SIG Group AG (SIGN) Earnings Call Transcript & Summary

[Audio Gap] So in the unlikely event of an emergency, please follow the green exit lights and [indiscernible]. On these words now, I would like to hand over to Ann for the Q3 Trading Update. Ann, the floor is yours.

Very good. Thank you very much, Christoph. But you need to give me the club, please -- Messy. Good morning, everybody, here in the room and also on the webcast, and thank you very much for making time to see us today. We appreciate your time, that especially during such a wonderful Autumn day you find -- found your way to this app location. So as Christoph already mentioned, I will now guide you through the Q3 update, and I will do that probably a little faster than we normally do that because there's much more interesting stuff to be presented as a capital markets update, afterwards. Also, I wanted to invite you to stay with us for lunch because we're not only having the leadership team that you will see presenting today, but we also have a number of senior leaders of SIG joining us for lunch, so in case you're interested to ask them questions. Please feel free to do so. And with this, I would go directly into the numbers. And that's now a little complicated because I need to memorize everything much more difficult than a normal quarterly trading update. So forgive me if I miss to mention one of the numbers. You see them all on the slides or in the media release. And also forgive me, I won't say all the time that the comparison is against last year's without nonrecurring charges. So take this as a given that's what we compare against. So really operational performance against operational performance. Now Q3 revenue came in stronger than what we had anticipated going into the quarter, at constant currency and constant resin, the growth rate was 6.5%. And within that 6.5%, we had Aseptic Carton achieving almost double-digit growth. We had Bag-in-Box, Spouted Pouch, a negative 4.6%. [indiscernible] 17.4%. Again, that's a very steep increase compared to last year's Q3. [indiscernible] from lower raw material costs from inventories that we had on stock. While the third quarter has underlying material cost really at the elevated level as stocks have been consumed. Also, the surcharges have ramped up and had a stronger contribution in the third quarter compared to the second. And of course, that is what kept the margin basically then stable. It also translated into very nice adjusted net income of EUR 94 million. So that's also a significant increase compared to prior year. And same also for free cash flow was EUR 91 million, also significantly up versus last year. And I will comment on that in detail when we come to the free cash flow slide. Now this drives the 9 months to a growth rate at constant currency of 3% and constant currency and constant resin of 2.5%. Within this, you see again the different speeds of the business is reflected with a Aseptic carton above 4% growth rate. Bag-in-Box, Spouted Pouch negative 4% and Chilled carton negative 2%. Also for the 9 months, the EBIT margin has increased considerably compared to last year by 150 basis points and also EBIT overall, in absolute terms, naturally increased. Adjusted net income is now at EUR 228 million, up from EUR 197 million last year. And free cash flow for the 9 months period is positive at almost EUR 60 million compared to still a negative number in the prior year. All of this leads us to updating the financial guidance for the year. We keep the revenue growth unchanged in the range of 0% to 2%, and we upgrade the expectations for the EBIT margin from 15.7% to 16.2% to now 16% to 16.5%. Now let's take a look at the regions at some detail, and my colleagues, of course, will comment much more on the regional opportunities that we see going forward, but quickly for the 9 months update. So basically, for all regions, the same holds true. Q3 comparables are pretty soft, so that supported performance. But Europe for the quarter came in above 3%, and that is a nice development and a still very difficult market environment in Europe. And we can say the topics that we have discussed over the last couple of months has haven't changed a lot for Europe. Nevertheless, we see some nice momentum from new line installations supporting the result also. The IMEA region had a stellar quarter with 18%, now taking the total to almost 6% for 9 months. And as we have said that all the time, I believe, since I'm around, we always have quite some fluctuations in the growth rates in that region because life is more volatile in the IMEA region, and that holds, of course, especially through this year. So really, this is an outstanding performance in a very difficult market environment with geopolitical challenges, but it's very much also here driven by volume. In Asia Pacific, the growth rate for the quarter was almost 5%, taking the total for 9 months to around 3%. The trends are a little different in the Asia region. Here, we benefit very much from innovation with new formats that we have put to market and which are appreciated by customers to also conquer new markets. And also, we have had significant gains, for example, in projects like school milk expansion in Southeast Asia. In the Americas, we also saw another very strong quarter with 9% at constant currency. As this is the region that has the highest share of Bag-in-Box and Spouted Pouch business, it makes specifically sense to also here look at the number without the resin impact. That is then taking the quarter to 7.6%, 9 months, almost 5%. Also here in the region, the business development was very much driven by Aseptic carton across geographies. So we have seen good developments in the U.S., in Mexico and Brazil and all key locations, basically. Bag-in-Box, Spouted Pouch was a little softer. But overall, if I may comment on that business for the quarter or the 9 months, if you dissect the growth rate of minus 4% into really what was core and what was noncore. And it's fair to say that the core business is more or less flat, while we have seen the -- what we define as noncore or less attractive pockets of business was double-digit negative. Now let's take a look at the adjusted EBIT bridge for the development for the 9 months. And here, I would first like to start with FX. Basically, like already in the second quarter, also in the third quarter, FX was a neutral component for the EBIT bridge. Other than that, almost all bars within this bridge have changed quite a bit compared to how the bridge looked in half year. This was expected, so no surprise. But let's look at the details. So the top line or our top line contribution is significantly higher than where we stood after 6 months driven by the volume that was significantly growing against last year's Q3, but of course, also driven by the surcharges that we have implemented even more in the third quarter than the contribution to the second quarter was. In turn, you see also that the sourcing bar has become significantly more negative now at minus EUR 25 million. And don't forget the sourcing bar is only reflecting basically the cost increases for the unhedged portion. You remember that per our hedging policy, we try to always hedge a very significant amount of the cost for the next year. And we went with a hedge ratio of around 70% in the year. So basically, this reflects 30% of the raw material cost base moving. Production also improved quite a bit compared to the half year, and that's no surprise because better volumes make the plants run more efficiently and help the plans deliver a better performance. also waste rates and quality has been better in the quarter. So really an outstanding job done by everybody in the operations in the quarter. Freight costs, on the other hand, continued to trend negatively. So also no surprise, I guess everybody would have expected that. SG&A, still reflects the underlying restructuring savings of the initiatives that we have kicked out last year in the fourth quarter. However, the comparison against last year looks a little softer than in the half year. And that is basically driven by effect relating to STI and LTI provisions. Last year, we had quite some release of these provisions given the weak performance that we had in 2025. This year, we were in the fortunate position to slightly increase those provisions driven by the good performance that we are discussing today. All of this makes the EBIT grow 12% now for the 9 months against last year and even 17% at constant currencies. Now here is the two detailed slides with all the reconciliation from reported to adjusted. There's not much that we need to discuss, I believe, on this slide, I would just like to draw your attention to a few numbers. So starting with the minus [ 17% ] that you see in the first column. This basically reflects the unrealized gain of hedging positions that we still have for our raw material hedges. Number slightly smaller than in the last quarter as some of this has been consumed throughout the year, but there is still a gain of EUR 17 million. And then as we have discussed multiple times, the PPA changes, the amortization related to the Onex acquisition is done. Nothing happening there in this year anymore. And the PPA for the other acquisitions is also on a lower level compared to prior year, of course, driven by the impairments that we have seen last year. Same for the net income reconciliation slide. We just put this in for completeness, I think there is nothing that needs to be discussed on this slide. It's very unexciting overall. And now let's take a look at free cash flow and CapEx. I already said, free cash flow for the 9 months is at EUR 59 million, up compared to the minus EUR 84 million that we have seen last year. So no surprise, the strong operational performance, of course, has contributed to this. And then also the second topic that we have discussed quite a lot also during this year and last year, is the contribution of the customer incentive payments. You know that we have volume agreements with our customers. And you know that if they grow significantly in volume, we pay them a discount in the following year. Now in 2025, our volume growth hasn't been very high. Accordingly, we also don't have to pay a lot of incentives this year. That is very different than to a year ago, where we basically had high payouts relating to the high volume growth in the Aseptic Carton business in 2024. I know this is always a little confusing, but that is exactly also the reason why we don't give a guide for free cash flow because it's not easy to forecast. If I should quantify the impact for the year, that's around EUR 60 million positive on that bucket. And split between rebates that we didn't have to pay and also one portion for volume growth that we have seen this year, which leads to higher cash inflows. The third quarter was also supported by the phasing of working capital. So that was a positive for the quarter, which we expect to reverse to some degree in fourth quarter. We have also discussed that the timing of coupon payments is a bit different than in prior years because of the refinancing with the new Eurobond, so that also contributed. The tax payments were lower by EUR 19 million compared to previous year. And CapEx is also lower by EUR 19 million. As you can see in all the details below. So overall, PP&E, we stand at 6.3% of revenue. After 9 months, that's at the lower end of the guidance. I believe that also reflects some of the discipline that we have put into the processes. But of course, the big driver here of the reduction compared to last year is that the Indian plant basically is complete and doesn't require any additional spending, while the large -- single largest, biggest project that we still have ongoing is the extension of the Mexican plant where Ricardo will talk about later. So this takes me to leverage. The leverage has come down to 2.6x. So that is perfectly in line with the game plan that we have laid out. when we were standing a year ago. Gross debt has reduced by around EUR 300 million and net debt even slightly more than EUR 300 million compared to a year ago. The refinancing is very much on track and completed for the year, and we now look at a very balanced maturity profile. This all leaves us to updating the guidance for 2026, as I mentioned before, on the profit line. So we take up the adjusted EBIT margin guidance to 16% to 16.5%, basically moving it up by 50 basis points. I note that now a question would be why didn't you also upgrade growth guidance? Because at this moment, you already sent a 2.5%. And here, the answer is that the third quarter was its very low comps, of course, has influenced the 9 months number positively. We are a little more cautious for the fourth quarter and don't want to extrapolate, and I think it wouldn't be reasonable to extrapolate the third quarter growth rate also into the fourth quarter. And considering all the volatility in the world, we said this was the right thing to do. Everything else is basically unchanged. But I think overall, this is a nice -- or showcase is the nice performance that the business has delivered over the last 12 months. I also know that many of the SIG team are dialing in normally to our quarterly update. And we also know that they are registered in big numbers for today. So I guess it's a very nice opportunity to also say thank you to everybody who has contributed to the good numbers so far. And we look all of us together forward to talking to you later when we do our Townhall. So I think this is all on Q3. I know there will be questions on Q3. We will address all of the questions together in the Q&A session at the end of the presentation. And with this, I would then translate into the CMD part. So as Christoph has said, we have a couple of different building blocks for the agenda for our update overall. The agenda. You see this reflects very much the new segments in which we will report going forward. You have also -- or most of you will have met most of my colleagues who will be presenting their respective businesses today. But there is one person that you don't know yet, and I would love to introduce you all to Chris Jones, who will be running our Global Bag-in-Box, Spouted Pouch business in the future. Chris, if you quickly could stand up and make yourself known. Thank you very much. So Chris has joined SIG less than a year ago. He's based in the U.S., and he comes with a very rich experience in the paper and packaging industry. And he has collected experience both in operations-related roles, but also, of course, in commercial roads, which [indiscernible] perfectly for the challenges ahead. Good. So now let me start first by setting a bit the strategic context and giving you a brief update on SIG's vision. So over the last year, I think it's fair to say that we spend a lot of time and effort on focusing to restore execution discipline within SIG and to making sure that we deliver against the commitments that we have made exactly here a year ago. Today, we want to showcase much more on transparency, how we intend to run the business going forward. And also, we want to show you the strength of our competitive positioning and then how this competitive visioning translates into sustainable value creation overall. At the heart of our strategy stands a very healthy aseptic business. And we have three very clear priorities for the company overall. That is number one, accelerate profitable growth. Number two, improve the returns. And number three, you will hear that a couple of times, creating a simpler and more focused company. So, at the essence, if you split our business into the different product lines, around 80% is the Aseptic Carton business, around 17% Bag-in-Box and Spouted Pouch and 4% is the Chilled Carton business, which we have declared already a year ago as being noncore and for which we are exploring options. You know how our business model as an aseptic system solution provider works. We have basically a [indiscernible] reinforcing model that starts with filling equipment that we place at customers, filling equipment that provides customers with industry-leading TCO so it's highly competitive and is always ready with innovation to match flexibility needs of the customers to make sure that our customers run operations very efficiently at the lowest waste rates in the industry and also that positions them super well when it comes to sustainability to make sure that they can always fulfill the latest demands of consumers or also regulatory bodies. We have a recurring revenue stream with packaging solutions in a number of formats. And I think we also have a couple of examples standing out there, so that customers, especially in these times where on the go and smaller formats and proliferation play a big role, more protein comes with much more different SKUs. And our equipment basically helps customers to be able to accommodate all of this. And we complemented at the end with services with a very large global field service network and increasingly also with more and more digital service offerings. A couple of data points here also. So for the Aseptic Carton, we expect an attractive market growth and Christoph will talk about that in more detail of 2% to 3%. We have outgrown these markets consistently over the past decade by 1 to 2 percentage points a year, and we intend to continue to do so, and we will also explain to you in the later sections why? The market overall is pretty attractive also when it comes to profitability. And couple more KPIs on our offering. So the most flexible machines can do up to 9 different formats on one machine. So that also helps, of course, customers manage their investments better if they can run different formats on one machine. Lowest CO is the recurring theme. So -- and when we talk later about the NEO launch, you will understand even better also why the output per square meter also a very important KPI. And the new generation of machines is 20% to 45% more competitive here. On technical service. We have more than 700 people around the globe, helping our customers. And also, that is seen and acknowledged by customers. So coming out with an NPS, Net Promoter Score last year of EUR 42 million. It's also very important to me to mention that what we have promised last year, we really have put into action, and we have delivered on those themes. You might recognize again the 3 themes that we have talked about last year, portfolio optimization, performance improvement and capital allocation discipline. On portfolio optimization. Let me start by -- so we have improved the share of high value-added products in our portfolio, and especially Angela will also talk about this later. We have executed very consistently on the portfolio portfolio prioritization. That's always a difficult word, prioritization -- on the Bag-in-Box and Spouted Pouch portfolio and in the Chilled Carton business, while we haven't yet closed the efforts to find a strategic solution for this, we are super encouraged by the margin improvements that we have achieved during the last 12 months. Performance improvement overall. Mentioned in the Q3 update already, we are up 150 basis points in margin, and that is very much driven by the reductions in SG&A that we have kicked off a year ago. And despite the very turbulent year when it comes to raw materials, logistics and everything, we could hold to this one because also here, very diligently, we have executed the unfortunately needed surcharges. Indirect procurement savings are ahead of plan, and we come to that later. We even believe there is more opportunities also into the next year. Last year, we also said we would close two plants in the Bag-in-Box, Spouted Pouch universe. One is completed, and the other one is underway and on plan. When it comes to capital discipline. So we have implemented a number of new KPIs within the organization that help us to run this more stringently. And it's -- I would say also the new EBIT perspective is fully institutionalized when we discuss business now internally. We also see net CapEx at the lower end of the range and all of this contributing also to an uplift in ROCE, so an improvement in the returns of almost 2 points. But this is not it. So we are far away from declaring [indiscernible]. We are very much encouraged by the progress that we have made so far, but we clearly believe there's more that we can do as a team. So today, you will hear us talk about the growth corridor. We are confirming the 3% to 5% that we have put out last year, and we believe that we are well set up to continue to outperform also the markets. While we have made great progress on the margin, we believe there is more to do. And it's important to me to say that there is not one silver bullet when it comes to margin improvement, but it's a number of different measures that are partially self-reinforcing, but really a big agenda that we will be driving. And it's also important to say that this is not just about cost reduction, but this is about creating an organization that is well set up to be even more successful in the future. So this is not about just short term, improvements, but really optimizing the enterprise as a whole, strengthening accountability on all levels of the organization, continuing to have disciplined resource allocation everywhere. And also to be very clear on the organization is, when it comes to distribution of roads and responsibilities to avoid duplication, and at the same time, ensuring that we do everything super professionally and highly customer-focused. Now here, I would like to briefly summarize and let's start at the bottom right. Our vision is to be or to become the #1 choice in Aseptic Solutions. Where we compete today for deals, we are very, very successful but we want to enlarge that universe where we play. And whenever there is a choice to be made for a new installation, that should be SIG. There is three priorities overall. Starting with optimizing structures, then elevating performance and all of this we do because we want to excite our customers. So this is about more than just market share gains. We want to really be the preferred partners through innovation, TCO, sustainability service, and we want to continuously and consistently win where we compete. Quickly talking about optimizing structures. We, today, basically announced the creation of separate organization for Bag-in-Box and Spouted Pouch, so that we can manage the different businesses according to their different needs also in a very transparent way. We will also address the organization overall in Bag-in-Box and make sure that we run it with the leanest possible team. At the same time, of course, we are reassessing all internal structures to drive efficiency but always with customer proximity in mind. When it comes to elevating performance, we have basically two very strong buckets where we want to optimize further. On the one hand, that is procurement also on the indirect materials, but of course, also on the direct materials. And then we all believe there's more to do in manufacturing and in supply chain. We have defined for all plans, very structured agendas on how to drive performance and operational excellence, and we are executing this as we speak. All of this is complemented with two enablers and there's, on the one standardization, really making sure that we run professional processes supported by modern systems and tools and also make sure that automation plays the role that it should play in the professional organization today. And last but not least, we are also very much focused on culture, the way how we collaborate as a high-performing team and really with a play-to-win mindset to make sure that we do justice to our product offering and to our teams. So now let me quickly touch on the numbers for the different substrates and the different missions. Let's start with aseptic carton at the very left. So you see -- or you have seen that before, growth rate after 9 months, 4.2%, margin of the business, adjusted EBIT 19.1%. So the mission here basically is to continue what we have been doing in the past, continue to grow and do further optimization. On Bag-in-Box, Spouted Pouch. Basically, this business has been slightly declining over the past couple of years and now achieved a margin of around 5% over the 9 months. And let me give you a little color on this one. Many of you will probably remember that this business had an EBITDA margin in the high teens at the time of the acquisition. From there, you need to deduct something like 7% points for DNA. So that brings you to slightly more than 10% EBIT margin as a starting point. factor in additional corporate allocation that, of course, every business and a larger family needs to bear, then you are probably somewhere around 10%. So what you see is basically a clear decline compared to the situation back then. You also probably remember that we were encouraged by the first successes in the business and markets being very favorable in the first quarter after the acquisition. But then the market downturns clearly have led to lower operating leverage in the end. So that wasn't helpful for the margin. Next to that, also some capability and investment gaps needed to be addressed. And that, of course, took a toll also on the margin. And the mission very much from here is now a turnaround to drive performance up again, while at the same time, making sure that clearly defined [indiscernible] pockets are being served efficiently and innovation is being put to market. Last but not least, under the nonoperative segment Other, we will, in the future, also report the Chilled Carton business. And when you look at the numbers there, you see this, and we talked about this a year ago. That's a highly competitive market. So growth rates haven't been stellar also here. But what is very encouraging, you see the margin expansion compared to previous year. So while this business is not at the core, we were still able to improve it significantly compared to where it stood a year ago. And that very much goes to cost of goods optimization, both in the field of different board structures that we use now in different paper suppliers, but also stepping up the execution in our own manufacturing facility. This change of the segment reporting, we expect will result in the fourth quarter in a goodwill impairment that is noncash of around EUR 250 million going back to the acquisitions of Shale and of Evergreen. Important to say that this impairment is noncash and has no implications for our debt capacity or for the underlying economics of the business overall. And while the three businesses really have their unique challenges or unique positions to build on at the moment, I would still also like to highlight again that we believe that the Bag-in-Box business, although it looks a little difficult at this moment, we believe, is a good business and a business that can look even better in the future. Now important also is that incentives and shareholder interests are aligned, and we have discussed this a year ago, also slightly and said that we would work for the coming year also on adjusting our compensation frameworks a little. So what is new? In the long-term incentive, we are changing the comparison for the relative TSR from an index to defined peer group and simple reason here is that the index is not being provided anymore. So we needed to find a solution. An external partner has found us the best correlations and basically, this peer group consists of packaging companies, industrial companies, customers and also equipment suppliers. On the short-term incentive, we have two changes a couple of changes. First, we introduced ROCE as a KPI, as we have discussed already a year ago also. And we changed the nonfinancial KPI from the EcoVadis score, where basically it can't get any better also for SIG with a 96 starting point to different financial targets of CO2 targets, safety targets and customer intimacy targets and NPS. You will also probably notice that the weight of growth has been increased slightly in this composition. And that for bottom line, we now fully focus on the margin and have removed an absolute EBIT component. All right. So this closes now the introduction. And what we will now do. First, we will have Christoph and Gavin talking about market and innovation. Then we do a deep dive into the regions on Aseptic Carton, where our regional leaders will guide you through the most attractive opportunities that we have identified going forward. Then we will have Chris speaking about the turnaround plans for Bag-in-Box and Spouted Pouch. And then in the end, I will summarize it all and tell you what this will mean for the numbers. And with this, I hand over to Christoph.

