SIG Combibloc Group Aktie

Ladies and gentlemen, welcome to the SIG H1 2026 Results Conference Call and Live Webcast. I am Mathilde, the Chorus Call operator. [Operator Instructions] The conference is being recorded. At this time, it's my pleasure to hand over to Christoph Ladner, Director, Investor Relations. Please go ahead.

Thank you, Mathilde. Good morning, everyone, and welcome to SIG's half year conference call. I'm Christoph Ladner, Head of Investor Relations. Hosting the call with me today are our CEO, Mikko Keto, and our CFO, Ann Erkens.

In today's conference call, we will refer to the presentation that is available for download on our website. As always, I would like to draw your attention to the disclaimer and cautionary statement on Slide #2.

The call may contain forward-looking statements containing risks and uncertainties. These statements are subject to change based on known or unknown risks and various other factors, which could cause the actual results or performance to differ materially from the statements made in the call.

And having said that, let me now hand over to Mikko.

The first half of 2026 was characterized by challenging market conditions. These included uncertainty related to the conflict in the Middle East, higher raw material and freight costs and continued softness in some of the end markets. Against this, we, SIG delivered slightly positive revenue at the constant currency and improved profitability and substantially stronger free cash flow.

But let me start with a few key takeaways. First, revenue increased by 0.8% at constant currency and by 0.4%, excluding resin pass-through effect in the bag-in-box business. Aseptic carton, which is most of our business, grew by 1.6%, while soft market conditions continued to weigh on chilled carton, bag-in-box and spouted pouch. Secondly, profitability improved further. Adjusted EBIT margin increased by 80 basis points to 15.6%. This was supported by improvement measures we initiated in 2025 and disciplined surcharge execution.

Thirdly, free cash flow improved more than EUR 100 million to negative EUR 32 million. Main drivers were improved operating cash flow, including lower customer incentive payments given the low volumes of '25 and lower capital expenditure.

Based on this solid performance, we are confirming our full year guidance. While developments in the Middle East continue to create volatility in the freight and raw material markets, our surcharge mechanism is allowing us to offset the cost increase. So we can say this has been successful in the first half of the year. A good portion of these higher costs only started flowing through our P&L during the second quarter, and we continue -- and continue into the second half of the year. Since our last update, we opened a new business service center in Mexico, where transition is underway.

Let us now look at the first half financials in more detail. Revenue was EUR 1.56 billion. Reported revenue declined due to the negative currency impact from the first quarter, while growth at constant currency was positive as we just discussed earlier. Adjusted EBIT increased to EUR 244 million and margin expanded to 15.6%. We are especially proud of this point. Adjusted net income was broadly stable at EUR 133 million. Free cash flow improved by more than EUR 100 million year-on-year despite the normal first half seasonality. Return on capital employed increased to 25%, reflecting stronger profitability as well as the effect of impairment recognized last year.

The second quarter provides a more current view of the underlying development, and we were pleased with the progress achieved despite the geopolitical uncertainty. Revenue grew by 1.5% at constant currency, supported by strong performance in the Americas and resilient demand for aseptic carton. Currency impact was neutral for the second quarter. Adjusted EBIT margin increased by 100 basis points to 17.5%. Free cash flow turned positive at EUR 32 million compared to the negative EUR 50 million in the second quarter '25. Overall, the quarter demonstrated resilience of our business model as well as our execution capabilities in difficult market conditions.

Then we have a few comments about markets. Europe remained challenging in terms of revenue. But on the other hand, profitability benefited from a number of positive factors. Revenue declined by 3.1% at constant currency and constant resin in the first half. This reflected pressure in the ambient juice market and low participation by our customers in the UHT milk tenders. One clear positive was continued success of our Terra, aluminum-free solution offering. Volumes increased by approximately 25% in the first half of the year, demonstrating strong customer acceptance for this product.

SIG Terra now generates about 10% of volumes in Europe, which means that there's a high demand for the product. Softer demand for non-system applications impacted bag-in-box and spouted pouch. Despite the revenue pressure, adjusted EBIT margin increased to almost 25%. The margin benefited from favorable raw material costs in the first quarter, positive hedges recorded in our procurement entity, which also belong to the segment and other segments and lower depreciation and amortization.

Then we turn into IMEA. The India, Middle East, Africa region remained resilient despite the geopolitical situation. And we are particularly proud of the team in IMEA, how they manage the situation. First half revenue increased by 0.3% at constant currency and constant resin. We successfully passed through the most of the increase in the raw material and logistics costs. It also continued to win new business, securing 13 filler contracts during the first half, keeping the pace of last year. There was occasional supply chain disruptions related to the regional situation, but our teams managed them effectively and maintained service level to our customers.

Adjusted EBIT margin improved to 17.7%, supported by efficiency gains and lower depreciation and amortization through -- partially offset by adverse currency impacts.

Let me turn into Asia Pacific. First half revenue in Asia Pacific increased by 2.4% at constant currency. China and Southeast Asia continued to benefit from our pack-size diversification strategy and premium innovation, including DomeMini format. This supported further market share gains. In the second quarter, challenging market conditions for chilled carton and softer bag-in-box and spouted pouch volumes weighed on performance, while aseptic carton demand remained resilient.

Adjusted EBIT margin declined due to foreign exchange effects and price pressure, particularly in China. Efficiency initiatives partly mitigated these headwinds while the chilled carton business delivered substantial margin improvement.

Then the Americas. The Americas delivered excellent performance and delivered strongest regional growth in the second quarter. Revenue increased by 4.4% in the first half and by almost 10% in the second quarter. On a constant currency and constant resin basis, first half growth was 2.9%. Growth in aseptic carton was broad-based. It was supported by strong refresher demand in the United States, continued momentum in dairy and market share gains in Mexico and successful pricing and mix initiatives in Brazil.

Bag-in-box and spouted pouch also returned to growth in the second quarter, driven mainly by syrup and dairy applications. Margin improved to 13.5%. Price increases and additional efficiency measures more than offset higher raw material and freight costs. Overall, region picture confirms the resilience of aseptic carton and benefits of our operational and commercial actions.

And at this point, I will hand over to Ann for a more detailed financial performance presentation.

Thank you, Mikko, and good morning, everyone. Let me start with the adjusted EBIT bridge. The improvement in adjusted EBIT and margin is one of the key highlights of the first half. Adjusted EBIT increased by EUR 11 million to EUR 244 million. On a constant currency basis, EBIT grew by around 10% in this first half. Note that while FX was still a headwind in the first quarter, it turned to neutral in the second quarter. Top line benefited from the timely implementation of surcharges to address the raw material and freight cost inflation that we saw following the escalation of the crisis in the Middle East.

We believe that this underlines the value that our solutions deliver to our customers in our long-term partnerships. We appreciate the constructive dialogue in this challenging situation as we expect more headwinds to be absorbed also in the second half of the year. As you might remember, sourcing contributed a positive EUR 5 million in the first quarter. This turned negative in the second quarter as the unhedged portion of higher raw material costs started to kick in and inventories that had been purchased at lower costs were consumed.

Operational performance was particularly strong. Production efficiencies and SG&A savings from our improvement measures initiated last year more than offset inflationary pressures and higher freight costs. Lower depreciation following the prior year impairments also contributed. As a reminder, the D&A impact will annualize after the third quarter, reflecting the timing of the impairments recognized last year. Overall, the bridge shows that our improvement measures are delivering tangible and increasingly visible benefits.

Now turning to the adjusted EBIT reconciliation. Profit for the period increased substantially to EUR 134 million. The main drivers were the unrealized gains on commodity hedges and the end of the Onex purchase price allocation amortization after the first quarter of 2025. Net finance expenses were broadly unchanged. Income tax expenses increased substantially versus prior year H1, mainly due to a higher share of profit in higher tax countries, higher nondeductible expenses, including interest in Germany and also some phasing effects. The largest adjustment was EUR 21 million of unrealized gains on commodity hedges. The year-on-year comparison also benefited from the cessation of the Onex purchase price allocation amortization after the first quarter of 2025.

We also incurred approximately EUR 4 million of restructuring costs related to regional optimization initiatives in Asia and the new business service center in Mexico. As in previous periods, we present these adjustments transparently to provide a clear view of the underlying operating performance. There's not a lot to discuss on this slide. Adjusted net income was EUR 133 million, largely unchanged from last year. And as there are very little adjustments in H1 2026, reported and adjusted net income are almost the same.

Moving on to CapEx. Net capital expenditure, including leases declined to EUR 96 million or 6.2% of revenue. The decrease mainly reflects the completion of major investments in India last year. At the same time, investments in filling lines increased as we sold more higher-value filling lines to support customer growth and prepare for future volume opportunities. We continue to expect filler placements in 2026 to be broadly in line with 2025, means in the lower half of our normal corridor of 60 to 80 placements.

The Mexico expansion project is progressing according to plan. It will support regional growth and improve efficiency through greater localization. The project is expected to be fully completed around the end of 2027. Free cash flow was negative EUR 32 million in the first half, an improvement of more than EUR 100 million compared to last year. This will reflect our normal seasonality, while free cash flow was already positive at EUR 32 million in the second quarter. The improvement was driven by higher operating cash flow, mainly due to lower customer incentive payments for lower volume growth in 2025 as well as lower CapEx.

Let me take you through the main components of the year-on-year improvement. Number one, lower customer volume incentive payments had a positive effect of approximately EUR 40 million to EUR 50 million. Number two, the base effect in trade working capital in a similar magnitude. Number three, coupon payments had a negative effect of approximately EUR 18 million to H1. And number four, lower tax payments contributed approximately EUR 8 million.

The inventory level increased as we intentionally build some safety stocks in response to supply chain uncertainties. Depending on developments in the Middle East, there may be an opportunity to normalize part of this position as the year progresses.

Finally, let us look at leverage. Gross debt declined by almost EUR 240 million compared with June last year, while net debt declined by almost EUR 290 million. This reflects the improved free cash flow and the dividend. The bond issuance in April and the agreement signed in June to replace the U.S. dollar term loan have largely completed our refinancing needs for 2027. They have also strengthened our maturity profile at attractive terms. Reported leverage remained at 3x as last year's nonrecurring charges still affect the last 12 months EBITDA calculation. Leverage under the group's covenant definition, which provides a clearer view of the underlying development, improved to 2.8x from 3x in June 2025.

And with that, I hand back to Mikko for the outlook.

Thank you, Ann. Let me conclude with the outlook for the full year of 2026. Based on the solid first half performance, we are able to confirm our full year guidance. We continue to expect revenue growth of 0% to 2%, and adjusted EBIT margin between 15.7% and 16.2%. Net CapEx, including leases of 6% to 8% of revenue and an adjusted effective tax rate of 26% to 28%. Uncertainty remains around freight and raw material costs related to the developments in the Middle East. Our first half performance significantly derisks our delivery of full year targets, but the risks remain in the business because of geopolitics.

We remain focused on cost discipline, operational excellence and accelerating growth in aseptic system solutions where we see the greatest opportunity for value creation. And we'd like to invite you to our Capital Markets Day, which is scheduled to be on October 27 at The Circle Convention Center in Zurich, and we look forward providing a deep update on our strategic growth and growth opportunities and financial ambitions.

I'd like to thank you for your attention, and Ann and myself are now happy to take your questions. Let me move into the Q&A, please.

[Operator Instructions] The first question comes from the line of Jorn Iffert from UBS. Please go ahead.

It would be 2.5, if it's okay. The first one would be, please, on your volume outlook for the second half. I mean you have easier comps. I mean what indications you get from customers here? Also, what is your initiative to stop the juice bleeding in Europe here, if there's anything you can do against this to tackle this?

Second question would be, please, there are always, of course, the discussions with non-system suppliers and competitive environment. Can you give us an update what your volumes in aseptic carton actually did in Southeast Asia and in China over the last 3 to 6 months?

And the half question just technical one, the EUR 10 million lower group function expenses. Is this now the new run rate? And what was driving the fact?

So on the volume outlook for the second half, let's first take a step back. I would say, volumes in aseptic carton overall, if you exclude some one-off impacts that we have had in the first half of 2025, where we also had some equipment sales in aseptic carton, I would say we see mildly positive volumes in the first half, and we believe that this will also continue into the second half. But of course, as you said, Bjorn, the baseline, especially in the third quarter is a little lower. So overall, I think we expect a sequential improvement.

Then on the juice topic, indeed, that is -- so the soft demand for juices in Europe that is a topic that has been accompanying us for a number of quarters now. Difficult to say when this bottoms out. But we don't expect that this category will come back into full swing pretty fast. Nevertheless, also, as a reminder, the volume -- the share of juices in Europe is -- I mean, the majority of the business, let's put it easily, is in dairy, of course.

And I might take a question, Jorn, for the system supplier and Asia Pacific, China. We see our position to be extremely strong in China, which is one of our core markets and our position and system supplier. And we've seen rather positive market share development and the opposite. And the challenge more in the China, in particular, is the price level that it's more difficult to increase prices because of the competitive pressure. But our system supplier position, providing kind of sophisticated fillers and feeding our fillers fully with our carton is working well in China. So China proves that we can be competitive. And the challenge there is more that price increase opportunity is more limited because of the competition.

I think we said earlier also in the script that in China, the volumes in aseptic carton have been pretty resilient. And then on Southeast Asia, maybe one to call out, which we also discussed in the first quarter, that is the new Indonesia [indiscernible] program, where we see also in the second quarter a significant contribution, and we're very happy.

So we're optimistic about our Asia position, which is, of course, one might say one of the most competitive markets. And I think if we do well there, then we typically do well in rest of the world as well.

Okay. And then last on the group functions overall. I think -- that's not a topic to really consider from my point of view. I mean it includes, of course, some FX impacts also. And then there's intercompany and phasing of IT costs, but I would overall say it's not a new level overall.

Next question comes from the line of Gabriel Simoes from Goldman Sachs.

So my first one would be on the Americas division. So we saw very strong growth in this quarter, ahead of expectations there. So it will be interesting to hear your thoughts on the reasons more specifically for the accelerated growth that we saw there and on the sustainability of this higher growth that we've seen in this region for the second quarter into the second half of the year. And if you saw any one-off events that you would call out here as pushing your growth further there?

And the second question would be on the cost savings. So if you could please give us an update on the actions you're taking to improve the margins, that would be great.

And I would like to particularly know if you've made any progress on the procurement side. So as LPG is one of your key raw materials, is adding more LPG suppliers something you've been discussing? And if so, when should we hear news on that front?

So I might firstly comment the Americas market. I think it's one of our strongest. Our market position is good in Brazil, and it's, of course, the largest market to us in Americas, and it has been going well. And -- but of course, the success in Mexico is where we are particularly proud. And that's the reason why we are also investing more to Mexico. We are taking -- we are building [ extruder ] line in Mexico over the next 1.5 years, a year and to localize it even more.

Americas or North America market is smaller for aseptic, but of course, then in the smaller market, we can still do well, but it's one of our strongholds. But when you, of course, look at quarter-by-quarter, the different markets, that's nature of the global business that depending on the quarter, one market is doing better than the other and vice versa in the following quarter. But I think -- but we are strong in Mexico and strong in Brazil and the U.S. market for aseptic carton is still very small. And of course, we are hoping to do well there as well.

And probably to add on this, in the Americas, we have also been pretty successful in implementing pricing actions, including surcharges. So the team has also done a very good job over there.

And then the second question was on procurement and impact from [ LPB ] supply channel distribution.

So I might actually take that one because it has been defined to be our strategic initiatives, and there's always a delay factor, qualify a new supplier to a new product or to us, it takes on average 1.5 years. And we are, as we speak, working with a number of liquid packaging board suppliers to diversify supply base and at the same time, qualifying existing suppliers to new categories. So it's ongoing work. And typically, we will see benefit in kind of competitive dynamics between the suppliers for some delay. But this strategic initiative that we continue to do.

And I would say the bigger benefits will be then visible in 1.5 years of time on average. But I think even before that, we see some benefits. But it's a long-term strategic initiative and delays is because of technical qualification is quite challenging in terms of kind of technical capabilities of the board suppliers meeting all our requirement for selected formats. But it's ongoing work, it's high priority, and we expect to see midterm significant benefits out of it.

We now have a question from the line of Cole Hathorn from Jefferies.

Could you just clarify on the 1H organic growth number? What's the split between kind of price mix and volumes? Apologies if you said that, I just misheard it.

And then on the surcharges, you did very well to pass along the higher polymer, aluminum and logistics costs. And I'm just wondering how do those surcharges actually work? Could you just give a little bit more color? Did you potentially get a little bit more benefit in 2Q with some more of the costs actually impacting, let's say, the third quarter just because of a lag and we shouldn't extrapolate higher margins into the future? Or how do those surcharges effectively roll off if raw materials come down? I'm just wondering how that impacts your business going forward?

Maybe I can take that and combine both questions into one. So overall, how do the surcharges work? I mean, different to a pricing discussion that you normally have, which we, as you know, have once a year at the beginning of the year. For a surcharge, basically, you need to provide lots of documentation because you really want to discuss an impact that wasn't anticipated before. While when you have a normal pricing discussion, of course, we discuss the value that we deliver to the customers. So that said, that you provide lots of information and documentation also means that we really price for the impact that we have seen in those surcharges and not price for anything higher.

Overall, you're totally correct. So the surcharges have been ramping up throughout the second quarter and not much effective in April, but then much more in June. However, we saw also a similar development, probably even slightly slower on the raw material side. As I also mentioned that in the beginning of the second quarter, we still benefited from old stocks, stock that we had bought at lower cost. And this stock is now consumed.

So it's fair to assume that the material cost level that we're going to see in the third quarter will be higher and balanced by also the surcharges then now being effective for full quarter and not only 2/3 of the quarter. But overall, I wouldn't expect a further significant ramp-up. It's probably more keeping a similar pace.

And then maybe just following up with the margin guidance. I mean it's a very strong performance considering your business is seasonally stronger in the second half. I'd just like a little bit more color if you -- if the margins are robust in H1, what made you kind of keep the margin guidance unchanged?

Basically, I think, if you look at all the factors, what we discussed that we've been able to defend our margin with some of our actions in the first half and particularly in the second quarter. I think those challenges remain and not likely to see significant improvement in underlying conditions regarding whether it's oil, resin price and that of things. So there's still the uncertainty in the market remains, and that will typically negatively impact some of the input costs and factors. So I think it's -- we believe it's a good guidance, and we didn't see at this point, reason's to increase it. I think it's what we believe in.

The next question comes from the line of Ioannis Masvoulas from Morgan Stanley.

First question on the surcharges. Could you quantify the actual benefit to your Q2 growth? That would be the first question.

And the second question is on bag-in-box and spouted pouch, where we saw a contraction of 4.4% better than what you had in Q1. So the question here is, shall we expect that business to turn closer to a stable year-over-year development by the end of this year? Or that's more of a 2027 story?

Ioannis, let me start with the surcharges. So I mean, it doesn't make sense to just look at this 1 quarter number. It's still building up, and it's a low single-digit percentage as a contribution to the second quarter. And on the bag-in-box side, I would believe we should rather look at 2027 to see a sustainable change there.

We now have a question from the line of Pallav Mittal from Barclays.

Two of them. Firstly, talking of Europe, clearly weaker on the volume side of things and some customers not participating in tenders, as you say. But from a margin perspective, can you help us understand the split in terms of the benefit that you saw from lower raw material costs and the hedging? That's the first question.

And then secondly, so far, it seems that you have been able to pass on higher input costs to a larger extent. How should we think about the price minus cost equation in the second half? And do you think you can still pass it on like you have done already? Or do you expect it to be a headwind?

Yes. Let me start with the second one. So price minus cost equation. I believe we have been pretty balanced in the second quarter, but again, also supported by the fact that we consumed stock that we previously bought at cheaper cost. I would expect the contribution to be slightly less positive in the second half overall. But of course, we continue to work on both the surcharge discussion side and second, also on further efficiencies.

And on Europe, indeed, so as we have discussed, volumes were softer. We saw -- the exit rate of the second quarter is slightly a touch better than what you see for the total second quarter. So we would expect that potentially into the second half, slightly better, which then will also contribute to margins. And as discussed, I mean, the margin improvement included more favorable costs in the first quarter on the raw material side. It also includes impacts from the restructuring efforts that we kicked off in 2025, and it also includes benefits from indirect procurement and so on. So I think that's a good description.

And I think all in all, I think long term, Europe is not a growth market. So there, it's important to maintain market share and profitability. And as we commented earlier, we see volume up and down a little bit with our customers as well and their participation rate to certain tenders and especially customers with a large filler installed base, how their volume develop. But it's -- so in Europe, it's really a lot the profitability and market share gain rather than underlying market growth long term as well.

Next question comes from the line of Chiara Di Giammaria from Berenberg.

I have a follow-up question on China. I mean considering your margin decline in APAC, I appreciate your comment on competition, but can you give us more indication? Is this competition increasing compared to last year's? And do we expect this to get worse going forward in terms of price sensitivity, therefore, seeing like China is less of a focus for you as a market?

And the second question is on D&A. This lower level in H1. Should we expect this to be a sustainable run rate for the full year?

I will first comment the China market, this is one of the most important markets to us, and we remain competitive there. And the dynamics just in the market is that there has been a very much competitive pressure in the past, and it remains. But we don't see -- we don't see fundamental change in what's happening in the China. And of course, when I mentioned earlier about the difficulties of price increase is that China has not seen inflation in the economy. So there's not kind of like in the Western countries.

So I think in the lower inflation environment, price increases are more difficult, but we can do other measures in China, for example, reducing our rebate discount levels, we can look at the fixed cost. So there are still levers that we can use also other than price to maintain our competitiveness and profitability. But China is really a measure how well we do long term in the world, and we are doing well in China. So our market position is extremely strong.

Okay. And let me take the question on the D&A. As said earlier in the script, we started -- we had the impairments recognized last year in September. So basically means it annualizes after the third quarter. So half of the impact that you saw for H1, you can also anticipate for H2 still to come on top.

We now have a question from the line of Manuel Lang from Vontobel.

I have just 1 or maybe 2, but on the same topics on your alu-free solutions. I think it's a highly attractive segment. You also gave us some numbers there. But I'm interested if you could give a bit more color on the market in general, let's say, in terms of competition?

And then second, also, maybe in more detail, could you share the volumes or yes, the share of volumes you have in other markets ex Europe and the margin profile also compared to alu solutions, for example, just to understand the acceptance of this format also outside developed countries a bit more.

I think aluminum-free format, the price profitability profile is similar to our core business in aseptic carton. So it's, in many ways, cost price neutral because we knew that when we bring something new to the market, competitive market, we cannot ask too much premium for that one. So we are ahead of the competition in aluminum-free formats, and we continue to ramp up in Europe. And Europe is our focus at the moment. And I think there will be other markets that we will follow, but Europe is a lead market in that. And hopefully, over time, it will become dominantly aluminum-free all the formats.

And the benefit of our solution is that the filler update to support aluminum-free format is extremely fast and cheap. So when customers are looking at the alu-free format, the increased -- so this entry cost is very low from a kind of -- there's almost nonexistent CapEx for that one. So we can fast turn the filler to support aluminum-free format. So that's why we believe that in our installed base, it will take over market share from traditional formats fast. And we are -- it's more or less market making.

We are ahead of the competition, and we believe that it becomes almost standard format in Europe in the coming years. And of course, that creates stickiness of our product to our filler, again an additional benefit from a sustainability point of view. So I think strategically, that's super important development. And we are happy to work with a large volume of customers in Europe to prove technical feasibility of that solution. So we are proud of that development. But Europe is a lead market and others will follow.

Next question comes from the line of Alessandro Foletti from Octavian.

I would like to ask one on the aseptic carton. I mean, is it in Europe, just the weakness, most of that related to juice business or also this tendering is affecting that really substantially. Can you give a bit of a split of the decline there between the 2 elements?

I don't think we really give that level of detail. But if you look at the world, juices consumption is rather on the decline than increase globally, including Europe. And then the dairy part is more to do with our customers and their participation rate and success rate in winning tenders. So that then, of course, when they win the tender or participate, then more volume go through our installed base fillers. And then if they don't participate, then less. So I think structurally, I think juice market long term is weaker than dairy market.

All right. And then maybe a similar one on the system non-system business in bag-in-box and spouted pouch. When you mentioned that it has been declining, I think, in Asia and also in EMEA, I don't remember about Europe, you certainly mentioned the non-system business being weaker. By contrast, in Americas, when you mentioned it's coming back to growth, you kind of underlined the system element and also the dairy, I understand also the syrup was a driver there. But with respect to the system non-system also there, can you share a little bit which direction this journey is going? And how long it will take for you to be, I don't know, 3 quarters system?

I would say we follow very much what we have discussed last October on how we want to optimize the portfolio also, where we said we see the best value in either system solutions or aseptic solutions in the bag-in-box and spouted pouch arena. And coming back to -- so as mentioned -- Mikko has mentioned this in Europe that non-system applications were softer and similar also for EMEA.

