SIG Group AG (SIGN) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and thank you for joining us. Ingrid McMahon, our Head of Investor Relations, can't be with us today, and Ann and myself will be hosting the call. The slides for the call are available for download on our investor website. The presentation may contain forward-looking statements involving risks and uncertainties that may cause results to differ materially from those statements. A full cautionary statement and disclaimer can be found on Slide 2 of the presentation, which participants are encouraged to read carefully. And with that, let's get me started. We are pleased to report a solid start to the year. Q1 revenue growth at constant currency and constant resin was 3.2%. This is in line with our guidance of 3% to 5% with growth weighted towards the second half of the year. This growth demonstrates the strength of our business model in the current market environment. This includes the resilience of our customers' end markets, our multiple channels to market, including retail and foodservice, and our well-invested global footprint. Carton continues to perform well, except for China, which continues to be subdued, while we have seen further growth in bag-in-box revenues in North America. The outlook for filler placements in 2025 remains strong, and we reiterate our expectation to place 60 to 80 aseptic carton fillers this year. Regarding trade tariffs, we currently foresee limited impact due to our in the region for the region supply chain network. Import of carton sleeves from our Mexican sleeves plants into the U.S. are exempt from tariffs under the USMCA free trade agreement. We expect to incur trade tariff charges on limited volumes between the U.S., the EU and China. However, we believe the overall cost is manageable and continue to expect, even if the European Union and the U.S. resume the currently paused tariffs, a mid-to-high-single-million-euro impact for 2025. During the quarter, we were delighted to be upgraded by Moody's to investment-grade status, consistent with our investment-grade rating from S&P, which has been in place for some time. We also successfully completed our 2025 debt refinancing, extending our debt maturity profile. Revenue growth at constant currency increased by 3.8% compared to the prior year. Given higher resin costs in bag-in-box and spouted pouch, which in most cases are passed on directly to customers, growth at constant currency and constant resin was 3.2%. Adjusted EBITDA rose to EUR 166 million with the margin increasing to 22.3% from 21.5% a year ago, primarily driven by top line contributions. Net CapEx, including lease payments, decreased by EUR 19 million, reflecting the completion of investment projects in China and the U.S. in 2024. Free cash flow, which is usually lowest in the first quarter of the year, was negative EUR 90 million, an improvement compared to the negative EUR 101 million in Q1 '24. Net leverage was slightly above the year-end '24 level, reflecting business seasonality at 2.7x. However, it has improved compared to a year ago when it stood at 2.9x. Turning now to the performance by region. Europe grew by 0.5% at constant currency for the quarter compared to a strong prior year growth of nearly 6%. Aseptic carton experienced good growth, primarily due to the ramp-up of fillers that were still under installation in Q1 '24. Revenue from bag-in-box and spouted pouch was adversely affected by lower sales of filling equipment during the quarter compared to the previous year. As previously mentioned, the sales of filling equipment in bag-in-box and spouted pouch can fluctuate from quarter-to-quarter. The region continues to observe a good pipeline for aseptic carton, bag-in-box and spouted pouch filling machines. India, the Middle East and Africa grew by 9.6% on a constant currency basis for the first quarter. This reflects a favorable prior year comparison, which was impacted by shipping disruption in the Red Sea. In addition, in line with our strategy to expand our presence throughout the region, North Africa experienced strong growth in the quarter, together with continued growth in India, where our new plant is ramping up according to plan. We remain confident that IMEA can be the group's fastest-growing region, notwithstanding occasional quarterly performance fluctuations. We're also seeing good progress in the ramp-up of bag-in-box and spouted pouch filling lines placed in '24. Overall, the region continues to win new filler contracts in liquid dairy and food in all packaging substrates. Revenue for Asia Pacific on a constant currency basis was broadly flat, following a high comparable base of 8% growth in the prior year. We continue to gain market share in the region, including in the subdued Chinese market environment. Our growth in Thailand, Vietnam and Indonesia was driven by partnerships with customers who are winning in the market, as well as from new product launches. In the first quarter of the year, we launched over 100 SKUs across the Asian markets. Approximately 80% of the launches were driven by our ability to provide flexible packaging sizes in order for customers to offer products at critical consumer price points. The remaining 20% of launches were based on our value-added packaging such as being able to fill products with particulates. Revenue grew by 9.2% on a constant currency basis for the Americas region. Aseptic carton performed strongly in Mexico and in the surrounding countries of Brazil, as we expand our presence in these markets. Bag-in-box revenue grew in the U.S. as the production challenges experienced in '24 have been resolved, while the growth in the out-of-home dining market remains fragile. This brings me to the end of my part of the presentation. To summarize, the first quarter showed resilient revenue growth and a solid financial performance. As stated in our full year results presentation in February, we continue to expect the ramp-up of fillers in the second half of the year to support revenue growth. We also expect to benefit from our well-invested asset base, which will deliver greater operational efficiencies as production scales. Now, I will hand you over to Ann to go through our financial performance.

