Q2 2026 Edita Food Industries SAE Earnings Call

August 17, 2026

Speaker #1: Next.

Speaker #2: Hello everyone, this is Haith Malek from EFGRMS, and welcome to Edita’s Q2 2026 results call. I’m pleased to have on the call today from Edita, Hani Berzi, Chairman and Group CEO.

Hatem Alaa: Hello everyone. This is Hatem Alaa from EFG Hermes, and welcome to Edita's Q2 2026 results call. I am pleased to have on the call today from Edita, Hani Berzi, Group Chairman and CEO, Sameh Naguib, Deputy Group CEO, Ahmed Samy, CEO, Egypt, and Omar ElAbhar, IR Senior Manager. We will start by some comments from management, and then we will open the floor for your questions. As an initial reminder, to ask a question, you can either type it in the Q&A chat box or you can click on the raise hand button. Gentlemen, please go ahead.

Hatem Alaa: Hello everyone. This is Hatem Alaa from EFG Hermes, and welcome to Edita's Q2 2026 results call. I am pleased to have on the call today from Edita, Hani Berzi, Group Chairman and CEO, Sameh Naguib, Deputy Group CEO, Ahmed Samy, CEO, Egypt, and Omar El-Abhar, IR Senior Manager. We will start by some comments from management, and then we will open the floor for your questions. As an initial reminder, to ask a question, you can either type it in the Q&A chat box or you can click on the raise hand button. Gentlemen, please go ahead.

Speaker #2: Sameh Najib, Deputy Group CEO; Ahmad Sami, CEO Egypt; and Omar Al-Abhar, IR Senior Manager. We'll start with some comments from management, and then we'll open the floor for your questions. As an initial reminder, to ask a question...

Speaker #2: You can either type it in the Q&A chat box, or you can click on the raise hand button. Gentlemen, please go ahead.

Speaker #3: Good afternoon, ladies and gentlemen. This is Hani Berzi speaking, and thank you for joining our Q2 2026 results call. Let me first begin by thanking Hatem Alaa from EFG Hermes for hosting us today.

Hani Berzi: Good afternoon, ladies and gentlemen. This is Hani Berzi speaking, and thank you for joining our Q2 2026 results call. Let me first begin by thanking Hatem Alaa from EFG Hermes for hosting us today. Exactly like he said, I have with me Sameh Naguib, the Deputy Group CEO. I have Ahmed Samy, the CEO of Egypt, and Omar ElAbhar, our Senior Investor Relations and Investment Analyst Manager. As we close the first 6 months of the year, we are pleased with the strong momentum sustained year to date and what is shaping to be another record year for Edita. Revenue grew 30.5% year on year in Q2 to EGP 6.5 billion, while net profit increased 31% to EGP 707 million with a healthy margin of 10.9%.

Hani Berzi: Good afternoon, ladies and gentlemen. This is Hani Berzi speaking, and thank you for joining our Q2 2026 results call. Let me first begin by thanking Hatem Alaa from EFG Hermes for hosting us today. Exactly like he said, I have with me Sameh Naguib, the Deputy Group CEO. I have Ahmed Samy, the CEO of Egypt, and Omar El-Abhar, our Senior Investor Relations and Investment Analyst Manager. As we close the first six months of the year, we are pleased with the strong momentum sustained year to date and what is shaping to be another record year for Edita. Revenue grew 30.5% year-on-year in Q2 to EGP 6.5 billion, while net profit increased 31% to EGP 707 million with a healthy margin of 10.9%.

Speaker #3: And, exactly as he said, I have with me Sameh Najib, the Deputy Group CEO; Ahmad Sami, the CEO of Egypt; and Omar Al-Abhar, our Senior Investor Relations and Investment Analyst Manager.

Speaker #3: As we close the first six months of the year, we are pleased with the strong momentum sustained year to date, and with what is shaping up to be another record year for Edita.

Speaker #3: Revenue grew 30.5% year-on-year in Q2 to EGP 6.5 billion, while net profit increased 31% to EGP 707 million, with a healthy margin of 10.9%.

Speaker #3: For the first half, revenue reached EGP 12.3 billion, up 32.5% year-on-year, while net profit increased by a strong 63% to EGP 1.5 billion, with net margin widening from 9.9% in Q1 2025 to 12.2%.

Hani Berzi: For H1, revenue reached EGP 12.3 billion, up 32.5% year on year, while net profit increased by a strong 63% to EGP 1.5 billion, with net margin widening from 9.9% in H1 2025 to 12.2%. This growth was not driven by a single lever but reflects the combination of stronger demand, disciplined price point management, and continued execution across segments. Total pack sold increased 16.6% year on year in Q2, while tons sold grew 23.9%, alongside a 12% increase in average price point per pack to EGP 6.14. Underscoring the balanced contribution of volume growth and continued migration toward higher value price points. What gives us additional confidence is that the momentum was broad-based across our segments.

Hani Berzi: For H1, revenue reached EGP 12.3 billion, up 32.5% year-on-year, while net profit increased by a strong 63% to EGP 1.5 billion, with net margin widening from 9.9% in H1 2025 to 12.2%. This growth was not driven by a single lever but reflects the combination of stronger demand, disciplined price point management, and continued execution across segments. Total pack sold increased 16.6% year-on-year in Q2, while tons sold grew 23.9%, alongside a 12% increase in average price point per pack to EGP 6.14. Underscoring the balanced contribution of volume growth and continued migration toward higher value price points. What gives us additional confidence is that the momentum was broad-based across our segments.