And I would say it's a mixture of really -- to a large degree, this is really the impact of portfolio management. But that business typically is lower margin and also not so sticky, and this is what we have seen. So I guess this portfolio optimization will still continue until the end of the year for sure. But it is very much in line with what we wanted to achieve and what we have said in last October. So actually, I think it's going in the right direction overall.

So may I ask a follow-up because earlier on another question, you mentioned that you would not expect this part of the business to come back to growth this year, but maybe next year. And now you're telling me that you think this shift is going on until the end of this year and then by next year, maybe you are closer to where you want to be. So are the 2 things connected then the growth is kind of, yes, market-driven, but partially also homemade because you're doing this shift?

I think we are actually preparing for the Capital Markets Day updating our plan for bag-in-box and spouted pouch. And as Ann said, in those 4 businesses, you have a system business, but there's also a component business. And it's a component, meaning that you can have a closures kind of injection molding business, then you can -- so I think we're also looking at different markets.

So bag-in-box, spouted pouch which are the markets where we are doing well, which are the market where we are doing less well and which are the markets we focus on because all in all, it's a smaller business is one might say is less global than aseptic carton. So I think we need to be more selective there, which are the markets and which are the businesses we want to play and focus on to get basically biggest return on effort.

And I think that's what Ann said that we are looking at the global portfolio and there are areas that we do well and there are areas we do less well. And I think then I think in the Capital Market Day, we want to tell a little bit more about what's the future focus of that business.

We now have a question from the line of from Ephrem Ravi from Citi.

I've got really 2 questions left. Firstly, on the working capital increase. You flagged the inventory increase, it's almost EUR 80 million year-on-year, which is a fairly big amount. Is this going to be structural? Are you planning to keep higher safety stocks going into the future as well? Or is this like a one-off increase in inventory which has been sigh of relief, which did give you quite a lot of working capital headroom if you do?

And secondly, in terms of the fillers, you called out the India 13 new filler projects. But could you kind of give us a sense as to how many new fillers that you sold in the first half globally? And what's your expectations for the full year?

So on the working capital, specifically the inventory, one component when you look at absolute numbers, of course, to also consider is the higher cost levels. So of course, we also value the inventory at a higher price at this moment, and that also contributes to the absolute development. Nevertheless, also if you look at it in comparison to revenue, you see an increase. And as mentioned before, there is an element of safety stock in there and it depends a bit on how the volatility in the markets develop, whether we can build that down until year-end or whether we will keep it at the level.

But you can be sure that we monitor this very carefully and that we track it super closely. Then on the number of filler placements, I mean, we don't comment on the number for the quarter or even for the first half because there's always moves from one quarter to another. So you can't really -- it's not always the full year number just divided by 4. But what we can say or what we also said is we are optimistic that we will land in the usual guidance range at lower half of the range of EUR 60 million to EUR 80 million, similar to 2025. And we wouldn't be optimistic probably if the number for the first half would be significantly off. We can leave it there.

The next question comes from the line of Lia [indiscernible] from AWP.

So you mentioned the impact of the Middle East conflict in terms of price, but I was wondering how could it also impact consumer sentiment? Do you have any maybe ideas about the risks?

And then secondly, is there any update on finding a strategic partner for chilled carton?

Maybe I take the -- we haven't seen negative impact for the consumer sentiment yet. And I think it has to do more to the overall inflation in the countries. And of course, there has been concern that if the conflict will significantly increase inflation, for example, in the developed world. But so far, I think there's no -- from what we see, there's no significant negative impact. And also in the region, we've been doing, I would say, somebody might say surprisingly well in terms of end user demand.

And the challenge in the region has been more with the logistics and sometimes we need to have alternative routes for supply if the port of Saudi is congested. So then we use land routes, transportation by truck. So I think the demand is there in IMEA region as well and Saudi and Egypt being the biggest ones and more impact on be innovative in how we get product and logistics rules and that type of thing, so which has caused, of course, a cost increase to us what we have surcharges for. So in that sense, that's in a good shape, I would say. We have no concern about consumer sentiment at this point is the clear answer.

And to follow up on the question on the finding a strategic partner for the chilled business. So that is not an easy project, and it's well -- it's still underway. And once we have something to say, we're going to also say something on it.

[Operator Instructions] The next question comes from the line of Christian Arnold from ODDO BHS.

Yes. Just one on Americas. I mean this 9.9% growth is -- it's fantastic, I would say. I wonder, is there any positive impact from the World Championship -- Football World Championship. How do you see that?

I think -- I don't think that really -- I think there was an expectation in the market that it would impact a lot, but I don't think it did. So I was actually there. I was happy to be present in the final, but I didn't see any out-of-ordinary behavior there. So it was fantastic final. But we haven't seen it -- I think there was expectation in the consumer businesses or maybe a bigger impact. But I think, of course, it's positive, it's never negative. But then I don't think it's impacted that much as a whole.

And the 9.9% of course, also includes a component of resin and pricing moves. So that also needs to be considered.

We have a follow-up question from the line of Cole Hathorn from Jefferies.

A bit of a strange one, but given all the droughts, et cetera, that we're expecting. I'm just wondering if there's anything that we should be considering for your volume expectations in any of the regions just for -- from a dairy category or anything like that, either a boost on the juice side or kind of a negative impact on the volumes of the milk side?

I think we want to kind of steady the ship because I think it's quite a lot going outside our control in the market, especially in the Middle East. And I think our effort has been to kind of run a steady ship and then kind of cover the input cost increases, logistics cost increases in the kind of market. So I think it's -- some of that uncertainty, as we discussed earlier, will continue in the second half of the year. So I think it's -- that's why we don't really expect anything out of ordinary. I think positive or negative. I think it's -- we want to run a steady ship for the second half.

We have a follow-up question from the line of Ioannis Masvoulas from Morgan Stanley.

The first one is on Europe. Could you quantify the percentage of revenue that relates to ambient juice just to get a better idea of the exposure there? And then the second question, could you give an update on the Scholle litigation, please?

Yes. Let me start with the second one. So the arbitration process is ongoing, and there's a lot of back and forth and document submissions. So let's see when this concludes. Probably it will drag into 2027, but it's not possible to predict this really properly.

And then on the question of the share of juices within Europe, I would say it's around 25%, 30% or something. So it is the juice business within carton.

Ladies and gentlemen, that was the last question from the phone.

We have another question via the webcast. It comes from Allegra Catelli from Bloomberg, and it's about new tariffs that the U.S. has imposed. So what type of impact are you expecting at the Swiss industry to have to deal due to this new duty level? And given that many products manufactured in Mexico continue to enter the U.S. tariff free under USMCA. Does this increase the attractiveness of Mexico as a manufacturing location versus Switzerland or affect future investments decisions for SIG at all. Basically, does the new rate change where production is most competitive for the U.S.

And maybe let me answer to this. So overall, the flow of goods from Switzerland into the U.S. is not an important one for SIG. So we are probably not prepared to comment on this one.

And then on the second one, indeed, that's correct that goods can travel from Mexico to the U.S. under the so-called USMCA agreement and which basically means they are tariff exempt and which we are also benefiting from already with our carton production site in Mexico into which we continue to invest and where major extensions are ongoing, which should be completed by the end of 2027. So that, yes, is a competitive location for us overall.

Okay . There is also no more question from the webcast. And therefore, I hand over to Mikko for the closing remarks.

I'd like to thank you for participating in our earnings call and all your questions. And I think I would like to conclude by saying that the first half results demonstrate our ability to deliver value, even the volatile and uncertain environment. Revenue growth, improved margins, strong executions underscore our resilience of our business, razor-razorblade business model and also dedication of our teams.

As we move through the remainder of the year, we continue to drive operational excellence and maintain disciplined approach to costs. And based on solid first half of the year, we will -- we remain on track to deliver the full year financial guidance. And once again, thanks for joining to the call and showing a high level of interest to SIG. Thanks for that.

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.

Ladies and gentlemen, welcome to the SIG Q1 2026 Results Conference Call and Live Webcast. I am Sandra, the Chorus Call operator. [Operator Instructions] And the conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Christoph Ladner, Director of Investor Relations. Please go ahead, sir.

Thank you, Sandra. Good morning, everyone, and welcome to SIG's Q1 Trading Update Conference Call. My name is Christoph Ladner, and I joined SIG in April as Head of Investor Relations. With me today hosting the call is our CEO, Mikko Keto; and our CFO, Ann Erkens. In today's conference call, we refer to the presentation that is available for download on our website. As always, I would like to draw your attention to the disclaimer and cautionary statement on Slide #2. This call may contain forward-looking statements containing risks and uncertainties. These statements are subject to change based on known or unknown risks and various other factors, which could cause the actual results or performance to differ materially from the statements made in the call.

Having said that, let me now hand over to Mikko.

Good morning also from my side. We have a lovely morning here in Neuhausen, sun is shining. I'm pleased to walk you through our performance in the first quarter. All in all, we had a very solid start of the year despite a difficult market environment and strong comparisons from last year, our revenue at constant currency was stable year-on-year. And more importantly, we delivered clear improvement in profitability and cash flow. Results are also positively impacted by the actions we announced last September and October, and those, of course, are bearing fruit now in this year. And the focus is cost discipline, execution and strategic priorities.

Looking at quarter 1 in more detail, revenue at constant currency and constant resin was stable year-on-year. Aseptic carton grew by 1%, supported by good performance in Asia and EMEA. And on the volume side, chilled carton had a positive growth of 0.8%. The Bag-in-Box and Spouted Pouch business declined 5.7%, which is, of course, reflecting continued weakness in out-of-home consumption in mature markets. On profitability, adjusted EBIT margin increased to 13.4%, up from 12.8% last year. Also, improvement in cash flow compared to last year.

Strategically, our focus remains firmly on aseptic system solutions and restructuring program that we announced last year and is progressing exactly as planned and of course, ramping up in the first half of this year. We maintain our full year guidance, having initiated targeted actions to mitigate potential impact of the Middle East conflict. Then we'll briefly discuss the Middle East situation on this slide. The EMEA region represents around 14%, 1/4 of group revenue with the Egypt and Saudi Arabia being the largest countries followed by North Africa and India.

As we are aware, the conflict and the closure of Strait of Hormuz has driven prices up for oil and gas and also having impact on energy, transport and logistics. Importantly, we have not seen disruption on our plant in Riyadh, and we managed the supply chain challenges effectively. I'm actually very proud of our team in Saudi Arabia and logistics team who managed the situation well. The financial impact of the conflict in Q1 was limited, but we are seeing raw materials and cost for freight increase, and we, therefore, have initiated mitigation measures, including discussions around surcharges to protect our bottom line going forward.

Then if you look at the quarter 1 financial summary in more detail. Reported revenue declined due to foreign exchange effects, while revenue at constant currency remained stable. Adjusted EBITDA margin improved slightly and adjusted EBIT, which is now our main measure for the profitability, increased to EUR 96 million, translating to 13.4% margin, as I mentioned before. Adjusted net income rose to EUR 48 million and free cash flow showed clear improvement, reflecting lower capital expenditure and disciplined working capital management.

In Europe, revenue declined 4.6% at constant currency. This reflects softer demand in core aseptic carton categories such as milk and juice and also that we had a very high comparison from the year before. Bag -in-Box and Spouted Pouch performed well in the region, but that also benefited from lower comparison from the year before. Positive news is that India, Middle East, Africa revenue grew at constant currency on top of a very strong Q1 the year before. We think that these numbers also reflect a small impact from some customer stocking in the region because of the current conflict in the region.

Aseptic carton growth remained strong despite the geopolitical situation, while Bag -in-Box and Spouted Pouch was down due to high comparison comparisons. Asia Pacific delivered strong performance with revenue growth of 7.8% at constant currency. Growth was supported by channel expansion, increased market coverage through innovative products and the favorable timing of Chinese New Year for this quarter. Chinese New Year, of course, every year will impact China numbers and Asian numbers a lot. We're also seeing continued good development in Indonesia because of the new school milk program in the area. In the Americas, revenue declined by 2.5% at constant currency and constant resin. Growth in aseptic carton in particular, in Brazil was offset by continued softness in the Bag -in-Box and Spouted Pouch in the U.S.

Now I will hand over to Ann, who will take you through the financial performance in more detail.

Thank you, Mikko, and good morning, everyone. During the next couple of minutes, I will take you through our financial performance for the first quarter, focusing on profitability, cash flow and leverage. Starting with the adjusted EBIT bridge. Our adjusted EBIT for Q1 2026 was EUR 96 million, broadly stable year-on-year, while the margin increased by 60 basis points to 13.4%. In this, it has to be considered that foreign exchange rates continued to be a headwind in the first quarter. At constant currency rates, this will -- sorry, at current rates, this will become more neutral as the year progresses.

However, we were able to more than offset this by several positive drivers. Raw material sourcing contributed positively in the first quarter, supported by favorable tender outcomes for polymers. Note that Q1 did not include meaningful unfavorable impacts from the Middle East conflict. Production efficiencies also improved, reflecting operational discipline as well as lower depreciation and amortization following the impairments recorded in 2025. In the first quarter, we have completed also the transfer of the Bag-in-Box operations from Chile to our Brazilian site without any disruptions and also closed the old site.

SG&A benefited from phasing effects and the improvement measures initiated in the second half of last year. More than 90% of the targeted positions have been eliminated by now. The rest of the savings will ramp up within the second quarter. Overall, the impact of lower depreciation for the quarter across all buckets was EUR 4.6 million. We think that Q1 has delivered a significant margin improvement in constant currencies, which confirms the effectiveness of our cost and efficiency actions.

Turning to the reconciliation from EBIT to adjusted EBIT. Reported EBIT increased significantly year-on-year to EUR 190 million, driven primarily by unrealized gains on operating derivatives related to our hedging activities for mostly polymer derivatives and aluminum in the amount of EUR 34 million and also the cessation of the PPA depreciation and amortization of the Onex acquisition that still weighed on last year's EBIT was EUR 21 million. After adjusting for these and other effects, adjusted EBIT amounted to the EUR 96 million, broadly in line with the prior year. The usual net income reconciliation can be found in the appendix.

Let me briefly comment on the key input costs for our business on the next slide. Liquid packaging board sourcing is largely secured through multiyear contracts, as you know, providing decent visibility for 2026. For resin and aluminum, around 70% of the expected annual volumes are hedged for the year. In addition, Bag-in-Box and Spouted Pouch benefit from a resin pass-through mechanism, which is contractually fixed and leads to a full pass-through within typically 3 months. Freight costs remain more exposed to higher fuel prices and container rates, while our overall energy exposure is limited. As Mikko said before, we have initiated the implementation of surcharges to mitigate cost pressures.

Moving to free cash flow. Cash flow in Q1 was minus EUR 64 million, an improvement of EUR 26 million compared to the prior year. Net cash from operating activities improved, supported by lower customer incentive payments following the lower volume growth in Aseptic Carton in '25. Capital expenditure decreased to EUR 58 million, reflecting the completion of the Indian plant and lower investments overall compared to last year. Net CapEx, including lease payments amounted to EUR 44 million, equivalent to 6% of revenue compared to 8% in Q1. Q1 cash flow also included an EUR 18 million headwind from interest payments, driven by the timing of coupon payments following last year's refinancing with the Eurobond.

Turning to leverage on the next slide. Net debt at the end of March stood at EUR 2.2 billion. Net leverage was 3.1x compared to 3x at year-end, reflecting the normal seasonality of our business. Per our debt agreements, bank leverage was 2.9x, comfortably within our limits. Also in April, we successfully completed the issuance of a EUR 500 million Eurobond with a 4% coupon, further strengthening our maturity profile. With that, back to you, Mikko, for the outlook.

Thank you, Ann. And let me close with a few words on the outlook. We maintain our full year 2026 guidance. We continue to expect revenue growth at constant currency and constant resin in the range of 0% to 2% and an adjusted EBIT margin between 15.7% and 16.2%. As usual, we expect a stronger performance in the second half of the year, reflecting seasonality and continued ramp-up of our restructuring and efficiency measures. After a solid start of the year for the Q1, we anticipate Q2 to be probably more challenging. While uncertainty around input costs, foreign exchange rates and Middle East situation remain, we are taking targeted actions to mitigate this.

Strategically, our focus remains unchanged, aseptic system solutions, disciplined cost management and leveraging our strong customer relationships and balanced retail footprint. And finally, I would like to invite you to Capital Markets Day on October 27th this year in the Zurich area. There, we will give more details about our future plans and focus areas. And also that I would like to take this opportunity to thank Ann for the job well done and onboarding me to SIG over the last few weeks. Very big thanks for that one. And then we go back to the operator for the Q&A session.

[Operator Instructions] Our first question comes from Jorn Iffert from UBS.

The first one would be, please, on the raw material price situation. How confident are you that you can pass it on? Have you spoken to all your customers already? Did they agree to the surcharges? Or is there still a bulk of negotiations to come in Q2? And then we have to see what is the outcome for the second half? So checking clarity here.

And the second question, if I may, on Europe, the comps it was, I think, 0.5% growth last year. The year before, you had higher growth, but minus -- close to minus 5% organically is quite a bit. What exactly do you think is driving this? Is just really lower consumption per capita? Is it also higher filler retirements? Is this anything else we need to consider here? And do you expect things to improve in the next 2 to 3 quarters?

Thank you for the question. So regarding customer negotiations, we are in the middle of those. And we expect to be more clear about the outcome of those negotiations during second quarter. We try to get most of the cost increases covered, but realistic expectation is that this is probably not 100%. So we do two types of measures, customer negotiations regarding surcharges and then we continue cost discipline and probably further cost out in the second half of the year to compensate that. And I think, Ann, you could comment the European situation.

So on Europe, indeed, the last year's comps were positive and now we're negative this year. And I would first come back to overall, Europe for us is, in general, not a growth region. So we always said this is a region where we believe 0% to 2% is a reasonable assumption in a normal market environment. Now we are faced with, first, lower consumer confidence and not a normal market environment.

And then second, as we have discussed last year quite a lot, I mean, milk prices have been fluctuating quite a lot over the last months and quarters and also the allocation of raw milk into different processing types. And this quarter, we have seen more milk going into powder actually, which has also impacted our results. But overall, I would always point back to the long-term or midterm outlook on Europe. I would always anticipate flat to 2% is what we should look at in general.

The next question comes from Manuel Lang from Vontobel.

I have 2 questions as well. First, on the substrates. Well, aseptic looks much more solid versus the others. But could you help us understand if this is driven by nature of carton in general? Or do you see similar trends in aseptic technology in the other substrates such as Bag-in-Box and Spouted Pouch.

And then the second one on the EMEA region, there, you mentioned the growth of 1.9%. This reflects already preorders to secure supply. So where would you see, let's say, an underlying or normalized growth in the region in Q1, let's say, if you put that effect aside? And also on that topic, how big is the Middle East region, so Egypt, Saudi Arabia together as a stand-alone? Could you quantify that?

So maybe I will start with the substrate comment. As you saw from the result, the aseptic carton is very strong, and that's, of course, 80% of the business. And in other business, Bag-in-Box and Spouted Pouch. And Spouted Pouch, the aseptic technology is still not a volume business for us. So we have developed fillers that can do aseptic pouch, but it's more business development area rather than volume as of today. So we continue to develop technology, meaning the kind of different sizes of fillers for that business, which are aseptic because that was a reason for the acquisition that we can actually bring that aseptic solutions and systems to that market. So it's still not the volume business for us, but that's the idea.

Yes. And so if I take the questions on the EMEA region, yes, we mentioned preorders or slight upstocking just to be complete. But if I should spell out how much this was, this is a very low single-digit million number. So if you deduct this from the EMEA growth rate, probably then we would have been slightly more than flat in the region on top of a very strong first quarter in the year before. But again, just for reasons of completeness, we wanted to also mention this one. And then how big Saudi and Egypt are together, I would say it's around 40% of the total region, something like that. And again, business is ongoing without significant disruptions in the region.

The next question comes from Gabriel Simoes from Goldman Sachs.

So first one on the guidance. So you basically maintained the guidance for the year in terms of growth. I would like to understand the breakdown you expect in terms of the region in that guidance and the impact that you see from the conflict in the Middle East and how much of that is baked into your estimates for the year and the impact you would expect, not only in the region, but also for the other regions, as the conflict basically spreads out in terms of the higher costs and then demand?

And the second question would be on the resin side. So I understand you have a pass-through clause on your contracts, but I'd like to understand how that feeds into your margins, right? So as a portion of your exposure is already hedged. So in other words, my question is that if you pass through only the portion that's unhedged in your contract, and that's already taken into account or if you're passing through the full impact and then actually that's positive to your margins?

So on the guidance growth outlook, I mean, we don't give a guidance now by region. But as Mikko said, I think we had a very, very solid start in Asia. So that's great. We also see the Americas actually not too bad developing right now. So overall, I think probably also considering that there will be some surcharges on the growth guidance, we will probably feel very comfortable with what we have out right now, and we're reassessing that. Our potential secondary impact on volume development in that environment, at this moment, we don't see any changes to our assumptions. But of course, this also needs to be monitored.

And then when we think about the surcharges, of course, we try to pass on as much as possible and also to protect the margins and not just the absolute amount. But as Mikko also said before, I think this -- we're well prepared if we also complement this with additional cost-out measures. And then how does one more time, the mechanism work in the Bag-in-Box and Spouted Pouch business, I mean, that is contractually fixed, that's within a certain time lag, we always have updates of the prices reflecting the latest indices. That's why I said, with an average of 3 months delay, we pass this absolutely through. Hope that helped.

The next question comes from Cole Hathorn from Jefferies.

I'd just like to ask on free cash flow considerations. considering polymer, aluminum, costs are going a little bit high. Just wondering if you're giving any working capital guidance or any particular kind of raw material product that we should think about where it's not just price, but you've got a shortage of raw materials. I don't imagine so, but just to ask the question. And then any other free cash flow items that we should think about that is impacting you in 2026 beyond the working capital?

Yes. I think we have discussed free cash flow quite a bit also during the full year call a couple of weeks ago. Yes, all of these are elements that you have mentioned. And of course, there's moving parts as the year progresses. But at this moment, I wouldn't see that we need to discuss any new items that we need to take into consideration. I think up to now, the equation works as we had anticipated.

Then maybe just using the opportunity as a follow-up then on some kind of prebuying or kind of safety stock. Have you seen this progress through the second quarter? And is this across different regions? Or is it particular to the EMEA region?

Prebuying on the customer side, really that was, I believe, a pretty limited impact even in March, to be honest, when the situation started to evolve. I would say, at this moment, we more or less see really normal developments as we had anticipated also. And prebuying on our side to build additional inventories, we don't think is necessary at this moment. Supply chains are a little challenging, but manageable at this moment.

The next question comes from Alessandro Foletti from Octavian.

Yes. Also 2 of them, maybe 1 on the CapEx. You are trending slightly -- on the net CapEx, you're trending slightly below last year. I was wondering if you can give an indication if this is -- will be driven by lower growth CapEx or higher upfront cash?

So I would say already looking at the first quarter number would be too early to judge because there's always fluctuations when projects are happening within the year. So we don't see any reason to adjust the outlook for the full year on that front. So that said, of course, we carefully look at all CapEx into PP&E as we also discussed that we want to be more efficient on that front.

When we think about growth CapEx to be invested into new filler placements, the first quarter has developed according to our plans. And we don't see at this moment a trend change that we wouldn't land in the normal range of EUR 60 million to EUR 80 million, probably lower half, as we also indicated in the full year call. So no change actually there to be seen.

Okay. My second question I would like to go back on aseptic and non-aseptic. Obviously, in the Scholle business or Bag-in-Box and Spouted Pouch, there's less non-aseptic business. So if you are transitioning away from non-aseptic towards more aseptic, I wonder if you can give an indication how many millions, so to speak, you have to substitute. I have a number in my head, certainly a triple-digit million number. And how long it will take to make that transition until then, I don't know, Bag-in-Box and Spouted Pouch business starts growing again in line with the aseptic trends?

Yes. Maybe I can take that and clarify. So I mean, the Bag-in-Box and Spouted Pouch business has aseptic components in it and has non-aseptic components in it as we also discussed in the October investor update. And also within the non-aseptic part, there is businesses that are attractive and that we want to continue to do for simple reasons, such as also plant utilization and so on. And for example, the syrup business that ends in carbonated soft drinks in the end, in food service outlets. I mean, that is a nice business that is growing, that has decent margins and that gives a very good capacity utilization for our plants also.

So no reason to ever think of not doing this. I think this transition part, from non-aseptic into aseptic is much more a topic for the Spouted Pouch business. And also here, we have shown, I think, with very telling bubble sizes where we stand right now in the portfolio in the October update. So the vast majority of that business, at this moment, is still non-aseptic. But for all the benefits that we have discussed in the last, I don't know, a couple of quarters or years even, I mean, aseptic spouted pouch gives you a product that still looks like the product that you have put in. It gives you a product that still has all the nutrients in. It doesn't need preservatives or sugar, and it doesn't need a cold chain. So there's lots of arguments.

But as we also said, this is a totally new market that needs to be built. We just see customer traction or customer interest there because, I mean, it represents really an interesting opportunity, both on different fronts, as discussed for toddler foods, especially, but then also for health food for sports people and also even for food for elderly people. And putting this into context, until this aseptic spouted pouch will become a triple-digit million euro number, that probably will still take some time, not because we start off a very low base, but of course, the growth rates are interesting and the market is building as we speak, but it still takes time.