Thank you, Samuel, and good morning, everyone. To begin, let us look at the Q1 adjusted EBITDA bridge. Adjusted EBITDA for the quarter amounted to EUR 166 million compared to EUR 155 million in the same period last year, leading to an 80 basis points increase in margins. The currency adjusted EBITDA growth was 6.9% for the period. The top line contribution demonstrates a favorable drop-through, driven by volume growth, mix improvement and price increases. The modest benefit from raw materials is due to the timing of favorable hedging contracts in the first half of the year. For the second half of the year, we still anticipate a headwind. Production costs include ramp-up of expenses for the new aseptic carton sleeve plant in India and wage inflation. As volume expands in the second half of the year, given the typical pickup of revenue growth, we expect stronger fixed cost absorption. SG&A reflects growth investments, including into digitalization and process improvements, as well as wage inflation. There was little foreign currency impact in quarter 1. However, we expect this to have a negative impact going forward, given the recent strength of the euro. This is now the usual reconciliation between reported and adjusted EBITDA. Just for information, given the small difference, I would not comment further on this slide and directly move to the next one. Here, we detail the reconciliation from profit for the period to adjusted net income. As usual, the largest adjustment to net income is the Onex PPA depreciation and amortization, which arose when the group was acquired by Onex in 2015. I would like to highlight that these intangible assets are now fully amortized, and there will be no amortization charge going forward in this bucket. Turning to the free cash flow generation. The higher EBITDA contribution to cash flow from operating activities was offset by the phasing of tax payments. Cash outflows from net working capital remained relatively stable compared to the prior year, and as usual, reflected the payment of volume rebates. Overall, free cash flow reflected the typical seasonality of the business and was negative EUR 90 million compared with negative EUR 101 million in Q1 2024. Net capital expenditures, including lease payments, were 7.9% of revenue and amounted to EUR 59 million, EUR 19 million below the level of the previous year. For the full year, we anticipate net capital expenditures, including lease payments to be 7% to 9% of revenue. The reduction in filling capital expenditure is driven by phasing, and we continue to expect the placement of 60 to 80 aseptic carton fillers in 2025. Regarding net leverage and financing, net leverage at the end of the quarter was 2.7x, reflecting the group's seasonality, while showing an improvement compared with Q1 2024, which was 2.9x. We're very pleased with the successful placement of our EUR 625 million Eurobond in March with coupon of 3.75%. This has extended our debt maturity profile and maintained access to diversified sources of funding for the group. The quarter-end gross debt position was impacted by this placement of the Eurobond. Cash and gross debt are expected to reduce when the 2020 Eurobond is redeemed in June. Following the repayment of the 2020 Eurobond maturing in June of this year, the group's fixed versus floating debt ratio will be approximately 50-50. SIG has no further debt maturities until June 2027. Now, let's turn to guidance. We are maintaining our full year guidance and guiding for total revenue growth at constant currency and constant resin of between 3% and 5%. In line with our usual seasonality, the adjusted EBITDA margin and free cash flow will be higher in the second half of the year. The adjusted EBITDA margin is expected to be within a range of 24.5% to 25.5%. This includes our expectation of a direct impact from current tariffs of approximately mid-to-high-single-million euros. As always, our guidance is subject to fluctuations in input costs and foreign currency volatility. And this concludes our presentation, and we are very happy to take your questions.

[Operator Instructions] The first question is from Charlie Muir-Sands with BNP Paribas.

