stabilize volumes in the second half of 2026 and return to volume growth from 2027 onwards. This recovery is supported by targeted actions on pricing and affordability, increased brand investment, stronger consumer activation, innovation, and further expansion of our global footprint.

Over the next few slides, I will walk you through the concrete actions we are taking and why we are confident to get back to a volume growth momentum. The foundation of our volume recovery plan is not pricing.

It is the strength of the Lindt brand, and our brand equity is stronger than ever. For the second year in a row, Lindt was named the world's most valuable chocolate brand in the Kantar ranking.

With a brand value of $11.7 billion, up 24% year-on-year, we now rank seventh across the entire food and beverage category. This recognition demonstrates the resilience and strength of the Lindt brand.

This strength has been built over many years through a relentless focus on premium quality, continued innovation, and consistent investment behind our brands. Most importantly, it reflects the deep emotional connection and trust that consumers have in us.

That makes us confident to regain household penetration, fuel consumer demand, and get back to volume growth. Our strong brand equity is built on something very tangible, the high quality of our products.

We call it the Lindt difference. The combination of premium ingredients, long-standing manufacturing expertise, continuous innovation, and unmatched craftsmanship.

For more than 180 years, we have focused on creating the highest quality chocolate from bean to bar. From carefully selected cocoa beans and ingredients to the Lindt conch, invented in 1879 and still at the heart of our chocolate-making process today.

Every step is designed to deliver a superior consumer experience. This is what sets us apart.

It matters more than ever. Across many markets, consumers are increasingly choosing more mindful and fewer, but better indulgences.

They are looking for quality, authenticity, and products that are worth the price. This premiumization trend plays directly to our strengths.

As the category returns to volume growth, we believe Lindt is exceptionally well-positioned to capitalize on this trend and continue gaining market share in the premium chocolate segment. As pricing pressure across the industry begins to normalize, we have greater flexibility to take targeted actions where we see opportunities to support volume growth.

We have already announced selective price decreases in key markets such as Germany and Switzerland, particularly in our Christmas portfolio. These measures will support consumer demand during our most important season and reinforce our leadership in seasonal chocolate.

We are expanding our portfolio with new formats and price points for some of our most popular brands, including Lindor. By broadening our price architecture, we can attract new consumers, increase purchase frequency, and offer more touch points with the Lindt brand without compromising our premium positioning.

We are also continuing to invest behind our brands. Strong brand support remains one of the most effective drivers of long-term volume growth, and we are increasing our focus on both traditional and social media.

The extraordinary success of our Dubai Style Chocolate launch demonstrated the growing power of social media in building awareness, engagement, and demand for our brands. We are therefore expanding our social media presence and creating a more seamless consumer journey from inspiration and discovery to purchase.

This strategy is helping us reach new audiences and strengthen our relevance with younger consumers. In Germany, for example, a recent YouGov study ranked Lindt as the most popular chocolate brand among Gen Z.

Taken together, these actions are designed to improve affordability, strengthen consumer engagement, and support a return to sustainable volume growth. Throughout our history, innovation has been one of the key drivers of growth for Lindt & Sprüngli.

It allows us to attract new consumers and increase brand attention. A great example is our Lindt Choco Wafer.

Following highly successful pilot launches in the United Kingdom, Italy, and Bulgaria, consumer response has exceeded our expectations. Based on this success, we are now preparing for a global rollout.

To support the demand, we are investing in additional production capacity and are currently building a dedicated Choco Wafer production facility at our site in Italy. We expect the new factory to become operational by 2027 and will then gradually expand the distribution of Choco Wafer across our global network.

When discussing innovation, it is impossible not to talk about Lindt Dubai Style. Following extraordinary consumer demand, Dubai Style has evolved from a trend-driven launch into a well-established product that is now broadly available across retail channels and increasingly becoming part of our core portfolio.

While the initial hype has naturally faded, consumer interest remains strong, and the platform continues to offer significant growth opportunities. Building on the success of Dubai Style, we are expanding the platform with additional recipes, formats, and flavors.

Earlier this year, we launched Tokyo-Style Chocolate, a matcha and strawberry-based recipe inspired by the Japanese tea culture. We will continue to introduce further city additions to the portfolio.

Our ambition is to create a broader family of city-inspired chocolate creations that combine global food trends with Lindt's premium chocolate expertise. This approach allows us to continually refresh the platform, attract new consumers, and generate excitement around the brand.

Our Global Retail business continues to be one of our most powerful growth drivers. It allows us to showcase our brands in the best possible way and create unique consumer experiences that strengthen brand equity and loyalty.

We continue to invest in both established and emerging markets. Earlier this year, we opened a new flagship store in Lucerne, one of Switzerland's most visited tourist destinations.

Later in the year, we will further enhance this location with a chocolate experience exhibition. Later this year as well, we will open a new retail store in a prime location in Oslo.

Looking ahead, one of our most exciting projects is the opening of a 1,200 sq m Lindt flagship store at Marienplatz in Munich, planned for next year, which will become one of the largest Lindt stores worldwide. At the same time, retail is an important spearhead for our expansion into new markets.

Earlier this year, we opened our first Lindt store in China in Shanghai, marking an important milestone. In India, where we recently established our own subsidiary, we expect to open our first stores in the third quarter.

By the end of the year, we will open stores in Saudi Arabia and Malaysia. These investments are much more than additional points of sale.

They increase brand visibility, strengthen consumer engagement, and help us attract new consumers in some of the world's most attractive growth markets. Taken together, our retail expansion strategy provides another important growth factor in the second half of this year and beyond.

Let me close by underpinning how these trends and our actions will translate into positive volume development. Long-term consumer trends continue to play to our strengths.

We have already discussed the ongoing trend of premiumization. Consumers are looking for quality and mindful indulgence, which continues to support premium brands and premium chocolate.

At the same time, the global middle class continues to expand, particularly in emerging markets, while aging populations in many developed markets increasingly prioritize quality and enjoyment over quantity. Through innovations such as our city-inspired product range of Choco Wafer and Choco Wafer, we are attracting new consumers and keeping our portfolio relevant for evolving consumer preferences.

With our Lindt Maître Chocolatier, we will continue our communication on our heritage, craftsmanship, and high quality. Our accelerating expansion in both established and emerging markets allows us to reach consumers wherever they choose to shop.

We are expanding the reach of the Lindt brand, offering the ultimate shopping experience in our stores. Based on the strength of our brand, the quality of our products, the actions we are taking today, and the favorable consumer trends, we are confident to return to sustainable volume growth in 2027.

We have the right strategy and are well-positioned in the market to confirm our mid to long-term growth ambitions. With this, I now hand over to Martin, who will take you through the half year results.

Martin Hug Thank you, Adalbert. Despite a difficult global operating environment with declining volumes in the global chocolate market, sharply rising costs for cocoa, and the need to again implement price increases, Lindt & Sprüngli was able to continue its sales growth trajectory.