Speaker #3: This growth was not driven by a single lever, but reflects the combination of stronger demand, disciplined price-point management, and continued execution across segments.

Speaker #3: Total PAX sold increased 16.6% year-on-year in Q2, while TON sold grew 23.9%, alongside a 12% increase in average price point per PAX to EGP 6.14.

Speaker #3: Underscoring the balanced contribution of volume growth and continued migration toward higher-value price points, what gives us additional confidence is that the momentum was broad-based across our segments. Cakes and bakery continued to lead growth, with revenue increasing 30% and 42.5% year-on-year, respectively.

Hani Berzi: Cakes and bakery continued to lead growth, with revenue increasing 30% and 42.5% year on year respectively, while candy and biscuit also delivered strong growth of 37.3% and 32.4%. Particularly encouraging is the continued development of our frozen segment, where revenue grew 33.6% year on year. We are developing Forni through both B2B and B2C channels, with the strategic B2B partnership adding commercial momentum. While on the consumer side, we are refining the proposition through a more focused SKU portfolio, higher value offering, and improved packaging based on the market learning we have accumulated since launch and supported by progress across both B2B and B2C channels. Innovation remains at the heart of Edita's continued performance. During the quarter, we introduced Molto Gold in bakery, a premium butter croissant positioned at the category highest price point of EGP 20 per pack.

Hani Berzi: Cakes and bakery continued to lead growth, with revenue increasing 30% and 42.5% year-on-year respectively, while candy and biscuit also delivered strong growth of 37.3% and 32.4%. Particularly encouraging is the continued development of our frozen segment, where revenue grew 33.6% year-on-year. We are developing Forni through both B2B and B2C channels, with the strategic B2B partnership adding commercial momentum. While on the consumer side, we are refining the proposition through a more focused SKU portfolio, higher value offering, and improved packaging based on the market learning we have accumulated since launch and supported by progress across both B2B and B2C channels. Innovation remains at the heart of Edita's continued performance. During the quarter, we introduced Molto Gold in bakery, a premium butter croissant positioned at the category highest price point of EGP 20 per pack.

Speaker #3: While candy and biscuit also delivered strong growth of 37.3% and 32.4%, particularly encouraging is the continued development of our frozen segment, where revenue grew 33.6% year-on-year. We are developing Forni through both B2B and B2C channels, with the strategic B2B partnership adding commercial momentum. On the consumer side, we are refining the proposition through a more focused SKU portfolio, higher-value offering, and improved packaging based on the market learning we have accumulated since launch, and supported by progress across both B2B and B2C channels.

Speaker #3: Innovation remains at the heart of Edita's continued performance. During the quarter, we introduced Molto Gold in bakery, a premium butter croissant positioned at the category's highest price point of EGP 20 per pack.

Speaker #3: We also launched new offerings in cake and wafer, further building on our strategy of strengthening our brand, broadening consumer choice, and expanding our presence across higher value propositions.

Hani Berzi: We also launched new offering in cake and wafer, further building on our strategy of strengthening our brand, broadening consumer choice, and our presence across higher value propositions. Together, this broad-based performance across our segment demonstrate the strength of our core business while highlighting the progress we are making in building additional growth engines across the portfolio. On the industrial side, we continue to bring additional capacity online to support demand. One of the bakery line acquired in October 2025 was fully ramped up by April and reached full utilization during the Q2. This is the second of the four acquired production lines to become fully operational and fully utilized. Following the cake line ramp-up during the Q1, which serve as testament to the strong demand. Additionally, the third of the four acquired lines in October, also dedicated to bakery, is currently under installation.

Speaker #3: Together, this broad-based performance across our segments demonstrates the strength of our core business while highlighting the progress we are making in building additional growth engines across the portfolio.

Speaker #3: On the industrial side, we continue to bring additional capacity online to support demand. One of the bakery lines acquired in October 2025 was fully ramped up by April and reached full utilization during Q2.

Speaker #3: This is the second of the four acquired production lines to become fully operational and fully utilized, following the cake line ramp-up during the first quarter, which served as a testament to the strong demand.

Speaker #3: Additionally, the third of the four acquired lines in October, also dedicated to bakery, is currently under installation. In parallel, and as part of our planned CAPEX program, we have ordered three new production lines for Egypt, one for Morocco, and one for Iraq.

Hani Berzi: In parallel and as part of our planned CapEx program, we have ordered three new production line for Egypt, one for Morocco and one for Iraq, further expanding our capacity platform across both our home market and regional operation. These additions strengthen capacity in our core category and give us further headroom to capture growth in the markets. Regionally, Iraq remains an important pillar of our expansion strategy. Local cake production, our newly introduced segment in the market, commenced toward the end of March and generated EGP 72.5 million in revenue during the Q2. Following the close of the reporting period, our second local production line in Iraq dedicated to bakery also commenced operation in July and is running at full capacity. This marks another step in moving our Iraqi platform from market development toward a broader local manufacturing presence. Our wide regional platform also continued to progress.

Speaker #3: Further expanding our capacity platform across both our home market and regional operations, these additions strengthen capacity in our core category and give us further headroom to capture growth in the markets.

Speaker #3: Regionally, Iraq remains an important pillar of our expansion, of our expansion strategy. Local cake production, our newly introduced segment in the market, commenced toward the end of March and generated 72.5 million Egyptian pound in revenue during the Q2.

Speaker #3: Following the close of the reporting period, our second local production line in Iraq, dedicated to bakery, also commenced operation in July and is running at full capacity.

Speaker #3: This marks another step in moving our Iraqi platform from market development toward a broader local manufacturing presence. Our wide regional platform also continued to progress.

