Ladies and gentlemen, welcome to the ARYZTA's Full Year 2025 Performance Trading Update Conference Call and Live Webcast. The call will be hosted by Urs Jordi, Chairman and Interim CEO, and Martin Huber, CFO. I am Moira, the correspondent operator. I would like to remind you that all participants will be in listen-only mode and the conference has been recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast.
At this time, it's my pleasure to hand over to Paul Meade, Head of Investor Relations. Please go ahead.
Thank you, Moira, and good morning to everyone. Thank you for joining. After some opening remarks from our Chairman and Interim CEO, Urs Jordi, the call will then move to Q&A. The key risks and uncertainties which apply to today's discussion are provided on page two of our short presentation.
I would now like to hand over to our Chairman and Interim CEO, Urs Jordi.
Thank you, Paul. Good morning, all. Thank you for joining this trading update call today. The purpose of this call is to give reassurance of our performance level. This is based on our key performance metrics such as organic growth, EBITDA, and cash generation. The full year results will follow on March 2nd, 2026. The audit 2025 is still ongoing. I've invited you now to go on page 3 of the presentation. The organic growth is in low to mid- single- digit range, supported by volume and price. The EBITDA is north of EUR 305 million. Free cash flow is in the range of EUR 115 million -EUR 120 million. Financing costs, including lease interest, are in the range of EUR 42 million -EUR 44 million, significantly below the guidance we have given.
On the next page, then, we did complete negotiations with key customers. This is usually a year-end, maybe in some constellations, beginning of the year activity. We did conclude and complete this in a good and expected way. New capacity is ramping up to expectations. You know the investments we did: Germany, Switzerland, Malaysia. We have a new one soon coming online in Perth, in Australia. So this is all ramping up according to plan. Business cost optimization is well advanced. You know our two projects, the Agility to Win and the Excellence projects. So we see their progress and effects arriving on our results and business setups. There is an investment in Portugal which was confirmed. This is basically a burger bun line going online in 2028. This is a good message to have projects in the portfolio supporting future organic growth.
Thank you for this. Martin, is there something to add?
No, not from my side. I think we're probably going now to Q&A and answer questions that might exist.
We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to disable the loudspeaker mode and eventually turn off the volume from the webcast while asking a question. Anyone who has a question may press star and one at this time. The first question comes from the line of Jörn Iffert from UBS. Please go ahead.
Good morning, Urs. Good morning, Martin. Good morning, Paul. Thanks for taking my questions. Would be three quick ones, please. The first one is on the average selling prices for 2026. You are now guiding organic sales growth, but can you maybe give a bit more detail what you expect about the average selling prices? And if you have good visibility on these average selling prices for the full year, or will there be another round of discussions by mid-year, like it was maybe during inflation times and during COVID? The second question would be, please, on the cost savings. I mean, what have you initiated, and what is roughly the cost savings you could expect to come up with the P&L during 2026, and where exactly is it coming from?
If you allow me a quick third question on the free cash flow for 2026, can we expect a similar range like in 2025? So it's EUR 150 million, EUR 120 million. Is it fair to assume despite the CapEx ramp? Thanks a lot.
Good morning, Jörn. I'll take the three questions that you have given. In terms of, I think it's very important to reiterate what Urs has mentioned in his introduction speech. We have concluded the negotiation with our key customers and therefore have a pretty good understanding of where the pricing is evolving, and we do not expect a significant impact on pricing in that sense. So organic growth for the coming year, 2026, will be supported by volume and mix, and we don't see pricing as a negative impact on our overall performance figure. We will give further details on the guidance in terms of organic growth, in terms of profitability, and the usual measures on the 2nd of March.
In terms of cost savings, I'd like to draw your attention to the elements that we have highlighted in the Capital Markets Day. These are the blocks: operations, procurement, and structural costs, where we have guided for the midterm plan savings of EUR 20 million -EUR 30 million. Urs has mentioned that we have made strong progress on our initiatives. He mentioned Excellence, which is primarily targeting operations, and he mentioned Agility to Win, which is addressing our structural costs. We have indicated that we made good progress in Switzerland already. We have optimized the structure already in 2025 to a large extent. This is part of why, let's say, we were able to exceed, for example, our profitability figures that we have communicated today, and we expect to further accelerate in operations and procurement.