Just 2 for me, please. Firstly, on tariffs, setting aside the direct impact that you've helpfully quantified based upon what tariffs could currently be, clearly, I just wonder whether you have seen any impact on demand through potentially any consumers, particularly perhaps in China, reducing spending, given uncertainties? And then, secondly, I just wonder, given you've now completed the refinancing, whether you had any change in view of your net financial expense costs for the year?

Charlie, thanks for your questions. Maybe I'll get started with the first one, and Ann can take the second one. I mean, at this stage, and you can imagine, we observe it very closely also with our local teams. I'm not in a position to say that we see these indirect impacts on demand. So, I mean, we see that the markets that were sluggish before like China continue to be sluggish. The foodservice growth that we saw improving in the fourth quarter last year continues to improve, but I would call it a fragile growth. Let's see what's going to happen going forward. And the other markets kind of are kind of -- we see demand levels on the level that we also saw in 2024. So at this stage, I can't say that we see indirect impacts on demand. It's maybe a bit different if you consider also the current currency environment is an indirect impact, as Ann said before, but not on demand. Ann, on the second...

Yes. On the refinancing, we believe at this moment, it's still a fair assumption to assume that net financial expenses will be approximately on prior year level with the positive of underlying rates being offset to some degree by the higher coupon for the new Eurobond.

And sorry, just back on demand, I forgot to add into my question. I just wanted to check because I think you originally indicated that you thought that H1 growth could be even potentially a little bit below 3%, and it's obviously come out slightly better. As we move into Q2, just on a kind of year-on-year basis, Q1, Q2, are there any particular calendar effects that you think might have shifted demand at all? Or do you think that the Q1 run rate is a reasonable proxy for the second quarter as well?

Yes. Thanks for the question, Charlie. No, I mean, our view hasn't really changed. We still expect the growth rate for H1 to be a bit slower and H2 to be faster growing also as a function of just simply the installations that are underway and that will add more capacity that will then go through ramp-up in the second half year. So our view hasn't changed in that perspective. I mean, we are pleased with the solid start into the year, but also we wouldn't read too much into one single quarter, but rather think in full year growth terms and as we now started to split in half years, and there, the view hasn't changed in terms of the growth profile. We expect sequential improvement throughout the year.

The next question is from Ben Thielmann with Berenberg.

This is Ben from Berenberg. A few from my side, if I may. The first one is on bag-in-boxes or the whole QSR/foodservice business. If we assume in terms of filler placements that you're going to place, let's say, 60 to 80 fillers this year, this only refers to aseptic carton fillers, right? Could you maybe help us a little bit in understanding how is actually the demand or the number of fillers being placed for the bag-in-box business look like over the course of 2025? Is it fair to say that it's going to be in line with what we have seen in 2024? Or do you actually see that customers are somewhat hesitant or reluctant with the filler placements as of today, given the environment? That's the first question.

Thanks for your question, Ben. I mean, absolutely, the 60 to 80, that's related to the aseptic carton fillers. And that's where, obviously, given the business model, we have good visibility and also feel comfortable to provide an indication as we believe that the numbers of fillers placed on a gross basis is an important KPI for future growth. We also talked about the cross-sell wins on the full year announcement for bag-in-box, spouted pouch, and to a smaller degree, also there were carton fillers in there. You might recall, we showed a number of 39 cross-sell deals. This is only the cross-sell, not the entirety of it. And that was a composition of 9 that were -- that we did win in '23 and 30 in '24. So I don't view the 30 as kind of the run rate how you can expect us to bring home such cross-sell wins. But if you look at on an average basis with the 20, even if you don't get to the 20, I think that would be a very, very solid number, just to give you some flavor around lines that we expect to place or to win.

Okay. That's very clear. And then, the next question would be on revenues generated from Europe. I know it was a tough comparison base, given that you were growing by nearly 6% in Q1 last year. But I was wondering, do you see any impact on your European revenues, given the lower milk supply actually coming into the market? I know it's early in the year, but if I look at the amount of milk coming basically from European farm gates into the market, it seems to be down low-to-mid single-digits in Q1. And I was wondering if that is something that could impact European growth throughout the year? Or was it really mostly that Q1 was a tough comparison base?