Speaker #3: Net export sales grew 38.3% year-on-year in Q2, while we continued to build our presence in Morocco, with first-half revenue increasing 7.2% year-on-year. The combination of exports, local manufacturing, and expanded brand reach across Africa gives us multiple routes to scale Edita beyond Egypt in a disciplined manner.

Hani Berzi: Net export sales grew 38.3% year on year in the Q2. While we continue to build our presence in Morocco with H1 revenue increasing 7.2% year on year. The combination of export, local manufacturing and expanded brand rights across Africa give us multiple routes to scale Edita beyond Egypt in a disciplined manner. Sustainability is also becoming increasingly embedded in how we invest and operate. In May, we started installation a rooftop solar photovoltaic system at our 6th headquarters with approximately 390 kilowatts peak of installed capacity. In July, we were also awarded ISO 50001:2018 certification for energy management system, our fifth ISO certification covering five of Edita's Egypt six factories. This provide us with an internationally recognized framework to systematically measure, benchmark and improve energy performance across our operations.

Hani Berzi: Net export sales grew 38.3% year-on-year in the Q2. While we continue to build our presence in Morocco with H1 revenue increasing 7.2% year-on-year. The combination of export, local manufacturing and expanded brand rights across Africa give us multiple routes to scale Edita beyond Egypt in a disciplined manner. Sustainability is also becoming increasingly embedded in how we invest and operate. In May, we started installation a rooftop solar photovoltaic system at our 6th headquarters with approximately 390 kilowatts peak of installed capacity. In July, we were also awarded ISO 50001:2018 certification for energy management system, our fifth ISO certification covering five of Edita's Egypt six factories. This provide us with an internationally recognized framework to systematically measure, benchmark and improve energy performance across our operations.

Speaker #3: Sustainability is also becoming increasingly embedded in how we invest and operate. In May, we started installing a rooftop solar photovoltaic system at our Sheikh Zayed headquarters, with approximately 390 kW peak of installed capacity.

Speaker #3: In July, we were also awarded ISO 50001:2018 certification for our energy management system—our fifth ISO certification—covering 5 of Edita's 6 factories in Egypt. This provides us with an internationally recognized framework to systematically measure, benchmark, and improve energy performance across our operations.

Speaker #3: Both of these initiatives support our focus on improving energy efficiency and reducing our environmental footprint as the business scales. Overall, we entered the second half of the year with confidence.

Hani Berzi: Both of these initiatives support our focus on improving energy efficiency and reducing our environmental footprint as the business scales. Overall, we enter the H2 of the year with confidence. We have healthy demand, stronger volume, additional capacity coming online, a broader portfolio and a regional platform that continue to advance. Our focus remain on converting this opportunity into sustainable and profitable growth while maintaining the pricing, cost and execution discipline that has supported our performance. With that, I will now hand over to Sameh to walk you through the financial highlights before we open the floor for questions. Sameh, can you please take the lead?

Speaker #3: We have healthy demand, stronger volume, additional capacity coming online, a broader portfolio, and a regional platform that continue to advance. Our focus remains on converting these opportunities into sustainable and profitable growth while maintaining the pricing, cost, and execution discipline that has supported our performance.

Speaker #3: With that, I will now hand over to Sameh to walk you through the financial highlights before we open the floor for questions. Sameh, can you please take the lead?

Speaker #2: Thank you, Hamid. Good afternoon, everyone. Let me take you through the key financial highlights for Q2 2026. Revenues reached £6.5 billion in Q2 2026, up 30.5% year-on-year.

Sameh Naguib: Thank you, Hani. Good afternoon, everyone. Let me take you through the key financial highlights for Q2 2026. Revenues reached EGP 6.5 billion in Q2 2026, up 30.5% year on year, supported by strong underlying volumes, healthy demand across our key categories and continued portfolio migration to higher price points. This brought H1 revenues to EGP 12.3 billion, up 32.5% year on year. Operationally, total packs sold increased 16.6% year on year to 1.1 billion in Q2, while tons sold rose 23.9% to 44,500 tons. Average price per pack increased 12% year on year to EGP 6.14, demonstrating the balanced contribution of volume growth and continued price point migration. At the segment level, our core categories remained the main growth engines. Cakes revenues increased 30% year on year to EGP 3.4 billion, while bakery revenues rose 42.4% to EGP 1.9 billion.

Sameh Naguib: Thank you, Hani. Good afternoon, everyone. Let me take you through the key financial highlights for Q2 2026. Revenues reached EGP 6.5 billion in Q2 2026, up 30.5% year-on-year, supported by strong underlying volumes, healthy demand across our key categories and continued portfolio migration to higher price points. This brought H1 revenues to EGP 12.3 billion, up 32.5% year-on-year. Operationally, total packs sold increased 16.6% year-on-year to 1.1 billion in Q2, while tons sold rose 23.9% to 44,500 tons. Average price per pack increased 12% year-on-year to EGP 6.14, demonstrating the balanced contribution of volume growth and continued price point migration. At the segment level, our core categories remained the main growth engines. Cakes revenues increased 30% year-on-year to EGP 3.4 billion, while bakery revenues rose 42.4% to EGP 1.9 billion.

Speaker #2: Supported by strong underlying volumes, healthy demand across our three categories, and continued portfolio migration to higher price points. This brought first-half revenues to £12.3 billion, up 32.5% year-on-year.

Speaker #2: Operationally, total packs sold increased 16.6% year-on-year to 1.1 billion in Q2, while tons sold rose 23.9% to 44.5 thousand tons. The average price per pack increased 12% year-on-year to 6.14 pounds.