Thank you, Anna. So good morning and a warm welcome also from my side. I'm Christoph Wegener, the Chief Markets Officer and President, Europe at SIG. In this section, we will be focusing on Aseptic Carton, which makes 80% of our revenue and contributes the lion's share of profitability and cash. And my colleague, Gavin Steiner, our CTI and I, we will focus on three topics. Number one, why do we remain confident in the structural growth of Aseptic Carton. Number two, why do we remain confident that SIG will continue to gain market share? And number three, how does our strong innovation pipeline strengthen our competitive position. Let's start with the market first. The long-term growth of Aseptic carton is supported by four fundamental drivers that drive end market growth and that favor Aseptic Carton as a packaging substrate. Firstly, dairy demand will continue to grow globally, simply by a growing population and by GDP growth. If anything, that is amplified by what we call the worldwide protein wave. So what started a couple of years back in the Western world, mostly in sports nutrition has really proliferated across the world, we see globally and in all consumer segments and increasing demand for high protein products, which is driven by a trend towards healthier food, but also accelerated by weight loss drugs and is portions -- food portions get smaller, protein density simply has to increase. On the packaging side, we see a lot of growth in portion pack, and that is simply a function of growth in the emerging markets where smaller pack sizes. So 350-milliliter and below are the prevalent packaging size. And Aseptic Carton is the most cost competitive packaging solution for sensitive products with long shelf life. We'll deep dive into that later. Further, we see continued interest in sustainability, regulators, food and beverage companies retailers and consumers are concerned about the environment, and that favors packaging that allows ambient distribution, which is low in energy and lower in CO2 emissions. It favors packaging that is designed for recycling that is low in CO2 that is made from either renewable or recycled material. And Aseptic Carton ticks the boxes of all of those, which is why we say it is the most sustainable packaging substrate for sensitive products. But let's deep dive into these important statements. And I said more consumers, higher protein demand, more milk consumption. And that fundamental link is one of the most important growth drivers of Aseptic Carton going forward. And this is the data to support it. So you can see on the y-axis Milk Protein consumption. And on the X axis, GDP per capita. Now you see structural difference in diets. So you have the Western diet, which tends to be richer in milk. So that's the European, the American bubble up there. And you see Asian diets that are a little less rich in milk. But all of these markets have one thing in common, is GDP per capita grows, so does protein consumption. And what coincides with economic development is typically urbanization. And when you have sprawling urban centers in emerging markets, you simply cannot provide milk from dairy farms around the town. Supply chains get longer, and therefore, ambient distribution gets more important. Now the key question is, which packaging substrate will capture that growth? And I said Aseptic Carton is the most cost-effective and the most sustainable packaging substrate to pack sensitive products for long life. Now you have two dominant technologies in that segment. So you have Aseptic Carton and you have Aseptic PET. And here, we've chosen our DomeMini, our latest innovation, which we call the carton bottle, and we compare it against an Aseptic PET bottle, both portion pack where we see most of the growth happening. So shape and convenience, they're very similar. They have center spout, easy to consume on the go. But in wait, they're very different. DomeMini has 40% less weight than an aseptic PET bottle. And material still is the biggest portion of packaging cost, respectively, DomeMini is 30% to 50% less expensive than Aseptic PET. And by the way, here, we have just taken average resin prices from '23 to '25. We haven't even factored in the spike in raw material prices that we've seen in the Middle East crisis. Less material also means lower CO2. And hence, we do say Aseptic Carton and portion pack is the most cost competitive and sustainable solution. Now the question is which company will capture all of that growth? And SIG over the last 10 years has outperformed the market throughout every economic cycle. So we had a period of growth from 2016 to 2019, where we over delivered and outperformed the market, and we certainly also had a period of soft markets driven by a pandemic, the great inflation, trade wars, real wars, but still, we have delivered 2% volume growth through market share gain. Revenue was even higher based on pricing. Now due to the four trends that I mentioned, we believe that Aseptic Carton will return back to a structural growth of 2% to 3%, and our ambition is clearly to continue outperforming the market. But market growth is not the only factor in our growth model. We have market share gain. We still have attractive white spaces that we can enter. We increasingly see growth opportunities in technical service, and we have value uplift through mix and pricing, as we have executed in the last two years of soft market environment. Now that's a multifactor growth model that is really the foundation of the resilience of our growth track record over the last 10 years, and that gives us confidence to continue to deliver the 3% to 5% topline growth. But if we say market share gain and entry into white spaces, that requires that we have a differentiated superior product offering. So what do we do to ensure we keep that lead in the marketplace. So as Ann mentioned, we have a system offering, an integrated system offering. So we are filling systems. We have packaging, the unique sleeve system that is designed for our filling machines and they offer technical service to keep the whole system running. And we innovate simultaneously in all three elements of the system. On the filling machine side, we are in the process to launch our new Neo series of filling machines. So we are increasing the speed of our filling machines by 25% to 40%. That allows our customers to produce more. It reduces the unit cost, therefore, so higher output on the same asset. But what is also important, we've designed them in a way that they are faster, but still in the same footprint. Because if you want to gain market share, you need to replace filling machines. And we don't want our customers to move walls to increase their space in their filling rooms. We want them to plug and play with our new machines. And even our fastest Neo series comes with a strong points of SRG, volume flexibility, industry-leading waste rate, high technical efficiency. On the packaging side, we are in the process to launch our Tirol portfolio of [indiscernible] barrier solutions. This allows us to offer the most sustainable Aseptic Packaging Solution as the only player that has really industrialized that and gain share in markets where regulation gets tight to consumers and retailers get more focused on sustainability. We also have unique shapes. I mentioned the DomeMini that can play in premium segments and help our customers to bring their premium products and the right packaging to the market. On the service side, we have established a global platform of technical service. Our field service engineers are providing services to filling machines in more than 100 countries on this world. And each year through our customer satisfaction surveys, we hear that our service delivery is superior to competition. But that's the core service. We see quite some growth opportunity in digital solutions for Technical Service, and Gavin will share more about that shortly. So in a way, our integrated system remains competitive. We heavily invest into all three elements. And the more filling machines we will sell, the more packaging material we will sell, the more service opportunities we will create. But it's not just a superior offering. It's also the way how we bring it to our customers that creates long-lasting customer relationships and customer loyalty. And here, we focus really on joint value creation together with our customers. And that means their success is our success. We help them to identify market opportunities in new beverages market opportunities in new channels. So every day, our marketing teams that are embedded in our customer organizations are having innovation workshops. They discussed with our customers, market trends, market opportunities. Up to September, 344 of such workshops have happened with our customers. And once we have identified the joint opportunity, we can help them in our tech centers in Dubai and Germany and China to develop these new beverages. We can advise them on the right packaging format for a premium product, a premium pack for a commodity product, a commodity pack. And we do even joint market studies to find the right sizes, the right price positioning and we invest into AI tools to help them to become even more effective in selling our joint products. And it's really that joint approach that creates long-lasting customer relationships and loyalty. And with that, I would hand over to Gavin, who will talk more about how we deploy our innovations and how they enhance our product offering, how it expands our digital service and also our cost effectiveness.