Yes. I think in the case of Europe, obviously, the entire last year is going to be a tough comparison, right, as we basically grew Europe last year in every single quarter with 6%. And that, as you recall, was a function of, yes, there was an elevated level of raw milk supply, especially in the first half or the first 3 quarters. But then, it was also simply on the back of the share gains that we had. And we have a good visibility on equipment that is under installation, that comes on stream, and there will be further installations in Europe also this year. So that's where we said already when we talked about the guidance for the full year that we expect Europe to continue to grow also in the year 2025, but more in line with what we saw in the past, this low-single-digit percentage growth. And that's a composition of mainly share gains. We talked already at the beginning of the year that price plays a moderate role. This year, it's more about volume growth, and that view hasn't changed. I mean, if you look to the raw milk production, there are always different use from obviously cheese to powder, to the drinkable milk. And from this perspective, we haven't seen now a drop. We were pleased with the start of the aseptic carton in Europe.

Okay. That's very clear. And then, one last question, then I go back into the queue, is regarding the legal overhang. You mentioned it in the last earnings call. Is there maybe any update -- now considering that you also had your AGM, any update on that topic in general?

No, there is not really an update. I mean, you're familiar with the arbitrational proceedings. They take their time. And at the point of time when we have a result -- obviously, we have clarity. Our determination hasn't changed. I don't think the AGM is related to these arbitrational proceedings. So from that perspective, there's not much more that I can tell you now, Ben.

The next question is from Patrick Mann with Bank of America.

I just wanted to talk a little bit about currency again. So can you just remind us if the -- sort of the sensitivity to the stronger euro that you have? And then, the second question, maybe less to do with the consumables, but more around the filler machines. I mean, if I think about it very simplistically, and apologies if it's too simplistic, but basically, these are euro-costed or Swiss-costed fairly expensive machines for most of the rest of the world. And so, do you think this could have an impact on your ability to place or to price these machines and to put them in? Because I also know you price the machines based on a proportion of upfront, but also how much people will pay you for consumables. So it will -- it should, I think, impact your costing for consumables as well if that's gone up. So maybe is that the right way to think about it? Is there anything I'm missing here? And how much of a headwind could the stronger euro be?

Yes. Maybe let me start maybe with a breakdown of our revenues by currency. So our dollar-denominated revenue is approximately 30%. Euro-denominated revenue is a bit more, 35% probably. And then, other currency exposure that we have is Brazil, China, India, Thailand, I would say, the most important currencies. So -- and then, if you look at the bottom line, the EBITDA sensitivity, I would say, roughly 1% depreciation of the euro against all currencies around the world would mean a 10 bps margin headwind. So -- but then, I mean, that can vary depending on the quarter and the revenue composition, of course, of the quarter. And of course, it would mean that all currencies need to move in the same direction at any point in time. But I would say that is very much the sensitivity. And if you believe that we would stay at the current spot rate levels, of course, that might have an impact then on our margin outlook for the full year, and we would probably then rather find ourselves at the lower end of our guidance range if everything stays as it is today.

And then, on your second question, it's correct that some of our equipment is assembled, built in Europe, and obviously, also the input costs are euro-denominated. But also, don't forget about the fact that especially the single-serve machines are manufactured in Asia, whereas also some bag-in-box and spouted pouch fillers are produced in the U.S. So there are other input cost factors. And of course, for those assembled in Europe, we feel that. But I think if you step back, if you look at the total cost of ownership over the 6 to 7 years of the initial lease term, there basically the equipment costs don't move the needle. So it's mainly about the consumables, and the consumables, as discussed before, we have the in the region, for the region approach where we also, by now with local extrusion in place in most of the regions, can source locally and that we have a better input cost function as a result of that.

The next question is from Alessandro Foletti with Octavian.

Can I ask you a couple of geographical questions, maybe? First of all, on Scholle, can you say if it was down in Europe and how much?

Yes. I mean, you recall, we had often the discussion whether we have soft comps or weak comps for Scholle for last year, and we said, no, not really for Q1 as there was a bit of a normalization effect in there. And then, we still also have to look at how end markets improve. Overall, I would say we were positive with the start into the year. We obviously give more quantitative updates in the half year. The carton was the fastest-growing substrate, speaking globally. And more specifically, bag-in-box and spouted pouch in Europe was a drag because there were still one-off machine sales in the last year's spaces that didn't repeat. Consumables, we were pleased to see the progress. And obviously, we had a good start into the year in North America.