Okay. Can I just have a quick add-on in the Bag-in-Box and Spouted Pouch business, the weakness that we have seen this quarter, maybe also last quarter, et cetera, then is more driven by the end consumer market than by the transition from non-aseptic business?

Yes, absolutely. And this quarter, we looked at a weaker business in the Americas specifically, where the baseline was also, to be very fair to the team, a little stronger. But overall, consumer confidence and traffic is not yet where it should be also very clearly. It was a bit better in Europe, but in the other of the smaller regions, I think decent, nothing needs to be discussed on that front. But really, the U.S. in the first quarter wasn't living fully up to the expectation. And I mean, you can also probably attribute it to some degree to the cold weather that we have seen there. So ice cream premixes haven't been too much in demand and stuff like that. But I would say no structural change in the U.S.

[Operator Instructions]

Next question comes from Pallav Mittal from Barclays.

So following up on Europe, aseptic, clearly, you said was impacted by raw milk allocation and also tough comps. But Bag-in-Box and Spouted Pouch was strong. So what is leading to that? And as a percentage of your European segment, how big is Bag-in-Box and Spouted Pouch. So that's the first one.

Yes. So we always said that overall Europe accounts for around 20% of the Bag-in-Box business -- or Bag-in-Box and Spouted Pouch business, and that also hasn't changed a lot. So what helped the development in Europe in the first quarter was, as mentioned, on the one hand, weaker comps. But then also we had a couple of customer wins and equipment placed in the first quarter. So I would say this shows the team did a decent job there.

Sure. And then just on the cash flow -- the free cash flow, so how much of the lower customer incentives on a Y-o-Y basis was a benefit? And then also, I see there was some cash inflow from the sale of land in China. So how much of a benefit was that in Q1 on the cash?

Yes. So we discussed at full year that the customer incentive impact was around EUR 40 million last year. And if you consider that a good part of this falls into the first quarter, that gives you approximately the magnitude of the benefit. Then there was EUR 2 more million coming out of the land sale in China approximately. Those are the positives. And then on the negative, as I mentioned earlier in the script also, there was the coupon payment, which was a temporarily higher impact on the interest expenses in the magnitude of EUR 15 million or EUR 18 million. And that's basically the bridge that you need to take into consideration.

Sure. And then finally, can I just check if there is any update on the litigation case with Laurens Last?

Yes. Yes. There is no update. The progress -- the process is progressing as it was laid out in the beginning, and we don't have any new considerations or any new information at this moment in time.

The next question comes from Christian Arnold from ODDO BHF.

I have 2. You mentioned that you have a positive impact of EUR 4.6 million lower depreciation after the valuation of assets in '25. I mean is that the run rate we can take, so roughly EUR 20 million for the full year? That would be my first question. And the second question I don't know if you can comment, but the EUR 34 million unrealized gain on operating derivatives. I mean, on the back of what you know today, be it your hedging positions, spot prices, to what extent can we expect a similar impact in the quarters or how fast will that impact phase out?

So, I would say, I mean, that's the reason why this is adjusted out because it's nonrealized at this moment. And that means, I mean, it's subject to market fluctuations. So a little difficult to give a forecast there. And that's why I would also refrain from trying to give a forecast on that one. And thinking about the depreciation, so EUR 4.6 million without currency impact in the first quarter. I think it would be a bit too much to just multiply this by 4 because you need to consider that we already started adjusting the asset values in September last year. So I think maximum 3 quarters, even a little less needs to be considered for the full year.

The next question comes from Ioannis Masvoulas from Morgan Stanley.

Just a couple of clarification questions left from my side. First, on the cost development. How should we think about the unhedged polymer and aluminum exposure for the second quarter? Could you potentially provide a cost impact either versus Q1 or year-over-year? I would assume that by now, you should have good visibility, given the typical P&L lags. And I'll stop here for the first one.

I think it's a little challenging to give right now a good outlook for the second quarter. But what definitely we should anticipate is that we see an increase overall when it comes to also surcharges or freight costs that we see. The underlying, as discussed, is hedged by 70% for the month or for every month basically. But I would refrain at this moment to give you a concrete number, but definitely, it will be higher than what we have seen now in the bridge for the first quarter.

And also that there's no direct correlation for the oil price of a day to some of our cost items like logistics. Higher oil and gas prices, of course, will impact a little bit of everything, but it's not a straight line that we can see so that some of the cost items, we see the development then in the second quarter.

Okay. Understood. And going back to the topic of surcharges, just to understand that a bit better, is it the focus here or the discussions around transport and logistics costs related to diesel price, for example? Or are you looking at passing through some of the other cost elements as well?

So we have a model that we estimated cost impact for the -- of this kind of oil and gas price logistics-driven inflation. And we are sharing that estimate with our customers and try to cover that with a surcharge. So we have a model that we are using.

And of course, that model looks at all different cost items, not just isolated smaller topics.

And of course, then it should cover most of the inflation and our target is to cover the inflation impact. And how big part of the inflation impact it will cover, we don't know yet because typical annual negotiations, they are end of the year, start of the year, but this is out of ordinary negotiation cycle. So we don't know the outcome. We will estimate the outcome during the second quarter. And then, of course, as we discussed earlier that we are looking to take some further cost measures to mitigate also the impact of input inflation.

Ladies and gentlemen, so far, no further questions. I would like to hand the conference back over to Christoph Ladner for the written questions from the webcast.

Yes. We have one question from the webcast from Marc Widler from Helvetia. I think it's already answered to some extent. Any news regarding the pending legal case that we said there's no news? And Mikko, have you already talked to Laurens Last or met him?

As a part of the AGM, I was speaking to family member of the company, but it was more meet and greet, but no detailed discussions. And I think, of course, we have ongoing litigation case so that we cannot discuss about that. But then, of course, they are still important shareholder of SIG. So we can discuss about the performance of the company, but not actually the litigation.

And in general, the litigation process, I think I answered earlier, no new news process is going according to plan. What?

There are no further questions?

Thank you very much for the call and then welcome to the Capital Markets Day on October.

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.

Ladies and gentlemen, welcome to the SIG Full Year 2025 Results Conference Call and Live Webcast. I'm Vickie, the Chorus Call operator. [Operator Instructions] And the conference is being recorded. [Operator Instructions]

At this time, it's my pleasure to hand over to Ann Erkens, CFO. Please go ahead.

Good morning, ladies and gentlemen, and thank you for joining us for this full year 2025 earnings release of SIG Group. My name is Ann Erkens, CFO of the company, and until 2 days ago, also Interim CEO. I will discuss the results with you today, and it is a big pleasure to have our new CEO, Mikko Keto, with me on the call today, who joined the company on March 1.

As always, the slides for this call are available for download on our investor website. This presentation may contain forward-looking statements involving risks and uncertainties that may cause results to differ materially from those statements. A full cautionary statement and disclaimer can be found on Slide 2 of the presentation, which participants are encouraged to read carefully.

And with that, Mikko, welcome on board officially. Do you want to say a couple of words as a first introduction?

Thank you, Ann. And I would like to congratulate you and the SIG team for the strong fourth quarter. And that fourth quarter gives a solid foundation to start the work for 2026. And I began my onboarding a while ago, firstly, looking at outside in, the company and the performance, and now, I have pleasure to do onboarding in the company looking at inside out. And there are some really strong points in the company when I look at it, for example, solid foundation through innovation, customer partnerships and delivering value, both to our customers and shareholders.

One key aspect of the business also is customer retention. I can see that the customer retention is high. We have long-term relationships with most of our customers. It means that the lifetime value of the customer is high. I will continue my journey in the beginning to understand the business in more detail, now being inside the company. And I'm looking forward working with you all in the coming months and years to deliver value to shareholders and the SIG organization as a whole. And thank you for your trust and support and looking forward to working with you all.

Ann, back to you.

Thank you, Mikko. Let's start with the key messages for the fourth quarter. In line with our announcement on September 18, our revenue growth has reflected the subdued consumer environment throughout the year. However, we were pleased to see that we saw a sequential improvement in the fourth quarter, resulting in a positive 0.5% growth for Q4. This brought full-year revenue growth to plus 0.1% at constant currency and constant resin, so to the upper end of our expectations, communicated in September.

On a substrate level, aseptic carton grew by 1.2%. It was especially strong in the Americas, which is one of the reasons why we expand the capacity of our production plant in Mexico. The chilled carton business declined by 5.3%, impacted by the competitive environment, especially in China. It is noteworthy though that the situation was improving in the fourth quarter. The bag-in-box and spouted pouch business was negative 3.4%, reflecting the higher comps in the second half of the year.

As announced in September, following a strategic review of the group by the Board of Directors, and in light of the prevailing soft market conditions, we have recognized nonrecurring charges of EUR 351 million pretax in 2025. All charges relating to this review have been booked now. In the fourth quarter, these amounted to EUR 31 million with the largest item being restructuring charges relating to the elimination of positions as discussed at the investor update.

All conversations with the affected employees have been completed in 2025 and the corresponding savings are ramping up throughout the first half of 2026. Also, during the fourth quarter, we could complete 2 asset disposals with land sales in China, the retired chilled carton plant in Shanghai and in Germany. These 2 divestments contributed approximately EUR 17 million as a positive onetime impact to the 2025 free cash flow.

Now, moving to filler placements. We placed 68 new fillers in the year 2025 across all geographies and well within our aspired range of 60 to 80 placements in a year. The incremental growth of fillers in field was 14 as 54 fillers were returned or scrapped at customer sites. The average age of these old fillers was more than 15 years. Total book value was around EUR 1 million. This was normal course of business and has been reflected in the financials as such.

As discussed in the Q3 call, as part of the strategic review, we have also assessed the utilization and corresponding cash generation of fillers in field. This led to EUR 21 million of filler impairments within the nonrecurring items for underutilized fillers at customer sites, respectively, for fillers on stock. Please note, this does not mean that there was a reduction of available capacity in the field.

For 2026, we have an attractive pipeline and expect to place a similar number as in 2025. On the innovation side, the second machine of our new Neo line has been placed in Saudi Arabia. Next to higher speed and output, this machine is also characterized by a very low waste rate of below 0.5%. The Neo line is, of course, also capable of processing the new Alu-free full barrier sleeves, where our rollout continues in Europe and also in Southeast Asia. Terra Alu-free full barrier from SIG is the first aseptic carton that is recognized as recyclable under Korean regulations.

In the other direction, from East to West, we see the expansion of the DomeMini format, which was first introduced in Asia and is now coming to Europe. It is expected on shelves in Europe in the first half of 2026.

And finally, we were very proud that we received for the seventh time the EcoVadis platinum status with a record score of 99 out of 100.

Now, let's take a look at how our business has evolved on the revenue side. We closed the year 2025 with a revenue of EUR 3.25 billion. In reported terms, this is 2.4% below the prior year due to the stronger euro. At constant currency, revenue growth was 0.4% and at constant currency and constant resin prices, it was up by 0.1%.

The revenue share by segment, which is the region, is almost unchanged versus the prior year. Europe with a 32% share remains the largest region. Asia Pacific and the Americas each have 27% share, and IMEA is 14%. For SIG, the largest countries in the IMEA region are Saudi Arabia, Egypt, North Africa and India. By business line, aseptic carton is 79% of our sales, chilled carton is 4% and the bag-in-box/spouted pouch business is 17% of our revenue, unchanged to the previous year. By product, 87% of our revenue is packaging material, and service contributes 7%, was last year 6%; and equipment 6%, was last year 7%.

Moving to the results of 2025 on profit, cash flow and returns. Adjusted EBITDA amounted to EUR 718 million with a margin of 22.1%. Excluding the nonrecurring charges related to the strategic review, adjusted EBITDA was EUR 788 million with a margin of 24.2%. This compares to 24.6% in the prior year. The adjusted EBIT was EUR 442 million with a margin of 13.6%. If we exclude the nonrecurring charges, adjusted EBIT was EUR 500 million at a margin of 15.7%.

On adjusted net income level, we recorded EUR 231 million or EUR 285 million without the nonrecurring charges. EPS declined from EUR 0.81 to EUR 0.75. Free cash flow landed at 101 -- sorry, EUR 191 million for the year 2025 after EUR 290 million in 2024. As the nonrecurring charges in '25 were almost exclusively noncash, there is no need to discuss the number without nonrecurring items here.

Lastly, return on capital employed, ROCE, calculated at a 30% tax rate was 25% and 29%, excluding the impact of the nonrecurring charges. Capital employed is here defined as PP&E, right-of-use assets, capitalized development and IT costs, net working capital and the noncurrent deferred revenue.

Looking at the Q4 figures. Revenue at constant currency slightly grew by 0.6% and by 0.5% at constant currency and resin. Adjusted EBITDA was EUR 223 million, translating into a margin of 24.7%. This includes EUR 8.4 million of nonrecurring charges. Without these charges, adjusted EBITDA was EUR 231 million in the fourth quarter with a margin of 25.7%. Adjusted EBIT was EUR 156 million, translating into a margin of 17.4% and also including EUR 8.4 million of nonrecurring charges. Without these, adjusted EBIT was EUR 165 million in the fourth quarter with a margin of 18.3%. Adjusted net income was EUR 78 million. Excluding the nonrecurring charges, it was EUR 88 million. Free cash flow in the fourth quarter was EUR 275 million, close to previous year's levels.

Turning now to the performance by region. In Europe, full-year revenue has declined by 0.8% at constant currency compared to strong prior year growth of above 6%. We were delighted to see the region showing a growth of 4% in the final quarter of the year. This performance reflects several factors, including lower availability of raw milk for aseptic processing compared to the strong supply conditions in 2024, especially in the second and the third quarter of the year.

In the fourth quarter, the industry observed lower raw milk prices and correspondingly more milk going into aseptic carton. Also, the region benefited in 2024 from the ramp-up of filler placements following wins related to EU regulations on tethered caps in prior years. Throughout the year, export volumes of UHT milk has been lower, and the juice category in the region has also declined, impacted by a weak summer season. Excluding nonrecurring charges, both adjusted absolute EBITDA and EBIT increased in Europe.

Also, margins expanded by more than 200 basis points. The margin was positively impacted by price and by a favorable customer mix due to the lower export volumes. In India, the Middle East and Africa, overall revenue development for 2025 was impacted by a strong prior year comparison of 13% growth, leading to a slight growth of 0.4% for 2025. In the last quarter of '25, revenue growth has been slightly positive, too.

Carton volumes have been impacted by lower consumer demand across the region as well as by higher competition and the monsoon season in India. Bag-in-box and spouted pouch revenue growth has been strong in the region, including in India. The EBITDA margin without nonrecurring charges came in at 26.8%, slightly ahead of the previous year. FX headwinds in the region were more than offset by pricing. The EBIT margin was slightly below the prior year, as it was impacted by additional depreciation of the India plant following its start-up.

For the financial year 2025, revenue for Asia Pacific declined by 1.7%, both on a constant currency basis and on a constant currency and constant resin basis. Continued market softness in the region and the competitive environment in chilled carton impacted our revenue performance last year. Also, the later occurrence of the Chinese New Year in 2026 had an impact on volumes in China, particularly during the fourth quarter, making Asia the only region that did not record a positive volume growth in Q4. Still, we were able to continue to outperform the market in China with product innovation and flexibility.

Southeast Asia, Japan and Korea continued the growth momentum despite the market downturn. We recorded strong filler sales and also have a good pipeline for 2026. The adjusted EBITDA margin without nonrecurring charges was negatively impacted by product mix and SG&A costs. The adjusted EBIT margin was additionally impacted by the annualization of the depreciation of the new chill plant in China.

The Americas were the region that recorded the highest growth in 2025 with 4.4% at constant currency and 3% at constant currency and constant resin. Aseptic carton growth was especially impacted positively by liquid dairy in Mexico. Also, we saw price increases in Brazil and a higher service revenue. In the bag-in-box business, share gains achieved in the U.S. in dairy and in syrup could mostly offset declines in wine, the retail business and non-systems businesses. In this segment, the margin both on an adjusted EBITDA or EBIT level was impacted by unfavorable foreign currency movements, investments necessary to enhance capabilities and wage inflation.

On this slide, we have summarized the breakdown of the full EUR 351 million nonrecurring charges that were recorded in 2025 in connection with the strategic review and the market softness. After the EUR 320 million recorded by the end of the third quarter, the fourth quarter saw an additional EUR 31 million. The total of EUR 351 million is well within the guidance range of pretax EUR 310 million to EUR 360 million, which we provided in September. We also indicated that around 90% of this amount will be noncash with the cash outflow mostly occurring during 2026. We expect the '26 cash impact to be approximately EUR 25 million.

The split by bucket of the nonrecurring charges is as follows: EUR 107 million is an impairment to the value of the bag-in-box and spouted pouch businesses, reflecting weak consumer sentiment and business performance. This has affected the recoverability of acquisition-related assets. EUR 86 million of impairment concerned the value of the chilled carton business. This principally reflects the weak market conditions in China, which has impacted the recoverability of the assets.

EUR 82 million relate to the reassessment of the required operating capacities in aseptic carton within the context of the current weaker market environment. This includes production capacities in India, selected equipment in China and some filling lines across locations, where, as discussed on the first slide, impairments related to low capacity utilization.

Under the headline innovation, around EUR 62 million is associated with the reassessment of the group's innovation portfolio, including the impairment of equipment that is no longer required and the impairment of capitalized development costs relating to projects that have been stopped following the strategy review.

Finally, a charge of EUR 14 million mostly covers the restructuring costs related to the elimination of a low 3-digit number of positions in SG&A and R&D. Our annual report summarizes all relevant information in Note 4 of the financial review, and additional details are presented in the Notes 7, 9 and 12 to 14.

Let me now remind you about what we discussed in Q3 on the presentation of the nonrecurring adjustments. In line with our standard definitions, charges included as part of adjusted EBITDA are those where regional management is held accountable for the delivery of returns on customer projects, such as filling line investments or product launches. As you can see from the graph on the right, this portion amounted to EUR 69 million.

Charges excluded from adjusted EBITDA include noncash, unrealized derivative positions and noncash impairments of intangible assets. In addition, we also take charges below the line that relate to footprint or capacity rationalization as well as rightsizing of the organization. Any such booking below the line needs group approval and rigorously follows our standard definitions. Charges excluded from adjusted EBITDA amounted to approximately EUR 281 million for the period, taking the total nonrecurring charge recognized in 2025 to EUR 351 million.

Next, let's take a look at the EBITDA bridge for 2025. EBITDA was affected by a negative EUR 44 million relating to the currency impact, which reduced the EBITDA margin by 60 basis points. Excluding FX, the adjusted EBITDA without the nonrecurring charges increased by EUR 12 million. This improvement of EUR 12 million was mostly supported by EUR 42 million contributions from top line, which reflects price increases and favorable mix impacts. In addition, raw material costs were overall lower by EUR 9 million in '25 compared to the prior year. This was mostly due to the polymer category.

On the other hand, production was negative EUR 10 million as the lower volumes in the second half led to unabsorbed fixed costs and lower efficiency. In addition, SG&A was up EUR 17 million in '25. This included wage inflation and growth investments in the first half of the year, which we have reduced in the second half due to the softening of the market.

Turning now to adjusted EBIT. As of 2026, we will report our business performance on an EBIT level as introduced during the investor update in October. We believe this enhances transparency and relevance, and at the same time, will support our management teams around the world to take better capital allocation decisions.

In the backup of the presentation for this earnings call, you can find a summary of 2024 and '25 EBITDA, adjusted depreciation and amortization and resulting EBIT by region. The adjusted EBIT margin '25 without nonrecurring charges amounted to 15.7%, below the prior year number of 16.5%. Naturally, also here, there was a negative impact of FX on the margin, 70 basis points.

In absolute terms, adjusted EBIT without nonrecurring charges was EUR 511 million with the improvements in EBITDA, discussed before, being offset by additional depreciation of EUR 12 million, driven by the PP&E CapEx in India and China as well as by the filler placements.

In this slide, we show our usual reconciliation between reported EBITDA and adjusted EBITDA. For '25, you can see the impact of the nonrecurring charges on the relevant line items with the right-hand side aligning to our definitions as discussed on Slide 13. Same as in Q3, other includes costs for the renewal of the group's IT systems and consulting charges for the strategic review.

Under the column for nonrecurring charges, other reflects penalties related to the delay in the further expansion of the group's production facilities in India and the charge for the CEO separation. The gain on sale of PP&E and other assets of EUR 5 million primarily relates to the asset sales in China and Germany.

Following the methodology presented on the previous slide, here we show the impact of the nonrecurring items on net income and adjusted net income. Profit for the period without nonrecurring charges was EUR 208 million in 2025, including all nonrecurring charges, the group recorded a loss of EUR 87 million for the year.

On adjusted net income, as stated in the last quarter, the Onex PPA amortization, which arose from the acquisition accounting when the group was acquired by Onex in 2015, was fully amortized as of the end of Q1 2025. As such, this line will be 0 going forward. We have added for your reference, a slide to the backup of this presentation that summarizes the amount of the Onex PPA and all other PPA by year and also shows the impact on gross margin, SG&A and EBIT.

Please note that also all other PPA is expected to be lower in '26 following the impairments in '25. As a disclaimer, the '26 estimate is, of course, subject to FX fluctuations throughout the year. In summary, the delta between the reported and adjusted KPIs will be smaller going forward.

Net CapEx, includes -- including lease payments in 2025, amounted to EUR 200 million or 6.1% of revenue. While CapEx for the plant in India following the completion of the first phase was lower, we continued to invest into the expansion of our Mexican aseptic carton factory given the strong growth that we have seen in the region, America North.

Please also note that the cash inflow from the sale of land and buildings in China and Germany of EUR 16.9 million for the group's definition is included in net CapEx. For the 68 filler placements, EUR 173 million CapEx was spent. The upfront cash ratio has been slightly lower at 71% in '25, but still at a good level. Net filler CapEx as a percentage of revenue was 1.5% after 1.1% in the previous year.

Free cash flow amounted to EUR 191 million in 2025 after EUR 290 million in the year before. This was driven by the lower adjusted EBITDA versus prior year, which included a significant FX headwind of EUR 44 million, as discussed before. The other significant negative impact laid in the higher payments for customer volume incentives in 2025, which were a result of the very strong volume growth of 6% in 2024. As an approximation in the balance sheet, the provision for customer volume incentives decreased by EUR 39 million in 2025.

On the positive side, tax payments were lower by EUR 11 million in the period. Additionally, 2 favorable impacts that were of a one-off nature supported the cash flow: one, the already discussed EUR 17 million for the asset disposals in China and Germany; and two, lower interest payments as for the new bond of 2025, interest payments only occur once per year. Overall, interest payments were lower by EUR 27 million. Net working capital as a percentage of revenue improved by 100 basis points as accounts receivable were lower. This was offset in the operating working capital by the lower liability for various customer incentive programs.

Turning to debt and leverage. Net debt at the end of 2025 was EUR 2.144 billion. The stronger euro helped to reduce the reported net debt by EUR 43 million. However, the free cash flow earned in '25 was lower than the dividends paid in '25. Our interest expense was lower by EUR 15 million versus previous year. This was driven by more favorable underlying market rates, and on average, lower utilization of the revolver, partially offset by the higher coupon of the new bond.

The net leverage ratio at year-end stood at 3x after 2.6x in the prior year. The net leverage ratio was influenced by the lower adjusted EBITDA and also by the nonrecurring charges. As per the determination rules of our net -- of our debt agreements, which, for example, exclude the impact of impairments, the net leverage ratio stood at 2.8x.

In line with the initial guidance that we had provided at the investor update in October, we expect a similar market environment as in 2025, resulting in an outlook for revenue growth on a constant currency and constant resin basis of flat to 2% for the year 2026. We feel encouraged by the sequential improvement and return to growth in the fourth quarter.

We said in October that we would see the '26 EBIT margin improve versus the '25 margin, excluding nonrecurring charges, and we expect to land in a range of 15.7% and 16.2% this year. In line with our usual seasonality, adjusted EBIT margins and free cash flow will be higher in the second half of the year. As always, our guidance is subject to input cost changes and foreign currency volatility.

The guidance for the adjusted effective tax rate is 26% to 28%, and net CapEx, including lease payments, is projected in the corridor of 6% to 8% of revenue. On the dividend, as highlighted in our communication of September, the Board will propose to the AGM to support the payout in '26 for the year '25.

Our midterm financial guidance is laid out as follows: Revenue guidance for constant currency, constant resin growth is in the 3% to 5% range, reflecting a normalization of market dynamics in the midterm. The EBIT margin will reach a level of above 16.5%. Guidance for net CapEx, including lease payments, remains at 6% to 8% of revenue, and there's no change to tax expectations.

We will focus on cash flow generation and deleveraging to improve our balance sheet. In the midterm, the group targets a net leverage ratio of around 2x, and we have set ourselves an important milestone of achieving 2.5x by the end of 2027. The company remains committed to returning cash to shareholders and expect to reinstate dividend payments in a corridor of 30% to 50% of adjusted net income in the coming year.