Thank you, Christoph. Thank you very much. Ladies and gentlemen, it's a privilege and pleasure to be here with you today and with all of those guests online, too. A lot has been said already by Christoph around the area of innovation. But let me steal your attention just for a second. What does the word innovation conjure up in your mind? Is it the next big breakthrough? Is it a product development that substantially changes the world. What does the word innovation mean to you? Does innovation in our area where you're talking about incremental changes across the system warrant such a big change. And the answer could be different. Yes, we all look for it and in R&D, that is a dream [indiscernible] but as a system enterprise, innovation comes in incremental changes that develop a competitive advantage across the ecosystem. What I presented to you last year was a road map of renovation. Christoph has highlighted one of the really interesting parts around the filler, the sleeves and the services. If you look there, we have a discovered, developed deploy color coding. And on that, the real power of innovation is not the big breakthroughs. It's the incremental knowledge that we bring constantly into this ecosystem that changes the way we behave as an end-to-end business. SIG Neo platform has gained a lot of momentum, a lot of interest on the deployment of that knowledge that's been created over the past, culminated into the new machine park that we dub SIG Neo and that deployment is gaining traction. I'm going to cover a little bit more detail on the next slide around what platform upgrade and unification means. You can see 2026 is the start I presented this last year and I must say that we have traction and speed on all of these initiatives on time and full. The sustainability initiative, which we bring to the sleeves, the alu-free, that's with the paperization journey that we're on is also gaining a lot of traction, a lot of interest in the markets, and you heard and you will hear from other colleagues about the deployments that are happening. So really proud about the innovation so far and the SIG promises that we made. And then a little teaser at the bottom there. The service, Christoph mentioned about digital. There is something around digital that everyone talks about AI and all the buzz words, but I want to bring to life something unique that is built on build blocks over the past. And we -- if you can see the time line there, we're commissioning something called Digital One, and I'll bring them to life in a second. So continuous innovation and not isolated breakthroughs is what we're doing. Platform unification and upgrades. Ladies and gentlemen, this is really leveraging what we do to deliver more to the customers and reduce complexity in our ecosystem. So the knowledge that SIG has with more than 10 platforms of fillers across the world, reducing that down to a unique set of highly performing, best-in-class fillers then, which we get down to 5. Look what it unlocks. And this project has been going on with the teams, taking all that knowledge and bringing it into reduced efforts. Once you've only got five platforms, cost reduction, not only from building of these machines, but also the training, development and deployment, enhanced level of IT/OT. So this is the security levels where we have to deploy patches to the world, if there's any security issues. When you have a unified platform, that's a lot simpler and a lot more efficient. And it also comes back to me, it helps my deployment and innovation, because we've got plug-and-play methods now which can fit across the five platforms. So ladies and gentlemen, that's the ecosystem that we are looking at with the platform upgrade and unification project, and it is really a priority for us and the team. So simplified to scale and standardize to accelerate. Moving on, this is what I had the teaser on the first slide for you all, around Digital One. So what if every filling machine that we connect, what if every filling machine that we connect makes every other connected machines smarter. Digital One is exactly that. We've been building modules. And you're going to see in Latin America, my colleague will present a couple of these modules that have been in development for years, Digital One has been connecting different parts of the process. Our fillers are fully connected. And with that, a unified AI native platform evolves. And this brings with us a single interface to the customer, customer enhancing getting value from the digital data lakes that we have and retrofitting that into the customer base, not only on efficiency performance, TCO, but also on the quality management, root cause analysis. And imagine all of those connected fillers coming back with that data to us to enhance our ecosystem as we grow. Fabulous, this is digital one, and we've been building this over years. Now you're going to see the rollout as we go forward. So every connected filler makes our digital platform stronger. All of this culminates and so R&D is normally measured Well, some people like to [indiscernible] on the cost, okay? But the cost of R&D is probably not the right metric. It's how much value we generate. The cost should be irrelevant if you're generating the growth and the value R&D has many times been thought of as the creative crazy people who just invent stuff. That's how many people see me. We are very enthusiastic and we create a lot. But ladies and gentlemen, R&D is very structured. We have in SIG, a Discover platform, a developed platform and a deploy. Those three are very structured. We allow the crazy inventions around the discover. We have to test, we have to prove. That then translates into the developed and then we accelerate in the deploy. So, looking at the scalable model, many people ask me, so how do you see AI, artificial intelligence, the modules in R&D, we leverage that significantly. And we have only touched the tip, let's be honest, this journey every week changes. But for us, in R&D, we've seen acceleration in lead times, in development, in modules that we can reprogram our coding, our deployment of the coding. It is really a game changer. So, as digitalization accelerates, and you see it there as a foundation within R&D, we really see the value of this growing. So in summary, ladies and gentlemen, this is SIG's innovation model. This is the future proof, and it's not the how breakthrough. My first question on innovation to you all. But it is a system of incremental innovation that changes the game. So that in a nutshell, my colleagues are going to bring to life some of the deployments, some of the things we are really proud of. And I hand back over to Christoph to summarize. Thank you very much.