So do I understand correctly that maybe in Europe, it was down, but in America, it was up, Scholle specifically?

Yes.

And it was up also very significantly because otherwise, you would not have come out with this 9%. Or was carton very strong in Latin America?

Yes. I think carton had a good start into the year. I've said it before on the call already. In Mexico, we saw a good start into the year. We're very pleased with that, and -- but also across South America in the markets that we have now built out our presence. And I would say, carton had an equally strong start into the year in Americas.

Okay. Good. Let's leave it at that. And then, maybe in Asia, particularly in China, I thought that -- I would have expected sort of a weaker start. What happened there? I thought that you have indicated that China would have been more negative.

Yes. I mean, for us, obviously, it's difficult to assess how the Chinese market recovery is going to pan out, right? I mean, we all saw that there were some announcement of stimulus. We don't see them happening on the ground yet. We are carefully monitoring also consumer confidence, and obviously, consumer behavior. At this point, it might have been a bit better than what we expected, given that we saw the strong Q4 last year. But we, overall speaking, haven't seen yet the sentiment shift that brought Chinese demand back.

Okay. And then, maybe the last one. When I look at IMEA, do I get it right that maybe Middle East was weakish?

No. I mean, obviously, India is an important factor in there, but so is also Middle East. And already last year, we saw a stellar performance also of the Middle East, as you said, that especially also some GCC economies did hold up well or improve well. And that continued into this year. I mean, we were very pleased with the start into the year. And I wouldn't be surprised if Q2 may be a bit slower. But for the full year, we really think that IMEA is going to stay the fastest-growing region.

Okay. And then, maybe if I may, the last one, how much debt now is still variable, so to speak?

Yes. As I tried to explain in the script, I would say, 50-50 after June when we have done the repayment of the 2020 bond, approximately.

Okay. 50-50 of the whole gross debt will still be variable? Is that correct?

Yes.

Okay. So EUR 1.5 billion?

50%.

I mean, it goes down when we do the repayment and the gross debt will be lower after the second quarter. And then, the ratio will be 50-50 again.

The next question is from Ioannis Masvoulas with Morgan Stanley.

First question for me is on IMEA, where revenue growth was again very strong. Can you give us a sense on proportion of India in the EUR 100 million revenue you reported for Q1? And I'll stop here for the first one.

Yes, we don't really break out India from the IMEA segment. But I would say, we were pleased, as I said before, with the start into the year with both markets. You still can imagine that India coming from a lower base, given the recent market entry, and that Middle East and Africa is the big lion share of the revenue in there, but India remains an important driver to growth.

Okay. Very clear. And second question on CapEx, which was fairly low in Q1. Shall we expect some catch-up from Q2? Or could we end up towards the lower end of the guidance range for the year?

I think -- so this was 7.9% as a ratio for the first quarter. And we believe also that for the rest of the year, we're going to be in the range that we guide for, the 7% to 9%. And at this moment, too early to say whether we want to -- at this moment, we don't want to narrow the range.

The next question is from Manuel Lang with Vontobel.

I have a follow-up on the tariffs. And there, I'm wondering if you see any front-loading already taking place in March, but also maybe April this year so far? Or maybe in other words, can we still expect a similar top line improvement for the second quarter as with the first quarter? That's my question.

Thanks for your question, Manuel. I mean, the short answer is no, we don't see this front loading. And maybe the background is also, as we said on the script, the volumes, the trade volumes that might be exposed to such tariffs, they are basically between continents. And that's also -- given that we have to ship the product with a certain lead time with vessel across the ocean, that's not really practical to or even feasible to do some front-loading. And I think that's one factor. But overall, as I said, there is limited exposure there. And from that perspective, we haven't seen that.

Okay. And then, maybe a second one also on CapEx. But singling out the gross filler placements, the CapEx were down minus 40% in the first quarter. So can we expect a more similar level to 2024 for the rest of the year? Or will there change like the ratio between PP&E and filling line CapEx? So just these 2 items separated. That's my second question.

Yes, I wouldn't really now guide on the sub-level for CapEx, but really leave it to the 7% to 9%. But of course, considering that we say we're going to confirm the 60 to 80 filler placements also for this year, I think you can deduct from this that the share will probably be a bit higher now going forward.

