Good morning, and welcome to the Sigma Foods Second Quarter 2026 Earnings Conference Call. As a reminder, today's call is being recorded.

The replay will be available on Sigma Foods Investor Relations website later today. I will now turn the call over to Hernan Lozano, Sigma Foods IRO.

Thank you, operator, and good morning to everyone joining us today. Further details regarding our second quarter results can be found in the press release and earnings presentation that were distributed yesterday.

Both documents are available in the Investor Relations section of our website. Before we begin, please note that today's discussion will include forward-looking statements.

These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results may differ materially.

Sigma Foods undertakes no obligation to update these statements. It is my pleasure to participate in today's call together with Rodrigo Fernandez, CEO; and Roberto Olivares, CFO.

Today's agenda is straightforward. Rodrigo will start a strategic overview, Roberto will follow with a financial review, and we will conclude with Q&A.

With that, I'll turn the call over to Rodrigo.

Thank you, Hernan, and good morning, everyone. Sigma Foods continued to build on the strong start of 2026, delivering record second quarter volume, revenues and comparable EBITDA.

This good performance reflects the adaptability of our diversified business model and reinforces a clear trajectory towards our financial objectives. During the quarter, we also made meaningful progress on several strategic priorities by investing in strengthening our manufacturing network and complementing our portfolio through a disciplined acquisition.

In Europe, we reached important milestones in our capacity recovery plan. We advanced in the start-up process of new vacuum production capacity at La Bureba plant and continued the construction of our new facility in Valencia to begin production in summer of 2027 as planned.

Together, these assets will restore the capacity lost in the Torrente plant flooding and support the long-term profitability and growth of our European business. In the United States, we completed the acquisition of Roger Wood Foods, a sausage producer with a leading brand in the South region.

This bolt-on transaction complements ongoing organic initiatives, including a recent nationwide Sigma product launch as we expand our participation in the Dinner sausages category, which represents a high potential opportunity for our U.S. operations.

In addition to disciplined investment in high-return projects, returning capital to shareholders is a core component of our capital allocation strategy with cash dividends representing the primary mechanism. During the second quarter, we paid the first installment of our approved annual cash dividend, totaling $76 million.

The second installment will be paid in October. We also executed opportunistic share buybacks, reflecting our constructive view of the underlying value of the business, particularly in the context of the recent share price trends.

From a valuation perspective, we're actively engaging with consumer sector investors and analysts to strengthen awareness of Sigma Foods as a leading global food company. These efforts have contributed to expanding our sell-side coverage, enhancing our reach within the investing community and supporting a greater understanding of our long-term value proposition.

We appreciate the opportunity to connect with all market participants. As we reflect on the first half of 2026, Sigma Foods has made encouraging progress across multiple fronts.

Our diversified business is well positioned to navigate a fluid macro environment where we continue to see a healthy balance between external tailwinds and headwinds. Looking ahead, we have greater confidence in delivering our full year EBITDA guidance of $1.1 billion.

With that, I will now turn the call over to Roberto for a more detailed review of our second quarter financial results.

Thank you, Rodrigo, and good morning, everyone. The second quarter represents another period of solid consolidated results, driven by consistent execution and the positive effect of currency translation.

Revenues were up 6% versus second Q '25 and increased 10% in the first half of the year, reflecting moderate volume growth, stable currency-neutral average prices and a favorable foreign exchange conversion effect. Importantly, comparable EBITDA was 17% higher, both on a quarterly and accumulated basis with strong contributions from Mexico, Europe and Latin America.

Let me walk you through key results by region. Mexico delivered another outstanding performance with record high second quarter volume, revenues and EBITDA.

In the current consumer environment, we continue to see different volume dynamics by channel, categories and brand segments with a stronger momentum in retail relative to foodservice in the dairy category and in value-oriented brands. Positive volume growth, improving input costs and a favorable currency translation effect boosted accumulated EBITDA by 23% versus the first half of 2025.

In Europe, volume and comparable EBITDA continued to grow, supported by the fresh meat business, which benefited from a temporary decline in the live hog prices in Spain. The business delivered its highest second quarter comparable EBITDA since 2021, reflecting the continued progress of our turnaround efforts.

Year-to-date, comparable EBITDA is 66% higher than the first half of 2025. In the United States, seasonal trends supported sequential increase of 12% in volume, 9% in revenues and 12% in EBITDA, excluding the integration of Roger Wood Foods.