In summary, we remain confident in the structural growth of Aseptic Carton of 2% to 3% in the midterm. We are innovating across all elements of our system to ensure that we will continue to deliver above-market growth. We have key innovations coming to market in all three elements of our system. We are on track to deliver them. The Neo series are filling machines, the Tirol portfolio of alu-free full barrier solutions. We're bringing SIG Digital ONE to the market that allows us to scale, service solutions, digital service solutions and also lays the foundation for further growth, and we have innovations focused on cost efficiency basically slashing the number of equipment platforms from 10 to 5 with the respective scale effects and cost effectiveness. Now we have all building blocks with that in place to continue to deliver top line growth. And in the next section, we will share with you how we have translated the growth model and our innovation pipeline into regional growth strategies. I'll be joined on the stage by my colleagues, the Regional Presidents. And we will look at each region step by step. Now I've said aseptic carton market is structurally attractive, but growth opportunities differ region by region. They're different by product, by geography, by channel, by category. So that is why we've translated our product portfolio, our growth model and the opportunities into regional strategies really targeted at delivering above-market growth and focusing on the most attractive opportunities in the respective markets. We will start with Europe. As President, Europe, I will guide you through the details of that. And then I will hand over to Abdelghany, our President IMEA, followed by Angela, our President, APAC; and last but not least, Ricardo Rodriguez, our President, Americas. But let's start with Europe. So Europe is SIG's home market. It really combines strong profitability with large size. In 2025, that has contributed EUR 933 million of revenue, which makes 30% of the group's Aseptic Carton revenue. So it's the largest geographic segment. Over the last couple of years, we've delivered 6% annual growth in an overall flat market. which is a testimony to the ability to gain market share in Europe based on our offering, our strong customer relationships, but also pricing discipline. Now if we take a look at the European market, there are three important trends that really shape the market. Number one is packaging regulation. So over the last couple of years, the European Union has really introduced what I would call the most ambitious regulation to drive transition towards more sustainable packaging. We had packaging and packaging waste regulation, extended producer responsibility, single-use plastic directive, corporate sustainability reporting director and I could go on and on and on. But eventually, it's all really targeted at driving a transition in packaging towards packaging that's designed for recycling, that is easy and cost effective to recycle that it's lean and wait and low in CO2. And aseptic carton really is perfectly positioned to benefit of that transition. The second really important trend is the power of retail. We see large retailers to increasingly consolidate on national level. We see a lot of growth in private label taking market share from brands and retailers interestingly have even more ambitious packaging guidelines, even more ambitious requirements to pack their private label brands. And some of them even explicitly express that. So we have [indiscernible], which is one of the largest pan-European retailers that now in their packaging guidelines specifically says they prefer al-free Aseptic Carton as a more sustainable packaging option. So retailers are really a driving force that will also create more pull for sustainable packaging. And last but not least, Europe as a market might be flat, but there are pockets of growth. specifically in liquid food in value-added dairy, so high protein-fortified milks, but also in plant-based. So in summary, Europe remains a large market, an attractive market for SIG with market share gain opportunities and with trends that really play to our strength. And that's what we have built our growth strategy around these trends and innovation that allows us to gain market share. Number one, we are, as the leader in the industry with an allo free solution, we can be really the catalyst of that transition and can gain share in delivering a solution that no other company has industrialized, which is Aseptic Carton without aluminum. Number two, with our unique filling technology, we can benefit and enable our customers to grow in liquid aseptic food. We have an al-free solution that can help our customers to grow in plant-based and we all know consumers of plant-based, they're not just concerned about their health, but also about the environment. So we have a perfect match of a good pack and a good product. And we do see opportunities in value-added dairy, where premium formats like DomeMini can really play a significant role. The last growth opportunity that we are really looking at is asset replacements. I mean Europe has an aging asset base. We estimate that about 20% of all aseptic carton filling lines are older than 20 years. So they are clearly at their end of life. And here, again, our new platform comes into play. We don't ask customers to move walls, we just ask them to swap machines preferably with an SIG machine. So let me deep dive into the first two growth opportunities, and let's start with sustainable packaging, mean we are not new and alu-free. Most of you know that. We've had this product out for a while. And we have shown with 10% growth per annum above market growth. But the solution we had didn't have what we call a full barrier. So we could play in white milk, and we could play in moderate climate conditions that were less challenging on the barrier needs. Now this year, we've launched [indiscernible], which really unlocks a lot more categories as well as geographies. It's really the full barrier that now allows us to address the full addressable market for sustainable structures. And as you can see, that has been received by our customers with quite some interest. Not only in the first 6 months of this year, we were able to double our growth in alu-free. So alu-free is really is the answer to a lot of the requirements by retailers, by regulators by food and beverage companies. It reduces CO2. It reduces material complexity. So we go from three structures, paper, plastic and [indiscernible] two, easing the recycling process. But also, and that is really lately a hot topic in the exchange with our customers it increased strategic supply chain resilience. Now we've all learned about choke points of global trade. If you look at alu, the ore comes from one African country, Guinea, and a lot of alumina that is imported into Europe comes from China. So removing a volatile raw material that also has a very concentrated supply chain increases the resilience of the product supply chain itself. So it really hits the nerve on a lot of topics. Then I said Europe as such is rather flat, but there are these pockets of growth. I mentioned liquid food. And here, Aseptic Carton really is growing beyond its traditional dairy core, replacing cans and glass. And we have shown quite some good growth, 5% over the last year in this category, and we will continue to grow so based on our ability to fill highly viscous products to fill particulates. Then on the private label side or on the plant-based side, I've already mentioned that there's a lot of dynamic also in private label. I mentioned that alu-free is a perfect pack for plant-based products. Now we can also provide the barrier that is needed to pack alu-free -- sorry, to plant-based in alu-free. And last but not least, value-added dairy, where we now have an offering of DomeMini, which we are deploying the first time in Europe, that really opens up that category in Portion Pack also to our product offering. And in the last 12 months, we have placed filling machines precisely in these segments with APIs as one example. It's the largest tomato producer in Spain. And they went for SIG technology for its volume flexibility. As you know, that's exactly our strong point, and a lot of these tomato products are packed in different volume sizes. So again, we are combining volume flexibility with our ability to fill highly viscous products. And [indiscernible] Milk, a major dairy group from Austria that has a significant export business in value-added dairy. And we plan to continue with this strong product offering to grow in these segments and as such, also diversify our category mix within Europe. So in summary, Europe is not an easy market. It's not a high-growth market, but we have the right product offering to continue to deliver growth even in this market and with the size and our market share we continue to see headroom to continue our growth trajectory. And with that, I would hand over Dr. Ghany to cover IMEA.

Thank you, Christoph. So good morning. I represent IMEA. And I think each and everyone in the room is very much aware of the situations there. I don't want to go in details on the stuff that you see on the news, but let me give you some color of what are we facing there. So, we have some situations. Ships are rerouted, ports are congested, airports are attacked, civilians are losing their lives. Materials that used to take weeks today takes months, if arrived, tough situation. But what really matters is what we SIG have been doing over the last 9 months. Every single demand every single sleeve, every single spot that we have received have been delivered on time to each and every customer in our factories. Our service engineers, despite all of these challenges have been standing in our customer factories, making sure that our customer products hits their shelf and there is no missing back. My name is Abdelghany Eladib. I represent SIG India, Middle East, Africa for the last 10 years. I come with 20 years before in the FMCG world, in the same beautiful region. And if I say one word, and I want to say this word to my people, I have never been proud or prouder of a team like what I am today, the team is really doing fantastic. So if I want to give you some color about the region, what do we really characterize it? Resilience is the name of our game. Passion and passion to win is what we brief. Customer intimacy is the name of our game. That's my people. But it's not only that the region is a phenomenal region. It's the fastest-growing region in Aseptic Carton in SIG. And we're here to win that, and you will see that. And it's not only growth that is in pockets of India, Middle East, Africa. You'll see that across the whole Middle East, Africa and India, and we're terrible charging it with the sub-Saharan frontiers. And last but not least, we are proving, and I will show you that in the coming slides that technology innovation is another success story that we bring in it in India, Middle East, Africa. Let me take you a bit into what is India, Middle East, Africa. Our region is 86 countries. We're currently present in 1/3 of that. And before I talk about population growth and actually, we represent more than half of the world population. Let me give you a bit of a geography. If you put this region in million kilometers were 63 million kilometers. What does this mean? You can actually fit the two Americas. You can fit Australia and you can fit EU in this region. So what are geographically spread. And it's not that. I mean, this region is a hot climate region. It actually lacks an infrastructure of a cold chain. So what would be the solution? It's SIG, Aseptic carton. And this is what you will hear what we are actually bringing into this region. So, what are the characteristics of our region. I've talked about the geography, but I actually want to tell you some kind of demographics. It's the fastest population growth region. From an economic point of view, from a GDP point of view also, it's the rising middle age income. So all of the fundamentals are there, consumptions are there. And you will also hear that per capita consumption of dairy is the lowest. We're talking in some countries, less than 2-liter per capita per person a year. In some countries, it's even less than one glass of milk per year per person. For the number, huge opportunity. So that is really a fantastic opportunity. Over the last 5 years, we've really had a CAGR growth of a stunning 9%. Last year, acetate closed at EUR 414 million. And if you put the 9%, you will see that over the last 5 years, we've delivered more than EUR 100 million of Aseptic Carton revenue growth. If you take our numbers and look into the distribution of our business, you will see 55%, as you see in the graph of our revenue is mainly dairy based, 44% is juice and 1% is food. 55% dairy, and that's a fantastic, very affordable best nutrition that you can offer to this region. So it's our engine of growth, and we're really driving that. You can always challenge me and say, hey, hey, 1% food, that's weak. And I tell you that is another opportunity that we are conquering. I've talked about the consumption. I've talked about 2-liter per capita, so that's a huge headroom that we are actually leveraging. I think I talked in the beginning about the volatility of the region. I think each and every one of you knows the region, probably more than I do. So you might see some kind of volatility in over a quarter. But what you really need to take out is that the opportunity is there. The growth potentials over the year is there. And I think my 9% is the clear proof points. So if I would like to really double down on our three characteristics profile of this region, I would call it #1 growth that is here durable and for long term. That's number one. I'll say number two, is that demographics and economics are in our favor. And number three, I'll talk about the technology that is really accelerating our growth in this region. So let me take you into the first perspective. Our growth, we definitely want to grow in line of market. In reality, as you've seen, the 9%, we want to outbeat the market growth. And how do we do that? Our system, as I said, is the best offering that you can have for a hub climate that lacks a cold chain infrastructure. So if you think about what will be the best pack, stable, shelf-stable, sustainable pack, SIG comes into the place. And if I would give some statistics over the last 5 years, in the Frontier Africa and Sub-Saharan Africa, we've tripled our customer winning our filler deployment in the region. What does this mean? Africa is now on the edge of sub-Saharan Africa is now on the edge on the scale to really establish investment and build local capacity. And we're there there to pick the strategic customer which will be in a strategic hub location to really build the right SIG Aseptic capability to cater for the local demand of the country but also act as a hub of the neighborhood countries. So we're very specific to really attack that. Second, technology. In Middle East Africa, our customer factories are full. Lines are really at capacity. They want to grow. Demand is growing, but Middle East, Africa, getting permits is a bit challenging. It's low. Investment to build the factory for a next line is also high. So what's the solution? Here comes Neo. And I'm so proud that we have brought into the globe and in Middle East Africa last year, our first slim line, the 15,000 of 1 liter. And that's a fantastic thing. Christoph talks about we can place that line without moving the walls of the factory. And suddenly, the factory is producing not 4 quarters, not 365 days. We've increased the output from 12,000 to 15,000. So automatically, we give back to our customer 1, 3 quarter a year. So funny enough, SIG IMEA, in 1 liter, our year is 5 quarters or actually our customer production is 5 quarters a year, and that's really phenomenal. And I'll talk more about that, and I'll share much more examples of that on the technology. Third element in the growth, which is also phenomenal is food security. All of us have lived into the globalization before. I think with the current challenges with the current turmoil, I think now we're going back into localization. And specifically, in my region, lots of factories now are thinking that we cannot rely on imports because of the geopolitical tensions, because of the currency challenges and so on and so forth, we really need to build our current infrastructure. And that's big. That's big. This is a decision that comes on a generation. That's a decision where critical customers sit talks with government and make this kind of critical once in a lifetime. And the great thing we are sitting on these decisions and our customers speaking to us, and I'll give you much more examples of that. So if you put that together, you'd see fantastic things. You'll see growth potential. You'll see technology that really delivers. And you will see demand is driven by customers pulled by government, and we are benefiting out of that. So that's growth. I'll move into the next one, demographic and economics. Proud to say, I mean, region of the highest population growth, but it's not only population growth. Our region is young, 26 years old. So that's a huge potential. That's the customer that's making choices for what they drink, what kind of pack they drink, what kind of product they drink, and that's the decision that they give also to their kids. GDP of 5%. So population growth, GDP growth. And as Christoph said, with the rising income, families move from loose milk into packaged milk and from packaged milk into shelf stable. And the choice is SIG because we offer a multi sizes, multi shapes on the same line. You will see on that Slide 3, clear examples of the Frontier Africa entry. [indiscernible] in Ghana becomes a hub, [indiscernible] lines in [indiscernible] and it's actually built to serve all the neighboring countries, Nigeria, Senegal and so on. You will see group [indiscernible] -- sorry, [indiscernible], you will see that in Senegal is also building their infrastructure to serve all of their countries around. And [indiscernible] but not only you'll see Libya is actually growing, you'll see North Africa is growing and so on. And last but not least, technology, as I said, IMEA before. I mean, we're used to technology gets to be developed in the I would say first world, I mean, Europe mainly because engineers are there, R&Ds are there, and then we take it for deployment. We are now taking the lead in deploying that, and that's a big deal. When a customer puts his trust in SIG IMEA to put a technology for piloting for validations and it delivered 15,000. That's a trust that we have earned, that's a trust that the customer has given us. And I'm proud to say they have stand up, this big customer last year of Middle East. In Galford, proudly praising our great performance delivered by that, and they have signed the second line, which is actually in startup now. I just came back from South Africa, where I actually met in Durban another customer of mine, proudly, I mean, farm gate -- okay, started up 2 lines 1 year ago. Both of them is 1 liter, 12,000. And even before I leave, he said Abdelghany please, I want to replace my 12,000 by 15,000 because my factory is [indiscernible] we've signed an LOI. And before I come back into the flight, I met Faircap"and they said, we need to really move into the capacity into the next level. So NEO is really accelerating the growth. Not only we're bringing the [indiscernible] our 24,000, putting it into 32,000 in the Middle East. So I talked about the 1 liter where we converted the quarters into 5 quarters. And here comes the exam our single serve, where we actually converted the 1 year by adding 1/3, 120 days extra in the same year, you can do the math. You can do the math. It's not only a more output. It's the same crews, it's the same energy and this factory is really on steroids. So, we're really now on the edge of deploying technology, proving technology and really anchoring that success in Middle East, Africa, which we have done before when we started our digital transformation with asset health monitoring and we've rolled it out. So if I want to leave you with a few words about my region. I would say our success stands on our resilience. We don't only think of a plan A. We always have a Plan B, C, D, and E because we know something will happen wrong and it does happen wrong. So we need to be ready for that. Growth is there, and we're ready to take that. Technology is anchoring that, and I think very [indiscernible] is in the number. And I joined SIG 10 years ago, and I would say one word before I give it back to Angela, I'm very, very much positive now on the future of SIG in IMEA now with what I see with the customer reception, with the growth that we're potentially 10 years versus 10 years ago. Thank you for your trust, and I hand over to Angela.