I would be more specific in terms of how these figures will impact 2026 when we come out on the 2nd of March. In terms of free cash flow, free cash flow performance has accelerated in the second half, and I think this is a state, let's say, a result of the power of our shared service center. Just like to remind you, we have about 60% of our revenue already covered by the shared service center, and we have made significant progress on standardizing processes. Among them is the payment schedules. So we have standardized the payment schedule of these businesses that are onboarded. That has helped us to drive cash performance. We have also made significant progress on improving our inventory management, and these together were the key levers to deliver the cash flow acceleration.
We have highlighted as well the fact that our financing costs are below our guidance. This is another element of contribution to the free cash flow.
Martin, for 2026, can we expect roughly more or less a similar strong cash conversion number? 2025, I'd assume.
Yeah, I would refer to our midterm guidance, where we have said that in the period of the current midterm plan, we target to achieve a cash conversion, free cash flow conversion of EBITDA of above 40%. So this is clearly the level we are working towards over this midterm plan.
Okay, thank you. And if you allow me a very quick last question, I remember in September, October, you mentioned the environment has changed. I mean, that is cured. Do you see now the overall bakery environment to have stabilized again? Has it in practice reversed?
I think, let's say, when we look at the overall context, I mean, we are in, and I don't have-- Davos is currently happening. And I think it's a picture that we have clearly entered the VUCA world. So VUCA is a reality. We have volatility, we have uncertainty, we have complexity, and we have ambiguity. This is here, and I think it is not a question of bakery. It is a question of the whole industry, of the whole economy. And I also like to, let's say, refer back to the point that Urs has mentioned many times before. Bakery is an economic category, is an efficient category from many points of view, is a key element of calorie for the consumers. And I think in these periods, we are a resilient category, and we are not to be afraid of the VUCA environment.
Thank you.
The next question comes from the line of Patrick Schwendimann from ZKB. Please go ahead.
Patrick Schwendimann, ZKB, Urs, Meade, Martin Huber, Paul. Could you please elaborate a little bit more about the current situation in the different channels and markets? That's my first question. Then second question, what's your best guess now for CapEx for 2026 and 2027, including now this investment in Portugal? And then finally, what's your best guess now for the net financial costs for 2026? Thank you.
Morning, Patrick. I would start with the channels. Retail is a winner of our days. This is visible, so the big formats are rolling out. We are a big participant and a strong participant in this business. This is a tough environment. It was always like this, and it will be like this and we are playing our good role as we did in the past, in the future, in this. So this is the retail part. Quick service restaurant is recovering. There was a little dip somehow during last year. This is coming back, ramping up, on a good track. One appearance of this is this investment we can do in Portugal, but we see it in other regions.
As Martin told before, there are always ups and downs, month on month or region on region, but overall, quick service restaurant is a part of our business, which is clearly a winner in days when price sensitivity is going up. Our Food Service businesses are doing well. We had a good winter, and we hope we can finish the winter in a good way. People are traveling, skiing, being on the road, so this is solid. The business model we are offering there in food service is clearly addressing the needs in our days, so shortage of labor, the volatility in guest count, the shortage of free reservation, so we are well positioned there.
We are quite optimistic for all these three business models, knowing that what Martin has told, we are living in a volatile world, but having a good portfolio bakery is the most efficient calorie on our table, not only for breakfast. This is a good place to be.
For the other two questions, I would hand over to Martin.
Thank you, Urs. Good morning, Patrick. In terms of CapEx, look, I think I would refer to the guidance that we have given also in the midterm plan, 3.5%-4.5% CapEx as a percentage of revenue. This is clearly the watermark we are using to manage our CapEx spend. Also, we have shown in 2025 that with all the projects we have concluded, that we have a CapEx spend that is at quite similar levels that we had in 2024. So we have a track record of proven delivery and management of CapEx. The bakery that we have been awarded to in Portugal is around EUR 40 million, as we have said. This is a bakery that will come online in the beginning, in the first half of 2028.
