Operator : Ladies and gentlemen, welcome to the SIG H1 2026 Results Conference Call and Live Webcast. I am Mathilde, the Chorus Call operator. The conference is being recorded. At this time, it's my pleasure to hand over to Christoph Ladner, Director, Investor Relations. Please go ahead.
Christoph Ladner : 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.
Mikko Keto : 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.
Ann-Kristin Erkens : 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.
Mikko Keto : 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 : The first question comes from the line of Jorn Iffert from UBS. Please go ahead.
Joern Iffert : 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?
Ann-Kristin Erkens : 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.
Mikko Keto : 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.
Ann-Kristin Erkens : 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.
Mikko Keto : 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.
Ann-Kristin Erkens : 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.
Operator : Next question comes from the line of Gabriel Simoes from Goldman Sachs.
Gabriel Simoes : 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?
Mikko Keto : 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.
Ann-Kristin Erkens : 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.
Mikko Keto : 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.
Operator : We now have a question from the line of Cole Hathorn from Jefferies.
Cole Hathorn : 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?
Ann-Kristin Erkens : 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.
Cole Hathorn : 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?
Mikko Keto : 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.
Operator : The next question comes from the line of Ioannis Masvoulas from Morgan Stanley.
Ioannis Masvoulas : 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?
Ann-Kristin Erkens : 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.
Operator : We now have a question from the line of Pallav Mittal from Barclays.
Pallav Mittal : 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?
Ann-Kristin Erkens : 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.
Mikko Keto : 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.
Operator : Next question comes from the line of Chiara Di Giammaria from Berenberg.
Chiara Di Giammaria : 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?
Mikko Keto : 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.
Ann-Kristin Erkens : 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.
Operator : We now have a question from the line of Manuel Lang from Vontobel.
Manuel Lang : 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.
Mikko Keto : 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.
Operator : Next question comes from the line of Alessandro Foletti from Octavian.
Alessandro Foletti : 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?
Mikko Keto : 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.
Alessandro Foletti : 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?
Ann-Kristin Erkens : 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.
Alessandro Foletti : 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?
Mikko Keto : 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.
Operator : We now have a question from the line of from Ephrem Ravi from Citi.
Ephrem Ravi : 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?
Ann-Kristin Erkens : 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.
Operator : The next question comes from the line of Lia [indiscernible] from AWP.
Unknown Analyst : 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?
Mikko Keto : 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.
Ann-Kristin Erkens : 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 : The next question comes from the line of Christian Arnold from ODDO BHS.
Christian Arnold : 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?
Mikko Keto : 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.
Ann-Kristin Erkens : And the 9.9% of course, also includes a component of resin and pricing moves. So that also needs to be considered.
Operator : We have a follow-up question from the line of Cole Hathorn from Jefferies.
Cole Hathorn : 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?
Mikko Keto : 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.
Operator : We have a follow-up question from the line of Ioannis Masvoulas from Morgan Stanley.
Ioannis Masvoulas : 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?
Ann-Kristin Erkens : 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.
Operator : Ladies and gentlemen, that was the last question from the phone.
Christoph Ladner : 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.
Ann-Kristin Erkens : 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.
Christoph Ladner : Okay . There is also no more question from the webcast. And therefore, I hand over to Mikko for the closing remarks.
Mikko Keto : 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.
Operator : Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.