Toward the end of the quarter, we also observed early signs of year-on-year improvement in monthly volume trends. We expect further improvement in year-on-year trends during the second half of 2026.

Also, the integration of Roger Wood Foods is advancing as planned with results during the first 2 months of operation in line with our expectations. On a final note, Latin America continued its positive momentum, delivering record second quarter volume and the fourth consecutive quarter of sequential EBITDA improvement, supported by better price cost alignment and an operational efficiencies across the region.

Moving on to selected items below the EBITDA line. Our accumulated net financial cost was $123 million compared to $57 million in the first half of 2025.

This increase was primarily driven by lower foreign exchange gains, reflecting a more stable Mexican peso in the current period. Accumulated net income was $164 million compared to $209 million in the first half of 2025, which benefited from extraordinary items, including insurance reimbursements related to property damage as well as higher foreign exchange gains.

Let me close with a brief comment regarding our strong balance sheet. Net debt ended the quarter at approximately $2.9 billion, up $78 million quarter-on-quarter, reflecting primarily a noncash foreign exchange conversion effect related to our peso-denominated debt.

Our net leverage ratio stood at 2.7x at the close of the second quarter. We expect this key metric to trend lower closer to our long-term target of 2.5x by year-end, supported by strong cash generation.

Sigma Foods remains well positioned to continue investing in its business model, backed by solid cash flow and ample liquidity. I now turn the call back to Hernan for Q&A session.

Please, Hernan.

Thank you, Roberto. We will now open the line for questions.

Operator, please.

Our first question comes from Ben Theurer of Barclays.

Two quick ones I had for you. So first of all, you've highlighted some of the sequential improvement in your prepared remarks and particularly in the U.S.

So as we're looking into the back half and thinking of just normal seasonality, but still kind of like a protein market that it's somewhat stretched too thin, particularly on the beef side. Are you seeing any opportunities as it relates to kind of like some sort of share gains within your portfolio against other core proteins?

And within that, what is your cost outlook from a raw material piece? Because you obviously highlighted the lower prices, et cetera.

So just as you look into the second half, what's your outlook volume and cost? And then I have a quick follow-up on Europe.

This is Roberto. Let me answer the question from the end of your question, and then I will move to the beginning.

Starting with cost, yes, we are seeing a better dynamic in raw material, particularly in the Turkey segment. As we reported in our earnings release, turkey thigh and turkey breast has decreased significantly during the quarter, and we're seeing that new level of prices at least to continue at that level, if not to continue a little bit lower.

In the case of pork, which is also a relevant component of our cost structure, particularly in Europe, we're also seeing a better dynamic there given the ASF in Spain that is helping us to mitigate any impact there. In the Dairy segment, I will say, particularly some meat proteins and nonfat dry milk during the quarter was a little bit tighter in the market.

Hopefully, by the second half of the year, we will see a better dynamics there. In regards to the sequential improvement, there's some seasonality, I will say, particularly in the second quarter in the U.S.

because of the summer season and how volume trends higher in that segment. But for the second half of the year, we do expect that the year-on-year trends on volume for the U.S.

to get better due to 2 things: first, a better comparable base, a lower comparable base and the second one as well, new listings that we are getting into the main retailers in our categories, and I will say, in adjacent categories or high potential opportunities for us in the U.S. like the case of cooked dinner sausage.

In regards to market share, I will say that in most of our categories in the U.S. or in our biggest category in the U.S., which is hot dogs, we're pretty much in line with the industry.

So our market share has remained solid there. In other categories where we see high potential opportunities as in the case of hen poultry or dinner sausage, we are gaining some share in those categories, which is still a small portion of our sales, but where we want to continue growing in those segments.

And just as a complement, Ben, I would say that by the end of the quarter, by June, we saw almost flat compared to last quarter. So we expect something similar in the third quarter, seeing almost flat in the U.S., and we see a positive comparison compared to fourth quarter compared to fourth quarter 2025 volume-wise.

Okay. Perfect.

And then in Europe, real quick, you had again a quarter with higher fresh contribution, which kind of like brought your prices down. So how long should we expect this to last?

Is that still something that's probably going to be a drag on pricing, just average pricing in the third quarter, just given what the dynamics are right now? Or how should we think about the pricing dynamics as it relates to the Fresh business?