The CapEx will be spread over 2026 and 2027 to a large part, a smaller part in 2026, and we will manage that within the framework that I've mentioned before. So I don't think there is anything to add to that. In terms of net financial cost, over the last five years, we have clearly laid out that the priorities are cash generation, business improvement with that, restructuring and continuous improvement of our balance sheet. Diversification of the funding is a strong element. Improvement of equity is a strong element, and we'll continue to do that. We have improved our cash management. This all has allowed us to come in significantly below the guidance in terms of financing costs.
We are working on developing the company towards getting an investment-grade rating to access the attractive capital market in Switzerland and further diversify the bonds, so further diversify the balance sheet. So in that sense, we continue to work on driving these measures, improving performance, delivering cash, making the cash used as efficient as possible, and with that, further optimizing our financing cost.
Thanks. Yes. Thanks, Urs and Martin. Just on the financial costs, I mean, it seems now that net debt, including everything, was below EUR 800 million, right, for 2025?
We'll communicate our figures in, let's say, exact figures on March 2nd. As Urs mentioned, the audit of the figures is currently ongoing, but I would expect to clearly communicate then on the 2nd of March a further improvement of our figures and in line with what I said with our priorities in supporting the deleveraging and further optimization of the balance sheet.
All right. Perfect. Thanks, Martin and Urs.
Thank you, Patrick.
For any further questions, please press star and one on your telephone. The next question comes from the line of Jon Cox from Kepler Cheuvreux. Please go ahead.
Yes, good morning, guys. Thanks for the statement. I wonder if you can just talk a bit on 2025 organic sales growth. You say you're in line with your target, but you probably have a better indication just roughly would be helpful. As an add to that, you mentioned earlier that pricing for this year is going to be, I'm guessing, flat. Is that what you were saying? Like a black zero or a red zero, something like that in terms of pricing? And then just on the free cash flow, I'm wondering if you can give us an idea of how much securitization may have contributed to the free cash flow. And also in terms of the CapEx, where did CapEx come in in terms of that free cash flow number? Thank you.
Martin?
I think to your first question, I would really like to go back to the statement that Urs has mentioned in the beginning. The update today is to remove uncertainty around the company's performance post the significant changes that we had in October. We are confirming with this communication that we have exceeded our guidance or met our guidance in all our criteria that we have laid out: organic growth for the full year in the low to mid-single digit range, an EBITDA of above EUR 300 million, and the free cash flow as well above EUR 100 million. W e have given within prudence these figures or ranges, and I would leave it at that.
In terms of pricing, as I mentioned, yes, we have negotiated with our key customers the contracts. As I mentioned before to Jörn, we expect organic growth to be primarily driven by volume and mix in the next year, and we don't expect any significant impact on the pricing side. We will be more specific when we come out with the guidance on March 2nd.
In terms of free cash flow, the acceleration of free cash flow, as I said, is strongly driven by working capital. As I mentioned before, the power of our shared service center is seen in this figure with the standardization of the processes that have onboarded there. Within this standardization process, we have aligned payment schedules of already about 60% of our businesses, and this is a strong contributor to the free cash flow acceleration. The second part, as I also mentioned, is the much improved management of inventory. These are key elements that have driven.
I mentioned before to Patrick as well that CapEx in 2025 was at comparable levels to 2024.
Okay. Thank you.
There are no more questions in the queue. Now I will hand back over to Urs Jordi for closing remarks. Please go ahead, sir.
Thank you for this. Thank you all for joining this short update. Again, the purpose of this call was the reassurance of our performance level. We will have the full year set March 2nd, 2025, answering then more questions and all the details you did ask today. Again, thank you for dialing in. Wish you a good day. Goodbye.
Thank you very much.
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