In summary, SIG has a clear path forward for value creation. With our strong business model and innovation capabilities, we can build on multiple growth drivers. We have executed the cost adjustment program that we described in October, and there are plans in place to further improve our best-in-class margins. Rigorous capital allocation discipline will improve our balance sheet and return profile and foster a robust cash generation.

This concludes the presentation. 2025 has been a challenging year for SIG, but a year that ended on a more positive note. We would like to thank our customers for their trust in our systems and solutions and our shareholders for their continued support for the company. And finally, a heartfelt thank you to the SIG teams around the world for their hard work, dedication and commitment.

And we are now happy to take your questions.

[Operator Instructions] The first question is from Ioannis Masvoulas, Morgan Stanley.

Mikko, congratulations on the new role. And I'd like to address the first question to you, if I may. SIG has already done a lot to reposition the business and cut costs over the past several months. Where do you see the biggest opportunities to go even faster and deeper on the self-help journey? And what could this entail for additional cost cutting or potential changes to the business mix? And I'll stop here for the first one.

So, of course, I started on Monday, and I've been looking at, as I said in the beginning, firstly, outside in. I've been looking at the benchmarks, the KPIs from outside. And I think we can still improve our competitiveness. And I'm trying to look at the value creation short term and longer term. And of course, the idea is that the long term, we build a stronger foundation for the kind of -- for the coming years.

And of course, the areas what I'm looking at is still organizational efficiency. I'm looking at the performance cuts. I'm looking at the purchasing program and also opportunities to simplify the business and how business is done. And when looking at the benchmarks, how we comp against other companies and peer group and typically targeting best-in-class, but I'm just in the process of doing that. And I think I will be working with the SIC team to look at all these areas. But basically, target is to be extremely competitive in terms of efficiency, performance culture, purchasing and looking at ways to simplify the business.

No, that is helpful. And good luck with the new role. Then the second question is just on the guidance. When I look at the EBIT margin that you managed to achieve for 2025 at 15.7%, excluding the one-offs. And then, looking at 2026 guidance, where the low end is pretty much at the same level. But then, you are indicating top line growth of between 0% to 2%. So worst case the top line is not going to be worse. And then, you have taken some costs out in '25 that should really fit through in '26. So what would get you to the bottom end of that range, assuming you're still able to maintain the revenue at, at least stable over the next 12 months?

Yes, Ioannis, thank you for the question. And I understand your view on this guidance, and I think it makes perfect sense. I would also call it cautious guidance. But we also have seen, especially in the last couple of days that the world remains very volatile and -- let's first start the year, and then we see how this develops.

The next question from Jorn Iffert, UBS.

My questions would be 2 to 3, please. The first one also for Mikko, if I may. You were saying you want to focus on to improve competitiveness. What do you mean with this exactly? And what are the action points to do so? Because we thought that SIG is gaining market shares over the last couple of years. So what exactly you think needs to improve here? This would be the first question.

Second question, if I may, on the competitiveness, you said in the 2025 release that you are facing more competition in some regions. Can you say from where is this coming from? Is this coming from your key competitors? Is it coming from non-system suppliers?

And the third question, just a technical one, please. Can you help us what do you expect on average selling prices for 2026 and on the raw material price situation? And what you're budgeting?

Maybe I will start and then hand over to Ann. And when I talk about competitiveness, our track record is good. If you look at the customer retention, we don't really lose customers, and the lifetime value of the customer, if you think that we place a filler, the lifetime value of then the packaging material and then services is really high. So in that sense, we are competitive. And of course, the foundation is a piece of equipment or technology, which is absolutely unique, and there's nothing matching that one. So the kind of starting point is good.

But, of course, we are facing all the time competition, so we cannot -- it's part of the performance culture that you always need to look ahead. You can't be complacent at any given time despite our position is good. And when I talk about competitiveness, I would look at still the organizational efficiency, are we at a good level in all the KPIs? And I'm just started, so I will be diving into details in the coming weeks and months. Are we efficient organization how we run the business?

And then, of course, looking at competitiveness in products, looking at competitiveness in packaging material, looking at competitiveness in service. And all those 3 areas, they have a slightly different kind of how you measure competitiveness. One is the technology, one is the product cost, and therefore, also the purchasing program is a very important factor to us.

And then, of course, as a part of the overall competitiveness has to do with organizational efficiency, is there ways to simplify how we run the business? Because typically, simple is more effective and efficient. But I will dive into all KPIs. And I think it's more, as I said, creating that we are competitive also long term because, as Ann may explain in more detail, we are facing, of course, competition from non-system suppliers for the packaging material. We've been defending that well because we are not losing any customers. But of course, long term, it's a race that we need to be competitive with the piece of equipment. We need to be competitive in packaging material. We need to have a value-add services so that customers see the value of our technical support and spare parts. So it's going all across.

And maybe if I can add on increased competition, I have mentioned that on the slide for Asia, specifically on the chilled carton business, where we said additional capacities have been placed in that market in the last 2 years, and that's also why we think it's not the perfect place for us to be active in the future assuming that probably a follow-up question will then be where we stand on finding a strategic partner. Let me also comment here. The process is well underway, and we would update as soon as we have something to say.

And Jorn, you have also asked on sales price development and raw material cost development. So on the price side, as always, we will have regions that will see price increases, driven by inflation, especially, and we will see others where it's probably more stable. And on average, for the group, I would not believe this plays a major role in 2026. Following now really 4 years of increasing prices, I think that has also demonstrated the value that we capture with our customers. And why is that at this moment considered also to be absolutely the right thing because the raw material situation for us this year is not so much a discussion topic. But of course, we also monitor that situation carefully now with the situation evolving in the Middle East.

I would also like to remind you that we have fixed long-term contracts on the paper side. So we know what the price outcomes will be on that front. And we apply hedging for the aluminum and polymers. But of course, there's always an unhedged portion, which then fluctuates with the market. But at this moment, you don't see us overly excited on that front.

And one clarification question, please. You mentioned one-off restructuring cash cost in '26 of around EUR 25 million, right?

Yes. Overall, cash impact of the nonrecurring charge is EUR 25 million for '26.

And the next question from Alessandro Foletti, Octavian.

Yes. Mr. Keto, I also have a couple, one by one. Maybe on the market in the Americas, or maybe more specifically the U.S., you mentioned that you saw certain categories up more related to dairy in bag-in-box and spouted pouch with others down. Can you give an indication of what's the size of these 2 categories? So we can sort of understand, I imagine one is growing faster than the other one or old categories going down, new categories coming up. So we can have a view on when this whole business can become positive. And the same question on the system, non-system split of sales.

Yes. Thanks a lot, Alessandro. On the Americas bag-in-box, spouted pouch, indeed, as we said. So -- and also, as we have described in the investor update, there is different product lines below. So going into food service, going into retail and also more industrial applications. And although the market overall for food service is not yet super exciting and picking up, we believe that we have held up very well and also improved our -- we had share gains in the foodservice segments, especially in dairy, but also in syrup.

But then, the retail business, which is largely the wine business, has been soft. Wine as a category is a little alcohol in general, is a little under pressure, and also non-system applications that we still had in the U.S. have not been very much growing in 2025. But overall, on a net basis, I think this came out slightly positively for the Americas, and that's why we are okay with the development in this year in the given market. And overall, for the U.S., I think also the growth of aseptic carton, again, coming back to why we are expanding the factory in Mexico has been very satisfactory.

Okay. But is it fair to assume that sort of the old declining category still represents 80% of your business, and the other one, the new and growing as more 20%? Or am I far away from this?

No. So I would say, overall, the Foodservice business is clearly more than half of the bag-in-box, spouted pouch business, absolutely. Yes.

Okay. Right. And then, I have a question on your dealers. You mentioned you will install around about the same number as this year. Now you have made some impairments last year. Can you use some of those fillers that you have impaired now for the growth that comes this year? And does it have an effect on your CapEx then?

Yes, of course, I mean, we will not scrap anything that can still be used, not as is normal practice also. We have always done it that way, and we will continue to do that, absolutely. So, yes, and if that reverses, we will, of course, also call that out specifically.

Okay. Okay, good. Maybe one final one. On the free cash flow, in the bridge, you mentioned already a couple of parts, but maybe can you give an indication of what can be expected from the working capital in 2026?

Yes. So if I should build a bridge for the EBITDA of 2026, I would assume that the EBITDA, in line with the earnings guidance, should be broadly the same, considering that we will have 1 quarter of FX overhang because the depreciation of the euro only started basically in April last year. I would believe that working capital definitely will not see negative contributions again in 2026.

And then, on the other hand, you also need to consider that the land and asset sales, of course, won't repeat and that we will have the one-off of the restructuring or reorganization that we have called out with EUR 25 million. And I think all of this should make you land slightly above EUR 400 million probably.

Right. That's very helpful. Maybe one very final addition. When you speak about the working capital, not seeing another contribution, you speak about the net working capital or the all-included operating net working capital?

Sorry, all included operating working capital -- yes.

The next question is from Benjamin Thielmann, Berenberg.

Welcome aboard, Mikko. Two questions from my side, if I may. We can take them one by one. First one is on the filler placement. You mentioned, Ann, that in '26, we can expect a similar number of fillers being placed, and in '25, 68 new fillers in '25, 54 were replacement and scrapping. I was just wondering, can we assume a similar mix in 2026 as well in terms of how many new fillers are coming on top and how many are being replaced on the customers? That's the first one.

Yes. No, Ben, thanks for the question. So first, I would say when we talk about filler placements, really the number of new placements is always the more important one because that is placement for customers that have a clear plan to sell something. Otherwise, they wouldn't put out the money for this filler. So -- and capacity of newly installed fillers, of course, is always higher than capacity of old fillers that we take out of the market. So on a net-net, it's an estimation that net increase of fillers, but the capacity added is always more.

So what do we expect as replacement or retirement for '26? It's always difficult to quantify in the beginning of the year. But I would not expect that it's going to be a 0 or a very low number. So it's normal course of business. You always have some coming back. And the longer the company is successful in the business, of course, also the more likely it is that some of our fillers placed in the market are aging and are being replaced by new fillers of our group.

Okay. And then maybe a follow-up on the filler placement, we got -- we have seen a very strong run rate in the last couple of years. If I look back to 2018, the filler placements in '25 and '26 are below the average run rate in the last couple of years. And there was an impairment, partly because of underutilized fillers on the customer side. Is that something that worries you as of today, the customers maybe have invested a little bit or overinvested in particularly the years around COVID and shortly after, and we should get used to a lower run rate? Or do you think this is a temporary lower run rate?

Ben, I think we always say 60 to 80 new placements in a year is the corridor that helps us to continue our market share's gain trajectory. And yes, the number has been elevated a couple of years ago, but that also was on the back of the introduction of new EU regulation, where our customers, especially in Europe, had to revisit their fleet and then made more often a choice for SIG than normal.

And also, considering the fact that we have a USP with the flexibility on sizes that we produce on a given filler, that also attracted significant attention of customers, of course, and continues to do so during the time of inflation. So I would rather explain it with positive one-off that we have seen in the last couple of years than with -- we now see a negative environment. It's within 60 to 80, everything is good enough to sustain our pace.

Okay. Perfect. And then maybe a last one, if I may, would be on competition. It seems that pricing is not a big issue for you guys in 2026, which is clearly good. I was just wondering, has anything changed in the competitive landscape recently? We have seen that, for example, Lamipak has launched a gable top carton. Is there anything that you would flag? It seems like you continue to gain market share if I look at the numbers of your peers. Any pressure on pricing from any new competitors? It doesn't seem like it, but I'm a little bit surprised. Any color on how you view the competitive landscape as of today compared to maybe last year?

Yes. I think the competitive landscape overall hasn't changed. The non-system suppliers have been around for many years. They basically provide roll-fed systems, not sleeve-fed systems. So -- but that said, we always need to, of course, be vigilant, make sure that we remain competitive and that we drive innovation in the market so that customers want to choose SIG also for the future. And that is exactly what we do. So we're never going to become complacent or stop innovating and driving our system forward. But at this moment, I wouldn't see any reason to be looking at the world differently than before.

The next question from Pallav Mittal, Barclays.

I'll take it one by one. So firstly, you highlighted Americas was strong and one reason was the growth in Mexico. Given the environment in Mexico at the moment, we have seen some staples companies highlighted as a tough environment. So how should we think about that for SIG in 2026? Are you seeing any impact on your operations so far?

Pallav, no, our operation in Mexico is running stable. And, of course, we monitor also this one very carefully because the safety of our teams is the most important thing for us, but we don't have any disruption there or any problems to report at this moment.

Sure. And then secondly, sir, I mean, at the top end of your margin guidance, EBIT margin for this year, 15.7% to 16.2%, you will be quite close to the 16.5% guidance that you have for your midterm. And given that you're not expecting any significant market improvement this year, is it fair to think that the margins could be much higher than that 16.5% that you've indicated in the outer years?

Yes. As we have discussed in the investor update in October, we see this midterm guidance really as a midterm guidance and not as a long-term guidance. And, of course, as Mikko has indicated, the company aspires to get better every year. And, of course, we also would target a higher number. But we will update once we get there. I think until then, the 16.5% is a nice yardstick to use for the time being as a midterm guidance.

And I think, of course, there's still a cost inflation in the cost base every year. There's 4 -- depending on the market, 4% plus inflation on the SG&A, which is kind of coming to all the companies. So it's putting pressure. But, of course, we are looking at competitiveness long term. And I think we will detail that, then maybe later in the year, what is our long-term plans. But I think it's good to understand that there's also cost inflation, of course, in the cost base of the company, which is putting some pressure.

Sure. Mikko, congratulations. And lastly, if I can just squeeze one in, is there any update on the litigation? Any updates on the core? How should we think about that?

No. There is no update on the litigation process that is running as per the timeline. And we also have not come to a different assessment of the case, and it's still considered to be a contingent liability, and you find it disclosed in Note 33 of the annual report.

The next question from Manuel Lang, Vontobel.

I have a question regarding the midterm outlook as well, more on the growth side. There you see some growth returned in the last quarter to positive territory, but you still expect muted growth this year. So what's the current indication or, let's say, run rate, if you will, that you see on the end markets in the different substrates and regions?

And then maybe a second question, more specifically on India, you mentioned the region was impacted by weather effects last year, but what's your view on the utilization of the plant in India currently, and also, let's say, midterm?

Manuel, so on the midterm -- sorry, on the guidance that we see right now, 0% to 2%, indeed, I said that we saw a strong sequential improvement in the fourth quarter, gives us confidence to be in this guidance range in 2026. And if we should discuss this by region, I think we should expect that Europe continues to be on this normal level that you should expect from a mature market. Americas, ahead of this, of course. Asia, I think we have reached something like a bottom level. So let's see how that continues in China.

And then, India, Middle East, Africa, I would have said up until Friday, of course, they will return to growth and will be our strongest growth region. And the team in the region is very familiar with disruption and lumpy development. So we're very confident that they will handle the situation also under these circumstances in a decent way. So -- and then -- yes, I think that's the outlook on the growth side.

And on India, indeed, last year, we have discussed, like many companies, quite a lot, the longer monsoon season, which impacted revenue growth. I mean, I can't give you now the weather forecast for in 2 months or so. But at this moment, we see a slightly more positive development from India, but definitely behind the expectations that we have had a couple of years ago, but it will be definitely a positive contributor to growth.

Okay. Very clear. I have maybe one follow-up on the fourth quarter growth. How much do you think, if you can share that, was driven by the volume incentives for clients? And what's really, let's say, the underlying improvements in volume growth?

I would say that wasn't really driven by any incentives. And that also you see, I think if you look at the development by region. So really the strong 4%, that we had in Europe, was driven by lower raw milk prices and really more milk being packed in aseptic carton. And also, in Asia, the negative number. I mean, that is a function of the occurrence of Chinese New Year. So I think the rebates really didn't play a role too much. That said, of course, the fourth quarter remains our largest quarter, and probably also, will continue to remain our largest quarter in the future.

We have a follow-up question from Ioannis Masvoulas, Morgan Stanley.

Just looking at Slide 4, where you show the growth -- revenue growth in bag-in-box and spouted pouch at negative 3.4%. Could you give us an idea what the underlying revenue growth would be if we were to exclude the noncore parts of bag-in-box, especially wine, just to get a sense on the earnings power of what you consider or revenue growth power of what you consider as core?

Yes. Ioannis, I don't want to now kill you with all the details, but it's very clear that the core segments within that portfolio, of course, have performed much better than the minus 3.4% that you see for the overall. Still, we need to consider the market environment in food service, especially in the U.S., which has not yet been growing significantly again. But I think you see the clear spread in the growth rates between the 2 boxes, if you want. So the core business was slightly positive.

We have some online questions, so if I could address those, please. Your guidance, does it include the guidance for revenue 2026? Does it include any perimeter changes you anticipate as you look to exit noncore operations from Charlie at BNP Paribas?

Yes. So our guidance for '26 on the growth side is an organic growth guidance. Should we achieve any divestment in the year, of course, we will exclude that from the perimeter.

And an additional one for Charlie, what depreciation and amortization charge do you expect in 2026, including or excluding amortization of acquired intangibles?

Charlie, I would point you to the backup slide that we have provided. I hope that, that would be helpful for you also.

Then, Christian Arnold from ODDO. Could you quantify the negative effect of the later timing of Chinese New Year compared to the previous year? And does it mean that you will have a positive impact on Q1 2026 in the same magnitude?

Christian, thank you very much. So it's, of course, impossible to perfectly quantify it. But indeed, as we saw a weaker Q4 in Asia Pacific, we should expect a slightly better Q1 that basically builds on the positive seasonality here.

Overall, let me again come back to how do we say -- how do we expect the growth for '26 to play out between the different quarters, please take -- continue to bear in mind that we had a bit of a special seasonality in '25 with a much stronger first quarter and also stronger second quarter. So I would expect that the comps also play a role in the seasonality of '25, but there is this positive one probably from Chinese New Year running against it.

And also from Christian, could you tell us to what extent you are changing -- increasing your prices in 2026?

Yes. I said, we believe that price increases doesn't play a big role also on the back of not too much inflation on the raw material cost side for '26.

And then from Ashish, Citi, how do you think about restructuring charges in 2026?

Yes. So all the restructuring charges relating to the measures that we have announced at the investor update in October has been recognized in 2025, and we will just see the cash outflow relating to this still in the first half of the year, probably.

That's all. Very good.

Okay. Operator, do we have any more questions on the line?

At the moment, there are no more questions.

Wonderful. Then, thank you very much for your questions, everybody, and for your time this morning. So I hope you take away, SIG has a clear path forward for value creation underpinned by a resilient business model and strong customer relationships. We remain firmly focused on disciplined and consistent execution, and we appreciate your continued interest in the company and look forward to updating you on our progress over the coming months and quarters. Have a wonderful rest of the day.

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.

Good morning, ladies and gentlemen. I'm Ingrid McMahon, Director of Investor Relations, and welcome to SIG's investor update. We're delighted to see so many of you here in the audience today, and we have a very large audience participating online. So thank you all for joining.

Before we start with the presentation, please note our disclaimers and also in case of an emergency, the access are directly behind you and please switch off your mobile phones.

So coming to the agenda for today. We will start with an introduction from our Chair, Ola Rollén. He will summarize his insights and expectations since joining the company in April. Ann Erkens, our CFO and Interim CEO, will follow with strategy and execution. Christoph Wegener, our Chief Market Officer, will talk us through our exciting growth opportunities; and Gavin Steiner, our Chief Technology Officer, will detail how we are setting the standards for packaging with our aseptic technology. Ann Erkens will then follow with and talk us through our financial framework and guidance. Thereafter, we will have time for Q&A, followed by a live lunch.

And with that, I'm delighted to hand over to Ola.

Good morning, everyone. So my name is, you can say, Ola Rollen, or I'm Swedish. And I spent most of my career with a company called Hexagon, started as CEO in 2000, stepped down in 2022. I'm now the Chairman of the Board of that company. And I also run my own private equity company on the side. And then as of April of this year, I assumed the role as Chair of the SIG Group. And SIG is slightly different from what I do normally. You can see a picture here of me and my brother, I'm to the right, just pointing out. And -- but I find this company quite interesting.

First of all, think of the mission. You've been following this company much longer than I have. But what you can do with an aseptic technology is just amazing for people and consumers around the world. I have a passion for Swiss German engineering as well. Think of everything from watches to precision machinery. And I think I learned that in 2005 when we were the first company to launch a hostile takeover here in Switzerland on a company called Systems, which is very similar to what SIG stands for. The system I don't need to talk about the razor blade model. For me, it looks like software company with ARR and you build the base and then you harvest what you sell.

Management team and Board, great people and the Swiss business culture is really nice too. So I think it was an easy yes -- to say yes to join the Board of SIG.

Now you could ask yourselfs why am I standing here today? The challenge should not be in a capital markets event. And I've done my fair share. I've actually calculated I've done 100 interim reports. So I've had my fair share of you guys. But we Secret stepped down in August, and we've been running a search. We're now very close. Unfortunately, we can't give you the details, but I can talk about the profile.

So our next CEO will have CEO experience, run a company of sufficient scale, global experience, been exposed to engineering because the engineering capital goods is very different from like consumer goods. Execution experience, successful turnarounds and profitable expansion, that is what we're looking for. And obviously, capital markets experience as well. I think we're in a situation [indiscernible] But now I want to talk a bit about -- my experience over these past 6 months. So let's do the good and the bad and the ugly.

What's good about SIG? Why are you interested in this company? Well, what I found was we have to say in Sweden, which is, "Don't spit against the wind. You will only get wet." So if you can stick with the wind, i.e., follow the megatrends that we see in the economy, you're far better off than if you try to fight these megatrends. And if we look at SIG, what we actually can do with aseptic packaging on a growing consumer base, the need for sustainable packaging and the shift towards protein-rich foods, which is like a 2 billion consumer problem, growing demand for dairy. And specifically in the bag in the box segment, we see a demand for food service automation. And I've been studying this a lot about the demographic shift in the economies of Europe, America and Asia. And that's why Hexagon launched that robot that you saw and why people are talking about humanoids. Now we're already faced with that problem in food service.

So zooming in on the aseptic technology, the fact that you can store a product for up to 18 months without cooling is in itself a miracle. That means that you can reduce your energy consumption, you can reduce the CO2 footprint, and we're all going to have to do that eventually. And we know we talk about recycling and building a sustainable ecosystem where our economies are using the waste to create new products. And we believe that we can reduce the waste by up to 10% by using the aseptic technologies. So there are some really strong factors why this industry is moving towards aseptic.

And then if you look at SIG itself, there are only 2 companies on this planet, one Swedish-based that we won't mention. And then it's SIG that can do a carton with an aseptic barrier. And how we win in this market is, for me, it was brilliant when I looked at the technology. We have a sleeve fed system, which creates flexibility for the consumer instead of a roll fed system. The total cost of ownership doesn't go up in spite of having the sleeves. We're actually competitive on that as well.

Sustainability leadership. You will hear later today us talking about how we're now taking decisive steps to make all our products recyclable. And the aseptic innovation we've talked about, that is at our core. So really exciting growth opportunities as a newcomer, I believe we can continue to gain share in the carton business through differentiated offering. Because when you're 2 major players, it's very hard to fight on price.

We have a huge opportunity that we will discuss today, and you've probably heard about it, but now it's for real, and that is launching an aseptic spouted pouch. That opportunity could be almost as great as the carton business. Leading transformation towards automated recyclable aseptic food service systems in fast food chains. That is another great opportunity that we are going to explore. So this is what I've learned. There are really positives about the 3 substrate strategy, and we're going to discuss that a little further.

The other thing I've learned is we got great management talent. We have 150 years of experience between these 8 individuals in relevant industries. And that's a great starting point. But it wouldn't be a story without challenges, right? So the share price is down 50%, then everything can't be hunky dory, right?

So what went wrong? And what are we trying to address? Well, I think I can paint a picture in one slide. SIG has spent EUR 3.4 billion in CapEx investments, either buying companies or investing in equipment over the past 4 years. Now that has generated a free cash flow increase of EUR 57 million. It's really painful, but I know you know math. If you divide EUR 57 million by 3.4, you get 1.7% return. And this is at the core of the problem, and this is what we need to resolve. So if we just look at the acquisitions, bag in the box, we see gaps in the product offering. We see gaps in our go-to-market capabilities. We have invested, but we need to focus much more on automating the workflow to bring down the cost of goods sold and improve the return on these investments. So it's really an operational reset for us to focus on profitable segments and then methodically working through the workflow and address costs that we can take out and make this a very competitive business.

When it comes to spouted pouch, you could say non-aseptic spouted pouch doesn't make sense for a company like SIG. It lacks the characteristics that we're looking for, system sales, aseptic, sticky product. But with the help of SIG's R&D and 2 years of relentless innovation into the spouted pouch segment, we now have a product that is recyclable, it's aseptic and it's a systems product. So now suddenly, aseptic spouted pouch is a core business.