Speaker #2: Demonstrating the balanced contribution of volume growth and continued price point migration. At the segment level, our core categories remained the main growth engines. Cakes revenues increased 30% year-on-year to £3.4 billion, while bakery revenues rose 42.4% to £1.9 billion.

Speaker #2: Across our nascent segments, candy grew 37.3%, biscuits increased 32.4%, wafers returned to growth with a 14.5% increase, and frozen revenues rose 33.6% year-on-year. Gross profit increased 29.8% year-on-year to £2.1 billion in Q2, with gross margin broadly stable at 33%.

Sameh Naguib: Across our nascent segments, candy grew 37.3%, biscuits increased 32.4%, wafers returned to growth with a 14.5% increase, and frozen revenues rose 33.6% year on year. Gross profit increased 29.8% year on year to EGP 2.1 billion in Q2, with gross margin broadly stable at 33% compared to 33.2% in Q2 2025. Direct materials costs stood at 36.1% of revenue, manufacturing overheads at 9.7%, while industrial depreciation declined to 1.2% of sales from 1.5% in the prior year quarter. SG&A remained well controlled relative to the pace of revenue growth, increasing 29.8% year on year to approximately EGP 1.1 billion and representing 16.4% of sales, compared to 16.5% in Q2 2025. EBITDA increased 30% year on year to EGP 1.2 billion, with margin broadly stable at 18.1% compared to 18.2% in the prior year quarter.

Sameh Naguib: Across our nascent segments, candy grew 37.3%, biscuits increased 32.4%, wafers returned to growth with a 14.5% increase, and frozen revenues rose 33.6% year-on-year. Gross profit increased 29.8% year-on-year to EGP 2.1 billion in Q2, with gross margin broadly stable at 33% compared to 33.2% in Q2 2025. Direct materials costs stood at 36.1% of revenue, manufacturing overheads at 9.7%, while industrial depreciation declined to 1.2% of sales from 1.5% in the prior year quarter. SG&A remained well controlled relative to the pace of revenue growth, increasing 29.8% year-on-year to approximately EGP 1.1 billion and representing 16.4% of sales, compared to 16.5% in Q2 2025. EBITDA increased 30% year-on-year to EGP 1.2 billion, with margin broadly stable at 18.1% compared to 18.2% in the prior year quarter.

Speaker #2: Compared to 33.2% in Q2 2025, direct materials costs stood at 56.1% of revenue, manufacturing overheads at 9.7%, while industrial depreciation declined to 1.2% of sales from 1.5% in the prior year quarter.

Speaker #2: SG&A remained well controlled relative to the pace of revenue growth, increasing 29.8% year-on-year to approximately £1.1 billion, and representing 16.4% of sales compared to 16.5% in Q2 2025.

Speaker #2: EBITDA increased 30% year-on-year to £1.2 billion, with margin broadly stable at 18.1% compared to 18.2% in the prior year quarter. Net profit increased 31.1% year-on-year to £707 million in Q2 2026, with net margin holding steady at 10.9% for the first half.

Sameh Naguib: Net profit increased 31.1% year on year to EGP 707 million in Q2 2026, with net margin holding steady at 10.9%. For H1, net profit reached EGP 1.5 billion, up 63% year on year, supported by continued revenue growth, improved operating profitability and significantly higher interest income. On the regional front, net export sales reached EGP 624 million in Q2, up 38% year on year and representing 9.6% of revenues. In Iraq, as Hani mentioned, local cake production commenced towards the end of March and generated EGP 72.5 million in revenues during Q2. Morocco continued to progress as we further develop our presence in the market. From a balance sheet perspective, cash and bank balances stood at EGP 5.2 billion as of 30 June 2026.

Sameh Naguib: Net profit increased 31.1% year-on-year to EGP 707 million in Q2 2026, with net margin holding steady at 10.9%. For H1, net profit reached EGP 1.5 billion, up 63% year-on-year, supported by continued revenue growth, improved operating profitability and significantly higher interest income. On the regional front, net export sales reached EGP 624 million in Q2, up 38% year-on-year and representing 9.6% of revenues. In Iraq, as Hani mentioned, local cake production commenced towards the end of March and generated EGP 72.5 million in revenues during Q2. Morocco continued to progress as we further develop our presence in the market. From a balance sheet perspective, cash and bank balances stood at EGP 5.2 billion as of 30 June 2026.

Speaker #2: Net profit reached £1.5 billion, up 63% year-on-year, supported by continued revenue growth, improved operating profitability, and significantly higher interest income. On the regional front, net export sales reached £624 million in Q2, up 38% year-on-year and representing 9.6% of revenues.

Speaker #2: In Iraq, as Hani mentioned, local cake production commenced towards the end of March and generated £72.5 million in revenues during Q2. Morocco continued to progress as we further developed our presence in the market.

Speaker #2: From a balance sheet perspective, cash and bank balances stood at £5.2 billion as of 30 June 2026. Gross debt stood at £5.7 billion, resulting in a net debt position of £440 million, compared to a net cash position of £266 million at year-end 2025.

Sameh Naguib: Gross debt stood at EGP 5.7 billion, resulting in a net debt position of EGP 440 million, compared to a net cash position of EGP 256 million at year-end 2025. Inventories stood at EGP 2.8 billion at the end of June, compared to EGP 2.3 billion at year-end 2025. While trade and those receivables reached EGP 374 million compared to EGP 243 million at the end of December. Total CapEx for the six-month period ended 30 June 2026 amounted to approximately EGP 726 million, primarily allocated to planned expansions and production lines. Overall, Q2 demonstrated the continued strength of demand and our ability to translate volume growth and portfolio migration into sustained profitability while continuing to invest behind future growth. With that, we open the floor to your questions. Thank you. Aton, can you open the floor for questions? Thank you.