Sure. Thank you, Ben.

I think the fresh business is important to think about price cost alignment. And at the end, price cost alignment volume and at the end -- what is most important is if you see EBITDA per ton.

So if you see, for example, this quarter and you see total Europe, you do see a difference in price. And again, that's coming from the cost dynamics in fresh meats.

But at the end, when you see price cost and you see volume, you see EBITDA per ton positive 7%. So at the end, that is the number that we should be consistent with.

And if price of raw materials go up or down, I think what is important is just to follow through on the EBITDA per ton.

Congrats on the results.

Our next question comes from Rodolfo Ramos of Bradesco.

Congrats on the great results. It was interesting to see the slide with the marketing campaign with Luis Garcia.

I mean, would you say that there was a notable influence from the World Cup on volumes? Or in other words, should we expect a moderation or weakness in the second half?

And also on revenue potential, can you talk a little bit about the drivers of sales growth in Mexico during the quarter, I mean, between pricing and mix, just to understand that very strong top line. That's the first question.

And the second one is it's a bit on the cost side. I mean you're getting clearly breathing room on some of your input costs.

I mean does the news around the Strait of Hormuz or El Nino, I mean, does that make you worry at all for the second half or maybe even next year?

Thank you, Rodolfo. Let me start with the first one, and I'll leave the second one for Roberto.

The campaign Luis Garcia actually was pretty good. The food instead of food, and it was very viral.

And then I would say that we do have campaigns for the rest of the year. That was a good campaign but we do have campaigns also for the rest of the year in the different geographies.

It is important to support the brands all over the place. And we do see sales growth in all the regions for the rest of the year, low single-digit volume, but we do see positive in all the geographies.

And again, all of them supported with some campaigns. And as far as Mexico for this quarter, we do see -- depending on the category, so we do see very good growth on dairy, especially if you think about it in volume in yogurt.

We do see a lot of growth in yogurts such as Griego, which has very nice contribution on that end. What we do see is that people are using some dairy products like yogurt for different occasions.

Before it used to be for breakfast, for example, and now they use it between the day and some other things. So we do see a positive stable change for the future in yogurt.

We also see some positive trends on the proximity channel within Mexico and also in value brands. And if you think about the case of pricing and mix, it also depends a lot on raw materials.

So we have been increasing prices, for example, in the case of Turkey in the last couple of months, years. And what we see forward, again, it's having a good price cost alignment, which at the end will allow us to have some volume growth, which is important, margins that comes from price cost alignment, but at the end, EBITDA per ton.

So if you think about what we think going forward, it's both balancing the volume for having revenues growth in the medium, long term, but at the same time, with very nice EBITDA per ton going forward.

If I can just complement a little bit on the question, Rodolfo, on volume regarding the World Cup. So we were expecting a little bit more volume coming from the foodservice sector.

We didn't see that much as we expected. So we have a limited benefit from there.

We saw and these were all over the news, lower expected international tourists in -- particularly in Mexico, or shorter stays if they were vacationing and higher ticket prices that we think that affected the overall performance of the industry. However, as Rodrigo mentioned, a lot of the growth that we saw in Mexico during the quarter has to do with retail and has to do more with the dairy and category.

So that's a good part about the diversification that we have different levers that we can pull out in case someone performs lower than expected. Let me move to the cost side.

Yes, I mean, if you see there's a lot of volatility in the market. You just mentioned 2 different drivers of that volatility.

We have seen some impact in some of our costs, particularly those related to freight in some regions in the U.S., in Mexico, we have seen some additional costs as well in some of the plastic packaging for our products. However, as we have said in the past, we do not see this impact as something that we cannot manage through our even revenue management initiatives or efficiencies that we're looking in the organization.

So there's still some headwinds, I would say, in the second half of the year. But as we mentioned in our initial remarks, we remain confident that the tailwinds, particularly in meat raw material, is going to help us offset that headwind.

And just maybe one last one, if I may. Can you remind us your FX sensitivity?

Sure. For each peso of depreciation, the translation effect is around $30 million to $35 million of translation in EBITDA.

Our next question comes from Nicolas Rodrigues of Citi.

With first-half comparable EBITDA effectively halfway to 1.1 billion target, could you discuss which regions are tracking ahead or your original plan and where you still see the greatest execution risk? Does achieving guidance require meaningful U.S.

recovery? Or can the other regions can offset this?