The next question is from Pallav Mittal with Barclays.

I have a couple of them. Firstly, on the cost side of things, your liquid paperboard cost inflation, you were highlighting around low-single-digit inflation in 2025. So is that in line? And you also mentioned raw material headwind for the second half of this year. So can you just talk about the various cost items with respect to polymers, aluminum, et cetera? That's the first one. And secondly, just very quickly on your 60 to 80 new fillers in 2025. Can you give us the geographical split, specifically, how much is Europe and then India in the IMEA segment?

Yes. So let me start with the material costs overall. So -- and let me comment on the full year. So -- and there's no change really to our outlook. As we said, exactly, liquid packaging board would have driven by the multi-year contracts that we have and their defined price adjustment formulas will have low-single- digit adjustment year-over-year, basically as always. And of course, that splits also equally across the quarters. And then, for the other 2 important raw materials, polymers and aluminum, as always, we have hedging in place, which covers a bit more than 50% of the spend. And that's exactly where my comment also in line that I made during the call or during the script, which is that we had favorable hedging contracts, which improved the result on that front, but that will not cover us probably in the second half of the year. But then again, also, let's see how those input costs will develop overall for the second half of the year and wouldn't be too negative on this front at this moment, but overall, the full year outlook and with this H2, of course, more affected, will be slightly negative still. No change basically compared to what we said before.

Yes. And on the 60 to 80 filler placements, I mean, without giving you specific numbers on the various geographies because obviously not all of that is locked in yet, as we already said in earlier calls, we see solid pipelines across all geographies where we operate, so in Asia, India, Middle East, Africa, Europe and the Americas. And I think also as IMEA is going to be our fastest-growing region from a consumer perspective, I think we're going to see another nice number of filler placements also in the year in that region, which further supports the growth in the coming years. But then, I think when it comes to the other 3 segments, I would always say from today's perspective, order magnitude equal weighted. But again, that can change. That also comes down to do customers kind of adhere to their own time line in terms of execution of these projects? So that's why we don't want to give specific guidance for these segments.

Sure. And if I can just follow up quickly on the litigation with Laurens Last, I know there's no specific update, but can you just give us some sort of time line or understanding of the next steps here?

Yes, I understand the question and the desire to get more clarity there, a desire that we actually also share, but also with our lawyers, when we discuss time lines, I mean, it's difficult to predict such an arbitrational proceeding and pin it down on the time line. I mean, the good thing is, and that's, I guess, why people choose arbitration as one of the dispute resolving processes, it has an end, right, not that you can go through multiple levels of appeal, but I can't give you really a specific timing.

The next question is from Ravi Ephrem with Citigroup.

Two questions. First, sorry to bang on about tariffs, but you've given the financial impact if the current tariff rates are maintained. Is there any clauses within your contracts with customers, especially on your annual fixed price ones, to pass on cost increases due to tariffs to the sleeves that you sell to customers? So is this like a worst-case scenario? Or is it -- is there some kind of clawback mechanism within your contracts that you could invoke? And secondly, on the filler placements, can you give us a sense of the carton and bag-in-box fillers by geography in terms of is there any particular geography where it is particularly weak versus some regions where it is particularly strong?

Thanks for your questions, Ravi. I mean, on tariffs, yes, I mean, in general, we look at tariffs as an input cost. And as you're familiar with our pricing, where we discuss normally around the first quarter of a given year prices with our customers, we look at all input costs, and that also includes tariffs. I mean, you have seen back in '22, '23 and even obviously, during the year, there were some significant cost escalation, especially in Europe that we had taken action. But generally, we discuss prices with our customers once a year. Now in terms of your second question, where we're going to place the fillers or how we see the demand panning up in our filler pipeline on aseptic carton, as I said before, really across the geographies, we still remain very pleased on the fast-growing IMEA, but all the others also very solid, especially Southeast Asia as part of Asia. And when it comes to bag-in-box and spouted pouch, also there, we do see that our enablement of the teams in the emerging markets, where Scholle didn't have a presence before, has worked, and we do see strong pipelines also there. Also there, I would say, really almost equally spread across the different segments, we see opportunities.