In addition to price increases, we have continued to implement projects across all regions that drive efficiencies and cost savings. Price increases, coupled with those cost savings projects, are the key drivers for the positive operating profit development that we expect for the full year.

Overall, we are pleased with our progress and remain optimistic about our future prospects. The Lindt & Sprüngli group has made a solid start to the year.

Sales in the first six months achieved an organic growth rate of 4.3%, which is within the range of the guidance we provided in March 2026 of 4%-6%. EBIT margin came in at 11.2%, ahead of the guidance we provided earlier in the year.

Net income margin reached 8.2%. Free cash flow came in at 2.6% of sales, a significant improvement on the -3.4% of H1 2025, and we will go into more detail on this later in the presentation.

Our net debt position increased from CHF 1.1 billion at the end of 2025 to CHF 1.6 billion. This balance is slightly higher than a year ago when net debt was at CHF 1.4 billion.

The main driver of this net debt increase in the first half versus our year-end position was the shareholder return through dividend payments of CHF 414 million and CHF 100 million in share buyback programs. Total sales reached CHF 2.33 billion in H1, with a decline in Swiss francs of -0.99% due to the strengthening of the Swiss franc.

First half sales grew by 4.3% organically. Of note, we saw particularly strong growth in North America.

Cumulatively, we have grown 45% over the last five years in the first half, representing a CAGR of +8.8%. Price increases of 11.8% were in line with the double-digit increase we communicated in March.

Due to higher input costs for cocoa, double-digit pricing actions were still required. The majority of the increases were pricing increases initiated during 2025, which partially carried over into 2026.

The exception was Easter, where we took price increases in the 2026 season. Looking ahead into the second half, we'll see pricing impact tail off and will therefore see a considerably lower price impact in H2 2026.

Volume mix was negative, in line with our expectations, with a decline of -7.5%. However, the price elasticity varied region by region.

Higher elasticity was mainly observed in Europe, while North America and rest of the world were better than the group average. The currency effect had a negative impact of -5.2%, in particular due to the weakening of the U.S.

dollar, euro, and the British pound. On the following slide, I would like to give you an overview of the sales performance by segment.

In the first half of 2026, we experienced a challenging environment in the Europe segment, where we generate almost half of the group's sales. We saw a decline in organic sales of -2.1% in the first half.

I would, however, like to remind you that we had an extraordinary result in 2025 of +17.7%. Over a three-year period, our growth CAGR is a healthy 8%.

It is also important to note that we experienced double-digit growth in our less mature markets, such as in the Nordics, Benelux, Iberia, as well as Central and Eastern Europe. The North America segment showed a strong organic sales growth of +12.7%.

All subsidiaries in the U.S. and Canada continued to grow, and Lindt & Sprüngli continued to grow market share in the U.S.

In the Rest of the World segment, we grew by 10.2%. Notably, the subsidiaries in Japan, China, South Africa, and our international distributors achieved double-digit growth rates.

Our Global Retail business was negatively impacted by the conflict in the Middle East. There are many large traditional chocolate markets within the rest of the world, where we see significant premiumization potential for Lindt.

As a result, we are convinced that we can maintain double-digit growth in 2026 and over the medium term. Let's move on now to the important topic of costs, category by category.

Material costs, which have been adjusted for changes to inventories, came in at 35.5% of sales, 220 basis points higher than in 2025. This reflects higher prices for cocoa in our products, which could be absorbed by efficiency gains in other lines of our P&L, price increases, and other revenue growth management measures.

Looking forward, we expect that our total material cost ratio for full year 2026 should be in line with 2025, as we see some easing in our cocoa prices in H2. For 2027, we will have a positive impact from lower cocoa prices.

Market volatility and uncertainty remain very high, which is illustrated in the next chart. The Cocoa Futures market has been highly volatile, with a sharp decline earlier in the year, followed by a strong rebound in recent weeks.

This recent increase is largely driven by weather-related concerns, particularly the potential impact of El Niño and ongoing uncertainty around crop developments in key producing regions such as West Africa. Over the medium to long term, continued investment in new plantations, especially in Latin America, supports a more balanced supply outlook, although future market developments will also remain closely linked to global demand trends in the chocolate market.

Personnel expenses continued to see a positive evolution. As a percentage of sales, we saw an improvement of 100 basis points compared to the same period in 2025.

Compared to 2022, we have shown strong economies of scale of 100 basis points. Operating expenses as a percentage of sales decreased by 130 basis points.

This is driven by continued cost discipline across our business. However, let me assure you that we continue to maintain high brand support across all geographies.

At CHF 260 million and 11.2% of sales, EBIT increased 20 basis points compared to the first half of 2025. Bear in mind that we recorded a positive one-time impact in 2024 and in 2023.

When looking back to 2022, which is a better benchmark, we have increased EBIT margin by 190 basis points. Net income reached CHF 192 million, or 8.2% of net sales.

In the first half of 2026, the tax rate is at 19.8% compared to 22.2% last year. The decrease is mainly driven by a lower share of profit in regions with a high tax rate.

We maintain our midterm guidance of a tax rate between 22%-24%. I would like to take you through the bridge of the main cash-relevant developments of the first half.

In the period under review, free cash flow is positive at CHF 61 million, improving by CHF 141 million when comparing to 2025. Capital expenditure came in at CHF 154 million in the first half, CHF 16 million lower than 2025.

This is in line with our revised plan, which postponed certain investments. At the end of the first half, net debt reached CHF 1.6 billion, slightly higher than previous year.

Overall, we still plan for EBITDA ratio of 0.5x to 1x in the medium term. After this update, I'm now handing back to Adalbert, who will take you through the financial outlook for 2026 and beyond.

Adalbert Lechner Thank you, Martin. As we have already mentioned, we had a solid first half year with double-digit growth in North America and rest of the world.

In the second half, we are expecting a more even spread of growth across the regions. As I shared with you at the beginning of this presentation, we have strong plans for our markets to support volume development.

That is why we are confident to meet our guidance for the full year. Accordingly, sales are expected to grow organically in the range of 4%-6%, with an improvement of the EBIT margin of 20 basis points-40 basis points compared to the previous year.

For the future, we expect the trend of premiumization in chocolates to continue. This supports our long-term strategy and market position as a global leader in this category.

This gives us the confidence in achieving our mid to long-term goal of an organic sales growth between 6% and 8% on average per year, and we expect to deliver an average annual increase in EBIT margin of 20 basis points-40 basis points. Thank you very much for your attention.

Back to you, Martin. Martin Hug Thank you for listening to our presentation.

I will now hand over to the operator who will manage the question and answer session. We ask you to limit yourselves to a maximum of two questions so everyone can participate.