Thank you, Abdelghany. Okay, so let's move into Asia Pacific. My name is Angela Lu. I'm the Regional President for SIG in Asia Pacific. So APAC is our second largest Aseptic Carton region. And it is a very, very dynamic market in the world. Following a period of softer market conditions, as we all know, we now see that the region is coming back with a more attractive growth trajectory. Why this is happening? Because we see the rising incomes of the middle-class families, and also the premiumization, the emergence of the new consumption occasions and channels. So with this, that we are more positive than the categories is coming back to a better growth trajectory. What is the more interesting in this trend for SIG is that the demand is increasingly driven by higher-value categories instead of just the volume expansion alone. And then the consumers are seeking for more convenient, functional and then differentiated products, which creates the demand a wider range of products that is covering from the different product pack size, formats and propositions. And this is playing exactly into SIG strength because of our system flexibility and also the innovations such as SIG's DomeMini is able to allow our customers to respond to the consumer trends quickly and also capture the market growth opportunity. And then this is also enable SIG to continue to gain market share in the market while the market is retaining back to the growth. So let's look into the details in the region. EP has a very, very and geographic coverage, as you can see from here and also a very dynamic market. Consumers are also changing in the region. So we see that the consumers are increasingly health conscious and demanding for functional products. So those products with a high-protein lifestyle, nutrition, and they are rising and also we see the higher demand in those type of products. While it coexist for the consumers demand for indulgence product. Urbanization, the rising incomes. And also, we have a lot of increasing in the single person households. And at the same time, an aging population as well. And all of this, they demand a variety of the product covering different price points, different types of proposition. All of those trends are very attractive for the category for our customers and essentially for SIG because those trends is driving the categories in value up and also coming back to the growth, while all of these demands for the customers, they demand a product packaging that is able to differentiate in the market that is able to offer different pack size, capturing different price point in the market. While at the same time, as you can see that in APAC, we have a very broad manufacturing, commercial and innovation footprint. So this enables and position us very well to capture those market opportunities supporting our customer. So with all of this, we believe that SIG is positioned very well in APAC to retaining to a stronger growth trajectory when the market is coming back. Let's look into the growth drivers. So we have three complementary growth drivers that put down here. Number one, packaging differentiation. So as I mentioned, the demand for the premium and value-added products are increasing in the market. And these require a differentiated and also distinctive packaging that is able to stand out on the shelf. So SIG DomeMini is a perfect example for that. Because of its unique bottle shape, it's able to support our customer to position it with a premium pricing and positioning and stand out on the shelf. As a result of it, the success of the success of this approach is reflected in Eli's commitment for more than 10 DomeMini lines already up until now. Second, flexibility. Flexibility remains very, very important for us in the region. As I mentioned, APAC is a very diverse region. We have consumers spending from across different income levels and also with the different age, different size of the family group. So that requires really different product pack size, formats. And also, we are now seeing a rising emergence of the new consumption channels and also occasions. So the snack shops in China has been rising significantly. The school milk in Indonesia is also increasing dramatically. So all of this -- we worked with our customers together to co-create new products, capturing those opportunities. Up until the -- just for the first half of 2026, we have already launched more than 100 new products, leveraging SIG's flexibility across the different pack sizes and also the formats. This has contributed for more than 5% of total AP volume in the first half of the year. The third geography expansion. Although China remains very important for us as the single largest market in the region, we see our growth strategy is more and more diversified into the Southeast Asia market. While also in addition to that, Philippines and Cambodia are offering very good growth opportunity for us to build in the additional growth because in the Southeast Asia, overall dairy penetration remains low, and we see a significant growth trajectory. Just in Philippines alone, in the last 5 years, we've seen a 24% growth year-on-year in the market. So, let's move into the example of the SIG DomeMini closely and see that how our customers leverage this platform to position themselves to create a new segment into the market and driving premiumization. In the left side, this is an example from Eli. Eli has launched a totally new segment in the premium dairy market in China and created a new consumption occasion for the consumer. Since its launch is being extremely successful. And as a result, we have already secured the commitment from Eli for more than 10 feeding lines. We are also at the same time expanding and also scaling it up in the rest of the region. So from the right side, you see the examples. So it is ranging from nutritional drinks in Vietnam to the high-protein bring health genes and also ready-to-drink coffee in South Korea. We are also seeing that more and more premium value-added dairy products flavor milk in China as well. What is extremely interesting for this opportunity is that this is creating the value, not only for the category growth premiumization is also creating value for our customers and for SIG. Flexibility, so we kept talking about the flexibility again and again. But I just want to show you here that flexibility is not just a technical feature it is really a real powerful growth driver for us, especially for AP. In Asia Pacific, majority of our cloud products are in the single-serve formats, which is more on the gold consumption. And as you can see here, we have launched more than 100 SKUs in the region in the first half of the year. and from those products, this is below 125 ml up until to the 1,000 mL and many of them are built on the single platform. So with this, our customers is able to launch the product quickly into the market and also reduce their cost of innovation, increased speed to the market. As a result of this, we see the asset utilization increasing for our customers. We also see that they have increased their return on the invested capital. At the same time, SIG benefit from the increased volume output on the installed base. So with this, we are very confident that we are able to continue driving the growth, leveraging on the system flexibility, and this is going to give us the recurring revenue growth in the future as well. And thank you very much. And with this, I will pass to my colleague, Ricardo, to introduce about Americas.