Speaker #2: Inventories stood at 2.8 billion pounds at the end of June, compared to 2.3 billion pounds at year-end 2025. Meanwhile, trade-in notes receivables reached 374 million pounds, compared to 243 million pounds at the end of December.

Speaker #2: Total CAPEX for the six-month period ended 30 June 2026 amounted to approximately £726 million, primarily allocated to planned expansions and production lines. Overall, Q2 demonstrated the continued strength of demand and our ability to translate volume growth and portfolio migration into sustained profitability, while continuing to invest behind future growth.

Speaker #2: With that, we open the floor to your questions. Thank you. Hatem, can you please open the floor for questions? Thank you.

Speaker #1: Thank you. To ask a question, you can either type it in the chat box or click on the Raise Hand button, and I'll unmute your line.

Hatem Alaa: Thank you. To ask a question, you can either type it in the chat box, or you can click on the raise hand button and I will unmute your line. Again, you can either type your question in the chat or click on the raise hand button. We will take the first question from the line of Tinashe Hove. Tinashe, please unmute yourself.

Speaker #1: Again, you can either type your question in the chat or click on the 'Raise Hand' button. We'll take the first question from the line of Tanashi Hove.

Speaker #1: Tanashi, please unmute yourself.

Speaker #3: Good afternoon, and thank you for taking the time. Also, congratulations on a pretty strong result. Just two questions from my side. The first one is income-statement related.

Tinashe Hove: Good afternoon, and thank you for taking the time, and also congratulations on a pretty strong result. Just two questions from my side. The first one is income statement related. During, say, late March, April, and May, the pound weakened somewhat. Can you give us a feel of what you guys expect of your GP margins in Q3 and Q4? Are you guys sitting on inventory acquired at a weaker pound that could put pressure on GP margins, or are you comfortable that the pricing that you have and the volumes that you can achieve, that you can pretty much defend the GP margin level you delivered in Q2? My second question. You mentioned some unutilized capacity in passing during the commentary just now.

Hatem Alaa: Good afternoon, and thank you for taking the time, and also congratulations on a pretty strong result. Just two questions from my side. The first one is income statement related. During, say, late March, April, and May, the pound weakened somewhat. Can you give us a feel of what you guys expect of your GP margins in Q3 and Q4? Are you guys sitting on inventory acquired at a weaker pound that could put pressure on GP margins, or are you comfortable that the pricing that you have and the volumes that you can achieve, that you can pretty much defend the GP margin level you delivered in Q2? My second question. You mentioned some unutilized capacity in passing during the commentary just now.

Speaker #3: So during, say, late March, April, and May, the pound weakened somewhat. Can you give us a feel for what you guys expect of your GP margins in Q3 and Q4?

Speaker #3: Are you sitting on inventory acquired at a weaker pound that could put pressure on gross profit margins? Or are you comfortable that, with the pricing you have and the volumes you can achieve, you can defend the gross profit margin level you delivered in Q2?

Speaker #3: Then my second question: you mentioned some unutilized capacity in passing. During the commentary just now, can you give us a reminder again as to how much headroom you guys have across your key categories for unutilized capacity?

Tinashe Hove: Can you give us a reminder again as to how much headroom you guys have across your key categories for unutilized capacity that we should be treating as upside potential? Thank you.

[Analyst]: Can you give us a reminder again as to how much headroom you guys have across your key categories for unutilized capacity that we should be treating as upside potential? Thank you.

Speaker #3: That should be treated as upside potential. Thank you.

Speaker #2: Thank you, Tanashi. Thank you very much for also congratulating the team for this strong result. On the income statement point, I will have Sam comment, but just to give some comfort on the gross profit margin, that's a continuous process that we keep on looking at with the team. I don't want to say week by week, but whenever we feel that there is inflation due to depreciation or appreciation of the EGP, or whether because of the regional tension that could add additional cost to our raw material, whether in logistics or whether in demand, like we have seen, or a hike in any commodity, like we have seen with cocoa powder over the past couple of years.

Hani Berzi: Thank you, Tinashe. Thank you very much for also congratulating the team for these strong results. On the income statement point, I will have Sameh comment, but just to give some comfort on the gross profit margin, that is a continuous process that we keep on looking with the team. I do not want to say week by week, but whenever we feel that there is an inflation due to depreciation or appreciation of the EGP, or whether because of the regional tension that could add additional cost to our raw material, whether in logistic or whether in demand like we have seen, or a hike in any commodity like we have seen with cocoa powder over the past couple of years.

Speaker #2: So this is something that we monitor very carefully, just to make sure that we maintain our margin within the healthy range that we would like them to be, in order to be able to deliver the net results that we are expecting and what we are budgeting for.

Hani Berzi: So this is something that we overlook very carefully, just to make sure that we maintain our margin within the healthy range that we would like them to be in order to be able to deliver the net results that we are expecting and what we are budgeting for. Sameh, would you like to shed some light further on what is the expectation for Q3 and Q4 when it comes to gross profit margin? I do not think there is any changes of what we are seeing today unless something unusual happens. Correct, Sameh?

Speaker #2: Sam, would you like to shed some light further on what is the expectation for Q3 and Q4 when it comes to gross profit margin?

Speaker #2: I don't think there are any changes to what we are seeing today, unless something unusual happens. Correct, Sam?