Please note that written questions asked via the web will be answered by email after the webcast. Operator We will now begin the question and answer session.

Anyone who wishes to ask a question, may press star and one on your telephone. You will hear a tone to confirm that you have entered the queue.

If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to disable the loudspeaker mode and eventually turn off the volume from the webcast while asking a question.

Webcast viewers might submit their questions in writing via the relevant field. Anyone who has a question may press star and one at this time.

The first question comes from the line of Jon Cox from Kepler Cheuvreux. Jon Cox Yes.

Good morning, guys. Thanks for this presentation and for taking the questions.

A couple of questions. Just the first one on Europe.

How confident are you that European organic sales growth will swing positive in the second half of the year? As you're talking about a better balance between the rest of the world, North America and Europe in the second half, would you expect volumes then to go positive in Europe in the second half of the year?

Also, you talk about an improvement in volumes for the group in the second half of the year. Are you talking about flat volume or are you still talking about potentially a decline in volume?

That's the first question. I know it's a bit of a broad one.

Second one, there's been some discussion in the market about your medium-term guidance of 6%-8%. You've expressed confidence today that you would get there.

Just wondering, any thoughts on that medium-term target? If you look back historically, you have cut it previously to 5%-7%.

Just wondering how confident you are on that 6%-8% going forward. Thank you.

Adalbert Lechner Thank you, Jon. To your first question, for the second half, we currently expect flat volumes for the total group.

For Europe, we have experienced quite a difficult first half with a surprising, also for us, surprising negative NTS development. You have probably also read that we reacted, I would say, pretty agile and addressed price points where we saw the biggest elasticities, or especially for the Christmas business after, I would say, relatively bad press coverage on pricing for the Easter business.

Also for other products, we went out with price pack architecture, so more affordable, smaller pack sizes on Lindor, which were launched for the second half, but also recalibrating our promotion prices. With all this package, we are confident that also in Europe, the volume should improve substantially and be positive for the second half.

This is-- Martin, you want to add? Martin Hug Jon, bear in mind as well that in Europe last year, we had certain issues, certain customers, which was also mentioned in the press, et cetera, like E.Leclerc in France.

We were completely out on the Christmas business. There was a time where we had some negotiations in Switzerland with one of the big retailers, as you may be aware.

Those two have been resolved actually last year, at the end of last year, beginning of this year. That could be a positive for Europe specifically because those are two important markets for us, France and Switzerland.

Adalbert Lechner To your second question, how confident are we about the medium-term guidance, 6%-8%? Given the strength of our brand, we have invested in the last years, despite the pressure from the cocoa price, more than ever behind our brands and also across geographies.

Given all the activities in extending our geographical footprint, extending the footprint of our retail stores, the field pipeline with innovations, we are confident to get back to this growth trajectory. The caveat that we have to make is 2027.

It's too early to give a guidance for 2027. You can imagine there are too many variables at the moment in the market.

Let's say, The sticker shock, how fast is the volume reacting with new pricing? For 2027, it's too early to give this guidance, but for the mid to long-term and as an average for the mid to long-term period, we are confident to achieve the 6%-8%, like Martin mentioned.

Also for the past years, we had an 8.8% CAGR for the last five years, in the first half, despite the fact that we only had a 4.3% growth in this year. Given the double-digit growth of the last years, altogether it was an average of 8.8%.

I would see a similar pattern and a similar picture for the years to come. Martin Hug When you look at the last 10 years or so in normalized years before the cocoa crisis, if you want to call it cocoa crisis, we achieved the 6%-8%, typically we didn't have a huge price impact, let's say.

It was probably in the 1%-2% area. Volume, we have proven that we can grow volume mid-single digit, right?

We have done that in all the years prior to 2020. We have still low market shares.

Typically in the 6%-8% algorithm, North America will outperform Europe because in North America we still have low market shares compared to some of the European markets. Rest of the world, we should be able to grow double digits because there is still a lot of markets where we actually have very low market shares and where we are now planting the seeds to harvest them later on.

Jon Cox Thank you. Operator The next question comes from the line of Joern Iffert from UBS.

Please go ahead. Joern Iffert Good morning.

Thank you for taking my questions. The first one would be, please, you can also use your own retail shops a little bit as try and fail or try and succeed.

The things you want to change at the retailer to stimulate volumes in the second half, have you tried this already in your own retail shops and what was the consumer response to a little better grab evidence and conviction level for the second half volume recovery here? The second question would be, please, on North America.

Year to date looks like a pretty good performance also versus the market. Can you give us a feeling which product lines exactly are behind this?

Is it mainly driven by Dubai Style or is it more broad-based, also linked to dark chocolate and Lindor? Some more color I would also appreciate it.

Thank you very much. Adalbert Lechner Thank you, Joern.

To your first question, of course you can imagine if you experience volume declines that everyone is alerted here. We did not only two tests in our retail stores, but we did broad scale tests in wholesale.

Before we initiate measures and when you launch additional smaller packaging is always a risk because first, you have a lower NTS per SKU and you need to have confidence that the volume uplift compensates for this negative effect. All of this, of course, is properly tested and this is why we are confident when reaching the market then finally in autumn, we will see the results.

To your second question, North America. The year to date performance is mainly driven by dark chocolate, as you have mentioned, where we see globally a very strong trend.

Our Excellence range is growing in a strong double-digit NTS across all markets, including North America. Yes, Dubai Style is incremental in the first half here in North America as we have launched it in Europe first half and only second half in North America.

This will also have a, let's say, slightly softening effect for the second half in North America, but then also Ghirardelli. Next to its range of dark chocolate, we have a very strong range in baking, where we also saw in 2025 very strong growth and this continues now also in the first half of 2026.

Lindor also had in the everyday business a very good performance and also worthwhile mentioning Russell Stover grew nearly double-digit in the first half. They also launched a Dubai Style Chocolate, they also are successful with their sugar-free range where they did a new price pack architecture last year already and could harvest the fruits in this year.

Also worthwhile to mention, Canada is gaining substantially market share and is also growing double-digit in the first half. I hope this answers your question.

Joern Iffert Thank you. Adalbert Lechner Thank you.

Operator We now have a question from the line of Warren Ackerman from Barclays. Please go ahead.

Warren Ackerman Yeah. Good morning, Adalbert, Martin.

It's Warren here from Barclays. I've also got two.

The first one, could you dig a bit more into your pricing interventions and your price pack architecture capability? You said that pricing will fade fast from here.

How fast do you think it will fade in H2 and into 2027? I heard, for example, you've taken pricing down in Germany below critical price thresholds like EUR 20 for Lindor.

Do you see any scenario where pricing will actually be positive in 2027? Because I guess you're going to have much lower cocoa COGS and I suppose the risk must be that your pricing drops faster than your volumes increase.

I'd love your perspective on that topic of pricing. Price pack architecture.

