in the U.S., could you share with us how much impact you could have from any tax levy from imports in the U.S.? And then second question would be on the margin. We saw indeed in H2 for the first time, a nice 20% plus margin in EBITDA terms. Is that something which is sustainable going forward? And then just a small one on the dividend payout now amounts to 40%. I'm just wondering, is that the new payout we should look at?

Thank you, Kris. Indeed, as I mentioned, the sandwich cookies are we produced in Belgium. And I think the strategy should be to organize ourselves that we can produce sandwich cookies also locally in Asia and the U.S. Sandwich cookies, as said, being produced in Lembeke. And it's quite still relatively new product. Efficiencies on these lines are getting very good. In the beginning, it was quite a struggle, but they're getting good. And now we also have captured the know-how. And now we are building the plans to also add sandwich lines in the U.S. and in Asia. So in a couple of years' time, we will have also these lines abroad, but that's not for the first 2 years. That means indeed that we still have to import the sandwich cookies into the U.S. that we still have to import them into Asia. So far, there are no additional import duties foreseen, also not in the U.S. And of course, we would prefer not to have additional import duties. But as said, that could maximum be an issue of a couple of years' time and probably not very significant on our overall figures. In respect of margin, second half of the year, indeed, 20% of EBITDA. I think we feel fine with an EBITDA percentage between 19% and 20%. As Mike also said, we want to invest more in our brands or brands, not only Biscoff but also the natural food brands. We have been investing in '24 more and more digital, supporting Biscoff, digital also supporting our natural food brands, and we will continue doing that. And we've seen good results, positive results on our investments. As explained last year, it was our first year of really significant investments in digital media, and it's working. And so now we know that we will further increase these efforts in '25. So that will also impact the costs. And at the end, we will end up hopefully with an EBITDA percentage between 19% and 20%. If we would lower these marketing efforts, maybe on the short term, we will not see immediate effect, but we want to build brands for the future and then we need to invest in the awareness of these brands. In respect of the dividend, results are good. Our net profit -- recurring net profit or underlying net profit, we have to say, has increased significantly. Our balance sheet is very strong, very low leverage. So we have indeed increased the payout ratio on our net profit, our recurring net profit to almost 40%, which is indeed a bit higher, but seeing the results, seeing the strong balance sheet. And also looking at certain yields on the value of the company in the last -- looking at the last years, this year and the last couple of years, we are always around 0.7%, 0.8% of yields on the value of the company.

One more Samantha from Berenberg.

I just wanted to come back to Natural Foods, please. I just wondered if you could give us a bit of an update on how you're getting on with launching the brands and markets outside the U.K. I know you've been investing in bringing more of the brands across Continental Europe. It would be great to see where you're at with that. And then could you perhaps give us a bit of an insight into how you hope that, that business will grow in the midterm? You quantified the mid- to high single-digit ambition for Biscoff. I'm wondering if you can quantify something for Natural Foods for us as well, please?

Thank you, Samantha. Yes, that's indeed exactly our strategy to keep on growing in the U.K., but we want to grow faster outside of the U.K. You're referring to Continental Europe. There, Natural Foods is doing well, especially the Naked brand is doing really well this year. So it's a real success. And as I said, in the U.S., BEAR is becoming a real significant brand. So the plan of internationalizing these brands are working out really well. But as Isabelle presented this morning, it's also important to focus on certain brands, focus on certain regions and countries and not take all the brands and launch these in 50 different countries. So we have our strategy now, and we will also implement that strategy diligently. As said indeed, Biscoff, we want to grow high single digits. Our ambition also with Natural Foods is to grow high single digits outside of the U.K. to be very..

Then I have one more question from Antoine, Bank of America.

Just as a quick follow-up on the tariff side of things for BEAR in the U.S. Is there a risk there on the tariff? Because I mean, you are importing, I guess, the work in progress type of product there and then your packaging in the U.S. So I mean, is there a risk, anything you want to flag there for BEAR in the U.S.

Well, indeed, the BEAR brand, BEAR products are being produced outside of the U.S. We are able to produce BEAR products at a very strong cost price, very good quality with a strong sharp cost price, which is important to be successful internationally. Today, we have not seen any changes in tariffs coming from South Africa into U.S. or into any other countries. So, so far, we don't see an issue. And as I said, that's the same for Biscoff sandwich. And we hope, of course, that remains the case, but there are no indications that, that would change. As everybody knows, today, there is a focus on Mexico, Canada, China and less so to other regions. So we feel today quite confident that, that will not change. Thank you. Thank you for all your interesting questions, and enjoy the rest of the day. Thank you.

Thank you also from my side, and have a nice day.

Thank you