Thank you, Angela. Good morning, everyone. My name is Ricardo Rodriguez. I run the Americas region for SIG since 2015. So America is a high-performing region with significant opportunities for further growth for [indiscernible] and this performance is anchored in, first of all, resilient categories. It's a huge asset market. where we are deploying differentiated technology where we have superior [indiscernible] and where we are deploying a lot of innovation as well. So we will cover next. So these strengths are reflected in numbers. So we have a strong performance in terms of market share expansion and also growth in general. And we have still plenty of firepower to grow further. And this is especially thanks to the very nice work we have been doing on expanding the production capacity in the region. That's what I want to share with you today. So let's have a closer look at the Americas region in numbers. So as mentioned, this is a large and diverse asset region in the world with 22 billion liters underpinned by resilient categories such as dairy, complemented by beverages and also food. The region generates over EUR 0.5 billion in revenue. And there, we see an amazing track record of 8% CAGR or 8% growth CAGR in the period 2021 to '25. We have an installed base of 180 filling lines and two production units, important production units, one for the South and one for North America. And now I would like to highlight two dimensions that are very critical for this success. First, scale and flexibility they matter. So customers need solutions that combine high productivity, format and size flexibility and a competitive. Second, innovation. So we are deploying new packaging formats, high-speed filling technology and very advanced digital services, digital solutions that are enabling SAG to move beyond a traditional supplier role, so increasingly to increasingly become a partner, a very strong partner of our customers in terms of driving growth and driving productivity in their plants. Let's now take a look at the most attractive opportunities and how we are translating our competitive position in traditional growth with clear focus on 3 major priorities. I will start with the one at the middle with Brazil? So Brazil is one of the largest dairy markets worldwide with around 9 billion liters, where we are strengthening our position in core categories, through our high-speed filling technology. So first of all, we start with the family sizes. This year, we are deploying our latest innovation, our SAG -- new SAG MID-15 [indiscernible] platform, which allow us to compete and to win in this segment running at 15,000 pictures per hour. In portion packs, we are already succeeding and doing an amazing journey with our high-speed platforms, which combine this superiority in very competitive CO with the -- this is very important with the unique size and viscosity flexibility of our filling lines. in very practical terms, what do I mean. So the same filling line can handle very different products with different sizes ranging from the very liquid the chocolate milk to very viscous product like sweet condensed milk. And definitely, it makes our position a lot stronger with our customers. It improves their flexibility, operational flexibility and confirms our superior value proposition and Spirit [indiscernible]. Then I would like to talk about priority #2, which are the patchy markets. And patchy stands for Peru, Argentina, Chile, Colombia and Ecuador. It means they are the important markets in South America. Our strategy there is to grow with the national champions and to expand into new markets. So between 2021 and 2025, we achieved amazing annual growth of 30% compared to a market growth of roughly 2%. This demonstrates the potential of combining our superior technology, our superior show with very focused commercial execution. Priority #3 is growing in Mexico and in high-value niches in North America, the U.S. and Canada. Mexico is already a market where we have proven to be very successful, having delivered 5 percentage point share gains in the last 3 years, okay? This is really amazing. This performance reflects our success with the leading there players. We have presented a very attractive value proposition supported by the local manufacturing. So in the U.S., Canada, our approach is different as we focus on attractive high-value opportunities, particularly with co-packers, we operate with co-packers and they produce for brand owners as well as for private label companies. Based on that, we are expanding our presence in broth, food, broth and in high-value beverages with special focus on food service in general. That said, let's now take a closer look on Mexico and understand how we are executing one of our critical dealers. Mexico is a very clear example of how our strategy is translating into measurable results. In 2023, we started local production in Queretaro, replacing an important base model with local supply platform. This has fundamentally improved our competitive position, and the results have been significant. So our production volume increased fivefold, while our market share rose from 17% to 22% -- 22.8% to be more precise in a rather flat market. So our next expansion phase is already undergoing. We'll double production capacity to 3 billion packages by 2028, and this will include further vertical integration. Queretaro is a regional hub nowadays, serving not only Mexico, but also customers across the U.S. and Canada. For SIG, this creates an attractive platform for our continued growth with efficient supply, local supply in the region and also improved scalability. And that said, we know that manufacturing alone is not enough to create a sustainable competitive advantage. And we know that the real value comes when we combine it with innovation, with execution and with long-term partnerships. And this is what you see in the next chart with Nestle. So we have a long-term partnership with Nestle, which is an excellent illustration of how we create value together. So product innovation. First of all, solutions for iconic brands and also sustainability. Over the years, we have consistently brought new solutions to Nestle. In Mexico, we have expanded into new applications into new categories such as culinary dairies, through the introduction of our high-speed filling lines in particular, the SIG MINI-24. In Brazil, our collaboration includes solutions for iconic brands like [ Neska and MSA ], where packaging, innovation and the size flexibility have supported product differentiation and growth. And then an element that I'm particularly proud of sustainability, and this stays very close to my heart. So our collaboration goes a lot beyond the product itself with Nestle. It includes paper straw conversion. We were the first ones to deliver this solution to the market and also initiatives to strengthen recycling infrastructure in various municipalities, especially in Brazil. So we are doing a joint journey with Nestle on that. Together, these elements show how strategic partnership convert our capabilities into durable value creation to our customers. So they also explain how we have conquered 100% share of wallet of the Nestle operations, [indiscernible] operations in Mexico. And also we have conquered 100% in various categories in -- of Nestle in Brazil, like [indiscernible]. Let me now turn to a new frontier of our value proposition that was initially explored by Gavin with digital services. So digital services is strengthening customer relationships. They create loyalty. They differentiate our offering and they create opportunities for additional value-added services. We have built a modular solutions on a common data platform. So basically, we are connected to -- we have an open platform, and we are connected to the complete process end-to-end in our customer manufacturing area. And we help customers improve operational performance, quality assurance, food safety, and this is across the entire manufacturing process, so with end-to-end scope. To give just two examples, we can support active OEE management and also to do end-to-end to implement end-to-end traceability. It's a very complex and advanced application, including certification of origin. We are proud of the progress we already achieved we have already achieved. So we had two customers in 2021. This year, we will finish with 25 active sites of our customers with our Digital Service Solution deployed and in use. At Santa Clara, which is the #1 -- the latest enterprise of Coca-Cola in the dairy world, located in Mexico, we are targeting a 10% OEE improvement for the complete plant using these solutions, using our digital solution. This scalable model combines standardized technology, cloud deployment and selected technology partners. Well, so -- what I would like you -- I would like now to conclude Americas with three messages. So first of all, the Americas combined meaningful scale, large scale with attractive opportunities for SIG. Second, we have demonstrated the ability to execute. That's what we have seen in Mexico, in Pace, in Brazil. So the market share gains in Mexico the expansion of Queretaro and the long-term partnerships with Nestle, for instance, they provide tangible evidence of it. Third, we are strengthening the foundations for future growth as we are deploying high-performance filling technology. We are expanding our production units and also we are deploying digital services. to create additional value for our customers. Our ambition is to translate these advantages in sustainable, profitable and value creation growth and long-term value creation for SIG. Thank you very much. And with that, I hand over to my friend, Chris. Please, Chris.

Thank you, Ricardo. Good morning, everybody. My name is Chris Jones. I'm the President for Global Bag-in-Box and Spouted Pouch -- excuse me, new to the stage this year. So thank you for coming in person, and thank you for being here online. We are going to walk through the turnaround plan for the Global Bag-in-Box and Spouted Pouch business. So this represents about 17% of SIG's total earnings. You've seen the data from Ann this morning that was reported and showed that we have under delivered in this business for the past few years in both revenue and earnings. So that said, we still remain very confident in this business based on the underlying market characteristics, which we're going to walk through today and then, of course, our position in those markets as well. So here, you see the headline across the top. Globally, it's about 2,200 employees for Bag-in-box, Spouted Pouch, about EUR 551 million in 2025 for revenue and you see a slightly decline in our CAGR that we've talked about already this morning. But if we pivot down to the market characteristics, let's talk about those. So what we're seeing in the Bag-in-Box side, and Bag-in-Box is going to be largely a food service side. Then we're going to talk about Spouted Pouch, which is more on the retail side. So, if I start with the Bag-in-Box piece, where we see the growth coming in the market there is in the foodservice business, both in syrups as well as really in the dairy sector, which is where we see some stronger growth that I'm going to talk to you about a little bit later in the presentation. You'll also see a shift to new beverage formats largely United States. And why do we call it the U.S.? It is our largest market for this business. So that's why it's quite relevant to this presentation. So you see a shift away from traditional sodas into dirty sodas. You see a shift into [indiscernible] see a shift into coffee blended drinks in quick service restaurants. Additionally, there's a huge push for automation on behind-the-counter services. So where is that coming from? I know we've been talking about dispenser technology for a couple of years, but it's really accelerating with online ordering and online apps. So the food service guys need quicker ways to get the same product out of the store because they have customers coming online, they've got customers in the store. So they're looking for ways to speed up service, which is where we play. Now I'm going to pivot over to the -- sorry, to the Spouted Pouch side and talk about that from a retail perspective. I Spouted Pouch, which there are some in the back of the room, if you haven't looked at them, it's all about convenience, out-of-home meal replacement, on-the-go healthy snacking. So you think about it in your backpack of brief cases today in your kids' lunch box, put it in a healthy stack snack. Where it really plays where we're trying to play is in the Aseptic [indiscernible] of this because then you get the clean label piece. You can do that without having preservatives in the product, which is a huge push today. People want a clean label of ingredients in what they eat. And then, of course, you've heard all my colleagues talk about the shift to this healthier focus from GLP-1s and smaller portion size and also inflation, just having smaller portion sizes as well. So where does SIG fit in this market perspective? So, we have the market outlook here for the next 5 years on the bag and box side at about 3% growth. That's heavily driven by the foodservice piece, which you see is about 46% of what we do in that space. And that's what I just talked about. It's the QSRs, it's the new beverage trends, the shift to smart dispensing and the shift from regular to aseptics, specifically in the dairy cycle -- or the dairy sector, excuse me. So where are we positioned in that? We're the #1 player globally in it. And from a profitability perspective, where we're trying to grow is by offering -- differentiate ourselves on our innovation and our films our innovation and our fitments, our innovation and our filling machines, both aseptic and non-aseptic. And we're -- we rate the profitability on this business, I would say, today at a medium. We see it growing in the Aseptic and the dispensing area. There's growing from a smaller base, but that's where we see more profitable growth coming from and it's an area of expertise for us. I shift over to the Spouted Pouch side, the outlook from a market perspective, there is 5% growth. This is all that healthy lifestyle I just talked about and on-the-go snacking, the trends that's out there for nutrition is food in smaller portion sizes. Today, we're the #2 player there. We're really trying to differentiate ourselves there. It's a bit of a crowded field today in the non-aseptic area. We are in the aseptic. We have a foothold in Aseptic, in the Spouted Pouch today. We're trying to accelerate that with our innovation of scale-up of speed on the filling machine that will be -- we have a prototype now. It will be commercial in 2028. I'll talk a little bit more about that. As well as first industry-first in-line sterilization capability. So that means you can sterilize the pouches in line with the filling process not done via a separate process. So that's where we're trying to play, which we see as more of a niche and a high competitive or highly more highly profitable area with extreme growth. So we're going to take a minute. Just look at the financials. We've talked about this this morning Ann talked about the dip in revenue and earnings. And I think the walk away from this slide from my perspective is we recognize it. We acknowledge it. We have a plan and we have a dedicated team in place, and I'm going to talk about that next. So we have a dedicated team already in place. We have the midterm ambition to raise our EBIT from 6% to 8% to 10%, and we're going to do it in three ways: excite our customers with growth elevate our performance and an optimized structure. So let me talk about those three for a second. If we talk about exciting our customers, it's all about scaling our innovative solution. On the Bag-in-Box, I told you it's new film, recycle-ready products new fitments, new technology and the filling equipment. On the Spouted Pouch. It's all about scaling our new product development there and our innovation road map on the higher speed in-line sterilization generation three spot filler. From a market perspective, we're on a pretty concentrated focus on the dairy market and the food service market. That's where we see the growth opportunity. And then from the team perspective, we're going to leverage this through a global team versus the previous regional structure with global focus on Bag-in-Box and global focus on Spouted Pouch each to make sure that we're serving those markets appropriately because there's different from a foodservice perspective to a retail perspective. From a performance perspective, you heard Ann talk this morning, we've already announced the closure of two sites in Bag-in-box, One of them is complete. The other will be completed in '27. We're going to continue to look at that footprint, to look for opportunities to optimize it in any way needed to match the business conditions that we're in. We're also going to look at outsourcing. As we go through our manufacturing footprint, if we don't have a competitive advantage by making something ourselves, there's opportunities for us to outsource that and perhaps not have to reinvest capital in that equipment that was making that. Continuous improvement. Again, this is going to be globally coordinated from a best practice sharing to make sure that we're spreading the best practice for improvement on OEEs and whatever it may be across the globe and get the best performance out of our operations. And then along with that, the disciplined capital management to make sure that we are investing in things that match our innovation road map or a growth road map, and we have dedicated our focus of capital in those areas. The structure piece. As I said, the new leadership team is in place. We have an innovation road map. We have a growth road map, and we have a cost savings road map as well. It's a leaner organization with a global focus versus the regional focus with about 1 or 2 percentage points of advantage. And then we're going to still share the back office of SIG. I'll talk a little bit more of that in the slide coming up as well. So I wanted to talk a little bit about dairy and our position to grow in there because this is obviously important sector to us, not only on the aseptic carton side that you've heard my colleagues talk about but in this area as well. So you heard me talk about Bag-in-Box and the market growth there of about 3%. We see, from a market perspective, a little higher growth on the dairy side. So you see the 45%, and I'll call more of our core customers and established markets, but more importantly, you see the 8% CAGR for forward-looking in some of our emerging markets. And we are covered globally in this business in the sense of U.S. and Europe are our largest markets, but then we've got operations in India. We've got operations in Australia and New Zealand, we've got operations in China ready to serve the world. From a -- I think what's important to point here too is when we see this growth in Dairy coming, this is where our Aseptic expertise was in play. And it's really important to point out that these aren't customers we have to go and find. We know these customers. We're doing customer -- doing business with these customers today. So it's about leveraging our relationship with these customers to grow our business. On the Spouted Pouch side, you see high single CAGR outlook there is what the market is reporting. We're already in this market, as I said. We've got footholds in Asia, in the Americas, in Europe. And our plan here is really to leverage our new technology that's coming with the industry-first in-line sterilization and the high-speed filler. The spill -- the filler that's in prototype form now, be commercial in '28 is 3x faster than the filler we have in the market today. So there's a lot of excitement in the industry about this. We were at Trade Shows talking through this, it's got a great future from our perspective. Let me talk a little bit about the structure. So if you see there on the left, I've talked about the network optimization. We closed one facility in Latin America, one in Europe that's in the process of closing now. I've talked about the fact we'll obviously continue to evaluate that footprint. Continuous improvement is huge for us. to make sure that we're cost competitive and get the best cost advantage out of our facilities. If I pivot over to the structure side, this is just a high-level look at the structure. On the left, you see three commercial areas. We simplified it a little bit of where we want to put our focus. We are globally leading the effort for sales on Bag-in-Box and Spouted Pouch as I said, each -- so focusing in those seats over there are going to double hat and have a region, but also make sure there's global oversight for our sales activity. And why that's important is we're dealing in these core markets with customers. We want to make sure we take that knowledge and our approach and how we sell and expand it into these emerging markets in the same way to get the best result. In the middle, you see the functional areas, the supply chain, the manufacturing, I've already talked about the coordinated activities that have to make sure for best practice share, and we're doing the right thing. We obviously have our global marketing is there as well. That's the start of our sales pipeline to push into the sales regions on the left. We have product management and change management. And those are some new things as well. The focus there is to make sure that we have a dedicated team pushing our growth road map, pushing our innovation road map to make sure we deliver and continue to deliver. And then on the far right, you see the shared resources. This is the BSC that we've talked about, the back office things of SIG. So if you think about this new structure, it's really focused dedicated to commercial, marketing, manufacturing, supply chain, project management, while still leveraging the SIG back office for efficiency. So, in summary, I want to leave you with three things to walk out of this room with. Number one, we're positioned for growth. We have a growth road map in place. We have innovation pipeline in place. We're the #1 and #2 player here. And we're projecting based on what the Mark's saying, 3% to 5% growth in this area. Number two, we've got a team focused on cost and efficiency. That is key to this business, they'll turn around the earnings that you guys have seen. So we've got a dedicated team with a lot of experience in this area focused on how do we become more cost competitive. What's the best footprint for us, what are the assets to invest in. And then third, final, we have a clear ambition for the midterm to raise our EBIT, as I said earlier, from 6% to 8% to 10%. Thank you. Now I'll turn it over to Ann for closing remarks.