My first question.

Thank you, Nicolas. Yes.

So we are -- I would say we're on track on all geographies in regards to what we expected in guidance. I know that the U.S.

is performing a little bit softer than the rest of the region, but that was our initial assumption since the beginning of the year. We'll see better dynamics, particularly in Mexico that could potentially help a little bit more.

But in general, all of the regions are tracking in line with what we expected since the beginning.

Okay. If I may, another.

You highlight an improvement in U.S. trends during June.

And could you discuss what's changed during this month? What's happening in June, please?

There are 2 things, Nicolas. On one side, as Roberto mentioned, we had a high comparison base.

We -- last year, we lowered a little bit inventories that we had through some promotions. And taking away that, June, as I said, was almost flat.

But at the same time, Roberto also mentioned that we have had new listings in national retailers. Those new listings have been going through the months of the quarter.

So by now, most of them are on. And therefore, we expect those listings also to help us out within the next months until the end of the year.

Our next question comes from Henrique Moraes of Morgan Stanley.

I have 2 follow-ups here. The first one on Mexico top line growth, more specifically on pricing.

You mentioned some price increases in some categories, some discounts in others and the idea that you have been conveying for a while of passing through the lower costs for consumers as well. But thinking about the prices for this quarter specifically, were there any mix effects or something like that, that impacted the unit revenue growth, having in mind the deceleration?

And considering the favorable costs on a sequential basis that you mentioned as well and considering that even with lower accelerating unit costs, you also grew margins a lot in Mexico. If you could also comment on how are you thinking about the magnitude of potential additional discounts going forward?

And what are you expecting in terms of elasticity from the consumer or volume growth coming from those discounts in the second half of the year? That would be very helpful.

And my second follow-up on the below-the-line dynamics. We noticed the higher net financial results that you mentioned in the initial remarks.

I understand as well the higher FX results you mentioned. But just to make sure if there was any one-off effect or noncash effect that impacted that line during the quarter?

And how should we think about that normalized behavior going forward? Those are my 2 follow-ups.

Thank you, Henrique. This is Roberto.

Let me go first through your second question, the net financial cost. If you see almost 90% of the change has to do with lower FX gains in second Q '26.

And that has to do with the appreciation of the Mexican peso. In the second Q '25, the Mexican peso appreciated around MXN 1.43, while in the second quarter of '26, the peso appreciated around MXN 0.60.

So in the second quarter of '26, we have a lower appreciation of the Mexican peso. Our U.S.-denominated debt is translated into a lower peso figure as the peso appreciates.

And this is reflected in the net financial cost as an FX gain. So most of the effect, again, has to do with -- in the net financial cost has to do with that effect.

And the remaining 10% has to do with higher interest expense coming from a large proportion of peso-denominated debt as in this year, we moved a little bit more of our debt into Mexican peso to be more in line with our EBITDA generation. Let me move now to your first question regarding Mexico top line and additional volume dynamics.

Let me just say that we -- Rodrigo was mentioning that in previous years, due to the inflation of Turkey, we had increased prices. Actually, this quarter, prices, if you compare it to last year in currency neutral are around 1% higher.

And that has to do a little bit with mix because we're seeing higher volume in yogurt and yogurt in general has lower prices than processed meat and cheese. If you see how we're doing with -- how we're managing margin going forward, we -- as we have said in the past, we are very conscious of trying to incentivize volume.

So we will try to manage our revenue management initiatives in order to also capture a good margin, but also being able to incentivize volume in the long term.

And Henrique, I think that the last thing that Roberto said, it's very important and it's a good way of thinking about it, how we think about it is just how to make sure that we can have sustainable volume growth for the long term, but balanced with a good EBITDA per ton. So at the end, those are most of the 2 check balances that we do very often in other geographies for the present and for the future.

Our next question comes from Felipe Ucros of Scotiabank.

Quick question on SG&A. As a percentage of sales, SG&A has been running a little bit hotter than historically.

And I asked about that last quarter. It's mostly been coming on the sales and distribution front, and you explained that a lot of that had to do with product mix.

Just wondering if there are other things in play there. Not sure if perhaps you shifted the timing of your marketing spend because of the World Cup or if there's any shift across regions that is probably making regions with higher SG&A profiles take a bigger chunk of the participation.