Speaker #4: Correct. I think what we've seen so far, Hani, and Tanashi as well—thank you—is that Q2 already reflects the impact of changes in material prices and the devaluation.

Sameh Naguib: Correct. I think what we have seen so far, Hani, and Tinashe as well, thank you, that Q2 already reflects the impact of change in material prices and the devaluation. We went from a 47 in Q1 to ranging somewhere between 49 and 51, maybe it peaked at 52. And what we have seen throughout the quarter compared to the same quarter last year, a total increase of 14% in the cost, 12% related to price increases and 2% in relation to the FX. I think we will continue seeing currency fluctuation till the end of the year or until we see more stability in the region. But I think our view is we will maintain the 50, 52 max on the FX during the H2 of the year.

Speaker #4: We went from 47 in Q1 to ranging somewhere between 49 and 51, maybe peaking at 52. What you've seen throughout the quarter, compared to the same quarter last year, is a total increase of 14% in the cost.

Speaker #4: 12% related to price increases and 2% in relation to the APEX. I think we will continue seeing currency fluctuation till the end of the year, or until we see more stability in the region. But I think our view is we will maintain the 50–52 max on the APEX during the second half of the year.

Speaker #4: And this will not have a significant impact on our total cost or our gross profit, as we will keep watching and adjusting—maybe slightly—the weights to maintain the profitability at the 33% currently.

Sameh Naguib: This will not have a significant impact on our total cost or our gross profit, as we will keep watching and adjusting maybe slightly the weights to maintain the profitability at the 33% currently. I think for the second part, in relation to the capacity utilization, I leave Ahmed Samy to take this one. Thank you. Sameh?

Speaker #4: I think for the second part, in relation to the capacity utilization, I'll leave it to Ahmed and Sami to take this one. Thank you.

Speaker #3: Sami: Thanks. Thank you, Sam. Thank you, Sam. I think, just adding to what you've been saying, definitely, when it comes to gross margins, as you just mentioned, we've seen that lately with all the geopolitical pressure that we've encountered, we've been able to manage our propositions perfectly in order not to get a hit on gross margins whatsoever.

Ahmed Samy: Yes, thanks. Thank you, Sameh. I think, just adding to what you have been saying, definitely when it comes to gross margins, as you just mentioned, we have seen that lately with all the geopolitical pressure that we have encountered, that we have been able to manage perfectly our propositions in order not to get a hit on gross margins whatsoever. And lately, if we look into the projections that we have also from supply chain level on the price of the different commodities, we tend to see that there has been some sort of ease in the projections and that numbers in terms of costs are getting down now, or especially when it comes to packaging material, which is a very important component, definitely, with almost 20% of contribution to our cost. So the perspective is somehow stable.

Speaker #3: And lately, if we look into the projections that we have also from the supply chain level on the prices of the different commodities, we tend to see that there has been some sort of ease in the projections and that numbers in terms of cost are going down now, especially when it comes to packaging material, which is a very important component, definitely.

Speaker #3: With almost 20% contribution to our cost, the perspective is somehow stable. We've already taken initiatives, and we're definitely willing and aiming to continue managing our portfolio in terms of indirect price increases in order to absorb any surge that happens at the COGS level.

Ahmed Samy: We have already taken initiatives, and we are definitely willing, aiming to continue on managing our portfolio in terms of indirect price increases in order to swallow any surge that happens on COGS level. Speaking of capacities, I think that overall we currently are, as a group, on 86% to 90% utilization. Hence, the heavy CapEx plan that we have. As you know that we had EGP 4 billion planned of CapEx in 2026, and almost half of it has been consumed and we are still in progression in order to continue this capacity increases that are definitely required. We have had a previous acquisition of four different lines for bakery and cakes from another food conglomerate, and two of which are already operational and the third one will get to operate by Q4, which will enable us more.

Speaker #3: Speaking of capacities, I think that overall we currently are as a group on 86% 86 to 90% utilization. Hence, the heavy capex plan that we have, we've as you know, that we had 4 billion Egyptian pounds planned of capex in 2026, and that we've already almost half of it has been consumed.

Speaker #3: And we're still in progression in order to continue this capacity increases that are definitely required. We've had a previous acquisition of four different lines for bakery and cakes from another food conglomerate, and that already two of which are already operational and the third one will get to operate by Q4, which will enable us more will add another additional capacity of around 10 to 13% on bakery specifically as we're running almost at full utilization currently.

Ahmed Samy: We will add another additional capacity of around 10% to 13% on bakery specifically, as we are running almost at full utilization currently. Moreover, we are planning for 2027 to have another heavy year in terms of investment, in terms of CapEx. We are introducing an extension to one of our existing plants in Polaris Parks, in Zagazig. We are introducing a new production hall that will be able to accommodate around six to seven production lines. Out of which four are planned to be effective in 2027. So definitely, the good news that we are having a very solid plan in order to increase our capacity, and that will enable us to continue meeting the demand in the coming H2 in 2026 and going forward in 2027, inshallah. Thank you.

Speaker #3: Moreover, we're planning for 2027 to have another heavy year in terms of investment, in terms of capex. We're introducing an extension to one of our existing plants in Polaris Zamel.

Speaker #3: We're introducing a new production hall that will be able to accommodate around six to seven production lines, out of which four are planned to be effective in 2027.

Speaker #3: So, definitely, we are at the good news that we have a very solid plan in order to increase our capacity, and that will enable us to continue meeting the demand in the coming half in 2026 and going forward in 2027, inshallah.

Speaker #3: Thank you.

Speaker #2: Thank you, Sami. And like he said, exactly. And both Sam and Sami, we have preponed the capex this year. We are building the extension of our E8 facility.