The second one maybe [audio distortion] marketing spend you said is up, but then you also had a VAT benefit, which boosted the margin in the first half. How should we be thinking about the margin moving parts for the second half?

Thank you. Adalbert Lechner Thank you, Warren.

Let me take the first one, pricing. I start with the second part of your question.

No, we don't see a likability of increasing prices in 2027. The opposite, we expect that we will do some price adjustments where needed, and where possible.

On the other side, we are fully with you, that we have to be very cautious with, let's say, passing on potential tailwinds that we see from cocoa price in 2027, knowing that with our hedging policy and with the current terminal market price of cocoa, we are in a situation that we might be under pressure again in 2028 to increase prices. Of course, this we want to avoid like a roller coaster going down now and then having to increase prices again.

It might be a slight price adjustment in 2027, which will be for sure helpful to regain momentum in volume. To your question, what exactly are we planning?

I will give you some examples. First of all, we have a double-digit growth in two out of our three regions.

We did not see any need, an urgency to address price points in some of the price corrections already this year, and this was in Germany and Switzerland mainly. Example is in Germany, we reduced prices at the Christmas range because Easter, the sell through was weak.

Easter, we were in the press that our Gold Bunny went now from CHF 4.95 to CHF 5.95, this was a big outcry from consumers. We were agile enough to say we correct this.

In Christmas you will see lower prices. Of course, we try with our customers with joint business plans to mitigate this impact by higher volumes, et cetera.

We will, let's say also, we will probably see in these markets, Germany, Switzerland, Austria, we will see softer Christmas orders. While we see North America and rest of the world very solid Christmas orders with strong or good volume development.

An example for price pack architecture. Key SKU in Germany for Lindor is 137 g Lindor pack.

It went up with the cocoa price increase, and I must mention that Lindor is especially affected as Lindor has a very high content of cocoa butter. Cocoa butter, as you know, with the ratio, increased twice as much as or has a bigger impact in the calculation than cocoa.

The price is increased up to CHF 7.99. We will change now the pack from 137 g to 100 g with the same 100 g price, but it brings us back to 49% of sales.

Of course, we had to be sure that the uplift in volume compensates for this. We did tests and we saw a dramatic uplift in volume, and we are confident that with this changing in pack format, with this price pack architecture, we will overcompensate the impact of the lower volume.

Other examples are Excellence. Also, on Excellence, we had to increase prices, understandably, with the high cocoa content.

We sell chocolate here 70%, 85%, 99% cocoa. Here we change simply our promotional policy because there is a relatively high volume on deal.

As we go out with a more attractive promotion price, we have also seen significant uplifts in volume, and we agreed already promotions with our retailers, and they are also somehow relieved because also something I mentioned today in the morning with the press agencies, also the retailers are not happy if their margin provider, number one, Lindt, is losing volume. Together we come up with plans that we reverse this trend.

Yeah, these are some examples. I would hand over to the second part for Martin.

Martin Hug In summary, the price increase net effect will still be positive in H2, right? Because there's still a carryover from last year.

I think that's important to bear in mind, for H2, they still have slightly positive pricing. From a margin perspective, I think if you look at the big picture and look at it by segment, it's clear that, as in the last years, it is North America that is the key driver of the EBIT margin improvements because North America is traditionally still below our group average.

I mean, also now at half year, North America is at 7.7%, massive improvement compared to the first half in 2025, where we were at 3.2% in North America. The same picture, not exactly in the sense of the growth, but the picture that North America is the key driver of our EBIT margin improvement, will be also true for the full year.

I think that's number one. Number two, as you have seen in our annual, let's say in our report, half year report, half of the profit improvement, versus our original forecast of 10%, we believe that we will be roughly at 10%.

Now we are at 11.2%. Half of this improvement more or less comes from the tariff reimbursement in the U.S.

That's about 60 basis points. The other 60 basis points are through efficiency gains, cost savings in areas such as personnel and operating expenses.

We continue to have a high investment in marketing, it was really our good work, let's say, in many areas of the business such as logistics, supply chain, also maintenance and repair in the factory, where we have been able to drive efficiencies. In H2, we'll have an additional benefit, which is the lower cocoa bean price, compared to the second half of last year.

You remember that last year we had still high cocoa bean prices, especially because we buy forward. There we will have benefits, and we have continued tailwinds in the same areas where we had tailwinds in H1, such as operating expenses, for example, logistics, for example, maintenance, and also in the area of personnel expenses.

I'm pretty confident, with the 20 basis points-40 basis points, that we will be able to improve our EBIT margin also in 2026. Warren Ackerman Thanks, Martin.

Just quick clarification, the VAT reversal, will that continue into the second half of the year? Will there still be a margin benefit in the second half or is that a one-timer in the first half?

Adalbert Lechner VAT? Martin Hug You mean the tariffs, right?

Warren Ackerman Sorry, the VAT. It is the tariff, I mean.

Martin Hug Yeah, okay. Warren Ackerman The tariff reversal.

Sorry. Apologies.

Martin Hug A lot of uncertainty, I would say, in this area. I don't want to promise anything.

There may be still a little bit more. We have to see.

Once we get the cash, we know that we have it. There may be still a bit of a benefit.

We confirm. Warren Ackerman All right.

Thanks. Operator The next question comes from the line of Samantha Darbyshire from Goldman Sachs.

Please go ahead. Samantha Darbyshire Morning.

Thank you for taking my questions. I may have missed some of this.

Just on your margin expectations for H2, could you maybe just explain, from the H1 movements, the absolute personnel and operating expenses came down quite a bit year-on-year. Was that mainly driven by FX or was there other initiatives?

I'm particularly thinking about the personnel side of things. Can you quantify how material that will be year-on-year, or is it really that most of the tailwind is coming through, from H1 2027?

My second question is just, could you talk to us a little bit more about your marketing investments? I've seen quite a few of your peers seemingly putting a lot of money behind big events like the World Cup, F1, the Olympics.

Just want to understand how you are thinking about your own marketing investments for Lindt, which has historically probably been a bigger spender relative to sales in some of these peers, how you are making sure that you stay relevant when everyone else is kind of competing harder and harder for that share of voice. Thank you.

Martin Hug I can start with the cost question and, Adalbert can take over with the marketing expenses. Personnel expenses, yes, partially driven by Forex.

At the same time, we also make improvements in many areas of the business, so it is a combination. Yes, you are right.

We also have benefits here from a Forex perspective. Cocoa tailwind, we can't share it here, let's say, how much of the tailwind will be in H2 and how much will be in H1.

Yes, we already have certain amount of tailwind in H2 2026. Of course, the bigger part of the tailwind we will see in 2027.

Yes, with that, you had a good question about the marketing expenses. Adalbert Lechner One thing which I would like to emphasize, when we increased prices throughout the last years, and this was a significant price increase, we had in mind, on the one side, to protect our gross margins.