When it comes to chilled carton, that does not fit the agenda for a company like SIG either. We are not differentiated enough. We can't command a high enough price on the chilled carton to make the returns we are looking for. And on top of that in '25, we've seen macro uncertainty. All industries are now faced with macro uncertainty. And you only need to go to the German automotive industry, and you know what we're talking about. It's political, it's geopolitical, it's new competition from Asia that everyone needs to get acquainted with. And that leads to cautious consumer spending, which in turn has led to muted growth across the packaging industry. And we've especially seen that in the second half.

So if I am to summarize my first 6 months with this company, I would summarize it like this: Great products, great people, great technology. The foundation is here to create a super successful company. Yes, we have a past, EUR 3.4 billion in investments on top of that EUR 600 million in dividends. So think EUR 4 billion with EUR 57 million return. That's not good enough in my books. Weak end market demand. But you know what, life is like this. And this, if you change it around and you say, this is a great opportunity for a reset, and that's exactly what you're going to do. And if you reset the company near the trough of the business cycle, you're going to make a lot of money when demand comes back.

So there is a strong future for SIG. And what are we going to focus on? Well, we will use the core advantages that we see from the carton business. And just to repeat those, system solutions, you need a sticky business. You can't just sell machines or packaging. The system is what makes the nice returns. We already have a global sales platform. We're present everywhere where it matters. We have a broad service offering. It's not just selling sleeves. You need to have the service organization to back up an installation. We do have the aseptic technology. We are literally an innovation engine, and we will not stop innovate, as you will hear from Gavin later. And the sustainability expertise in the packaging industry is second to none. Now if you take all this, you have a really good foundation for continuous growth in aseptic carton. But what we can do is we can take this transfer it into aseptic spouted pouch and aseptic recyclable bag in the box products for food service. So it's a very, very dedicated effort in bag in the box.

So when it comes to execution because you can stand here and show nice slides, but now the proof is in the pudding, as the English say. And we're going to move to EBIT because we think this company hasn't focused enough on the cost of capital. So when you start measuring internally and externally on EBIT, you put a price on CapEx, and that is absolutely important. Capital allocation discipline will be an outcome from that. And we will focus on returns. There are no M&A ideas on the horizon. This is very hard for me to say with my history, but it's absolutely true. This company, it's not on top of our agenda to do any M&A. Improved cash conversion and reinstate the dividend. That is our promise, and that is what we're going to focus on.

So if I am to summarizing my first 6 months with this company, I would say we have a fantastic opportunity to drive value. And SIG will become a leader in aseptic sustainable packaging systems. We try to capture everything we do in one line. And that will drive world-class products and margins. Proprietary technology will defend us and create high barriers to entry. We can offer the lowest total cost of ownership for our customers in spite of might -- we might not be -- the upfront price might not be the cheapest. But over time, we can prove that if you work with us and you work long term, you're going to make money as a customer, too. And at the end of the day, all of this will generate attractive growth and returns for our shareholders, and that is the ultimate target with a listed company.

So with that, I'm going to leave over to Ann, and she will take us through the strategy execution. Thank you.

I'll spend a couple of minutes on strategy execution, especially for the next 18 to 24 months. Just as a reminder, on our strong global platform that we operate, that positions us super well for long-term value creation. Ola mentioned already, we are facing attractive end market trends. We have a unique solution system that we operate, and we differentiate with aseptic technology. And all of this positions us very well to operate also very profitably in the future.

I would like to spend a couple of minutes on how we operate our system solution because it's important that we all understand this and are on the same page here. First, let's look at the separation of revenues into the different streams. For 2024, we had 7% of our revenues with equipment; 87% with packaging material. That's, of course, the core of everything that we are doing; and 6% with services. Services is also an attractive business for us, and we look to build out this even further. You can imagine that this is also a margin-accretive opportunity.

When we think about our system, we differentiate by using a sleeve fed system compared to roll fed with competition. And why is this actually great? And why does this help to create also a barrier to entry. With the sleeve fed approach, we do 4 production steps in-house for our customers. So we do that at scale for all customers, means we do this very, very well. And we have optimized this over several decades. There's lots of IP involved and lots of trade secrets. So -- and that's something that you can't copy so easily even if you tried. And if you tried it and wanted to do it, I mean, not only that it will take you lots of time to catch up with the excellence that we have in-house when we run those processes, you will also need lots of CapEx, which creates an additional entry barrier.

So I would say the sleeve fed system really differentiates us from competition. And it's very flexible also. As long as the footprint of the package is the same, you can run with a very short change over time. exactly on the same machine. And you know in this industry, it's all about the output that you generate in a given time frame. So the more you get out, the less time you need to spend on changeover, the better for your total cost of ownership.

And with the inflation environment that we are currently in and probably also continue to be in for the next coming years, when customers want to respond to this with shrinkflation, they are super well equipped with our flexible systems.

And talking about flexibility, an additional important angle, of course, is on our systems without any retrofit, you can operate the classical packaging sleeve, but you can also operate the up and coming. And we are very proud about the growth rates also in this segment, the non-allo sleeves, which Gavin will also talk about later a bit. So no additional retrofit, you can run this over the installed base, whatever any legislation will put you up for.

And it's also important to take note that the net CapEx that we have to invest into filler placements. You know that we always co-invest with customers has been decreased quite a bit over the last couple of years. It was a little more than 1% of revenue last year. And that is because we are more successful in negotiating upfront cash contributions also from our customers. And you remember probably we discussed last year also that we have put this in place even more stringently so that we get this cash also even earlier.

Now this all helps to entertain long-term customer partnerships, and we're very proud about really those long-term partnerships that we have with customers. And that goes across the portfolio. Our top 10 customers are with us for more than 30 years, and that is across substrates, both on the aseptic carton, but also in bag-in-box and spouted pouch. And you see that we partner really with all the relevant players, be them global customers or regional champions or also local champions. You know that we lock in our relationship by placing the system solutions for typically 6 to 7 years on the aseptic carton side and more than 90% of the customers also renew those contracts into a second cycle.

On the other substrates, we are still developing the systems approach, but we see that this is really getting traction. And you can calculate that on bag-in-box spouted pouch, where we have a system solution in place, the current contract time line is about 3 to 4 years already. All of this delivers us more than 90% customer retention, so we hardly ever lose a customer.

And there's numerous examples of how we support our customers, and I don't want to run you through now a lot of them, but at least 2 small examples when you think about, for example, Almarai, which is a leading dairy player in the EMEA region. They have partnered with us now for their asset renewal cycle over the next 5 years, and they were the first to place our new NEO filler, which gives you 15,000 liters output in an hour. And that is 25% more than the old machines.

Also in the bag-in-box side, we partner with customers and drive innovation with Coca-Cola. We have been driving, especially in America South, but also in Asia, mono material or monolayer material, which is good for recycling. And with this, we also support Coke in their initiative on the sustainability side, which is called a world without waste.

Now Ola has outlined a lot of challenges that we have ahead of us, but we have also done a couple of things pretty well in the last couple of years, which has helped us building a strong foundation. We have continuously grown our market share to around 25% now. And with this, we are the clear #2 globally. And we are very confident that we can also continue this journey over the next couple of years and continue to grow our market share every year.

We have expanded over categories and channels. So you find us now with a global #1 position also in bag-in-box and foodservice. And in spouted pouch, we hold the #2 position. Over the years, we have also improved our regional footprint from being very Europe and Asia centric to now being well distributed across the globe with around 30% in Europe, in Asia and in the Americas and a little more than 10% in EMEA.

So our multi-substrate strategy positions us for further growth. So we're not only limited to aseptic carton, but we have created now avenues where we can serve also more consumer occasions and more categories. and also different channels. And those channels also will give us access to structurally higher growth markets because any outlook for foodservice will position us at a higher growth rate than the classical retail business where you have the carton business running.

Now I wanted to talk also about how we want to drive value creation going forward. Three big pillars: Number one, portfolio optimization, performance improvement and rigorous capital discipline. When we think about portfolio optimization, this is all about focusing our portfolios and investments on the best opportunities and which we typically find in our aseptic applications. Aseptic is complicated, as Gavin will explain also later one more time. And of course, any problem, any complicated problem that you solve, you can command better margins than for easy things.

We will also continue to optimize our noncore segments for value, which doesn't mean that we don't like them or that we're not going to continue them. But naturally, the opportunities are more prominent in the aseptic space. So over time, the noncore parts will lose share.

On the performance improvement side, we're going to address a comprehensive cost program, and I will go through the detailed pillars on the next slide, but this is all about adjusting our structures to the current market environment and optimizing how we run operations and supply chain.

And last but not least, we have defined a very clear and also very disciplined framework for capital allocation and adjusted a couple of internal processes also to make sure that we really invest into the earnings accretive opportunities that we have on the table.

And last but not least, we have already started to change KPIs over the last 12 months, but we're going to take an additional step now moving on the bottom line from EBITDA to EBIT and also focusing more on return KPIs.

Now let's look at some details for each of them. Here's how we're going to optimize the portfolio. No surprise, you will find us with the strongest part in our aseptic core, which we expect in the midterm to be 90% of our portfolio. And that includes, of course, the aseptic carton business, but also aseptic spouted pouch and bag-in-box. Nevertheless, we will also continue to keep running non-aseptic businesses as core because part of the business is synergistic. And that can be basically twofold. Number one, those categories can be entry categories into customers that can later then open up more aseptic business. Or number two, you would run it over the same assets, and we want to sweat our assets, of course, in the best possible way. And that is why it makes sense to also keep a couple of non-aseptic businesses. We will also have still a very small share of other solutions in our portfolio, and that share will naturally decrease over time simply because the growth rates will be much slower in those segments.

And then last but not least, we're looking at finding a strategic partner for the chilled carton business because as Ola has described before, there is not too much synergies with the business, and we can't really capture the margins that we seek for this business.

To give you a feel for how big this business is, it's around EUR 120 million to EUR 130 million in revenues. And we basically operate in China, Taiwan and in Korea and also in those 3 countries have own factories to produce the respective material. And it's about 300 people that are employed in that business.

Now performance improvement program. We have launched the performance improvement program already a couple of weeks ago. And that will include or is including SG&A and R&D cost reduction on the back of really driving more automation in what we do and more standardization into processes. And I mean, no surprise, and we're not the only company, but in light of the current market environment, of course, we need to adjust our structures and also work on making our R&D work even more effective.

To give you a flavor for what we're talking about, so we're taking out about 5% of our employees in that population, and that translates into a low 3-digit number of colleagues or positions that we will make redundant. On the procurement optimization side, we have started already this year by driving a new governance and a new operating model for procurement on a global basis. And we are also specifically addressing all our indirect spend, which is a significant basket also of cost.

We're using category buyers now to make sure that we really do the best deals in a structured way across the world. And also here to give you a feeling of the magnitude, already this year, we have addressed freight cost that way, and we have optimized our freight costs quite a bit, which also has contributed, by the way, to the margin stability that we still see despite the lower volumes that we have had this year. And we believe, on average, we will take out in that basket also 3% to 6%. And we have used things like e-tenders and auctions, new tenders where we were very successful and just more digital tools also to compare cost better.

And last but not least, on the manufacturing side. So we have defined now clear road maps for every plant with a 3-year rolling horizon for conversion cost optimization to basically balance out inflation. And as Ola has mentioned it before, especially on the bag-in-box side, there is room for further operational improvement also through automation.

We are also optimizing our supply footprint further. A couple of weeks ago, we have announced the closure of a Dutch site in the bag-in-box space, which will take out cost also for next year in the mid-single-digit million euro amount, and we continue to look at further opportunities also.

All of this together will give us 150 basis points margin uplift. So our EBITDA margin without nonrecurring items will be above 24%, so 24% to 24.5% for this year. And we target to achieve this 150 basis points net uplift after inflation so that we reach more than 25.5% adjusted EBITDA in the midterm.

But now let me translate this from EBITDA also into EBIT. Our depreciation and amortization is around 9% points at the moment. So the starting point would be above 15%. And then if you add back the EUR 150 million, you come to 16.5%. Why do we do this? I think very clear, we need to increase the visibility of capital allocation decisions externally, but also internally to our teams. And we have done so also in the past. I mean, every project had postmortem calculations done in a very disciplined way. And we can also say, I believe, with pride, we always hit time lines when we did CapEx and we hit the budgets. But of course, that's always only a snapshot in a given moment. And if then utilization doesn't land where it should or is temporarily down, that's not so much in sight of the teams anymore, and that needs to clearly change also to generate learnings for future investments.

I believe using EBIT has also the additional advantage that it includes both the deferred revenue portion of our lease accounting, but also the corresponding depreciation of the filling lines so that basically, that is all equaled out in the bottom line. We have introduced this already internally in January and our STIs for 2025 are already sitting on EBIT because we really believe this will make a difference.

Now in summary, we have a strong global platform, and we have defined a very clear path forward. And now I would like to invite Christoph to the stage to give us more detail on how we're going to drive growth and how the market opportunities look like.

The exciting market opportunities for SIG that Ola already mentioned. I will first give you an overview of the broader packaging market and then zoom into our 3 strategic substrates, aseptic carton aseptic spouted pouch and bag-in-abox. And then I will also talk and more importantly, about our plan to win in these respective segments.

So let's talk about the wider packaging market. I mean, undoubtedly, the packaging market has faced significant headwinds in the recent past. Raw material cost inflation, food price inflation, macroeconomic uncertainty that certainly affects consumer confidence and holds them back from splurging and it holds back our customers from investing. But nevertheless, even if the waters are choppy, one should not forget the strong undercurrent of the packaging market, population growth, GDP growth. And with that, ultimately, a higher demand for protein, and that protein needs to be packed, and that's where packaging comes in.

Now SIG and with our core portfolio, we are playing in geographies like emerging markets, in technologies like aseptic and channels like food service that are forecasted to outgrow the wider market. And that will be an important driver for us to show above-market growth. I will take you through each one of these substrates in a minute. But before we get there, let me also share with you how we deploy our multi-substrate portfolio at our customers and how we create value for our customers and for us with it.

Now if we shift perspective and look at the food and beverage market from our customers' perspective, they have one objective, and that is to sell as much product as possible. And they think in 2 dimensions. Number one, channel coverage. So the more sales channels I can sell my product through, the more product I can sell. And number two is channel penetration. I will talk -- I will first talk about channel coverage. Essentially, if you think about channels, I mean, they're all targeting 3 basic consumption occasions. Number one, in-home; number two, on the go; and the third one is out-of-home dining. And you have 40 channels that serve these different occasions. Now we are the only player globally that has aseptic packaging systems that can address all of these 40 channels, and we can do that on a global scale. And that's a significant value that we can bring to our customers to unlock their growth strategies. And to give it an example, so Troll is a dairy customer, typical SIG customer, 2/3 of our revenue is in dairy. It's a Brazilian dairy. And for your perspective, Brazil is the second largest UHT market in the world after China. So a very important market for us. Troll is the fourth biggest player in that market, so what we call a regional champion.

Now up and until 2024, Troll was only playing in the in-home occasion served through retail and predominantly focusing on white milk. So if you think of this matrix of channels and categories, they really only played in 25% of that chessboard. After a couple of strategy workshops with them, and that's really the customer intimacy that we have with our customers, we define with them their strategies. They decided to venture into food service, a new and growing category in Brazil. They installed an aseptic bag-in-the-box filler from SIG, packing ice cream mix, a growing category and serving that to McDonald's. So they're widening their channel coverage.

They also decided to venture into new categories, cheese spread, yogurt spreads. Those are consumed at home. So they're increasing their channel penetration, and they're using our spouted pouch solution for that. And with these two investments, they are now playing on 50% of that chesspot, but that is only half of it. So there's a lot more to gain. And there are a lot more customers like Troll. But that gives you a bit of an example of how we deploy our substrate portfolio and how it really at our customer base unlocks value for them and for us.

But let's take a look -- closer look at aseptic carton, 75% of our revenue as shared.

Now also aseptic carton had its fair share of headwinds. So we are coming out of a period of growth, decline, growth decline driven by what I mentioned before, cost inflation. But we see a more normalizing inflationary environment, and we see that demand is coming back in the midterm. So we do see it returning back to its structural growth that we've seen before, which is 3%. But we will outgrow that market, and we are confident to do so. And why is that?

Because we are deploying a very exciting innovation pipeline, and that will really strengthen our positioning as the total cost of ownership champion, the sustainability leader and the aseptic innovator. But let me take you through that step by step. So we are now launching what we call the Neo series of equipment. It's a Neo series of filling equipment that has the highest output per square meter in the industry. We've deployed our first machine this year at Almarai, 25% higher output. And why is it so important, output per square meter. Because we can't build huge machinery and put that into shiny, big new plants. You can do that, but you're only serving a part of the market. We want to replace equipment, competitor equipment. And a lot of that is in brownfield plants. And when you replace equipment, you want to drive up efficiency, you want to drive up output. And that is where our Neo series comes in, 25% higher output same footprint.

We have started to do that with Almarai on our slim format, which is the biggest selling format in 1 liter. We're rolling that now out next year to Brazil to our square format, and we don't stop there. The next step is to roll it out to Portion Pack, which is most of our Asian market. So we're really bringing a solution to the market that will give a boost to total cost of ownership and help us to win more deals, gain share.

Second, sustainability leadership. We've been for quite a while, the leader in alu-free carton. Why is it important to remove aluminum. That is 25% of the carton CO2 footprint. So it really offers a more sustainable alternative.

Now what held us back is the barrier. So the solution that we had didn't have exactly the same light oxygen and water vapor loss barrier as alu has. Now thanks to our R&D, we've cracked that. We now have a full barrier solution. And that means we can unlock new categories like juices, which are oxygen sensitive. But even more importantly, we can go into new geographic regions of the world, hot climates where our previous barrier was not good enough. We started to launch it in China. We've brought it to South Korea this year. It's the only aseptic carton in the market that is labeled as recycling easy, thanks to our -- to the fact that we remove aluminum. We brought it to Southern Europe, and we are opening up the juice category. So with that innovation, we can really increase the momentum of alu-free deployment.

And last but not least, aseptic innovation. So we have a set of unique shapes of unique carton shapes that are IP protected and that really help our customers to stand out on the shelf. One example is our DomeMini, the carton bottle. I mean, the bottle is a perfect shape, extremely convenient. That's why it's been around for centuries. We've brought it to the carton. That plays really on the premium end. But we also have formats like our xSlim, where you can run 9 different volume sizes from 90 milliliter up to 200 on the same machine. And that really caters to affordability. It caters to shrink inflation. It really helps customers to weather that storm to offer competitive price points on the shelf and to grow their market share.

And in reality, 1/3 or every third machine in the last years has been one of those innovative shapes, which you can only buy from SIG, and that's really a testimony to the strength of our packaging portfolio.

Let's go to aseptic powder pouch. So that's a technology and a market opportunity that I'm personally very excited about, but more importantly, our customers are very excited about. Now to explain a little bit the market opportunity, I'm going to get a little bit more technical. You don't need a food science degree for that. I also don't have one, so I'm going to keep it quite simple. But basically, food and beverage categories, you can segment in 2 key segments, low acid and high acid. High acid means that products are very robust. They have preservatives by nature, which are the assets.

Think about lemon juice. Lemon juice doesn't go bad as quickly as milk.

Milk is low acid. No preservatives, perfect environment for microorganisms to grow. Now treating a high acid product and making it shelf stable is, therefore, simpler. Technologies like hot fill where you bring the temperature of the product up to 95 degrees centigrade and you fill the product and the product actually sterilizes the pack, very simple. It's very different for low acid. And the fact that 90% in the spouted pouch market is high acid product, it's not because of the consumer preference. It's not because 90% of all consumers prefer Apple pure, which is high acid over yogurts or banana pure, which is low acid. There simply is no technology yet available at industrial scale that can bring aseptic to the spouted pouch. And that's really the code that we cracked. So treating it at high temperatures only for seconds and then pre-sterilizing the pack, just like we do it with carton and thus extending the shelf life also for low acid products.

And this is a significant market opportunity. So we can, for our customers, really open up this space of highly nutritious, dairy-based, vitamin-rich products. And we're going to do that in 2 steps -- 3 steps, apologies. Number one was really the -- what I would call the technical proof of concept. We've done that in the last 2 years. We placed our first-generation aseptic spouted pouch filler. Still a very costly technology, and therefore, we focused on more the nutraceutical space, but it established that the technology works and that there's a market for it. The second step, which we have started just this year, we've brought our second generation to the market. That uses in-line sterilization, which brings down the cost of the system significantly, but it's still low speed.

The third step really is to bring a high-speed solution to market, which we will do post '27. And with that, we can really unlock the mass market. We can deliver aseptic technology at a competitive cost and really unlock that low asset space of products.

Last but not least, bag-in-the-box. And undoubtedly, also this segment of our market has had its fair share of headwinds. But it's very important if we want to also understand the future trajectory and the growth potential that we unpack that box. And I'm going to start at the bottom of the list. So basically, bag-in-the-box plays in 3 market segments. It starts with industrial.

Industrial are very large bags, 220-liter, 1,000 liter, and they're basically used to fill agricultural produce. Think about tomato. And they are sold to the agri business. So very different from where SIG traditionally plays. Now this segment, we see growing with a wider packaging market, but definitely not outgrowing it.

Then we go to retail. Retail bag-in-a-box is mostly used for wine. Now wine has 2 problems. Number one, people do consume less wine. And number two, it has a demographic problem. The younger generations are even consuming less. And if wine is bought, it's rather bought on the premium end, which typically is filled in bottles. So this segment, we see stagnating, maybe even declining. But where we are really excited, and that's where we will focus our investments and our efforts on is food service.

Now food service is -- growth is driven by 3 factors: Number one, QSR growth.

And if you follow McDonald's a bit 4 weeks back, they announced that they will actually increase their global store count from 40,000 to 50,000. So they're adding 25% more stores. All of those serve Coke. All of those have bag in the box. So there is an organic growth in that market. But there are also additional growth accelerators. So we see dairy and also new categories like lemonates, ready-to-drink coffees moving into dispensers for speed of service. And also they require aseptic. And that really is our strong point. And that's where we believe we can bring an edge to the market and unlock a significant share gain opportunity. And I'm going to walk you through how we want to do that.

So basically, we have a great filling platform, the -- SureFill42. It's in the industry, the fastest. It brings the strongest aseptic performance. But we had a couple of problems to roll it out globally. It was mostly sold in the U.S. Number one, cost, we brought that down, thanks to our assembly capabilities and reengineering capabilities in China. Number two, we had to do a technology upgrade to get CE certification so we can also sell it in Europe. And number three, our customers, especially new customers, they simply expect a service offering around it. It's a different thing if you already have 10 bag-in-the-box fillers in the U.S. and you're buying the 11th one. Then it's the first bag-in-the-box filler like a Troll. They expect the same technical service offering that we also have in carton. And we've built that technical service offering around that. So we can really -- and we have started to really roll out that platform as a system, so packaging equipment and technical service across the world. And you see here a couple of logos. I mean we can now say we actually have on each continent in Asia, in the Middle East, Africa, in Europe, aseptic shurefill platforms up and running.

But it's not just the TCO and the aseptic innovation that we bring. We're also the leader in the transition of bag-in-the-box to mono materials, so bags that are designed for recycling. And the sustainability discussion in the last years has been a bit more colorful, let's say. But I can tell you, when we talk to our customers, they don't slow down. And together with Coke, who was the largest player in bag-in-the-box, we are spearheading that transition to sustainable structures, which are products that are IP protected and which we are rolling out with Coke now in Asia as well as in Europe. So in a way, we are really recreating the winning formula that has been the source of our success in aseptic carton, systems that are leading in TCO, leading in sustainability and in aseptic performance.

So let me summarize. When it comes to the market, the fundamentals are still intact. Population will continue to grow, GDP will continue to grow. Demand for protein will continue to grow. And we have with aseptic a solution that can address that. In aseptic carton, we are very, very convinced to continue gaining market share based on the innovation pipeline that we are deploying, the new platform, fastest machines in the market, the Terra program, alu-free full barrier only solution in the market. With spouted pouch, with aseptic spouted pouch, we can create an entirely new market, a blue ocean for SIG, where we are the only player with an industrialized solution. And in bag-in-a-box, we will focus on where growth really is, and that is in food service, and we will focus on applications and categories like dairy where aseptic really matters and where we can deliver a competitive edge.

Now I will hand over to my colleague, Gavin. He will share more about the value of aseptic and why it really matters as well as the exciting technologies that will be unlocking these market opportunities.

Science behind the nuts and bolts and the material. It's a pleasure to be here with you this morning, and I'm Gavin Steiner, heading up as the CTO for SIG. So first of all, if you allow me, I'd like to start with a quiz because my colleagues have already shared with you a lot of the technology and the science. You don't need to answer the quiz, but the thought is what does aseptic filling technology bring to our customer, our consumer and the environment? What does aseptic filling technologies bring?

You've heard a lot of it today. So just to consider that, I'll highlight 4 areas for you. And those 4 areas are extremely important. The first one is around quality. Aseptic filling technology is a gentle technology. And that gentle technology allows us to maintain up to 5x the nutritional value if you're comparing to other conventional technologies, 5x the nutritional value. For example, it is able to protect or less impact on vitamin A and vitamin C, which are heat sensitive. Those can be retained at 90% in the pack.