Any color that you can give us on what things are moving there, but perhaps more importantly, what you expect for the coming quarters and for the long run, given that, that had been such a stable number for 5 years, and it's been rising quite fast. And then the second one on M&A, the Roger Wood Foods acquisition.

Just wondering about the rationale behind this one. Clearly, it plays in a space where you're already present and it complements the portfolio.

But it also called my attention that it's a local brand. So just wondering if this is something you're planning to bring to the national level.

And also, if you can discuss any footprint efficiencies that you can have because obviously, you're going to have a plant in a new location in the U.S. I'm just wondering if that's going to have any efficiencies as you probably reprofile your production.

Thank you, Felipe. This is Roberto.

Let me answer the first one related expenses. If you see expenses grew -- how they grew over the quarter versus last year, around 1/3 of the effect has to do with the appreciation of the Mexican peso.

So if you see currency neutral, you still see a growth, but a lower one. Then a lot of that has to do with payroll increase due to inflation.

There is some additional freight cost, as I explained, not only are we seeing higher freight cost due to fuel, but also availability, truckers availability and in general, other dynamics in the freight industry that are impacting cost. And also, we said as we move more yogurt volume is usually a little bit less efficient than processed meats.

So that also increased a little bit more freight. And marketing, as Rodrigo mentioned, we have been investing a little bit more on marketing as we're trying to incentivize volume and capture more market share.

So that has also increased a little bit the expenses.

And Felipe, this is Rodrigo. On the Roger Wood side, first, we had our first 2 months, and we're very happy with the results we have had.

And it's important to talk about sausages. We do see a good opportunity in sausage in the U.S.

We see it as a high potential opportunity. It's a market where the margins are healthy.

And at the same time, you do have some regional players in the different geographies within the U.S. And finally, we do see some opportunities of products and innovation within the whole market.

So the way we think about it is organically, we're going to continue delivering new innovation for now. For example, we have one called the Sausage project.

It's a chicken-based sausage. It's kind of a supplement or instead of rotisserie chicken that can be used for everything.

And things like that, we do see continue launching within the U.S. And at the same time, as I mentioned, there's a lot of strong regional players that we think that inorganically, we can pursue.

All of them, just like Los Altos, we did in cheese or like Roger Woods that we just did. These are bolt-on acquisitions that might happen.

But once you get a couple of them, then you can start looking at footprint. We don't see an opportunity in the short term in the footprint.

On the opposite, we're going to use some of the available space that we had at the plant to produce some of our sausages that we're launching organically. But we do see that there might be some other bolt-on acquisitions that could happen in the U.S.

and with that, consolidate a couple of strong local regional players with amazing products and with that, to be able to consolidate and to grow in the sausage category in the U.S.

I would like to complement, Felipe, that Roger Wood foods is very synergistic. We -- in terms of cost synergies, SG&A synergies, and we do expect to increase the margin in that business going forward.

Okay. Understood.

And if I can do a follow-on on buybacks. It looks like you started making some purchases in the open market, but it was still very small.

So wondering if there are any plans that you can discuss about getting more aggressive on this side in the coming quarters given that valuation has come down a little bit in the last few months? Or is this more or less a pace maintained?

Yes. Thank you, Felipe.

Talking about share buybacks, they represent an additional mechanism for the company to return value to shareholders, complementing the primary channel of capital returns, which for us is cash dividends. And as you mentioned, the business has delivered a strong start of 2026, and we maintain positive momentum through the rest of the year.

But at the same time, like you mentioned, the share price has declined since the start of the Iran conflict. And we believe this temporary disconnect between the performance of the business and the market valuation does create an opportunity -- an attractive opportunity to repurchase shares at levels that are in the best interest of the shareholders.

Having said that, we would love to allocate maybe a little more capital to share repurchases on the current circumstances. But at the same time, we also recognize that the net leverage ratio remains slightly above the long-term target that we want of 2.5x.

So this is why we have been executing buybacks selectively and opportunistically and at the same time, having a commitment to a strong balance sheet. So you might see something within the similar levels for the next of the year -- for the rest of the year.

Our next question comes from Alejandro Fuchs of Itau.

Congratulations on the results. I only have 2 quick ones.