On the other side, not to overdo it with price increases. As Martin has explained, our gross margin slightly came down, but still we were able, with efficiency measures and cost consciousness, to protect the bottom line.

What we for sure were always protecting was the brand support in ratio, not in absolute money. In absolute money, in the last three years, we had a significant higher spend in AMP than we had in the years before.

This is also for me the explanation why in this Kantar ranking, we have seen an increase of our brand value, which was unprecedented only in last year by 24%, and ranking now within really the top food and beverage brands ahead of all global chocolate brands, with content of our marketing. I think one of our strengths is that we have a very consistent and also coherent marketing strategy centered around the craftsmanship of our Maître Chocolatier, insinuating this high premium quality and focus on product and indulgence, and not focused on consumer occasions, which is, let's say, what most of our competitors are doing.

I think this campaign is ownable. It is consistent throughout decades, so people immediately recognize it, and we have a strong brand linkage whenever [audio distortion] shots, which are very indulgent and enjoyable to see.

This is why we focus on showing these ownable, key distinctive assets in our advertising. We don't believe that events or Olympics or world championship in soccer would strengthen let's say the perception of the premiumness of our brand.

It will probably strengthen the awareness of our brand, but that's not the key issue that we want to address with our communication, because we have very good awareness levels. The key challenge at the moment is to justify our premium, and to justify the premium, it's important to load the brand with value, and we believe that we can only do this with a lot from linear TV to connected TV, but also to social media.

This is the key challenge for us in our media mix, and sponsoring and events are not on our agenda. Samantha Darbyshire Thank you.

Adalbert Lechner Thank you. Operator We now have a question from the line of Antoine Prevot from Bank of America.

Please go ahead. Antoine Prevot Thank you.

Hi, Adalbert. Hi, Martin.

Two for me, please. Which I guess would imply is U.S.

and rest of the world negative, the trends here in H1 were clearly improving volume. Maybe not in rest of the world, at least in the U.S.

Just trying to understand if there is anything you want to flag there for 2H volume in U.S. and rest of the world.

Second question on Global Retail. Continue to have a good improvement in the number of stores, I guess you will cross the CHF 1 billion revenue mark this year.

Do you continue to target 40-50 stores in the coming years? Do you see a good pipeline with new locations?

Maybe what kind of level of growth it could contribute in the coming years as a price fade? Thank you.

Adalbert Lechner Thank you. For the volume in second half, I think important to mention is that in the first half, we cycled against a period with very strong development and also volume development in Europe.

If you remember, we grew nearly 18% last year, in the first half in Europe. Why?

Because the price increases were not yet fully implemented. Plus, in addition, we had this big launch of Dubai Style Chocolate.

We cycled now against the period with higher prices in first half 2026. Plus, of course, a slight fade of this hype of Dubai Style Chocolate.

We cycle in the second half against the period where volumes started already to correct. Dubai Style Chocolate will be on the same level.

This makes us confident that volumes will increase in Europe and in the other markets. We have anyhow seen a good development also in the first half, we don't expect things Might be a slight softening there in the second half.

Global Retail. Yes, as you have probably observed, we are really using Global Retail as a spearhead to enter those regions where we are still weak.

In a nutshell, we are strong in Europe and North America. We are weak outside of these two regions.

Latin America, we started to expand aggressively outside of Brazil. We only opened in two years, 14 outlets in Chile.

We enter now Colombia. We have other markets there earmarked and on our list, which we cannot publish yet.

We signed a joint venture in Saudi Arabia, where we will see the fruits end of this year, where we open the first two stores in Saudi Arabia. We opened the first stores in India.

We have a retail operator for Malaysia, Singapore, Thailand, Indonesia. We will see.

China, I mentioned, we opened the first store, of course, we have a plan to scale and to roll out. It is also worthwhile mentioning that the biggest share of our retail business is still coming from Europe and North America.

While we were decreasing our footprint in North America, that is the clear plan for the years to come. In Europe, anyhow, we have a certain number of store openings every year, especially as I have mentioned before, we go now in a more qualitative expansion, also increasing the visibility, increasing the footprint, 1,200 sq m in Munich on the main place next on Marienplatz, next to the Rathaus of Munich.

That is a statement like we did last year in Vienna with 500 sq m in Kärntner Strasse. We have more or less flagged all European capitals for new retail stores.

And these retail stores will have a different impact than the one that we had in the past time, because we saw that we can make decent money on a bigger footprint, 500 sq m-800 sq m, and there is more to come. I think retail will be like it used to be in the past time, a strong contributor not only of profitable growth, but also of enhancing our brand equity and also the awareness of the brand, especially in the emerging markets.

Martin Hug Just a couple of things to add to the first part of your question. Europe, North America, and rest of the world, where we saw a very strong growth in North America and slight decline in Europe in H1.

I think in H2, the picture, whilst we cannot give you the exact volumes, the picture will change a little bit in the sense that we will see an acceleration in Europe, not only but also driven by the additional listings we have in E.Leclerc and also in Switzerland, in Migros, where we had some period of time where we were in negotiations. Also relatively weak comps in November, December in Europe, where the volumes were down quite substantially.

In Europe, at full year, we believe the numbers will be improved versus the -2.1% in H1, whilst in North America and rest of the world, we may see a slight softening, not because our business is not healthy, more because we had such a strong growth now in North America also because last year we were -3%. The comps were obviously also a bit easier.

At the end of the year, it will look different to the -2%, +12.7% and +10%. Acceleration Europe and North America and rest of the world, slightly less growth than we see right now year to date.

Antoine Prevot Very clear. Thank you both.

Operator The next question comes from the line of Matthew Abraham from Berenberg. Please go ahead.

Matthew Abraham Morning all. Thank you for taking my questions.

First query just relates to Dubai Style Chocolate. Just wondering if you can actually quantify the percentage that Dubai Style Chocolate accounts for within the group, as a percentage of sales.

Just confirm if that rollout in North America for distribution has been completed or if there's a further tailwind to come, as that distribution expands in the second half of the year. Second query is just a high level query with respect to organic sales growth guidance for the full year.

Just wondering if you can provide some further background to the reiteration of that guidance today, given the shift from expecting H2 volume growth, which you've previously said. Today, talking about stable volume expectations in the second half.

Also, the newly announced pricing resets, which will result in a less positive impact of pricing in the second half of the year. Just wondering if there's anything else to factor in that's fed into the reiteration of OSG guidance for the full year.

Thank you. Adalbert Lechner Thank you, Matthew.

Please understand that we do not disclose individual product ranges or brands. Dubai Styles is, let's say, one of our bigger brands in the meantime.

To your question, rollout in the U.S., we have launched under Lindt, the Dubai Style Chocolate last year in the second half. We rolled out the distribution first half with Lindt and Russell Stover.