Color, for example, if you ever leave a banana out after you've cut it open, it probably goes brown within a few hours. As Ola and Christophe mentioned, we get a shelf life of 12 to 18 months, keeping that wonderful color yellow alive. So it has a very important aspect around the maintenance of fresh-like appearance. That's a differentiator for aseptic filling technology. Sustainability, as you get a 12- to 18-month shelf life, you also get a value chain -- significant value chain improvement, which is around the logistics going from refrigeration to ambient. You can just do the math there, we're talking about 60% CO2 reduction.

Looking at the shelf life itself, another wonderful value of it is the preservation of food, less food waste. Now looking at our technology in SIG, we spoke many times this morning about the flexibility, the total cost of ownership, the sleeve-fed system. Those are all very unique items that I'm quite proud of in the R&D area of the nuts and bolts as how that all comes together. And that obviously offers us a point of differentiation. But now let me build this into so what? How does R&D look when you look at this ecosystem of bag-in--the-box, spouted pouch and beverage cartons. I've been asked many times what are the synergies that we have between them.

Let me bring this to life for you. We have one R&D in excess of 450 scientists, both engineers and polymer scientists, so the nuts and bolts again and material. Bringing to life this carton, aseptic, spouted pouch and bag-in-the-box environment as one group where we share the technologies of sterile, of processing of efficiencies and of filling and of sealing. There's obviously a synergy there. Now looking at that synergy, the flexible sleeve system and aseptic beverage cartons, as we spoke about many times, if you look at that, there we have the unique opportunity of interchanging on the go within a few minutes, different format sizes. That is unique, and that is one of our differentiators.

Now the science of that is applicable to the spouted pouch and a little bit less to the beverage -- to the bag-in-box, okay? But looking at that, we have in all of these seating technologies. And there, we are innovating actively because the seating technology actually is a breakthrough because we are able to put new materials, sustainable materials into the current machine base, new sustainable materials into the current machine base with minimal investment, programming changes. I think that is really incredible.

And looking at that cutting edge allows us to deploy what both Ola, Ann and Chris have mentioned around this new barrier technology, alu-free packaging. It goes on to the current machine base. Competition are not so lucky. So ours works with our sealing technology development. So we have a full barrier property. I'm going to touch on the full barrier in a second again.

Now in this ecosystem, we also have a connectivity opportunity, digitalization. Beverage carton, as you can see there, already, 60% of the machines are connected. The connection on spouted pouch as it's in its infancy and in bag-in-box is an obvious one for us. And that science, the OT, the IT infrastructure is something which we will be leveraging going forward.

Now all of this is underpinned by a strong IP.

There's 270-plus families in the SIG portfolio. That is a fair number of intellectual properties that we have on the cards. However, ladies and gentlemen, IP is only one part. That's the public part. The more important part is the trade secrets. For a system, how do we do all of the different steps? And for me, that is extremely valuable. So we have both. It's a good portfolio, but at the same time, we also have a strength of intellectual property that is not declared, so the trade secrets.

Taking this into a little bit of more practical solution. Christoph was talking about the spouted pouch. Let me just bring this to life quickly. This is actually on a Generation 2 machine. This is a banana pure, but if you were to look at it, it is yellow. Generation 1 started out in a very simple way, leveraging the knowledge of the bag-in-box business, off-line sterilization. It was a quick introduction to test the theory. So you take the material, you sterilize it, you transport it to the factory, you fill it, leveraging the bag-in-box knowledge into the first part. The second step, Generation 2, which we just -- this is one of them, that was taking the aseptic in-line sterilization technology that we have and bringing that into the Generation 2. Logistics improvement, transport improvement, efficiency improvement, everything into the Generation 2 machine, which you see in the middle there.

Generation 3 coming in 2027 is where we leverage again the aseptic technology of multilane filling capped application and advanced sterilization technology at higher speed. So this is just showing you the question, are there synergies? Do we leverage in R&D? Absolutely. And the team have done a great job on that.

Okay. Christoph mentioned this, so I can go quite quickly. But I like the picture. If you look, this is -- we're talking about the material back to the beverage carton, this one here, taking the aluminum out. Again, aluminum is an amazing barrier. If you hold up a piece of aluminum foil, no light goes through it, no moisture and no oxygen. Take it out and you have a permeable piece of paper, okay? It doesn't really work. Christoph said we have a breakthrough. We have the equivalent barrier properties now in this pack that is equal to aluminum without the aluminum. So you get all the benefits of it. That, ladies and gentlemen, was step 1 in the R&D.

I spoke about this 2 years ago in terms of our step 2, which I'm going to talk about now. But look at the difference there. We get a 60% lower CO2 footprint of this generation, I call it Generation 1, so the alu-3.

Looking at the deployment Christophe already mentioned, we've gone live. So this is not just theory. This is actually working. But what I want to share with you -- you can read this slide. This is not the alu-free version. This one in my hands, ladies and gentlemen, is the 85% fiber content.

So alu-free was a precursor. Now 85% fiber content. Why? Why would you ask me, would we take the paper content by reducing the polymers up? Because the model of SIG is to fit into the current systems, whether it's our machines. I also extend this into the recycling industry. If we can fit into what exists today, we don't need to educate or train or change behaviors. That is the easiest way. If we had to create a new behavior on recycling, I think you all know what that means at home. You've got to try and tell your better half where to put a new piece of packaging, it doesn't work so well. Put it into the paper recycling is what the journey is about.

85% was step 1 -- sorry, it was step 2.

Step 1 was alu-free. Here is an 85%, and there are 2 comments on the slide there. I'll ask you to read them. So from EcoPaper, we've done an industrial trial, super impressive. This is recyclable in their facilities, and we're working with [ Freezenampina ]. We also had an amazing feedback to us.

Okay. So that was step 2. And then as we promised, we needed that in the science world to unlock Step 3, 90%. Now 90% includes the fitment. That has to be total fiber content of 90% in our pack. And that unlocks -- the dream is that we get into the paper stream. So you can see the full value chain as we move, step 1 Alu-free, step 2, 85%. We needed the science. We've got it.

Now step 3 will be to finalize that, and we said that was by 2030. I hope you followed that journey, okay? So that was a quick one of where we're going now. But you might say, so what about the bag-in-box and spouted pouch? Here, the mono polyolefin journey has also -- it's been ongoing. We're accelerating not only the pouch materials are all recyclable.

Mono-materials is the drive, and we have a whole lot of options available already on mono-materials. Also for the aseptic filling. This includes the cap. The cap and the pack are all of the same material. And therefore, that certification to fit into the plastic recycling facilities where they exist. We can debate that one, at least we've opened up the opportunity that this is recyclable and the materials are recyclable.

So ladies and gentlemen, we know that we have the industrial or the industry pressure to move. We have the consumers' requirement to move this. We have the right pipeline within the R&D coming forward. So future-proofing what we need for the business. Not all the science is there. I'm not going to stand up here and say I have everything. The 90% paper content, there's still some challenges, and that's what we paid for and why we get up in the morning. But that journey is really -- it's going well.

Looking at the environment, the regulations that are coming at us, we are preparing and we have prepared the ground for the future. So based on that, I'm going to now hand back over to Anna, and she will see and present the implications of all of these R&D as well as the financial points. So thank you very much.

Let me summarize the financial framework and the guidance for the next coming years. So -- but before we get there, we have now defined a very clear and disciplined capital allocation framework. And really, we're going to continue to invest into the business organically with CapEx, but focusing on earnings accretive growth. We are also very committed to a strong balance sheet and to a shareholder-friendly capital policy with prioritizing in the near term deleveraging.

Now what does this mean in numbers? On the revenue growth side, and this is organic revenue growth with what we have. For 2026, we expect a growth range of flat to 2%, reflecting the continuously still subdued markets, but assuming and being very confident about SIG's capability to outperform the market.

In the medium term, we look at getting back to a 3% to 5% growth corridor with markets normalizing in the medium term as well. Looking at the margin development for the adjusted EBIT margin, we expect for next year to be above 2025 without the nonrecurring items, of course, and in the medium term to achieve more than 16.5% EBIT margin, which, just as a reminder, translates into more than 25.5% EBITDA.

On CapEx -- net CapEx, including lease payments, we look at the corridor between 6% to 8% going forward. And all of the above should result or is expected to result into a leverage path, which should get us below 2.5x by the end of 2027. And we target to come to around 2 beyond.

On the dividend side, we are pausing the dividend for 1 -- or we're proposing to pause the dividend for 1 year.

So '26 payout for 2025. And after that, we see us coming back into a corridor of 30% to 50% payout ratio of adjusted net income of the year before, committed to returning cash to shareholders also.

I would also like to remind us that, of course, the interest of management, Board and shareholders are well aligned with the incentive systems that we have in place. And you see the graph. So the Board receives 40% of their compensation and equity. And for management, the variable portion is between 55% and 70% and of course, consists of a short-term incentive and a long-term incentive, very much focused on total shareholder return development and on bottom line and growth.

I would also like to highlight because we've had the one or the other time, the question that what you find in the compensation report shown under LTI is, of course, the amount at target, so at 100%. You need to read the text to see that already for the last cycle ending in '24, the achievement was 46% on that front.

And you can imagine that for the next 2 cycles, that will be a very low number probably. So in summary, we are well set up with market trends that should support us also going forward. There's multiple growth drivers across different markets, across different substrates and categories. The business does have a very attractive margin profile and has further room to grow the margins, and we have a clear plan in place how to do that, and we're going to drive robust returns with the business.

And with this, we come to the end of the presentation, and I would invite all my colleagues here back to the stage for Q&A. And yes, we would like to use, of course, the time most efficiently, but also we will be around at selected conferences in the next couple of weeks, and we look very much forward to continuing also this discussion on a one-on-one basis with everyone. Please, guys come back. Ingo, do you take the questions with the mic? Wonderful.

It's Jan from UBS. I would start with 2 questions and then go back in the queue. The first one would be, please, the cash conversion target. You said you want to improve cash conversion. This is part of the plan for the next 2 to 3 years. With all the securitization on net working capital, with the accrued liabilities, is anything changing?

And is there a path or can you give us more details if there's a path to a EUR 250 million plus equity free cash flow over the next 2 to 3 years? Because the leverage targets would imply the equity cash is more staying around EUR 200 million for the next 2 to 3 years. This would be the first question.

That's for you.

Yes. Thank you. So I'm not sure that I come to exactly the same math than you. So I wouldn't see that this means you stay at a free cash flow level of around EUR 200 million, but of course, bring it significantly above the EUR 200 million and with this also improve the conversion rate -- cash conversion, sorry. So yes. So EUR 200 million sounds a bit too low for me over the next years.

Just for '26, can you give us -- you gave a guidance of top line on margins? What does it mean roughly for 2026 on the equity free cash flow before the one-off cash costs?

Yes. So if we -- sorry, look again here at the specific guidance that we tried to already put in place now for 2026. And of course, we will detail it further, as always, when we publish our full year earnings early March. But -- so we see in the market environment, a growth that will be positive. But in that corridor 0% to 2%, we will have a margin that will be above 2025 levels.

And of course, considering all of the above and also considering that 2025, free cash flow is impacted quite a bit by the volume payments that we have this year for the significant growth of 2024. We would see, of course, free cash flow for '26 also being above '25, absolutely.

Then maybe going to the second question, in terms of execution, which you want to improve in general, what do you do with the structure of the company, the regional management, the regional reporting lines, the regional setups, the regional processes? Is there any material changes happening here?

I can take that. So we -- I think the regional structure works really well for aseptic carton. When it comes to bag in the box and spouted pouch, that is yet to be determined.

I mean, can you give us more details about execution improvements on the regional structures? What exactly is top management doing now here that things are improving versus the previous?

One of our top priorities is obviously to get productivity out of the North American footprint for bag in the box. So that is one of the areas.

And you do this with the same people you had before? Or is there anything changing you have plans to change things?

That would obviously not be something we discuss here.

Alessandro?

Actually, I have only one for now. On the capital allocation, I'm not sure I understood really well what you mentioned because it sounds like the EUR 3.4 billion investments over the last few years were like all wasted.

I would like to understand how much of that you would have done anyway because you are still having to grow your combi block business with your fillers, et cetera, plus you opened a factory in China. I'm not sure that one is completely impaired because it was wasted money. You have opened a factory in India and in Mexico, same thing.

So can you put that EUR 3.4 billion figure in context, what will generate returns in the future of that? And then what will not be necessary going forward, which maybe comes into cash flow then afterwards.

Do you want to take that?

Yes. No, absolutely. So I think if you recall the slide, the large portion out of the EUR 3.4 billion was relating to M&A. So -- and that, of course, needs to be taken separately. If I look at the CapEx that was put in place, I totally agree. There is -- you always have CapEx when you want to continue to run a business.

And if you want to grow the business, of course, you also have additional CapEx. And if I look back over the last couple of years, would summarize that, for example, the plant that we have built in Mexico was an outstanding investment. It's already full now, and we have to extend it, and that's a good thing that we extend it.

And of course, that's part of -- or included in the guidance going forward as well.

We have discussed 2 days ago that we had a couple of impairments looking at the current market development and also looking at how demand has picked up specifically in the one or the other geographies.

And in hindsight, you would probably have approached one of those growth markets with a slightly smaller investment than what we have done -- or what we have put in place already. And also if you look at China, I mean, we are super well set up for growth bouncing back in China. But at the moment, probably we are slightly over dimensioned there. That's probably the 2 things that I would discuss specifically on CapEx.

I think the filler CapExes that we have put into the market, by and large, have demonstrated the value that they should have demonstrated. And you know that we do this in a very diligent way with very clear business cases for each and everyone. And also here, the impairments that we have discussed on Tuesday, which were really on a minor part on the filler end. This is relating again to a soft market environment right now where we have pulled back fillers from customers that are underutilized. And for us, internally, the rule is if we don't place them within 12 months again with a new customer, we would, of course, take the hit.

And in the current market environment, it's a little more difficult to place fillers, and that's why the smaller impairment also on that side. But bigger picture, I would be very happy with the fillers that we have placed.

Maybe on the EUR 1 billion then CapEx, is there a way to tell us how much of that maybe was a little bit too over hasted or too quick, et cetera? And let's say, maybe 80-20 rule, maybe it was EUR 200 million out of EUR 1 billion. Does it mean that over the next 3, 4 years, actually this EUR 200 million would come kind of on top -- that's normal free cash flow generation.

No, absolutely. And that's what you see reflected in the new guidance that we move from 7% to 9% to 6% to 8%. I think that's a good proxy for it.

Ioannis Masvoulas from Morgan Stanley. Just a couple of questions from my side. The first, if we look at the filler placements for this year, the 60 to 70, I guess, the lowest since COVID. Going into next year, what should we expect given the weak market backdrop and the fact that you mentioned some of your customers have machines that are underutilized?

And then the second question, you addressed a lot of topics today, and that's very much appreciated. One topic you haven't discussed about is the lawsuit Mr. Lawrence last. Now given the management changes, given that you're reviewing many parts of your strategy, is there any way you could potentially readdress this topic and potentially find a way forward without us having to wait an extra year for a resolution?

I think if you take the filler question, I can take the lawsuit.

No, absolutely. And I would ask for a little more patience before we give a concrete guidance for 2026. I think it's fair to say that we have a robust pipeline that we look at. But we, of course, also during the budgeting phase, now need to make up a bit of a risk perspective or risk profile on what we see for next year, and we will communicate then on that specific detail also with the earnings release for '25.

Yes. And when it comes to the lawsuit, it's an arbitration actually. And in an arbitration process, there are 2 things it's secret and you enter that process with one idea. And over time, you massage your ideas to come closer and closer and closer. And I think that's where we are at in that process. And that's pretty much as much as I can say.

Pallav Mittal from Barclays. A couple of questions. So coming to the very first point, Ola, that you were making in terms of a new CEO search and it being very close. Very clear that you guys have laid down the medium-term guidance, but how should we think about any risk in terms of reset of expectations by the new incoming CEO? That's the first one.

And then secondly, in terms of your filler placements, are you seeing any risk from the nonsystem suppliers? We have heard a couple of names like Lamipack in India, then Shield Pack in China. Is it something which is impacting your growth in the number of new fillers that you're placing every year?

I'm going to take the first question, and then I'm going to pass to Christophe and Anna to answer about NSS. I would be greatly disappointed if the new incoming CEO isn't changing something about the company, right? So we should expect him or her to put their personal touch to this.

What we've been doing for the past 6 months is following a logical decision tree. When you enter into an organization, there are some really obvious low-hanging fruit that we have addressed, and that is regardless what management you would put in place.

So I think that is what we present to you today, and that will lead to a 1.5% EBIT improvement. Beyond that, we obviously need to ask the future management at Capital Markets Days like these, what is your vision? How are you going to outgrow the market? How are you going to make it even better? So I think that is for the future CEO to answer. And now to NSS.

Yes. On the NSS side, I mean, that has -- that part of the market has been established years or even decades ago. So and you see people coming in, people leaving the space again. And I don't want to say that we are complacent or anything.

But -- and of course, we monitor the space very carefully, but we feel very comfortable that the system solution and the tech service and the material that we bring to the party at the total cost of ownership that we can deliver to customers is appreciated and will not impact us significantly going forward also. I don't know whether you have anything to add there.

Yes, maybe one point. I mean we talked a lot about innovation, and it's noteworthy that, for example, the alu-free structure is a proprietary IP-protected structure. And as we transition to more mono-material, recyclable, more complex structures, that is a technology shift that those companies can hardly replicate because they don't have the same R&D and experience in the system as we do. And that, by the way, applies also to all other substrates, and you see that in other areas of the packaging industry as well.

Christian Arnold from ODDO BF. Looking at this chart here, the dividend payout, you're going to target the 30% to 50% based on adjusted net income. The adjustments on net income, will that be the same nature, what we have seen in the past? What has changed here?

No change to the adjustments. So I mean, on the net -- so between EBIT and net income, I mean, it's mainly the PPA that is still between the 2. So no changes. And I think we have detailed that also quite a lot in the Q3 call 2 days ago on how we think about adjustments that, of course, everything where we hold ourselves accountable or the regional management that is not being adjusted.

But if we take larger decisions to optimize the company like footprint decisions or also severances, we take that below the line because we want people also to take those initiatives promptly and on time and in full and not think about -- then I don't hit my target for the year.

So that's why we take that below the line, but very transparent also, of course. And the other below-the-line adjustments that we had before and we continue to have are the noncash items on the derivatives and so on as always no change in structure here.

And the second question would be on the noncore bag-in-box business, which I understand is linked to your clients in the industrial space and retail space. What's the end game here? Is it a downsizing? I mean you are talking about optimizing the value. Is it a rightsizing, a downsizing? Is it actually a disposal at the end of the day?

I would say we, of course, evaluate all different paths here. But what you should take away from the slides as we have discussed it, the growth will always be below average, as Christoph has shown, and that is why naturally, the weight of that part of the portfolio will become smaller over time. That, for sure, you should take away.

And then, of course, you want to run those businesses as efficient as possible. I think that makes all the sense of the word.

So it could be that in 10 years' time, you still have actually the clients in your portfolio.

Yes. I would leave that open for the time being. But yes, let's see.

This is Ben from Berenberg. A follow-up on Christian's question on the bag-in-box business. I understand you guys like the aseptic business more than a non aseptic one, I agree. But what is really the plan with the non-aseptic bag-in-boxes?

Could you really divest it if you find a buyer? I mean, there's plenty of packaging companies that do these non-aseptic bag-in-box. How does it work in terms of like footprint? Would it be easy for you guys to divest the non-aseptic bag-in-box business? Or is that really difficult thing to do because of the footprint overlap between the aseptic and non-aseptic?

I would like to clarify one more time. So not necessarily non-aseptic is not interesting because there is angles to non-aseptic that you would want in any case to have in the portfolio. And again, number one, this is where you create an entry point to customers to then later upsell to aseptic.

And number two, where you use the same assets to produce the bags, whether they go for aseptic or non-aseptic because that gives you better utilization, and that always makes sense. And a very prominent business, for example, is the post-mix business. So that is long established customer relationships that is profitable, and you like to have that business. So it's not black and white, non-aseptic and aseptic on the bag-in-box side.

I think Christoph has described the 2 categories that are below our target ambitions. But again, we need to really see what makes sense, whether -- and you can also argue that you like to have parts of that portfolio because also there, you have very profitable pockets in it. It's really a case-by-case assessment.

And then you need to, of course, take into consideration how entangled your manufacturing footprint is or whether anyone would want to take that over without a manufacturing and so on and so. But I think we should think broad over the next months on that front, but it's not a clear cut black and white case.

Perfect. Follow-up question would be on 2 to -- the 0% to 2% organic revenue growth that you expect in 2026. We have seen in Q3 just a couple of days ago that some markets really struggle under destocking. There is lower demand. The fillers are running on lower utilization rates.

What is the 0% to 2% growth rate next year based on? Is it assuming that destocking across the markets that is taking place right now is mostly solved? Or how could we read it the guidance for '26?

I mean it's difficult to estimate when this is perfectly 100% solved. But in any case, we believe it will be less of an impact in 2026. And then we, of course, also look at our strength and our opportunities to outperform the market, and we're going to continue placing fillers and also the fillers that we placed this year, I think, is not a bad number even in a difficult environment. So that's why we believe we can make it into that range.

Okay. And then maybe one last question, if I may, then I give back to my peers would be on capacity expansion. You mentioned that you placed a lot of fillers. I remember last 2 years, we have seen on a gross basis, 91 fillers and 91 fillers again.

Is there the risk that this ramp-up in capacity that we have seen over the last couple of years, not only on a gross basis, but also on a net basis with softer market demand that could last longer than 12 months, let's say, that we could see a bigger gap between capacity and actual demand that supply and demand is going to be somewhat in an imbalance over the next 1.5 to maybe 2 years.

Or do you have the visibility that, okay, utilization rates for the fillers sooner or later are going to pick up again based on how the cycle developed in the past years?

Yes. So I think we clearly expect that the utilization rates will come up again on fillers. And we also absolutely expect that we're going to continue to place fillers. So there -- we don't have any doubt at all. When we think about our own in-house capacities to manufacture sleeves, I mentioned before that we are extending the plant in Mexico even with 2 lines because it's full, and we see really good traction in the Americas region.

So also here, we see that some more investments, and they are, of course, part of the guidance are needed then while on the other hand, more towards the Eastern geographies, if you want, we have ample capacities. And also that's why we have really took the impairment that have taken the impairment that we had to take because there, we have a bit of a misalignment.

Yes. Maybe on this BIB noncore, can you put a percentage number how big that is in terms of sales, just to have a view?

It's a low double-digit percent of the bag-in-box portfolio.

Right. So you said 2 days ago that the BIB aseptic is 30%. Obviously, that would be all in the blue part that -- and then we have the syrup, which is the remaining non-aseptic part, right? And then the rest is grays that you're...

It's small gray ones, yes.

Okay. And my second question is on the in-line aseptic third-generation machine. I'm a little bit surprised I thought it would have come to the market a little bit earlier. Now you said basically you have it, so you have to increase the capacity. And I'm thinking very stupidly just add a couple of lines beside each other. Why is it so difficult?

So it's -- there's a bit of science required in terms of that line speed, and the application of the different filling or fitments into it. The aseptic technology is there. But when you scale it up, we don't -- we're not only putting multiple lines next to each other. That's the easy way. It's integrating it into one. So we're still in the R&D.

So there's some required knowledge that is being built as well as then we need to do the prototype testing because we go out with something which is robust and that would be meeting all the quality standards that we have.

And that requires a cycle of testing, proof of concepts, make sure -- so we're confident it's going to work, and we start all of that work in the next 3 to 4 months in terms of exposure of the machine in its running conditions, and we build that up. And then we do the serial rollout. So it's a process that is required. Otherwise, we go with something that doesn't work.

Okay. And the Gen 2, it's just one prototype in the market? Or are you going to sell it? I mean even if it's lower, it's already providing some value to the clients.

Christoph?

So as Gavin said, we follow that structured process of prototype and then rollout. So the Generation 2 is now 0 series, and we are selling it in Europe, and we'll have multiple placements in Europe.

Thank you. I think, operator, if we can open the lines to the analysts on the phone, please, and then we'll come back to questions in the audience, just aware that many analysts can make it today because of earnings seasons.

The first question comes from Cole Hathorn from Jefferies.

I'd like to just start on better understanding how you sell the sleeves to your customers annually. Would you mind just giving us an overview of how you negotiate and how SIG thinks about the correct price point when you price your sleeves every single year?

And then relating to that, from the outside looking in, you have placed a lot of fillers. Is there not an argument for pulling back more on your CapEx short term? Because my perception is, are your negotiations annually on the price points of the fillers impacted by the low levels of utilization? Or am I misunderstanding that point? It's not impacted by the low levels of utilization.

No, let me start maybe. And definitely, the price negotiations are not impacted by the level of the utilization of a filler, but much more by the value that we deliver to the customer. And also, I would like to clarify that really the investment or the CapEx allocated to fillers has been 1 point something in 2024.