[Operator Instructions] We have a follow-up question from Alessandro Foletti with Octavian.

Yes. Regarding the litigation, I take it from your answers that there is no intention or possibility to maybe also make an out-of-court deal, speaking with the other party and agree on something.

I mean, I can't really comment on that. We are in these arbitrational proceedings, Alessandro, as you're familiar with. You know our determination is very clear, and we follow the process now. And as soon as there is a result to be communicated, we will be out there.

All right. Okay. And then, maybe a final question for me regarding Brazil, you didn't really mention. You said Mexico was strong. But I wonder if there is any effect on -- from inflation there. What I understand is that inflation in Brazil for goods, any type of goods, including food, is enormous. So do you have any impact on your demand? Do you see anything?

No. I mean, I would say, Brazil falls into the same basket as kind of many markets in this world where we still see that consumers struggle with the inflation that we saw over the past couple of years. I mean, yes, Brazil saw always inflation. I don't recall a year where we didn't see inflation there. And consequently, almost every single year, we had pricing measures. But I would say, it's kind of the similar muted end market demand that we see also in many other markets in this world.

The next question is from Jorn Iffert with UBS.

I would have 3, please. The first one is to come back on some statements you made already. But if I remember correctly, H1 2025 organic sales were supposed to be below the full year guidance. Has this changed now? Just to double check how you think about the momentum currently. And I will take the questions one by one, if it's okay.

Absolutely. No, that view hasn't changed. So we still expect H1 -- to see in H1 slower growth than what we're going to expect for H2. As I mentioned before, that is also a result of the fillers that are going to come on stream in the second half of this year, and they're going to go through ramp-up. I mean, we don't guide obviously on half years and especially not on quarters, but we wanted to manage expectations when we started into the year, and that view hasn't changed. You also are familiar with our guidance for the full year, which is 3% to 5%, which is our way to say 4%, which we consider the low end of the midterm guidance, and we said, most likely, in the first half, below. And there is an opportunity to be above in the second half. And that view hasn't changed.

Sure. And the second question is, please, on the filler placements. Can you give us a little better feeling for what kind of end product this is really? Is it for small-sized packages, where you can fill in particles? Or is it fillers your competitors are also offering? Just a little bit more feeling on the exit end product.

I would say, the majority goes into dairy and dairy near applications, including also dairy alternatives, from an application perspective. Then we have probably -- that's more than half, and the remainder is probably equally split between food and noncarbonated soft drinks. From a volume perspective, in Asia, we continue to see, just given the price points in the market, there is a higher demand for single-serve, although we saw over the last couple of years that we placed every single year a bit more liter machines. There's obviously -- also, buying power is growing in Asia and price points or the opportunity to position certain products at different price points. And Europe and the Americas, where the liter format is a very established format. I would say, just ballpark, it can be within these 2 geographies about -- and also that includes Middle East, the more established part of Middle East -- can be half-half between single-serve and liter.

And the last question, please, on your equity free cash flow run rate for the full year, has anything changed? Has your view changed? Can be similar to last year, plus/minus, to double check this, please.

Yes. I think same seasonality, big picture, as always. So first half will be negative, and then second half will be stronger. And Q4, as always, has strongest quarter. But I wouldn't see, at this moment, any need to come up with any new guidance here.

We have a written question from Ryf Yannik with Zurcher Kantonalbank. As the new Chairman of the Board of Directors, Ola Rollen provided any new strategic inputs? Or will the current corporate strategy remain largely unchanged still, sorry?

Obviously, we are super pleased to have Ola now on Board. Obviously, he was elected now in the AGM in April, and we're going to have the first formal Board meeting now coming up. So I think we should give him some time to get familiar with the business. He has spent already a vast amount of time ahead of the AGM for onboarding and has visited sites, and that process continues. And then, we go through the strategy process as we do once a year with our Board. And -- but in this stage, we are still in the onboarding phase. And let's give the gentleman and also the other new Board members some time to get familiar with the business.

[Operator Instructions] It seems there are no more questions at this time.

Excellent. And thank you very much, everybody, for your time this morning. We appreciate your participation and your questions. Have a successful day and week, and we look forward to see you in one of the other engagement events or conferences. Thanks a lot. Stay safe. Bye-bye, everybody.