In the second half we will still see, let's say, an extended distribution, especially on Russell Stover. Of course, with Lindt, we cycle against a very strong period of Dubai Style Chocolate because in America, the hype was also here.

Russell Stover is incremental, and Ghirardelli is also out with a product. Altogether, I would say we see a positive contribution to growth from Dubai Style Chocolate in the second half in the U.S.

To the volumes, H2. Martin Hug He just asked about volume H2.

As we already said, volumes will be flat-ish in H2 overall in the group, which implicitly means when we say our guidance is 4%-6%, we confirm the guidance. It means that pricing will be in the mid-single digits in H2.

Trailing off afterwards in 2027. In H2, despite the fact that we have some price decreases in certain markets, the net is still a positive price impact overall in the group.

Matthew Abraham Okay, understood. Thank you.

Operator We now have a question from the line of David Roux from Morgan Stanley. Please go ahead.

David Roux Morning, gentlemen. Two questions from my side.

The first one is just on your product price points. Where do you see the affordability of your product portfolio now versus the chocolate markets and in particular, those premium segment peers?

Could you just tell us if you believe the portfolio is now more or less affordable compared to prior to the inflationary cycle that we've just gone through, back in the day when you guys were growing volumes at the sort of mid-single digit rate that you mentioned. My second question is a very brief one on Global Retail.

Could you tell us what same store sales were for the first half? I may have missed it.

I know that you had disclosed this number at FY 2025 results. Thank you.

Adalbert Lechner Thank you. The question, are we less affordable?

I would say the whole category increased prices substantially, and if you want so, of course, it's less affordable, and the whole category has suffered in volumes throughout the last years. If I take the example of Easter business we have in Germany, that was not a Lindt issue, that was a category issue.

The whole category suffered in volumes. We shouldn't forget that we cycle now against these volumes, and when we speak about volume growth, of course, this is the comparable base.

We normally see when prices go up, that there is an initial reaction of consumers, the so-called sticker shock. Our experience is that it takes 6-12 months that consumers adjust to the new price points.

Our premium did not improve substantially because the whole market went up with, let's say, some exceptions. If we take products that had a lower core content, like take one of our key competitors, Ferrero Rocher.

That's a product that contains a wafer. They didn't see an increase in raw material.

A hazelnut, they didn't see a dramatic increase in raw material, and a lot of palm oil. Then there is a coating of chocolate.

Of course, if I compare this product to our Lindor ball, they had a lower pressure to increase prices than us. Other than that, if you take the portfolio of other competitors, they are in the same position as us.

In percentage, the highest price increases, by the way, we have seen from private label, because they operate with lower margins, and with a very high amount of raw material in their calculation. If you want the price premium of our products versus private label has even come down.

I would say within the category, we are not less affordable. What we have also learned during the course of these price increases, that in some packaging formats, we simply, across the price thresholds, where consumers were no longer prepared to pay this for a confectionery or for a small treat.

This is why I said before, we will launch in mostly all markets, smaller formats, but also with lower prices to avoid any inflation suspicion here. If we bring a packaging, let's say 100 g instead of 137 g, the 100 g price will be parity or slightly lower, which makes us more affordable in terms of the export kit price.

Also when you ask now where is our positioning in comparison to the premium peers, I mean, first of all, we have to mention we don't have too many premium peers out there, at least not global premium peer. Mostly we compete with local brands.

We compete also with retail-only brands. For example, if you take Läderach, they still sell their products for minimum twice the price.

They charge CHF 13 for 100 g of praline, while we charge between CHF 5 and CHF 6 per 100 g. I think that our price positioning is where it has always been.

We are premium mass market player. There are brands above us and there are many brands below us, but I don't see an issue in affordability.

The last question or second question, same-store growth in retail. We saw negative same-store growth in Europe.

That was driven mainly by a steep decline in tourism that we have experienced, or Asian tourists that were traveling across the Gulf State hubs, Dubai, Qatar, whatever. We saw a steep decline there.

We suffered in Global Retail, but we also suffered in our retail stores. Also tourists from the Gulf States themselves didn't show up in the same amount.

In general, traffic issues in the inner cities because the consumer sentiment is, especially in Europe, extremely weak with the high inflation, the geopolitical insecurities, plus also high fuel prices, which were biting immediately. For the first time, we saw negative comp store growth in Europe.

In the rest of the world, the U.S. and rest of the world, it is fine.

Here we also expect to get back to positive comp store growth in the second half. David Roux That's very helpful.

Thank you very much. Just one follow-up question, if I may.

The fall in profit in rest of world, obviously we've had the Middle East issues, et cetera. Are there any other contributing factors to this?

Just be good to get some understanding if there's anything else driving this. Martin Hug I mean, number one, we have new markets in there, like one example is Saudi Arabia, which always in the beginning, there is not that.

India as well, there are costs, but not to invest over-proportionally in this segment. Therefore, you can also see the, let's say if you look at the last five or even last 10 years, the profitability in that segment has come down.

It was a strategic choice. We want to make North America more profitable.

I mean, that has been our promise, let's say, to the investors, in the last six or seven years. We have delivered.

I mean, if you look at the numbers, our guidance is 50 basis points-100 basis points per year in North America improvements, we have delivered against that. At the same time, we were able to invest some of that money in growth markets in rest of the world.

David Roux Thank you. Operator The next question comes from the line of Tom Sykes from Deutsche Bank.

Please go ahead. Tom Sykes Yeah, morning.

Thank you. Three quick questions, please.

Firstly, just on North America. In the scanner data, the baking products have increased far more quickly than in growth in the retail product.

That also has a higher level of price increase in it and presumably a higher raw material component. In H2, if you're talking about lower cocoa costs in North America, would you expect the profitability on the baking product to disproportionately benefit from that?

Just in your retail stores, could you maybe just confirm what same store like for like volumes have been like, and where you are sort of as a run rate now versus maybe where you were when we were at the height of conflict and travel retail impacts? Perhaps just related to that, is the reduction in personnel costs disproportionately retail store driven as well, please.

Would that have to go back up, essentially if volumes through retail stores start improving? Thanks.

Martin Hug I can maybe take the last one first. Personal expenses, no, I am not worried if the volumes go up.

I am not worried if that will have a negative impact. It would rather have a positive impact on our personal expenses if you have higher volumes in retail.

It was other contributing factors that led to these lower personal expenses, such as efficiencies, such as Forex, as we discussed before. No worries there.

Adalbert Lechner Retail like for like, I am sorry, we do not disclose. North America baking products, if we see a profit improvement due to the lower cocoa prices, I would say in line with the rest of the assortments or the baking products are not specifically burdened by cocoa products.

The highest burden, of course, we have with the very high cocoa content dark Excellence tablets. Also, Ghirardelli has products with 78% cocoa, et cetera.