So it's not really a major portion anymore like it used to be years ago, 3% to 4%. So just this as a clarification on the CapEx. And then Christoph, how about you explain how the...

Yes, on the pricing side. So we follow a philosophy of value-based pricing. So we have a very good understanding of each customer, what is their current asset base, what is the speed of the machine and what we bring, and that's why we call ourselves TCO champion.

We bring higher speed, for example, twice as fast as competition and lower waste rates, which are typically half those of competition, and that's a value, and we can actually quantify that value. And that's a value that we share with the customer, but it also at the same time, allows us a premium pricing.

So there's a very structured approach of how we price and how we price competitively, but at the same time, also monetize the value that we bring to customers.

Maybe if I just follow up on that, just to understand the pricing. So you would know at the beginning of every single year, a rough idea of your liquid paperboard costs an estimate of your aluminum and polymer, even though that will change. And then you'll have a specific price point, I imagine, per region, per carton that you'll need to price. And you will tell your sales team to target that level.

Absolutely. And that is a well-established process also, which is very rigorously executed. And we prepare for this, of course, always within Q4. And that's basically the part where we have now visibility of how material costs also will develop going into next year. And just as a reminder, our 3 major categories of raw materials, number one, the APB, so the paper -- there we have multiyear contracts with our suppliers.

So we have good visibility on how this big bucket will develop already now in Q4. And then for aluminum and polymers, you know that we apply a hedge policy where we hedge around 50% to 80% of a given year's demand. And that gives us already now a lot of visibility how prices -- how input costs will develop into '26.

And of course, that is also what we need to know if we want to have the price discussions with the customer, which typically take place in the first quarter of the year because also our customers on the carton side selling into retail, you only have basically once a year pricing discussion with your retail clients. So we need to have basically a fixed pricing horizon with a good visibility for a full year on the carton side. And that is well established and works very well, I would say.

On the bag-in-box and spouted pouch side, it's slightly different because here, and you have seen that since a couple of years, we always state our revenue growth at constant currency and constant resin. Here in bag-in-box and spouted pouch, we pass through the resin price increases or decreases with automated clauses that are defined in the contracts with a lead time of 6 weeks to 3 months.

And there, the pricing works a bit differently, but basically similar approach. We look at the value that we deliver, and that's what we price for, absolutely.

Very clear. And then just finally, as a follow-up on free cash flow. Why did you decide not to give any medium-term targets on free cash flow? And if you're not willing to give medium-term targets on free cash flow, maybe you could just give us some color of how you think about it.

What do you think is a normalized free cash flow level for SIG business? And can you call out that you plan to grow that in line with kind of EBIT medium term?

Yes. No, I think the parameters that we spell out here in the financial guidance already give you quite an indication on where we see free cash flow developing. The probably only moving component that you still need to consider in addition is fluctuations in the volume discounts that we are paying out, and that has been quite a substantial fluctuation between '24 and '25.

If we look at a picture where this is in a closer corridor of 1 or 2 points difference in growth between 2 years, you wouldn't even feel anything on that one. What you should also take into account, and you know that from history that our working capital overall is always negative. So we don't have to invest a lot of working capital into growing further. And I think that should give you enough of an algorithm to deduct free cash flow development based on the guidance here. And I think that's where I would like to leave it also.

Any further questions from the phone lines?

Yes. The next question comes from Manuel Lang from Vontobel.

I have 2 questions. First one on the dividend. I think it's pretty clear in terms of the payout ratio. But I see that you did not reiterate the commitment to a steadily increasing dividend. And I'm just wondering if you could confirm that you're not actually pursuing an increase in every year?

And then secondly, on the midterm guidance, also there, I'm wondering if you could put some number in years on the midterm targets, meaning by when are you planning to realize the targeted growth and profitability increase? And then maybe as a part of that, how big of a onetime arguably margin accretive impact do you expect from the disposal of the chilled carton business?

I mean on the chart, you showed it looks like an almost 1 percentage point increase related to that, probably realized next year? Or how should we look at that?

Yes. So let me start from the back of the question. So our guidance that we have given is, of course, within the current portfolio framework. If we would divest -- or if we divested the GI business, we need to update that. And you can imagine that it would be positive for the overall group margin. Otherwise, we wouldn't look at such a venture, of course. And then you had asked about progressive dividend payouts.

So I think we want to keep a little flexibility here with the 30% to 50% corridor. In the ideal world, of course, this growth year-on-year on year-on-year with also the profit expansion that we target. But then I think we have maneuvered ourselves into a more difficult space with the old guidance. That's why I think overall, the Board and management, we have decided to be a bit more open on this one here. anything else?

And then how long midterm is, I mean, we all know midterm can be 3 years, 5 years, something in between. But the target is, of course, to achieve it rather faster than later.

Any further questions from the phone lines?

No, madam. There are no further questions.

Great. I will read a few from the webcast and then we can return to the room. So from Charlie Muir-Sands from BNB. He asks, do you expect any major changes in the working capital model in 2026 and the coming years?

Clear answer, no, we continue to optimize our inventory profile and that there is still potential, especially in the acquired businesses, but I wouldn't say there's a change in the algorithm.

And he has a follow-up. Are your cartons considered multi-material or paper and the extended producer responsibility schemes in major markets where this exists? Is EU PPWR actually going to shift demand to more easily recyclable plastic packaging?

I can take that one. So to be clear, our aseptic carton is 100% recyclable. It is, of course, paper, plastic and aluminum. But already today, 100% recyclable. It is PPWR compliant. So it can be or it is considered as recyclable also under PPWR. But it's an important question to decomplexify the structure. And that's what Gavin has really talked about. So the sandwich structure, we eliminate one layer, we take the allo out.

It already makes it easier to recycle. And that's what you could see from the recycling mill that has confirmed that increasing that fiber share increases also the value of the recycling. So the journey is very, very clear. I mean, carton is good but we're taking it as SIG to great.

We have one from Mengxian Sun at Deutsche Bank. Could you please clarify whether of your current 2026 or midterm guidance includes any proceeds, specifically positive cash flow generation and margin contribution from the divestiture of the noncore business assets? If yes, to which extent?

Yes. We have taken, of course, a small assumption for divestment proceeds in here, and that's why I gave you a little details on how big the business is in the beginning. But again, the margin parameter, we would update in case the divestment is successful.

Returning to the room then.

I'm happy to hear that you changed the focus on your KPIs on EBIT. I think it's probably a cleaner number. I was just as a remark, a little bit bothered in the last years, the focus on adjusted figures. I always had a little bit of impression that also with this gap unadjusted adjusted figures, yes, that probably in the communication with the investors, you tried probably to -- you had to focus too much on the adjusted figures.

And so I hope that will change also a little bit in the future. So my question, another topic is we see a strong shift in the food and beverage market to non-label products. And I'd like to hear what your position is with non-label products? How much of your revenues is generated with packaging for non-label products?

And what kind of customers you have, like a big player in the market is Aldi, very big player, gaining market share a lot. Is that a customer of you? Or you have other customers to mention in this market?

So Aldi, of course, is not our customer, but the people that supply Aldi. But Christoph, you go and explain.

Sorry, what...

Private label.

Private label. Okay. Yes. So very good question, very good observation. There is clearly a shift towards private label products. These are typically packed at what we call co-packers. So companies that pack for multiple retail brands. We not only, by the way, see that in Europe, but also in China, interestingly. We see that actually as a positive trend because what these co-packers offer is production capacity.

And typically, one size is not the size that everybody uses. So they appreciate flexibility. And that's really where we can -- where we have a strong point. We actually have a very good market share in private label because they also -- I mean, the co-packers appreciate the TCO because what they make, their margin is basically that conversion cost.

And the more they can churn out of their filling lines and the more flexibility they have in their filling lines, the more they can fill, it's all their margin. So it's a trend that actually favors our technology as such.

And how big is the portion of revenues from total revenues you generate with the non-label products?

Truth, I think that's also category by category different, to be honest. So in white milk in Germany, as an example, I would probably venture to say 70% of the market is private label, and we are a market leader in that segment. But it's very, very hard to say to give a global answer to that. That's really difficult.

But as a conclusion, so it's not a bad thing. So private label different to many other companies, private label for us is not a problem.

Can I have a follow-up? In aseptic packaging, how looks the competition landscape in Asia, what kind of competitors you have in this market? Because you just mentioned that there is strong competition in chilled carton, but how does it look, yes, in aseptic?

Do you want to take it?

Yes, I can take it. So I can -- it's not just Asia, but I can give a global answer to that. There's 2 big companies globally that offer aseptic systems for carton, and that is Tetra Pak and SIG.

Now you have these what's called nonsystem supplies. And yes, their share is a little larger in China, for example. But also to be clear, their key focus is on the largest installed base, which are Tetra Pak machines.

Ioannis Masvoulas from Morgan Stanley again. A couple of follow-ups. First on the net leverage target. First question here is that 2.5x or under 2.5x by 2027, you mentioned that includes some divestment proceeds. Does it also include a dividend assumption payment during that year? That's the first part.

And the second part, several of your more diversified packaging peers are very comfortable running at 2.5, even 3x net leverage. Why do you think 2x is sort of the right level for SIG over the medium term?

Yes. I think many of our packaging peers are not Swiss companies. So I think that explains the difference in perspective here. And again, so we are really optimistic with our algorithm that we have laid out here on the guidance slide that we're going to be below the 2.5x by the end of 2027.

And that assumes a dividend payment during that year?

Yes, it assumes a dividend payment, of course, in '27 for '26. Yes.

Perfect. And the second question on the revenue growth target for 2026. Is there any assumption of incremental destocking during next year? Or do you take the view that destocking run its course in '25 and '26, the 0% to 2% is underlying demand growth?

Yes. So as I already tried to lay out in the call on Thursday -- on Tuesday in Q3, I mean, it's not perfectly easy to say this part of the sales development in the third quarter was destocking and this was other market categories or whatever.

So -- but again, so we believe that destocking will decelerate as the year progresses or as -- next year starts. So will '26, of course, still see difficult market environment? Absolutely. I mean, just read the newspaper. So I think there's not much to believe it would change comes January 1, and that's what we have taken into consideration with this more conservative guidance of 0% to 2%.

And I would also probably like to come back one more time to 2025 because, yes, we have seen a super soft Q3. But this super soft Q3 was also a function of a more optimistic start into the year where we were seeing growth rates that were even ahead of our expectations.

If you look at the 9 months period, we were still basically flat, although it's a difficult market environment. So just that we all take this into consideration also and not just purely look at the third quarter here.

[indiscernible] From Asset Management. I have maybe a question to Ola coming from outside with a fresh perspective. What makes the business model a bit special from an outside and also a bit of black box is they don't sell the fillers, they lease them out. They keep it on the balance sheet, write it down. So it matters a lot about the discipline to make the full economics of a filler of a lifetime. And obviously, this is the difficulty.

Did you have a bit of feeling that the whole model was a bit skewed to growth because you had to take down the growth target by a bit, you switch from EBITDA to EBIT. So what was your view? Was there anything too aggressive on the filler installation? Or is it just to get a bit of feeling?

I've been strongly advised to not comment on the past. So let's focus on the future. And it's absolutely our target within the Board to make the adjustments to the EBIT that we measure as small as possible going forward. And as a politician, I stop there.

I'm Samuel Weber. I'm an independent wealth manager. And last time I was sitting in this room, I was listening to Jan Janis explaining how he changed the incentives of the subsidiary managers. And I want to ask you, you're not as decentralized, but can you perhaps give me a bit of an explanation how deeply this incentive change penetrates the organization? Or how this is set up? Does it just affect the top management?

And the second question to the new President. You mentioned you're also an investor on the side. And given the potential you just explained, I expect that you put a big position also privately in SIT stock. So maybe you can also answer this.

I'll start with that. If everyone here in the room share your positions and what you're going to do in the next couple of weeks, I'm happy to share mine. But obviously, I come from something we call the pilot school in Sweden. And that is if you're in the cockpit, you should know the gears and you should invest along with your passengers. So that's about what I'm going to say about that.

And then let me take the incentive question probably. So yes, we have changed the incentive system for 2025, reflecting EBIT instead of EBITDA for everyone in the targets, and that goes across the entire organization. So everybody who is on an SIT, and that is now I have to lie, I think about 400 people globally, but maybe it's even a higher number.

So I don't have that in my head. So -- but it's a large crowd and everybody is, of course, synchronized that the targets that we have at the top also are cascaded to managers at the lower level. And even to a degree that you would find sales targets in the individual targets that are, of course, building up the total that we have as a target.

Miro Zuzak, JMS. I have a question regarding basically your financial targets. In the past, you often failed to meet them, especially on the margin side. Midterm guidance was always corrected down. Also current year guidance typically not met, especially on the EBITDA margin target. Now you could mention many other communication-wise mistakes or I could argue mistakes, which have been made in the past and as we want to talk about the future now, and I have a question.

Have you also basically accounted for this systematic overestimation by giving new lower targets now that you have a buffer in terms of targets that you communicate? And also within this context, you have an inflation buffer on the Slide 31. Could you comment on what you exactly mean by this inflation buffer?

Yes. So I mean, it would not be prudent, I believe, if you build up your midterm target by just looking at all the positives that you work on and looking at everything happens 100% as you have laid it out, I think then you are set to fail. And that is probably also some of the explanations why some of the targets haven't been met earlier. We need to take into consideration that the world keeps turning and that inflation will be there, and we need to, of course, define enough measures so that we compensate inflation and on top, drive our margins further.

And I think that's what we have done in a very diligent way, and this is what you see reflected here. And I don't want to now comment whether this is more conservative than before, but maybe it's always wise to take learnings from the past, I would agree.

Thanks. Just conscious of time. So I think if we take 1 or 2 more questions, and then we follow into lunch.

Just a quick one. Christian Arnold from ODDO BIF again. About the potential disposal of the chilled carton business. You mentioned you would then adjust the margin target. You have not mentioned the growth target or the net leverage target. Would that be just insignificant for these 2 or.

Yes. I would rather consider it's not a meaningful parameter change in that regard. But on the margin, I think it would make sense to reflect the additional uplift.

And last question with Ben.

Yes. This is Ben from Berenberg again. I'm going to be quick so we can have lunch on time. First question would be on Gavin actually. If I would buy a sick filler today, let's say, for aseptic cartons, how many cartons per hour could I do compared to how many cartons could I do 5 years ago from today? Like how did it change or how did the innovation change in the last couple of years in terms of output?

In multiple ways. So the -- we actually presented today that we've gone with the new Neo platform, which is a speed up platform. We've basically taken the current machines with new technology built into it and it's a 25% improvement in the current running rate of that machine.

So all of that knowledge and science has been built over time. And there's new technology, new digital tools, everything that we leverage into it to do a speed up program. And it's on the footprint, the size of the machine stays the same and the speeds are going up.

And maybe if I can add to that one, that's why we are always also focusing more on the gross filler placements that we do instead of on the net number because new machines typically have a significantly higher output than the ones that are coming back technically already.

But then, of course, also utilization-wise, it makes all the difference in the world if you take out fillers that are not really utilized and place them, place new ones with customers who have high ambitions to drive it further, just as an additional comment.

And one additional one on that is we also have kits where relevant that we can retrofit on the current invested base to speed them up with customers. And there is a couple of examples that have been really successful.

Okay. Perfect. Maybe one very quick one on the midterm targets. I mean you're now guiding for 3% to 5% organic revenue growth on a like-for-like basis. the previous targets were like 4% to 6%. You always said, hey, it's probably going to be the upper end of that. So it was basically 5% to 6%. What is the difference?

Like what has changed over the last few years that you say those 5% to 6% are not realistic anymore, but 3% to 5% is it -- there was always India being a big market that has a big share of chilled or fresh milk that is slowly but steady moving towards aseptic milk or aseptic packaging. Maybe just some quick words on why is it 3% to 5% and no longer 5% to 6%?

So I would say it was for me, at least always 4% to 6%. And with the target at one point, probably it lends in the higher end of the range. And if you look back a couple of the last couple of years since the IPO, also in most years, we have hit that range or even exceeded the range.

Now the 3% to 5%, I would understand them also as a reflection of learnings from the past. And should we return to a normal market environment, I think that's a wonderful target to have, and it shouldn't take too long to achieve it.

Thank you, ladies and gentlemen. I think that concludes today, and I invite you to move out of the room to lunch.

Thank you.

Thank you.

Thank you, everyone.

Ladies and gentlemen, welcome to the SIG Q3 2025 Results Conference Call and Live Webcast. I am Sandra, the Chorus Call operator. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Ingrid McMahon, Director of IR. Please go madam.

Thank you, Sandra. Good morning, ladies and gentlemen, and thank you for joining us. I'm Ingrid McMahon, Director of Investor Relations. And with me today hosting the call are Anna Erkens, CFO and Interim CEO; as well as Jess Spence, Director of Group Finance and Reporting; and Dmitry Lebedev, Director of Group Finance, FP&A.

As I believe most of you are aware, we will be hosting an investor update in 2 days' time in Zurich. At that update, we look forward to discussing the group's strategic direction, including capital allocation and midterm guidance, as was referenced in the company's announcement on the 18th of September. In today's call, we would like to focus on Q3 and the year-to-date financial results and to provide more information about the nonrecurring impairment charges also announced on the 18th of September.

The slides for this call are available for download on our investor website. This presentation may contain forward-looking statements involving risks and uncertainties that may cause results to differ materially from those statements. A full cautionary statement and disclaimer can be found on Slide 2 of the presentation, which participants are encouraged to read.

And with that, let me hand you over to Anna.

Thank you, Ingrid, and good morning, everybody. Let's start with the key messages for the third quarter. In line with our announcement on September 18, our revenue growth has reflected the deteriorating consumer environment throughout the year. In Q3, this culminated with softer volume demand across geographies and channels, including in the emerging markets. Given the challenging macroeconomic conditions and deteriorating consumer sentiment, customers have taken steps to optimize their inventory levels.

We also saw a softer performance from the parts of the portfolio that will be deprioritized going forward as we focus on the profitable expansion of our core portfolio, including, of course, aseptic system solutions. As announced on the 18th of September, following a strategic review of the group by the Board of Directors and in light of the prevailing soft market conditions, we have recognized nonrecurring charges of EUR 320 million pretax in the quarter. This charge is almost entirely noncash, and it is expected that the remaining part of the charge up to EUR 40 million will be booked in Q4 2025.

Associated cash outflows will also occur in 2026, for example, for severances related to adjustments in our structures. We will take a closer look at the composition of the nonrecurring charges in a few slides. Despite the tough market environment, however, we expect to place 60 to 70 fillers in 2025. This demonstrates our strong competitive positioning even in the current market situation. However, these new placements will not be sufficient to offset the currently lower level of capacity utilization across the installed base of over 1,400 fillers.

Looking ahead, we were delighted to see the commercial launch of the first products filled in our next-generation aseptic spouted pouch system with ALCA Corp, a leading supplier of tropical fruit ingredients. The product was introduced at the Anuga Trade Show earlier this month in Cologne and received significant interest. This major milestone is a direct result of combining our experience in spouted pouch systems with decades of expertise in aseptic carton filling, utilizing our in-line sterilization technology.

Lastly, we have an important update on the development of our 85% paper carton. We are very pleased to report the successful recycling trial, which took place at a paper mill in Indonesia in September. The higher paper content lowered the pulp line to half of a standard beverage carton. And crucially, the carton ran within the existing recycling infrastructure of the paper mill and resulted in an improved overall fiber quality and output.

Turning now to the key figures for quarter 3. Constant currency revenue declined by 3.9% or by 4.3% on a constant currency and constant resin basis. Reported revenue was down 6.7%. Adjusted EBITDA for the quarter was EUR 123 million, leading to a margin of 16%. Excluding the nonrecurring charges, adjusted EBITDA was EUR 184 million and the margin was 24%. Adjusted net income was EUR 17 million or EUR 61 million, excluding the nonrecurring charges. Q3 free cash flow amounted to EUR 55 million, which is below the prior year period. This mainly reflects lower business performance, unfavorable phasing of tax payments and lower upfront cash collection, partially offset by better working capital.

Looking at the 9 months figures. Revenue at constant currency slightly grew by 0.4% and was stable at constant currency and revenue. Adjusted EBITDA was EUR 495 million, translating into a margin of 21.1%. This includes EUR 61 million of nonrecurring charges. Without these charges, adjusted EBITDA was EUR 556 million with a margin of 23.7%. Adjusted net income was EUR 153 million. Excluding the nonrecurring charges of EUR 44 million after tax, it was EUR 197 million, in line with the prior year level.

Free cash flow showed an outflow of EUR 84 million. The lower free cash flow performance reflects the lower adjusted EBITDA, including the unfavorable foreign currency movements and higher customer rebate payments given the strong volume growth in 2024. CapEx, including lease payments, was in line with the prior year period at EUR 169 million. Net leverage increased to 3.3x as of the 30th of September. We will provide further detail on net leverage in the second half of the presentation.

Let me put the development of the quarterly growth rates into context on this slide, which shows our initial growth assumptions for 2025 compared to how the year has progressed to date. On the left side, going into the year, we assumed a softer start to the year with neutral to improving consumer sentiment as the year progressed. In addition, we expected the second half of the year to benefit from the contribution of new fillers placed.

Moving to the right side, higher-than-expected growth in Q1 of 3% reflected a slightly more optimistic view from customers on end consumer demand. In Q2, however, we saw a slowdown in momentum, although our half year assumption remained intact. The Q2 slowdown initially appears specific to a few markets, such as India and a softer Europe before Q3 saw a more pronounced decline in orders. We believe that this, to some degree, was driven by customers adjusting inventory levels in light of the deteriorating consumer environment.

Turning now to the performance by region. In Europe, year-to-date revenue has declined by 2.5% at constant currency compared to strong prior year growth of above 6%. This performance reflects several factors, including lower availability of raw milk for aseptic processing compared to the strong supply conditions in 2024. Also, the region benefited in '24 from the ramp-up of filler placements following wins relating to the European regulation on tethered caps in prior years. In particular, Germany experienced a soft third quarter. On the back of higher milk prices, there was an increased conversion of raw milk into cheese. Export volumes of UHT milk have also been lower. The juice category in the region has also declined, impacted by a weak summer season. In bag-in-box and spouted pouch, there's a good project pipeline in the region.

In India, Middle East and Africa, overall revenue development for Q3 '25 was impacted by a strong prior year comparison of 20% growth, leading to a negative 8.2% decline in Q3. For the 9 months of 2025, revenue growth has been slightly positive. The region has seen a slowdown in demand for cartons in the Middle East and Africa in the third quarter. In India, market demand has been lower than expected, particularly impacting the on-the-go noncarbonated soft drinks segment. We have reported this already in the half year. And while the main season is over, the trend is not yet reversing. On the other hand, bag-in-box and spouted pouch revenue performance has been strong, driven by growth in India.

Coming to the Asia Pacific region now. On an aggregated level, the performance of the region has been stable for the first 9 months of '25. However, the third quarter reported negative growth of 1.4%. In China, we have continued to focus on offering differentiated pack sizes and new product launches in aseptic carton. This has led to market share gains in a continuously soft market environment. In chilled carton, especially in China, performance has been affected by the competitive market environment and subdued market conditions, while in bag-in-box, there has been good growth in dairy. Elsewhere in the region, market softness in Thailand and Vietnam led to customer destocking, which was partially offset by a recovery in Indonesia.

Lastly, in the Americas, revenue declined at constant currency and resin by minus 2.8% for the third quarter, bringing the 9-month growth to 2.6%. Year-to-date, aseptic carton has seen good growth in Mexico, Chile, Argentina and Colombia, especially in dairy. This has been offset by customer destocking in Brazil. In the U.S., bag-in-box experienced a slowdown in Q3 following good growth, especially in syrups and dairy in the run-up to the key 100 days of summer season.

The out-of-home dining market has remained soft, reflecting subdued consumer confidence. Bag-in-box has also been impacted by a declining market in the wine category within the retail business and lower volumes of industrial bags. That concludes the regional section. And now let's take a look at the 9-month financials in more detail.

Adjusted EBITDA at constant currency and without nonrecurring charges was up by 1.3% versus the prior year period. The appreciation of the euro, particularly against the Brazilian real, Mexican peso, U.S. dollar and Chinese renminbi has reduced the adjusted EBITDA margin by 50 basis points. The drivers behind the improvement to adjusted EBITDA were price increases and a positive product mix as well as lower raw material costs, mostly due to a favorable polymer price environment. Higher production costs reflected unabsorbed fixed costs and lower production efficiencies due to the weaker-than-expected volumes in the third quarter. SG&A costs were impacted by wage inflation and growth investments in the first half of the year, while Q3 saw a slowdown in the rate of increase compared to H1 2025. After the nonrecurring charges of EUR 61 million, the 9 months EBITDA was EUR 495 million.

Let me now provide more color on the nonrecurring adjustments. In line with our standard definition, charges included as part of adjusted EBITDA are those where regional management is held accountable for the delivery of returns on customer projects, such as filling line investments or product launches. As you can see from the graph on the right, this portion amounted to approximately EUR 61 million. Charges excluded from adjusted EBITDA include noncash unrealized derivative positions and noncash impairments of intangible assets.