The first one, maybe in Mexico in terms of competition. I wanted to see maybe Rodrigo, if you could elaborate a little bit more what are you seeing currently for your main categories in terms of competition?

And also, how does the market react when we see, let's say, improved cost environment for many of your categories? Do you see a little more maybe aggressiveness in terms of pricing for some of the competitors?

Or is it very, I would say, rational competition going forward? That will be the first one.

And then the second one also on M&A. And I appreciate all of the color that you just gave.

But I wanted to know if -- should we expect more M&A going forward? And if so, which countries and sectors would be you more interested in looking at?

Thank you, Alejandro. Let me start by the second question, talking about M&A.

The strength that we have, which is growing the core, finding new areas of growth and enabling the company to do those 2. At the end, we want to produce sustainable growth for the company even without M&A.

And that's very important, and that's what we work on a daily basis. Having said that, we always have conversations in different geographies.

And when we look at M&A, it's a couple of things. One, it's the amount of value that it can bring to the company.

Most of these companies usually, just like Los Altos or just like Roger Woods, are companies that were started by the founder and the founder doesn't have a second generation to pass it to or something similar. And those are the opportunities that we see that add a lot of value to the company.

Those are the opportunities that with the knowledge that we have of the market, with the knowledge that we have in formulation, with the scale that we have for buying some raw materials, with the structure that we have on both on the central side, but at the same time on sales, bring a lot of synergies. So we don't have anything huge in any of the geographies -- we don't foresee anything closing in the short term, but we do have open conversations within the geographies of this type of bolt-on acquisitions that could happen in the future.

That depends a lot on timing and depend a lot if the owner is at the time on selling the business or not. But we do see proactively, again, small acquisitions within the different geographies that when they come, we expect them to bring a lot of synergies one by one.

Let me talk about your first question regarding Mexico and competition. I would say it depends a lot on the category.

We are usually -- we have usually the leading position in the category. So whenever there's some cost fluctuation volatility, there is -- usually, it's us trying to be the price setters, and that has remained during this volatile time.

I will say in yogurt, particularly, and we have discussed that we're gaining presence. We are particularly in those categories, subcategories of yogurt that are growing mostly Greek, as Rodrigo mentioned, and other functional yogurts.

We see that as very good dynamics. And we have seen, in general, very rational and good competition in most of the categories.

Our next question comes from Fernando Olvera of Bank of America.

I have a quick follow-up regarding cost. I would like to hear your thoughts if you see any risk on meat cost given the increase of grain prices?

And my second question is related to the U.S. If you can give us some color about the volume performance of national and Hispanic brands?

And what is your outlook for coming quarters?

Fernando, this is Roberto. Let me talk about cost.

So I mean, as I mentioned previously, there's a lot of dynamics and volatility, particularly in raw materials. We're seeing now a friendlier environment.

But definitely, there is a possibility for higher additional cost in the future. But I mean, due to grains and all everything regarding what is happening in the Middle East.

Let me just say that usually, there's a lot of dynamics or levers that move the price of protein. Some of them definitely are the input cost, the grains, et cetera.

But what we have seen recently more particularly in protein is that external effects such as -- or not external, but other effects such as diseases like what is happening with ASF in Spain or what happened with avian influenza in the U.S. at the beginning of last year or those type of things are the ones that move the prices at least in what we have seen recently in the recent history, more than higher input cost.

Having said that, there's obviously a risk, and that depends on how deep or how long the conflict remains in that region. But as we have done in the past and we have proven, if that happens, we will try to protect margin by having some revenue management initiatives and being very cautious about not affecting the consumer in the long term.

In regard to U.S. volume outlook, let me talk about -- we continue to see some growth in Hispanic brands, particularly as we are growing into some existing clients, but also getting some new customers.

As we have mentioned in the past, we're getting more of our Hispanic brands portfolio into mainstream channels as Hispanic has become more mainstream in the U.S. And in regards to national brands, as Rodrigo mentioned earlier, we saw better dynamics in June that we saw at the beginning of the quarter, and we do expect that the year-on-year trends on volume get better in the second half of the year.

Our next question comes from Froylan Mendez of JPMorgan.

Regarding free cash flow, in the first half, cash generation and deleveraging looked somewhat muted if you compare it with the EBITDA generation. Can you guide us through what specifically needs to happen in the second half to improve the free cash flow generation and the leverage reduction?