Lindor, as mentioned, there we would see a bigger impact, but not on baking products. Martin Hug I mean, bear in mind, when the market went from GBP 2,000 to GBP 10,000, we never increased our prices to offset the GBP 10,000 if it had stayed at GBP 10,000, right?

Baking has had the biggest impact on the cost of goods. In theory, yes, you are right.

When the market comes down, there is also benefit, but it always depends how much we have really increased the prices in relation to our hedging, and we do not disclose that. I think it really depends on that.

You cannot automatically say if the market comes down, we will have the biggest benefit there because it depends by how much we had originally increased the prices by and what we will do in the future with regards to prices. Tom Sykes Sorry, can the timing on hedging differ between baking and non-baking in North America?

Martin Hug No, we do not. Tom Sykes Okay.

Martin Hug Ghirardelli hedges the entire business, not specifically baking. Tom Sykes Okay.

Sure. Thank you.

Operator We now have a question from the line of Callum Elliott from Bernstein. Please go ahead.

Callum Elliott Hi. Thank you both.

Just wanted to come back to volumes, please. Your confidence in the long term, I think, was very clear.

I wanted to ask specifically on the sort of phasing of the recovery over the next 12, 18, 24 months. I guess the nuance of this question is, what we've seen quite consistently in the rest of Staples over the past couple of years is that volumes have remained stubbornly quite weak for a couple of years after the pricing cycle.

My question is, do you guys have good reasons to believe that the chocolate category is going to behave differently from what we've seen in the rest of Staples with this persistent volume headwind over the past couple of years and to drive some kind of faster recovery in volume for chocolate? I guess the second part of the question, how much of this speed and phasing of the recovery over the next year or two do you think is going to be driven by your actions specifically, rather than just how the category behaves?

Thank you. Adalbert Lechner Thank you for the question.

The answer is no. We don't have any reasons to believe that the chocolate category will see, let's say, a faster recovery than other fast-moving consumer goods categories.

We have reasons to believe that we will get back to the momentum to outperform the category, which we did in all these years in the past time. We could also argue that we have seen now also a stronger volume decline, and we have learned in which products, which price points, which promotions led to these declines.

As we are able to address specifically those areas with high elasticity, we are confident that we can correct this trend and get back to an over proportional growth within the category. It's not that we give a prediction how the category behaves, it's just a prediction how we, as Lindt, will recover volume and will gain volume.

I think we have enough data points to be confident that with the means in hand, meaning with a relief of cocoa price in 2027, we can invest, especially in those areas that give us volume growth again, being the right promotion prices, being the right price points, being also a brand support, cooperations with retailers, Revenue Growth Management, et cetera. This would be my answer to the first question.

How much of the recovery of the category would be driven by our actions, you asked. I mean, honestly, this is one of our promises also to retailers, that we are a growth driver for the category.

If we are able to get back to a significant volume growth, yes, we can be a contributor to the development of the category. According to our market share.

It needs also, in general, of course, a better consumer sentiment and also activities from our competitors to drive the category. Callum Elliott Okay.

Thank you very much. Adalbert Lechner Thank you.

Operator The next question comes from the line of Bingqing Zhu from Rothschild & Co Redburn. Please go ahead.

Bingqing Zhu Hi. Good morning.

Thanks for taking my question. I have two.

My first one is a general question relating to the premiumization trend. I guess, can you share how you see the premium chocolate trend developing in the current macro environment?

How resilient are those against the environment? Have you seen any signs of the consumer trading out of premium maybe at today's price point?

My second question is, would you be able to quantify H1 drag from the reduced tourist flows and decline in travel retail? Given the renewed instability in Middle East, have you embedded a continued headway into second half, or are you assuming some level of recovery?

Thank you. Adalbert Lechner Thank you.

Let me start with the last question. Of course, I think like everyone, we were more optimistic about the length of this conflict in Middle East.

Yes, we have baked in a recovery of tourism and travel activities, and passenger figures, traffic figures, et cetera, for the second half. We still are confident that this conflict will not last until end of the year, despite the fact that the recent days only indicate, unfortunately, a new escalation.

Yes, I'd say also the key season for the tourists from the Gulf states starts only now, mid of July. Normally, we see tourists from the Gulf states escaping the heat down there.

Yes, we are for sure also a bit dependent that the situation doesn't stay like it is. Premiumization, that's an ongoing mega trend, which we observe now for decades, I would say.

Especially also driven by an increasing middle class and an aging population. We see consumers who are more affluent and we call them also our empty nesters.

They are no longer providing for the family, but they can use the money for themselves. They become more hedonistic, and they invest more in their quality of life.

This is one driver for striving for premium products, premium travels, premium hotels, et cetera. This mega trend is intact and hasn't changed.

Of course, there can be setbacks like now when consumers are burdened by inflation or insecurity due to the geopolitical situation. In general, we see this trend going on.

Did I answer your question or is there anything open? Bingqing Zhu Thank you.

Adalbert Lechner Thank you. Operator The next question comes from the line of Ed Hockin from JPMorgan.

Please go ahead. Ed Hockin Hi, all.

Thank you very much for taking my questions. My first one's on pricing.

I think you say mid-single digit pricing still in the second half of the year. I think this is, it's a bit expected already.

I'm keen to understand on these targeted price investments being made, what magnitude of price give back are we talking about at the group level? And what magnitude of volume improvement are you expecting from that in the second half?

And then I think on 2027, the comment was that pricing would not be positive. What do you see as the range of possible outcomes on pricing in 2027?

Should we think that it could be in the range of flat to negative mid-single digit pricing at the group level? On margin, should we have as an expectation that 2027 is a 20 basis points-40 basis points improvement in margin year aligned with your midterm ambitions?

Thank you. Adalbert Lechner Thank you, Ed.

Again, for 2027, it is too early to give an outlook. We gave this indication that it is unlikely that prices will increase because this was a concrete question.

I think, to the margin, we can also say that given a windfall from raw materials, we do not see pressure on margins next year, the opposite. To determine now pricing, volume or top line, it is too early and we do not give a guidance.

Martin Hug Bear in mind also, if you look at the cocoa market, how volatile it is. It came from 10,000 straight down to 2,000, and now it is back up to 4,200.

In this environment, it is difficult even to give now already a concrete outlook on every single example of pricing action, et cetera. It is just really difficult right now in this volatile environment, as Adalbert words it.

Adalbert Lechner The first question was pricing again, what we can expect for the second half. I think it is important to understand that we mainly see a spillover of pricing activities that were implemented in North America in the first half.

Your question was the targeted price activities. They take place mainly in Europe because, as you have seen from the results here, we saw issues with price elasticity.

Here we will correct in those areas where we saw the biggest price elasticity. This reduces a bit the impact of the spillover, the result will still be a low to mid-single digit price increase across the group.