In addition, we also take charges below the line that relate to footprint or capacity rationalization as well as rightsizing of the organization. Any such booking below the line needs group approvals and rigorously follows our standard definition. Charges excluded from adjusted EBITDA amounted to approximately EUR 260 million for the period, taking the total nonrecurring charge recognized in Q3 to approximately EUR 320 million.

On this slide, you can see the breakdown of the full EUR 320 million. Approximately EUR 100 million is an impairment to the value of the bag-in-box and spouted pouch businesses, reflecting the weak consumer sentiment and business performance. This has affected the recoverability of acquisition-related assets. Around 85% -- EUR 85 million of impairments confirm the value of the chilled carton business. This principally reflects the weak market conditions in China, which has impacted the recoverability of the assets.

Approximately EUR 75 million relates to the reassessment of the required operating capacities in aseptic carton within the context of the current weaker market environment. This includes production capacities in India, selected equipment in China and some filling lines across locations. Finally, under the headline innovation, around EUR 55 million is associated with the reassessment of the group's innovation portfolio, including the impairment of equipment that's no longer required and the impairment of capitalized development costs relating to projects that have been stopped following the strategy review. As stated earlier, the total charge of EUR 320 million is almost entirely noncash, and it is expected that the remaining part of the charge up to EUR 40 million will be booked in Q4 2025.

On this slide, we show our usual reconciliation between reported EBITDA and adjusted EBITDA. For '25, you can see the impact of the nonrecurring charges on the relevant line items with the right-hand side aligning to our definitions as discussed on Slide 12. Other includes costs for the renewal of the group's IT systems and consulting charges for the strategic review. While under the column for nonrecurring charges, other reflects penalties related to the delay in further expansion of the group's production facilities in India and the charge for the CEO separation.

Reflecting the methodology presented on the previous slide, here we show the impact of the nonrecurring items on net income and adjusted net income. Profit for the period without nonrecurring items was EUR 138 million in 2025. As stated before, the Onex PPA amortization, which arose from the acquisition accounting when the group was acquired by Onex in 2015, was fully amortized as of the end of Q1 this year.

Net cash flow from operating activities mostly reflected the impact of lower EBITDA, including unfavorable currency movements against the euro as well as an increase in customer incentive payments for strong volume growth in 2024. Net CapEx, including lease payments, was in line with the prior year and remained at around 7% of revenue. Year-to-date, there has been a reduction in PP&E expenditure following the completion of the Indian sleeves plant, while net filler CapEx has increased due to lower upfront cash. In line with the group's usual seasonality, free cash flow generation is expected in the final quarter of the year.

Turning to leverage. As you can see from the table, net leverage was 3.3x, with the increase compared to December, reflecting the usual business seasonality. Net debt as of the 30th of September was broadly in line with the prior year period, reflecting a favorable impact from the translation of the U.S. dollar-denominated debt. This was offset by a slight increase in gross debt due to the construction of the Indian plant. The group's debt covenants stipulate a net leverage ratio of no more than 4x reported bi-annually. The calculation is based on net debt to adjusted EBITDA, excluding asset impairments. Based on this methodology, for the last 12 months, the leverage ratio was 3.1x.

Concluding with the guidance for the year. We confirm our revised 2025 full year guidance as announced on the 18th of September. This includes slightly negative to flat revenue growth at constant currency and constant resin. Including nonrecurring charges, the adjusted EBITDA margin for '25 is expected to be around 21%. Excluding the nonrecurring charges, the adjusted EBITDA margin is expected to be in a range of 24% to 24.5%. As announced, given the company's increased focus on capital discipline, the Board of Directors proposes to pause the cash dividend for the year 2025.

Lastly, as Ingrid mentioned at the beginning of the call, this Thursday, we will host an investor update with our Chair, Ola Rollén, and members of the management team to discuss strategic direction, capital allocation and the midterm guidance. That concludes the presentation, and we are now happy to take your questions on the Q3 financials.

[Operator Instructions] Our first question comes from Jörn Iffert from UBS.

So I will limit it to two as advised. The first one would be, please, a quick one on the net filler placements. You said gross filler placements between 50 and 70. What do you expect roughly for the net filler placements for this year? And the second question would be, please, on the equity free cash flow run rate. I mean, can you just -- can I just double check, I mean, what does it mean now for the full year, the clean equity free cash flow? Should it be around EUR 150 million plus/minus? And then also, can you advise, is there anything we need to consider in the bridge for 2026, like, for example, the one-off cash cost? Maybe if you can clarify how much it will be for 2026 falling into this bridge.

Jörn, thank you for the question. So on the net filler placements, I guess what you try to understand is how much of the impairments that we have booked relates to fillers. And I would like to clarify here that the majority of the impairments concerned here relate to fillers that we have on stock, for which we are not confident to place them within still 12 months, which is the role for considering impairments given that the market environment is a little softer. And those that are in market where we have taken a bit of an impairment is, of course, fillers that are significantly underutilized, but which customers would like to keep. And that said, altogether, I believe we should end probably net filler placements for the year, difficult to estimate really, but around 40 probably for the year.

And then second question on free cash flow. So you asked where we should consider to land for the year. And I would reiterate the same bridge that we have given already earlier, considering in last year that there was a significant amount of one-timers related to the improvement of filler contracts with earlier upfront cash collection and also building down of filler inventories. Then you need to take into consideration, of course, FX impacts that occurred during the year, and then the very large portion of the customer rebates, and I believe consensus is not sitting too far wrongly at the moment.

And looking into 2026, of course, too early to give a guidance. We will give a very first view on '26 in 2 days' time. But special one-timers that you should consider, correct, that is one-off cash outflows for the severance cost of the transformation. And then I think that's the major part that needs to be considered for next year.

And can you quantify these one-off cash costs is around EUR 30 million, EUR 40 million? Is this something I have correct in mind?

Yes. I mean when we did the announcement, we said more than 90% or approximately 90% will be noncash. So with that, I would land at the same number, yes.

And this is a cash out in '26, right?

Yes, mostly.

The next question comes from Ioannis Masvoulas from Morgan Stanley.

My first question is on the chilled carton, where you report a large impairment, this EUR 85 million is nearly 1/3 of the original purchase consideration for the business. And you've also noted the competitive pressure in China. I appreciate the Investor Day is coming up, but just if you can provide some color on whether this business is fully up for sale. And then the second question, looking at your cost base, we've seen aluminum has been fairly strong year-to-date. Can you remind us of your hedge ratio in aluminum and whether you feel confident to pass through the rising costs next year in light of the weak demand backdrop?

Yes. Ioannis, thanks for the question. So on chilled, so it's correct that the EUR 85 million is a sizable amount, of course, and it reflects really the market conditions that we see, especially in China. I would ask for patience until Thursday before we discuss really the portfolio details. But I guess, chilled doesn't really meet the definition of an aseptic solution business. So potentially, the answer -- you will find the answers on Thursday on that one.

On the raw material costs for aluminum, so our hedge policy hasn't changed, we always hedge between 50% and 80%. And we have done that also last year, and we will continue to do that next year. And looking again into 2026, we will provide guidance, of course, also first indications for guidance on Thursday and then the detailed guidance as always when we have our full year earnings release, which this time is early March. Against the market backdrop, that is a bit more -- a bit weaker, that's absolutely correct. But we are confident that with our very competitive solutions and innovations, we will also be able to pass on price increases where that is necessary as we have demonstrated also this year.

The next question comes from Lars Kjellberg from Stifel.

Two questions. First one on, you mentioned destocking and customer adjusting their inventory levels. Can you give us any sense what sort of impact that had on the quarter in Q3? And also looking into your guidance, of course, your, I guess, clean sort of revenue numbers were down 4.3% in Q3. Your guidance for the full year remains flat to moderately down, which would suggest actually reasonable performance in Q4. So the question there is being, are you now saying that there will be some year-end sort of purchase rally, which would then also bring the margins to bring it up to your guidance kind of north of 25% in Q4?

So let me start with Q3. I mean it's very difficult to single out what is now concretely a destocking impact versus a normal weaker market development. But I would also look at it not just so much on a Q3 perspective, but more really on a year-to-date perspective, where basically we are flat. Just the seasonality for the year was a bit interesting. That's how I would look at things. And what was built up earlier in the year then was probably contributing to a softer development in the third quarter.

Now our guidance for full year, indeed, we have confirmed that we will be slightly negative to stable for the full year growth rate. And with that, I believe we confirm it fully, and that leaves Q4 somewhere also negative, but we expect it might be slightly better than what we have seen in Q4. And talking about year-end really, I mean, as always, the fourth quarter is our strongest quarter that will not change. And yes, that's also what we see for this year. And of course, the last quarter will also drive the margins to a higher level. Yes.

And just to be clear then, as far as your customer contacts would suggest that destocking, we're sort of done with that in Q3, that's -- your guidance would imply that is the case.

Yes. I mean that's difficult again to estimate, but I believe Q3 has seen the major portion of that, yes.

The next question comes from Pallav Mittal from Barclays.

A couple of them. So firstly, in terms of the softness in various markets that you're highlighting, such as India, China, Germany, et cetera, are you seeing any structural changes in terms of the per capita dairy consumption? That's one. And then secondly, can you just confirm that the restructuring charge in adjusted EBITDA is still expected to be EUR 75 million to EUR 100 million for the full year? You have confirmed EUR 61 million for the third quarter. So just wanted to make sure that EUR 75 million to EUR 100 million is what you are still expecting for the full year.

So overall, I would say we don't see really structural changes in the market. What we see right now is a temporary softness, and we will also be discussing our perspective on markets and opportunities on Thursday. Now on the nonrecurring charges, so it's correct that within adjusted EBITDA, we have booked EUR 61 million in the first -- in the third quarter and that we expect further bookings in the fourth quarter, which, of course, will also fall into that bucket. So yes, we would confirm at this moment, the EUR 75 million to EUR 100 million also in that bucket. That said, I think you also mentioned or at least I understood that you mentioned severances. Severances doesn't fall into this bucket, but that would be below the line, as discussed earlier.

The next question comes from Cole Hathorn from Jefferies.

I'd just like to understand a little bit better how you're thinking about 2026. If volumes have been softer and utilization has been lower, do you plan to kind of pull back some of your CapEx or your filler placements into 2026 to improve utilization of your current filler base? So should we be thinking about kind of a lower CapEx number in 2026? And related to that, on the free cash flow side, should we be thinking about lower volume rebates being paid out in 2026? So lower CapEx and lower volume rebates supporting free cash flow in 2026.

Cole, thanks for the questions. And so on 2026, really, I would ask for a bit of patience still. I mean, it's only October. But -- so I think the consideration that probably 2026 is not going to be a year where we hit a record filler placement of above 90% again. I think that is a fair assumption. And thinking about free cash flow, where we have discussed for this year that we have had a significant negative impact for volume rebates payout. I would not expect that something like this repeats to that extent, of course, in 2026. But for full '26, so as discussed, the first guidance, we will provide on Thursday and then all the details we will give as always, when we release the full year earnings.

Understood. And then maybe then just focusing on the 2025 free cash flow, just to help us understand a little bit better the moving parts just because there's always a very big second half weighting of the free cash flow. You mentioned that consensus of around the $140 million to $150 million free cash flow is broadly in the right space. Could you just reiterate some of the benefits that you get into the fourth quarter? I just missed some of that earlier.

I think as always, the fourth quarter, really, that is driven by two factors. Number one, it's a very large quarter. So more sales, of course, also in the end, deliver more profit and with this more free cash flow. Then you should also consider that in the fourth quarter, there's typically no more payments for volume rebates of the year now because that happens largely in the first half, sometimes in the third quarter, but definitely not in the fourth quarter anymore. And always, of course also, don't forget, we have always a bit of an inventory buildup throughout summer autumn for the strong year-end season. And of course, that inventory will also come down and will drive also a higher free cash flow in the fourth quarter. Does that help?

Yes, that was very helpful. And then the last follow-up, I know you're going to give more on your Investor Day. But if we think about the impairment buckets and what has been impacted, if you look at the chilled carton, EUR 85 million, that's around 25% of the value that was paid for the Pactiv Evergreen acquisition in China. I'm just wondering, could you give a little bit more context of what you have done in chilled carton to integrate it with your aseptic? Is it still a separate business? Or how integrated is your chilled carton versus your aseptic business if that is considered noncore for disposal?

I think -- I mean, it's a separate business, and you can run it separately. But of course, I mean, we bought it also back then for the reason that it opens up a new customer base for us also for the aseptic carton, and we have been successful in diversifying the customer base in China over the last couple of years, but we believe that it's really a stand-alone business also still today.

So no footprint like manufacturing overlaps, et cetera? So you're not producing items in the same factories, it's still separate production for chilled?

Exactly. So there's limited overlap. And of course, it's in separate buildings.

The next question comes from Ben Thielmann from Berenberg.

I have two, if I may. The first one would be, if you onboard new clients in 2025, do you have any price erosion year-over-year, let's say, for your cartons or your bag-in-boxes compared to last year? That would be the first question.

I'm not fully sure I understand that. But if the question is, do we have price decreases, I would say the answer is no. To the contrary, we also see it in the EBITDA bridge that in the positive -- well, positive top line contribution, of course, comes from pricing. So no, the answer is no.

Yes, okay. Yes, that was the question. But I was wondering, is this the case for all of the substrates you're selling? Or is there a mix effect that you have it for the cartons, but not...

No, I think that's the same across the different substrates. I mean we always, of course, for the bag-in-box spouted pouch business need to consider the resin portion, and that's why we always call it out, and that's why we published the two growth rates. Because in that business, as you know, basically, you pass on the fluctuations of the resin cost. And that has been also coming -- the resin costs have been coming down, but I wouldn't consider this a price impact as such. That's just a normal fluctuation of the algorithm there.

Okay, perfect. And then maybe one question, which is a follow-up on the question from Jörn regarding the net filler placements or the gross filler placements. Is there any color you could give us how many of those 50 to 70 on a gross basis or the 40 on a net basis? I mean this is only related to the aseptic business, right? But maybe any color on the bag-in-box and the spouted pouch business?

Yes. Also in the bag-in-box and spouted pouch business, we have been continuously placing new fillers and new equipment. And I think we're very happy with the development over there also.

[Operator Instructions] The next question comes from Christian Arnold from ODDO BHF.

Question on the nonrecurring charges, the EUR 75 million market and capacities. Could you just repeat what's behind that and give us here maybe some additional color?

Yes, absolutely. So the majority of this concerns our Indian plant and also China. So in India, we were aligning our capacity investments with the demand outlook in the country. So India has not yet achieved really the expected run rate. And yes, we need to ensure that the group focuses on really profitable projects in line with our focus on higher-margin aseptic system solutions. And then in China, this relates mostly to impairments of production equipment. And then the last portion, that is also fillers. And as I described earlier, fillers that we have in stock, which haven't been sold or redeployed within a 12-month framework and really very limited on fillers that are in the market that customers want to keep, but which don't run at the capacity utilization as they should.

These three baskets, are they kind of similar size? Or what is the largest one, very important one?

No, I would say the Indian basket is the biggest one.

Okay. And the second question would be on the net leverage increase to 3.3x. I mean you also just mentioned the higher cash flow generation you're expecting in Q4 as always. So that should come down by year-end. Maybe still, do we have to fear some higher financial expenses on the back of the higher leverage, some risk premiums you have to pay on the financials?

Yes. So first, correct, of course, the leverage ratio should come down until the end of the year again, as always, the usual seasonality. And talking about interest cost or finance expenses. So in line with that the underlying rates being more favorable, of course, also our finance expenses are developing very decently for the year, and we are overall below last year. If there's any adjustment on -- because of anything a different leverage ratio, that should be really a marginal impact, especially considering the favorable development of the underlying rates.

The next question comes from Alessandro Foletti from Octavian.

Also related on the impairment charges. In a way, I don't really understand where they come from in the balance sheet when I look at your assets in the annual report. Can you give a little bit of an indication how much comes from the fixed assets and how much comes from the intangible assets?

So I'm not fully sure. No, let's put it differently. So all the splits, of course, we will publish with the financials for the full year. And I think it makes sense to give us the time to really also finalize all bookings during Q4. And -- but you can expect, of course, that a very significant portion of the impairments will go to intangibles related to the PPE -- PPA of the acquisitions. And then, of course, there will be also impairments on PP&E. So I think that's basically the two blocks where you would find that in the end.

Okay. And the capitalized R&D, can you give an indication how big that is?

Yes, that is a small double-digit million euro amount that we have there. And probably you remember from the discussions that were held back then on that topic that this very much relates to know-how generated for a new filling platform that was developed over a couple of years, which in the current market environment proves to be probably too complex and too costly for customers to adopt. And that's -- hence, why the decision was taken to stop the project and to not market that equipment further.

Right. And is there more capitalized R&D on the balance sheet or we are talking small amounts at the end of the day?

So after this, basically nothing -- very small amounts are left, yes.

Right. And maybe one last thing. Those fillers that I have now understood, you have some fillers on stock where you have impaired part of it because you cannot deliver them in the next 12 months. Maybe two questions to this. It has nothing to do with this filling platform, you just impaired the R&D on the filling?

So of course, for the fillers that are impaired, of course, there is also equipment relating to this new platform that is not going to begin. The fillers on stock that I had commented before, I mean you know that when fillers are deployed with customers, but then don't reach the utilization that we agreed, we have the opportunity to take them back, which we also do. And then we redeploy them typically with other customers. And for ourselves, we have defined the rule if such a redeployment doesn't happen within 12 months, then this is an indication that the value of the filler has impaired. And of course, in the current market environment, it's more difficult to redeploy fillers. And that's why we have taken a conservative approach and have impaired those fillers that sit on stock and haven't been redeployed within 12 months.

But will be redeployed later on?

Yes. I mean this is not tariff for the group, of course. So if we find an opportunity to redeploy them later, of course, we will do that, absolutely.

The next question comes from Miro Zuzak from JMS.

Just one question. In the last 8 years, you had quite a high increase in installed capacity. So just the net filling machines, the increase, but also given the fact that you install high efficiency fillers and you take back low efficiency fillers, means that your capacity has grown -- the installed capacity has grown much faster than your sales or organic sales growth. A question here. Given the fact that at the moment, there are some changes happening, you ran into some problems, you mentioned the fillers that you had to take back. Is it fair to assume that in the coming couple of years, the expansion in terms of numbers of fillers is probably going to be a bit less compared to the time in the past?

Miro, thanks for the question. So I mean, I don't have now the numbers of the last 8 years perfectly in my head. But if I recall well, filler placements also over the last years and not only the last 2 or 3 years have always been varying between 40 and 90. I believe 91 being the top in '23 that we achieved, I believe. So that there is fluctuations in the number of fillers placed, I think it's very normal. But would I agree that 2026, as I said earlier, is probably not a high number of 90-plus given the current market environment, I would also agree to that.

Now the development of the overall fillers in field versus own growth, I mean, we should always also take into consideration that you have a filler with the customer, and then it depends on how much that customer is also growing and develops its business. So there is never a one-to-one correlation between the market growth and the growth on the installed filler base. I think that also needs to be taken into consideration.

We will take now some questions from the web. Back over to Ingrid, please.

Thank you. So we have some questions from Charlie at BNP. He's asking, in total, how much cash onetime outflows do you expect in 2026?

Yes. Thanks for the question. So let's come back to the overall announcement that we made, where we said 90% of the nonrecurring charges is noncash. That leaves you with about 10% on the range of EUR 310 million to EUR 360 million, and I think that's a reasonable assumption. And of course, that is pretax, that number.

His next question is, what share bag-in-box and spouted pouch today is aseptic?

So the share of bag-in-box -- aseptic in bag-in-box and spouted pouch is more than 30% already today and improving year-over-year, especially now with the placements of the spouted pouch fillers Generation 2. We believe that this number will grow significantly over the next couple of years. But also in bag-in-box in the dairy segment, of course, we see increases in aseptic content.

His final question has basically been asked, but I will ask it. What do you estimate to be the destocking effect in Q3? And what gives confidence in the implied sequential improvement in Q4 based on full year guidance?

Yes. And the answer would be the same. So it's difficult to single it out perfectly. But we feel that especially taking into consideration the seasonality throughout the year with a stronger buildup in the first quarter, we believe that the majority of the destocking probably has happened in the third quarter, but potentially a little more ongoing also in the fourth quarter.

Operator, are there any further questions?

Yes, madam. We have a follow-up question from Jörn Iffert from UBS.

It's just a follow-up question, please, on the accruals and the volume discounts you are paying. Can you just remind us what is the volume discount you have paid out in 2025 comparing to 2024, so that we get a feeling what could be the bridge for the equity free cash flow going to 2026?

Yes. So I believe our customer incentive accrual at the year-end 2024 was EUR 400 million approximately. And with the current volume, of course, we believe that this will be lower at the end of this year. And to quantify the impact on the free cash flow this year, I believe you could easily assume a very good double-digit number, so mid-double-digit number in million euros for the year. So I would believe something between EUR 50 million and EUR 80 million is a reasonable assumption for the year.

As a cash outflow linked for the incentives for 2025, is this likely falling away in 2026, given that your volumes are flat to mildly down?

I would -- no, I'm not perfectly sure that you can make that bridge, to be honest. So because also -- I mean, it's always the combination of how much you pay in a year for last year and how much you collect in the year for that year. So it's a bit more complicated, that math. But if you ask me why it was significantly negative hit for this year, it should not be a negative hit definitely next year to even slightly positive. But not fully fair, it will be black and white.

We have another follow-up question from Cole Hathorn from Jefferies.

Just an administrative point. For your Investor Day on Thursday, are we expecting a release in the morning or after market just so that we can get some context of how you're going to put it out on today?

Cole, yes, it's usual to have a release on the day summarizing the contents of the investor update. So we will put that out in the morning together with the presentation.

We have another follow-up question from Miro Zuzak from JMS.

One question regarding also, again, the number of filling machines and the impact on your free cash flow and CapEx number. So if you look into the past years with this record high installments of new fillers, '22 and '23, and also the elevated levels around these 2 years, we could see that the upfront cash number, liability in the balance sheet has also gone up quite significantly. Now if you install less fillers, there are two opposing effects, I believe. One is, obviously, you have lower CapEx, but you also have lower upfront cash and then you also probably have to run down or to deliver the goods, which are now basically stated in your balance sheet number. Now the bottom line from these three opposing numbers, is it positive or negative? So if you take all the three numbers into consideration and you assume that you have less gross filler CapEx going forward, is it positive or negative for your free cash flow?

Yes. So I wouldn't look at the gross filler CapEx in that respect, but always at net filler CapEx. And that is, I think, important to bear in mind because -- so over the last couple of years, I believe the team has done a very good job in improving the procedures and our contract framework also on how we place fillers to the market, and we have managed to drive the ratio of upfront cash up quite a bit. And if I recall well, in last year, the filler CapEx or net CapEx of fillers in percent of revenue was only a little more than 1%. So that's significantly less than what you have seen in earlier years.

So that said, I think it also makes sense to, of course, also consider a ramp-up time of fillers that it always takes up to, I don't know, 12 to 24 months to ramp up the fillers if you want to model what it means if you have a lower placement rate. But again, and I think we have said that for quite a while, any number between 60 and 80 is a good number. And while we have been at 80 or higher a couple of years now, probably the next year, it is rather in the lower end of that range. But overall, the impact of net CapEx related to filler placements is not a big one anymore as it used to be because of the improved go-to-market model here.

And sorry to follow up or to ask again, so the bottom line would then be positive or negative if you grow less quickly?

Yes. So if you -- of course, I mean, if you grow less quickly and consider that you don't have a super big investment anymore these days, right, of course, it will have a negative implication for the free cash flow. That's, I think, clear because lower growth probably means also then lower profits.

We have another follow-up question from Pallav Mittal from Barclays.

So you did comment on aluminum and the cost being high over the last few months, and you will clearly give more clarity in a couple of days. But any indications in terms of your liquid paperboard because those are slightly longer contracts and you do negotiate in Q4. So any indication on how we should think about the paperboard costs for next year?

Yes, I think no change compared to the usual answer on liquid paperboard. We have a number of multiyear contract arrangements with our suppliers, and there is fixed mechanisms in there, which typically results in a low single-digit price adjustment. So I wouldn't see any reason why that should be different next year because those contracts are in place and will be executed accordingly.

This was the last question from the phone. Back over to you for some other written questions.

Thank you. So we have a question from Torsten at Kepler. Can you provide an update with respect to the litigation? Any changes in context of what has happened in summer? Any updates on the time line?

Yes. Torsten, thank you for the question. And we don't have an update on the arbitration processes compared to what we have discussed in summer.

There's a further question from Mr. Massimiliano at Stifel about the dividend, and we'd ask for your patience to wait for the investor update, please, in 2 days' time. Yes. I think those are all the questions that have been asked. If there are no further questions, then we will end the call.

Thank you very much, everybody, for dialing in, and thank you for your questions, and then we look forward to welcoming you on Thursday in Zurich.

Thank you.

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.