Hani Berzi: Thank you, Hessemy. Like he said exactly, and both Sameh and Hessemy, we have prepawned the CapEx this year. We are building the extension of our E08 facility. That is on a plot of land of 25,000 square meter to accommodate the new lines, some of the new lines that will be delivered by Q4 and Q1 2027. Thank you, Tinashe Hove. I hope we covered your question.

Speaker #2: That's a plot of land of 25,000 square meters to accommodate the new lines—some of the new lines that will be delivered by Q4 and Q1 2027.

Speaker #2: Thank you, Tanashi. I hope we covered your question.

Speaker #3: Understood, and I appreciate it. Thank you.

Tinashe Hove: Understood and appreciated. Thank you.

[Analyst]: Understood and appreciated. Thank you.

Speaker #1: Take the next question from the line of Varuna Kumaraj. Varuna, please unmute yourself.

Hatem Alaa: Take the next question from the line of Varuna Kumarage. Varuna, please unmute yourself.

Speaker #5: Hello. Hi. Good afternoon.

Varuna Kumarage: Hello. Hi, good afternoon.

Waruna Kumarage: Hello. Hi, good afternoon.

Speaker #2: Good afternoon.

Hani Berzi: Good afternoon.

Speaker #5: Hi, this is Varuna Kumaraj. I'm from SECO Bahrain. Thank you for the opportunity, and congratulations on the results. I have three questions. The first question is related to the forex loss that you reported in the income statement of EGP 73.5 million.

Varuna Kumarage: Hi. This is Varuna Kumarage from SICO Bank, Bahrain. Thank you for the opportunity and congratulations on the results. I have three questions. The first question is related to the FX loss that you reported in the income statement of EGP 73.5 million. I will appreciate if you can give some color on that and what was the main driver behind that item. That is my first question, if you can elaborate on that. Secondly, in terms of the Iraqi operation, I want to know, do you have any kind of medium-term targets. Where do you want to reach in the next two to three years. The last question is on Morocco. In terms of top line, there was a significant ramp-up in 2025, but last few quarters it kind of tapered off in terms of growth. What are your expectations in the Moroccan operation. Thank you.

Waruna Kumarage: Hi. This is Varuna Kumarage from SICO Bank, Bahrain. Thank you for the opportunity and congratulations on the results. I have three questions. The first question is related to the FX loss that you reported in the income statement of EGP 73.5 million. I will appreciate if you can give some color on that and what was the main driver behind that item. That is my first question, if you can elaborate on that. Secondly, in terms of the Iraqi operation, I want to know, do you have any kind of medium-term targets. Where do you want to reach in the next two to three years. The last question is on Morocco. In terms of top line, there was a significant ramp-up in 2025, but last few quarters it kind of tapered off in terms of growth. What are your expectations in the Moroccan operation. Thank you.

Speaker #5: I'll appreciate it if you can give some color on that. I mean, what was the main driver behind that item? That is my first question, if you can elaborate on that.

Speaker #5: Secondly, in terms of the Iraqi operation, I want to know what are the—I mean, do you have any kind of medium-term targets? Where do you want to reach in the next, you know, two to three years?

Speaker #5: And the last question is on Morocco. In terms of top line, there was a significant ramp-up in '25, but in the last few quarters, it's kind of tapered off in terms of growth.

Speaker #5: So, what are your expectations for the Moroccan operation? Thank you.

Speaker #3: Thank you very much, Varuna. Sam, can you take the lead on this answering on the Forex loss issue? Then we can elaborate together on the next two and three second and third question.

Hani Berzi: Thank you very much, Varuna. Sameh, can you take the lead on this, answering on the FX loss issue? Then we can elaborate together on the next two and three, the second and third question.

Speaker #2: Sure. So for the FX loss, we are currently keeping some dollar balances on our balance sheet. We're net positive in foreign currency.

Sameh Naguib: Sure. For the FX loss, we are keeping some currency, some dollar balances on our balance sheet. We have net positive in foreign currency, around $20 million. We have this position in anticipation of our regional expansion plan. However, we see with the variation on our FX exchange rates in Egypt, going from the 47 to the 53, 52, going down to the 50, we see gains and losses on these amounts. We had, I think, around $45 million gain in Q1, offset by $73 million loss in Q2. So a net position of $25, $30 million for H1, which we expect that it will keep on fluctuating until we go into the effective investment in our regional plan. That's the FX part. For Iraq, Hany, would you like to start?

Speaker #2: Around 20 million dollars. And we have this position in anticipation of our regional expansion plan. However, we see with the up with the variation on our FX exchange rates in Egypt, going from the 47 to the 53, 52, going down to the 50, we see gain and losses on these amounts.

Speaker #2: So we had, I think, around a 45 million gain in Q1, offset by a 73 million loss in Q2. So a net position of 25 to 30 million for H1, which we expect will keep on fluctuating until we go into the effective investment in our regional plan.

Speaker #2: So that's the FX part for Iraq. Would you like to start?

Speaker #3: No, no, go ahead, Yasama.

Hani Berzi: No, go ahead, yeah, Sameh.

Speaker #2: Okay. For Iraq, I think we are quite happy with the stage where we are now. We have our state line in operation, and we have started sales and introduced our new brand, Hohuz, locally.