Ed Hockin Okay. Thank you.

Adalbert Lechner Thank you. Operator We now have a question from the line of Feng Zhang from Jefferies.

Please go ahead. Feng Zhang Hi.

Thanks for taking my question. Just got one question.

What's the volume run rate in Germany and Switzerland after the price action you've taken? Trying to figure out how much visibility is out there.

Could you remind us on the pricing negotiation timing the second half for the key Christmas season, particularly in Europe? Thank you very much.

Adalbert Lechner Thank you. If you ask about the corrective actions that we take, for example, for Christmas, we speak about a low double-digit price decrease across the Christmas season.

On everyday business, it's, as I mentioned, more different promotion pricing, price pack architecture. We are not in the position for the everyday business to lower prices.

There are some small exceptions in Switzerland with some minor ranges. On a broad scale, we speak about the correction in the Christmas business as the sell-through was weak in the Easter business, and everyday business is more RGM activities.

Yeah. Martin Hug Speaking of Germany right now, for Germany specifically on Christmas.

That's Germany Christmas. Adalbert Lechner That's Germany Christmas.

Yeah. I understood this was the question, yeah.

I speak only for Germany. Germany represents 17% of the total group, and Christmas is a part of the second half, it has an impact, but I would not overestimate the impact on the total group.

Operator As a reminder, if you wish to register for a question, please press star and one on your telephone. Martin Hug If those who have asked questions have more questions, please just come in because we still have some time in case you have some more questions.

Operator Ladies and gentlemen, there are no more [audio distortion]. We have a last-minute registration coming from the line of Joern Iffert from UBS.

Please go ahead. Joern Iffert Thanks for taking the follow-up question.

It's a quick one. It was on the media, I think.

There's this one large retailer in Germany you have not yet agreed for the Christmas orders. Is there any update from your side you can share?

The second question is, please, the average selling price negotiations for Easter 2027, have they kicked off already? What you observe among your key accounts, your key retailers, is this meeting your expectations more or less on pricing currently?

Thank you. Adalbert Lechner Thank you, Joern.

Yes, the issue with the big retailer in Germany is solved. It was a tough negotiation because they were not happy about the sell-through of Easter and had some demands for the Christmas business.

We found, I would say, a reasonable compromise. Now all the Christmas orders are coming in, and we are in constructive cooperation with the customer again.

Average selling price is Easter for 2027. That's nothing we can comment on, if you understand, please.

I don't expect any disruptions there because we do not go out with further price increases, and normally the friction starts with price increases. Joern Iffert Thank you.

Adalbert Lechner Thank you. Operator We have a follow-up question from the line of Jon Cox from Kepler Cheuvreux.

Please go ahead. Jon Cox Thanks for taking the follow-up.

I'm really coming back to this medium term growth guidance. You've mentioned you don't know what's going to happen in 2027.

Martin, how can you give us reassurance then that what we're seeing now is different to that period 10-15 years ago when you did cut your goal from 6%-8% to 5%-7%? I think at the time there was pretty much zero pricing and maybe you weren't as developed in some of the emerging markets.

How can you give us comfort that you can maintain this 6%-8% based on what you can see today? What is different today compared to what it was 10 or 15 years ago?

Thank you. Adalbert Lechner Thank you.

Jon, I would say what is different. First of all, we always have earmarked the U.S.

with a very low share as our growth driver number one, the U.S. has grown in the meantime to a 35%-37% share of our group.

The second thing is we have reached out more aggressive to all the other markets outside of Europe and North America than we did before. We will see an impact there.

Retail, we only started in 2009. It has been a very small contributor to the growth, but it has always been in percent and over proportional growth contributor with the numerical expansion, but also, let's say, with the perfect execution in our own stores.

We always had a substantial like-for-like growth. This retail division in the meantime, is a significant part of our group and will have a stronger absolute impact to our growth story.

This is why we hold on to the 6%-8%, and all our midterm plans and all our bottom-up plans, which are discussed with the countries, confirm this is why we don't have a reason to step away from it. Martin Hug In addition, I think also, there's still a certain inflation in next years that we should expect, right?

We can see it now with certain food ingredients, for example, in next years, also driven by El Niño. If it happens, especially if it's strong El Niño, we will see a lot of food inflation outside of cocoa.

Just in general, I think the inflation is likely to be around still in next years. It may well be that our pricing in the next five years on average is still, let's say 1%-2%, as it was in this period that you're mentioning where we had 6%-8%.

It doesn't mean that net pricing, including all revenue growth activities, will be zero, right? It will most likely rather be in the neighborhood of 1%-2% as well.

I'm not talking about 2027 necessarily specifically. I'm talking about 2028 and beyond, next five years or so.

I think that's also one change. As Adalbert said, rest of the world in this period is very small, now we are planting the seeds to really make the rest of the world much bigger in the future.

If we grow double-digit in Global Retail and in the rest of the world, it will have a more positive impact than it had 15 years ago. D2C is now 8% of our business more or less, Global Retail, plus online.

It's a significant part of our business. If we can continue to grow at the speed that we grow now, this will add probably one percentage point to our growth each year.

Jon Cox Great. Thank you very much, and good luck.

Adalbert Lechner Thank you. Operator We have a follow-up question from the line of Samantha Darbyshire from Goldman Sachs.

Please go ahead. Samantha Darbyshire Hi.

Thank you. I just wanted to come back to, you mentioned the Choco Wafer expansion next year and that the capacity would be online by 2027.

Can you just confirm that's by the beginning of 2027? Then also, what kind of magnitude do you think that could support sales growth next year?

Could it be a similar size to Dubai Style? How would you expect that to phase?

Thank you. Adalbert Lechner We can confirm that the capacity should be available beginning of 2027.

Our internal plans are even end of 2026 that the line should be installed. Normally you have also a couple of months until the line has the full output.

We do not disclose individual product ranges. Let's say to give a comparison to Dubai Style, of course, let's say midterm, it should be in the area of a Dubai Style Chocolate.

Samantha Darbyshire Thanks. I appreciate that.

Adalbert Lechner Yeah. Thank you.

Operator Ladies and gentlemen, there are no more questions at this time. I would now like to turn the conference back over to the speakers for any closing remarks.

Adalbert Lechner From my side, first of all, I would really like to thank you for your interest, also demonstrating how detailed you are informed about our performance. As Jon said already, wish us good luck.

We also hope that some things are getting better in the months ahead, especially all these geopolitical conflicts. Let's say also the heat wave is already here in Zurich.

It seems to be over. We enjoy now a nice 25 degrees and no longer a nice 35 degrees.

We also hope for some tailwind, and we are sure, as we say, at the end of the tunnel, there is always a light, and we are seeing it already. Thank you very much.

Martin Hug Thanks, everybody. Operator Ladies and gentlemen, the conference is now over.

Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines.

Goodbye.