Thank you very much, Chris right. So now very easy to summarize everything that you have heard so far. So again, as a reminder, we have three priorities: Number one, exciting our customers because that's how we make money. How do we do this? In the Aseptic Carton business, we continue to outperform the market in Bag-in-Box, Spouted Pouch, Chris has just summarized the growth opportunities that we see there. And we will continue, as Gavin has described to front run on innovation. On rating performance, it's all about driving procurement efficiencies, both on direct and on indirect materials. And we will continue to optimize our own manufacturing footprint but much more how we run our operations ourselves. And of course, we will make sure that we continue to leverage our BSS and work on automation. Last but not least, we have heard today also that we optimize our structures by separating basically into different teams to run most professionally to different businesses by their different needs. And also, we will continue to streamline our internal structure. All of this, again, supported by standard and standardized processes, more modern tools and a reignited culture. Let's summarize quickly where the growth will come from 3% to 5%, where we are confident. And as Christoph has talked about it, the different pillars will be different in every given year. reflecting the market circumstances, but what will contribute is market growth, that's share gains that's conquering more white spaces that is driving further our service portfolio, and last but not least, also the value uplift. What is very important was this wonderful business. Every additional dollar or euro that we make in revenue translates directly into the bottom line with a drop-through rate of around 30%. So it's an important driver for earnings growth. Summarizing again the performance improvement measures and the structure optimization. So we will continue to work under the 3 headlines that we had introduced already. We will continue to further evolve in the measures that we had taken already and where we have additional stuff that we're going to tackle now in the next couple of quarters. And we have two new topics that we really prominently add to the agenda that is the organizational setup and that is optimizing the direct procurement. Also, again, as a reminder, the larger contributions will come from procurement optimization and from manufacturing excellence, while there will, of course, also still be additional contributions from SG&A and R&D efficiency improve. Now looking at the margin guidance for the midterm. We increased it to above 18% today, starting from the 16% to 16.5% that we have introduced earlier for 2026. There will be a meaningful contribution from growth and mix, as I have described before, with the drop-through rate of 30%, and there will be a meaningful contribution from performance improvements and structure optimization. Important to note, we see margin improvement potential across all substrates, probably the most intuitive improvements will sit with Chris, as you have seen in his presentation. but also in the aseptic pouted pouch, we see further potential to upgrade. So what does this mean for our capital allocation framework. No change compared to what we have presented last year. We will, in the first place, continue to invest into the business and drive accretive growth. That means we invest into CapEx that we need to accommodate growth. We will invest into CapEx that we will need to improve productivity. And of course, we will also continue to invest into innovation. Second priority is that our commitment to a strong balance sheet and the prioritization of deleveraging in the short term. that's especially important in the current environment with raising interest cost, obviously. But I think we have shown pretty good progress during this year, and we are confident to drive this road map further. And last but not least, we are also committed to a shareholder-friendly capital policy with an attractive and also growing shareholder distributions over time. We had already summarized the increased guidance for 2026, and the strong development of the business and the effectiveness of the measures that we have taken in the last couple of months has lead us to also being very comfortable to already say today that we would want to -- or we will want to propose to the AGM in next spring, to, again, have a dividend paid out to shareholders in the range of 30% to 50%. And again, as mentioned before. So we believe an attractive and sustainable dividend payments, and we expect that this will grow over time. Now summarizing all of this in the new midterm financial guidance. We confirm the 3% to 5% revenue growth, organic growth at constant currencies. We also increased the adjusted EBIT margin to above 18%. And we set ourselves a target for Aseptic Carton to be above 20%. No changes on net CapEx, 6% to 8%, including lease payments, no changes to the leverage outlook and also no change to the dividend outlook. In summary, so we have seen -- or I think you have seen a very experienced, very committed and very ambitious team, that is super committed to make this agenda happen. Multiple growth drivers that SIG can leverage going forward, attractive margin profile of the core Aseptic business and potential in the other businesses, and a very good return profile, which we will further support with very much discipline in our capital allocation. The transparency by the new substrate reporting will also support us here. And you also remember the business needs low working capital overall, which makes it a very, very attractive business. And with this, we are at the end of the prepared remarks, and I would ask all my wonderful colleagues to come back to stage so that we can do the Q&A. Good.

Maybe we start with taking questions from the room, and then we will also have questions from people on the phone. So First question from maybe Jorn and after -- state please your name and your company.

It's Jorn from UBS. Three quick questions. The first, and where are we in the growth path in Aseptic carton and where are we in the cycle, there was a peer it was more delicate. Is this now bottoming out across the board? And this is also confirmed by your filler pipeline, '26, '27? If you can comment on this?

Yes. So as discussed before, I think it would be too early and too hopeful to extrapolate what we have seen in the third quarter because the third quarter, of course, also benefited specifically from the low comps. But overall, I think as some of the colleagues have mentioned that we believe that the market is improving sequentially. It's not yet at the 2% to 3% growth rate that we consider being the normal structural growth rate for the market. but it's clearly better than what we have seen last year. And in major geographies, I think we are hopeful that we have reached the law, but never raise it too early. When we talk about the filler placements. Let's also take a couple -- or take a step back here. You have heard quite some talking about the output and an additional quarter in the IMEA region with the higher productivity of some of the assets. So the filler placement will continue to be an important leading indicator, of course, for us. But it's more and more -- I mean it has been difficult before already, but it's going to be increasingly difficult to predict just from an outside modeling, water filler placement number really means because there's so much variety and value. There's so much variety in output per hour that it's just not one is the same as another one. For the year, our filler placement, I think -- so we said earlier long that probably this year, we're going to be rather in the lower half of the range that we normally give with 60 to 80, and we would still confirm also this outlook for the time being.

And then two quick follow-ups. Just in Aseptic Carton in Dairy, what is the 1 liter play Manila? And how is this category doing? And what are these specialized nutrition, high-end protein [indiscernible] in terms of revenue share and growth, if you separate these two things?

Yes, Christoph, do you want to take that?

Yes. So the 1-liter carton plain vanilla is the majority of our Dairy business, right? It's -- so in Europe, it's for sure, the majority in all -- I would say, in all other regions as well. But the premium segment that is emerging, I would say that is, again, probably Asia and Europe is leading in that part. And I think the DomeMini example speaks to really massive investments also from large players going into that segment, but it is still a small portion.

And then the last question, sorry for this, on the cost initiatives because it should contribute around 150 basis points on your margins for the midterm. Can you give us the two key initiatives, concrete examples, what you're planning there, what you're doing and when you would expect this is executed on?

Yes. I think as we have laid out in this slide with the contribution of the building blocks. Number one is the procurement initiatives and here again, we have more potential on the indirect, although indirect has contributed already in 2025 and '26, but we have another good program for '27 lined up. And then optimizing also the raw material spend going forward. And we're very encouraged by the contribution that you have seen in the Chilled Carton business, where margin has improved following such actions. And we're going to continue to do the same also in the Aseptic Carton. And then the other big thing is the manufacturing excellence. We think there is stuff for us to do. We have gotten better already this year when it comes to waste in our own production and quality improvements, but definitely, there's more that we can do. And overlaying all of this, of course, is the turnaround agenda in Bag-in-Box with a sizable plan for Chris and the team.

Manuel Lang from Vontobel. I have two questions, as we're limited to. So first, in Aseptic Carton, I see you're targeting as well market share gains of around or even more in the future. That's a little bit of a step-up compared to the last 10 years. Just wanted to clarify what makes you so confident on that, even though the market in general is maybe a bit more challenging? And then second one, maybe if I could add this from the wording on the dividend policy, I just wanted to confirm if you commit to a regular dividend per share increase or if this is really dependent on the payout ratio and could eventually be limited by that?

Yes. So what we said on the dividend is that we see a range of 30% to 50% of adjusted net income as a payout ratio. And of course, with earnings growth over time, that number will then also, in absolute terms, increase. And then on share gains. Let's clarify the numbers, and then, yes.

Exactly. So I think I showed on the slide, the last 5 years, the market was flat in volume, and we have delivered 2% per annum growth. So I would say that's volume. So it eliminates the inflation of the price adjustments. That's probably more representative of our ability to gain share. So we are more saying we will continue on the same track. And I think with all the innovations that we have shared, that's backing up our statement that we are confident to continue gaining share.

[indiscernible] from Momentum Alternative Investment. You have just one question. In China and IMEA what share of the store fillers are actually running third parties lives? And are these nonsystem players putting any pressure on your margins. So if you can comment on the competitive landscape in this region, which I understand are also the faster growing for you.

Yes. Maybe let's start with a broader answer. -- the competition environment, yes. Christoph?

So we have -- there's no industrialized solution for sleep copies in -- globally, we can say that. The -- regarding the competitive pressure, I would still say that indirectly, the [indiscernible] material is, of course, it's an alternative. I mean the customer can decide between 2 systems. And if there's a lot of price competition on one system that has an indirect effect on us. That's the more important one. And here, we have to, of course, ensure that we stay competitive within the range of what TCO can deliver. And that's more the market dynamic that we have an eye on at the moment.