And my second question is more on Europe, into the second half, what is the right margin cadence that we should expect given the new capacity ramp-up? And maybe what is left from insurance recovery, et cetera?

Let me talk about free cash flow first. Usually -- so in the first half of the year, we usually invest a little bit more on net working capital.

If you see because we're building some inventory in both raw materials and products for the summer, the second half of the year usually has lower investment in net working capital. In regards to CapEx, we do expect to continue investing in CapEx to be very close to our guided number of CapEx -- investment in CapEx of around $460 million that just for everyone's benefit, remember that we are investing around $100 million more this year because of the Torrente, the Utiel plant, the Torrente recovery capacity that we're investing in Spain, that most of that investment was paid by the insurance last year.

So if you see we do not -- if you see the second half of the year, we do not expect net debt to change that much of what -- the figure that we reported in this quarter, but we do expect a higher last 12 months EBITDA of $1.1 billion, which will lower the net leverage ratio closer to our long-term target. In regards to Europe, there's a lot of seasonality in European EBITDA, the second half of the year and particularly the fourth quarter, significantly higher than the rest of the year.

We do expect to continue with that seasonality during this year. In regards to the insurance recovery, we are reflecting the payments that we receive from time to time in each month of the part of the business continuity of the business interruption part of the insurance.

So there's not no change in there. And we do expect, again, the seasonality to be in line with the previous one.

And at the end, we were seeing Europe very in line with what we expected since the beginning of the year in terms of guidance, which represents a significant increase versus last year.

And Fernando, the only thing I would add is that we do see business interruption until we have the facility back on track. What are those type of things that come in business interruption?

Well, we're producing, for example, some of the hot dogs in Portugal, and it has an extra cost to take them from Portugal back to Spain. And those are the type of things that the insurance pay.

And again, we see that until we have the facility back on track. And as Roberto mentioned, the second part of the year, it's about stronger seasonality in Europe.

We do expect to see double-digit growth on the whole year in the European part.

And if I could follow up just on the update on the sale of Grupo Vall, where are we? And when do you expect this to happen?

So now it's under the commission -- Spanish commission of Competition. And we do expect to have it on the third quarter -- to happen in the third quarter.

Our next question comes from Hinden Barredo of PGIM.

A quick one for me. Regarding the U.S.

side, can you just tell me what happened, remind me on the reason for the weakness on a year-over-year basis in organic terms?

Thank you, Hinden. So yes, I think it has to do mainly with last year during the second quarter of 2025, I would say on top of the softer consumer environment that we're seeing in the U.S., last year, we have a higher comparable base because we did some inventory optimization sale in the second quarter of 2025, we reduced our inventory days, our finished product inventory days, and that reflected the higher comparison base.

If we remove that effect out of the numbers, again, as we have mentioned of June, we saw an improvement -- a significant improvement in volume results. And I will say June is almost flat versus last year in terms of volume.

And again, with where we're seeing in terms of listings, particularly in the national brands business, we do expect that the second half of the year to be better.

And just Hinden, this is the way we thought about it from the beginning of the year. So even though it's a little below last year, it's on track on what we're expecting.

And as Roberto mentioned, we do see both volume growth and EBITDA growth on the U.S. compared to last year on the second half of the year.

Great. And just to quickly follow up on that.

You mentioned more kind of promotions last year. But when I'm looking at margins, it looks like there is actually a slight compression compared to last year.

Am I seeing that right?

In terms of margin, there's some mix effect, I would say, particularly in the Hispanic brands business that has to do with 2 things. First, I will say, lower sales of Hispanic product in independent retail stores versus big chains in the U.S.

as well as, I would say, a little bit lower margin in the dairy category in the U.S. just because milk is a little bit higher than last year.

And on a similar basis, if you see the rest of the year compared to '26 compared to '25, the second half, you might see an EBITDA per ton on the second half better compared to 2025 on the U.S.

There being no further questions, I would like to return the call to management.

Let me turn the call back to Rodrigo for closing comments.

Thank you, Hernan. We're pleased with the positive momentum we have built through the first half of the year.

Strong operating execution, disciplined capital allocation and a healthy balance sheet position us well to continue delivering consistent results. We greatly appreciate the continued support of our investors and business partners.

We look forward to updating you next quarter. Thank you all for your interest in Sigma Foods.

This concludes today's conference call. You may disconnect.