This is Gabriel Simoes from Goldman Sachs. So, my first question would be on the hedging side. So this is something we've seen helping the results this year, given the whole volatility we've had plastics and aluminum costs. I just wanted to understand how much of that is going to roll over and what's the expected impact for 2027, if you're already hedging a significant portion of what you need for 2027? So that's the first question. And the second one would be on the sourcing side. So especially on the paper, on the -- this is one of the initiatives that you mentioned in the past that you were going to conduct going forward. I just wanted to understand whether that has changed at all or if you're making progress in that front to add more potential suppliers?

No. So that hasn't changed at all. And yes, we believe that we do nice progress over there. But of course, that will continue to keep us busy also over the next couple of quarters because this is not just exchanging raw material that very often requires testing and requalification, but it's well underway. And that's why we also call it out so specifically as a contributor to the future margin development. Now the hedging is a complicated exercise because actually, I mean, we do hedging in order not to gamble, but still this year, it felt a bit like don't go in too early because you might lock into high prices, and that's definitely not what we wanted to do. So we have tightened the pace of execution quite a lot compared to years before. We now basically review every few days, how prices have developed and how the spread is being -- is developing, to then make our choices. And our normal policy, you know that is between 50% and 80%. That's what we target to achieve. At this moment, we still -- for next year, spend significantly lower because we felt it doesn't make sense to lock in the two high prices for the moment. There's still a couple of weeks to go, but let's see where we end, yes.

Cole Hathorn from Jefferies. Maybe just following up on that point. It might be a little bit too early to look into 2027. But a lot of those hedges have rolled over. What kind of price increases are you thinking about for customers? Have you started that negotiation yet? And just how are you protecting the margin for 2027, just like your initial thoughts. I know you haven't given 2027 guidance.

Exactly. I would say it's a little early for the 2027 guidance. And we would come with this, of course, in February as always or early March this year. But indeed, fourth quarter and first quarter is always the moment when you have these discussions and the things that we need to address is that we need to convert the third [indiscernible] of this year into fixed price increases and that we need to basically also discuss with customers the 70% hedged share of this year, what it means for next year. So pricing will be an important element in the growth equation for next year, but it's too early to give a concrete outlook on the numbers there. Although in the first region, we are out with price discussions already. And there, we would look at, I would say, mid-single digit, high single-digit discussion for the year.

And then when I think about in the context of global consumer staples, keeping 3% to 5% top line growth is an attractive growth driver. And I mean you talked about a 2% to 3% Aseptic market, you're growing 50% of the market, taking share that is ambitious growth. But when I think about your pricing into next year, one of my concerns in the past of SIG is you have a great business model in the as you know your costs in many ways ahead of the year and your price just whatever your fixed costs are divided by your number of volumes. What is the risk that you priced incorrectly because you're too ambitious of growth and you don't deliver those volumes and you actively price your cartons indirectly? How do you manage that going forward?

I think, of course, you can always be wrong, but what helps you to not be wrong is if you really have great transparency on the different number items that you need. I mean, that you have good discussions with your customers on prospective volumes that you have good discussions with your suppliers and that you have a feel for the market on where some of the raw materials might go. And then in the end, of course, that you have a number of self-help initiatives lined up. So that in case things go wrong, you can also react quickly. I feel we are well set up when it comes to transparency. I feel all of you are also very close to customers so that our long-term partnerships help us also to have constructive discussions. But that said, always something can go wrong. But then as Abdelghany said, we have a plane even ready.

Chiara Di Giammaria, Berenberg. I have two questions, if I may. The first one is on margins. You finally disclose margin by product so much appreciated, but could you give some indication on the EBITDA margin? Because I'd like to understand in terms of if we look at now versus historical levels, is the margin for Aseptic Carton improving or deteriorating? And then the second question is you mentioned the benefit of the Aseptic Carton versus PET. But if we look at the shelves, especially some protein lines are impassive bottles. So what is your discussion with customers looking like?

Let me start with the DNA share that you need to consider. Probably you remember that before last year, we had a guidance net CapEx, including leases of 7% to 9%. And I guess that's a nice proxy that you can use also to figure out the detail between EBIT and EBITDA. And as discussed, we have narrowed that corridor to 6 to 8, I don't know, 18 months ago. So of course, over time, that will also come down. I think that should help you on the first one and then the second one, Christoph, again to you.

Yes, you're absolutely right. If you walk into a retail store here in Switzerland, you'll see a lot of PET, but this is Europe. Let's not forget that. So that PET is typically not aseptic -- you'll see that also on the shelf life. It's 30 days on average. But if we look at Asia, there's no chill chain established as such. So I mean, Gilis a good example. They produce an inamongolia, it's got to be shipped to the population centers, which is along the coast ride. So having said that, still, in Europe, we do believe that there is opportunity to bring differentiation because what you see is a shelf full of plastic, it all looks the same. So a carton really stands out, right? So there, of course, the ambition [indiscernible] chain is already there. It's an infrastructure you can use. You don't need to invest in, you will use it. But if you want to drive differentiation, if you want to have the bigger pack, some of those customers will consider to change and that's also what we are driving.

This is Paco Ruiz from BNPP in Spain. Two questions. The first one is how we should understand the midterm for you on your guidance. And if the current restructuring that you are doing in some business will have some impact in absolute sales, not in organic sales in the future? And the second question is on the daily cost? You talked about Aseptic growth not about what [indiscernible] of growth of the Dairy product itself. I mean, facing some headwinds on GLP-1s on uses consumption, et cetera. So I mean, if you could give us a light of what we are considering in this 2% to 3% growth in Aseptic, what is the underlying growth of Dairy?

Do you want to start?

Yes. So we talk a lot about dairy because 2/3 of the product we pack is actually dairy. So it's the majority. Then we have 20% is NCSD noncarbonated soft drinks, so juices and 10% is liquid food. The dairy and outlook is quite robust, I would say. And that's what I shared. On liquid food, we also see growth replacing cartons -- sorry, replacing glass and cans. Then there is, of course, also organic growth simply driven by higher consumption in emerging markets, Middle East, for example, but also Mexico. Now NCSD indeed is a challenged category. I would say more so in Europe, where health concerns are more prevalent than in other regions, but that is not going to be the growth driver. But you have two categories that make up more than 70% of the business where we do see growth.

And Christoph, you need to go back to -- because the first question was a bit missing in the beginning. Yes.

I mean the first part of the first question is how we should start midterm order to get the 18% margin? And also if -- I mean the restructuring that you are doing in Bag-in-Box, Chilled Carton, it will drive some sales dropping in the coming years?

Yes. So no, should we see a range in the portfolio, for example, like we find a super partner for the Chilled Carton business. then, of course, we would take that out of the elite and that's why we call it organic growth. So that's why we have this guidance. And then on midterm, that's a fair question because last year, we gave you a midterm guidance of more than 6.5%. To be fair, we already said last year, this is a short or midterm. And I mean, it's good that the short term midterm was now very short. The new midterm, I would say, I would expect as a normal midterm as you would normally also expected 3 to 5 years, something like that.

Torsten Sauter, [indiscernible]. Actually, I'm afraid I have 2 very technical questions. First one, can you give us a little bit of a sneak preview of feeling what IFRS 18 is going to do to your financial presentation statements, where is it going to hit you maybe get us a qualitative feeling? And then secondly, I understand that last year's write-downs have reduced the starting asset base and thereby let we lower depreciation, which has given EBIT a bigger uplift in EBITDA. Now in what sense are these Q4 impairments, which are pretty considerable affecting depreciation in the years to come?

Not at all because that's a goodwill impairment, so that doesn't have any impact on depreciation, amortization or anything. Then the first question was -- sorry? IFRS. So of course, IFRS 18 is a wonderful project, and the full industry earns a lot of money on this one. But of course, it gives also more transparency, and we have done our simulations also. The major part that will be moving out of the financial part into the operational part is the interest cost for the securitization. And overall, I would expect that should have a negative impact of 30 to 40 basis points on operating profit.

[indiscernible]. I have two questions. The first one, could you please give an update on the proceedings with Lawrence last? And the second one would be on the nature of this midterm guidance upgrade. We have heard now that maybe the term is a bit longer. We've also heard today about the efficiency measures that you are taking. So this 1.5 percentage points incremental increase in the midterm guidance. What was driving the update? Is it also because you now see a bit of clearly through the stormy waters compared to one year ago? What is really what may change?

No, absolutely. So I think we have built a very good pipeline of measures that we are implementing, and we see that this gains traction. And then also as discussed, we see that markets are also improving a little. And of course, that with the drop-through also supports us on the margin. So that's on the one hand. And then the litigation or arbitration process is ongoing, nothing new, no new findings. You will see that also reflected in the Q3 financial reporting. And yes, we all hope that this will, at one point, come to an end, but it's always difficult to forecast when this exactly happens.

Chris Arnold, ODDO BF. Also 2 questions from my side. First, again, on the goodwill impairment, this EUR 250 million, could you make a comment on how you divide that between the bag-in-box pouch versus the chilled carton business?

Yes. I think it's very clearly weighted, of course, to the Scholle business because not only that the business was much bigger, but also the impact on that front is bigger. Very clearly. It's a 90%, 10% or 80-20, something like that.

Okay. And any guesstimate about the divestment process? I mean, are we thinking of likely to have that happen in '27 or it will be a longer process?

So difficult to forecast. You have seen that this is a very competitive and difficult market, but we continue working through different options, and we will update as soon as we have something to say. But in the meantime, we manage the business very professionally, and the team in Asia has done a very good job there, keeping customers happy and making sure that also all of us are happy by the better margin development.

And maybe just on Europe, I mean, the 6% average growth, I mean, that's quite impressive. How do you expect? I mean, what can we believe yes, what's possible going forward? I mean the 6% looks really high, right?

Indeed, it's a very strong result and a testimony to the performance of the European team. So I would say -- I mean, there's 2 things, right? Number one, there's, of course, pricing in it. So it's not just volume driven. And number two, we -- there was an investment cycle that was triggered by the packaging regulations, specifically the single-use plastic directive. I mean a lot of old lines had to be either upgraded or replaced. Customers opted in a lot of cases for replacement, and we were able to win a lot of these replacements. So that's an investment cycle that we were riding in the past years. We don't see that imminent in that magnitude. But as I said, we do see a pipeline of aging assets that have to be replaced, and we will continue to take advantage of that.

Any other questions?

Just a quick follow-up this time on the debt. How much of your debt is floating? And what are you targeting midterm in terms of between floating and fixed rate?

Yes. So it's around 50-50, slightly 52-48 or so. But I think -- and that is also our target. We -- at this moment, we don't see that we should change that dramatically.

One follow-up as well for Chris. I just wanted to get your diagnostics on what happened to the bag-in-box business in the U.S., in particular, but like globally? And how much of the plan for the turnaround also relies on the market actually improving? How much of that is like driven by own actions?

I'm not going to speak in history since I wasn't here for all that. But I think what's relative moving forward where I see the large opportunity, certainly, you heard me talk about growth and innovation, that's huge. But I think the underpinning piece that is really important for us to execute moving forward is the cost competitiveness, right? That's going to help us not only with that growth plan to perhaps regain some share that we may have lost. It's also going to help us as we maybe look at some businesses outside of our core market to help us be cost competitive and growing that. So I'm not going to go backwards because that wasn't here. But I think that the dedicated growth plan and then really the cost competitiveness is going to help us achieve that. That's where the focus is.