Sameh Naguib: For Iraq, I think we are quite happy with the stage where we are in now. We have our cake line in operation, and we started sales and introducing our new brand, HOHOs, locally. In July, as Hany said in the introduction, we have ramped up our production capacity for the bakery line and now it's on track. We see significant demand that we still have to serve from the Egyptian operations via export until we can increase our capacity there. We have heavy expansion plans still planned for Iraq with an additional production hall and two additional lines to arrive somewhere between end of this year and end of 2027, to complete the capacity. Then we will start looking at probably additional lines, depending on which segments will grow even faster. We are quite bullish on what we see in the market.

Speaker #2: In July, as Hani said in the introduction, we have ramped up our production capacity for the bakery line and are on track. We see significant demand that we still have to serve from the Egyptian operations by export until we can increase our capacity there.

Speaker #2: We have heavy expansion plans still planned for Iraq, with an additional production hall and two additional lines to arrive somewhere between the end of this year and the end of 2028 to complete the capacity. Then we will start looking at probably additional lines, depending on which segments will grow even faster.

Speaker #2: We are quite bullish on what we see in the market. The brands are quite strong. Our distribution channel is also well established within the different regions in Iraq.

Sameh Naguib: The brands are quite strong. Our distribution channel is as well well established within the different regions in Iraq. We had couple of delays because of the regional geopolitical situation. Now things are still a bit difficult, but way manageable, which will allow us to continue our investment plans. Since we see Iraq growing in volume and in top line, however, we see as well positively that Egypt as well is still growing at even a higher rate. I think Iraq would remain probably within 2, 3 years at 7% of our total top line. I think this is-

Speaker #2: We have had a couple of delays because of the regional geopolitical situation. Now, things are still a bit difficult, but way more manageable, which will allow us to continue our investment plans.

Speaker #2: I think we see Iraq growing in volume and in top line. However, we see as well, positively, that Egypt is also still growing at an even higher rate.

Speaker #2: So I think Iraq would remain, probably within two to three years, at 7% of our total top line. I think this is.

Speaker #3: Yeah, we are very, we are very pleased with the Iraqi operation. I know it's a very challenging country to work in. However, because we have established the brand, mainly Molto and Tiger Tail brands, many, many years ago, it was much easier to enter the market, replacing importation with local production.

Hani Berzi: Yeah. We are very pleased with the Iraqi operation. I know it is a very challenging country to work in. However, because we have established the brand, mainly Molto and Tiger Tail brands many years ago, it was much easier to enter the market replacing importation by local production. However, the line is, as we mentioned on the call, the croissant line is running at full capacity, so we produce only one SKU, and we serve the market with the additional SKU that are needed from Egypt. Eventually, crossing finger, we see a great potential in Iraq, like Sameh said. You want to elaborate on Morocco, Sameh?

Speaker #3: However, the line is, as we mentioned, on the cold side. The croissant line is running at full capacity, so we produce only one SKU, and we serve the market with the additional SKUs that are needed from Egypt.

Speaker #3: So, eventually, fingers crossed, we see great potential in Iraq, like Sam said. So, do you want to elaborate on Morocco, Sam?

Speaker #2: Yeah, sure. For Morocco, we have seen a drop in 2025. And we see we are still growing in the Moroccan market, however at a slower pace.

Sameh Naguib: Yeah, sure.

Sameh Naguib: Yeah, sure. Morocco, we have seen a drop in 2025. We are still growing in the Morocco market, however, at slower pace despite the different launches that we had during the year. I think we identified our main challenges on revising and improving our route to market strategy, which we are currently in the process of implementation and moving to a better coverage throughout the different regions in Morocco, which will allow to come back with a significant and more attractive growth rates for our operation there. We as well look to expand in an additional segment that should as well add to the top line locally in Morocco. Thank you.

Sameh Naguib: Morocco, we have seen a drop in 2025. We are still growing in the Morocco market, however, at slower pace despite the different launches that we had during the year. I think we identified our main challenges on revising and improving our route to market strategy, which we are currently in the process of implementation and moving to a better coverage throughout the different regions in Morocco, which will allow to come back with a significant and more attractive growth rates for our operation there. We as well look to expand in an additional segment that should as well add to the top line locally in Morocco. Thank you.

Speaker #2: Despite the different launches that we had during the year, I think we identified our main challenges in revising and improving our route-to-market strategy, which we are currently in the process of implementing and moving to a better coverage throughout the different regions in Morocco.

Speaker #2: Which will allow to come back with a significant and more attractive growth rates for our operation there. We as well look to the expanding to expanding in an additional segment that should as well add to to the top line locally in Morocco.

Speaker #2: Thank you.

Speaker #5: Okay, thank you. Thank you. Just, if I may ask one follow-up question related to the Forex loss: as you mentioned, it's related to the dollar balance that you keep.

Varuna Kumarage: Okay. Thank you. If I may ask one follow-up question related to the FX loss. As you mentioned, it is related to the dollar balance that you keep. You said it is around $20 million. I just want to get an idea as to what is your plan. I mean, are you going to maintain this balance, or are you utilizing this going forward? What is basically your plan regarding this currency?

Waruna Kumarage: Okay. Thank you. If I may ask one follow-up question related to the FX loss. As you mentioned, it is related to the dollar balance that you keep. You said it is around $20 million. I just want to get an idea as to what is your plan. I mean, are you going to maintain this balance, or are you utilizing this going forward? What is basically your plan regarding this currency?

Speaker #5: You said it's around 20 million dollars. I I just want to get an idea as to what's your plan in the I mean, are you going to maintain this balance or are you utilizing this going forward?

Speaker #5: What is basically your plan regarding this currency, basically?

Speaker #2: Sure. We usually do not like to keep foreign currency balances and we prefer to have our balance sheet as more or less a break even on on exposure on currency exposure.

Sameh Naguib: Sure. We usually do not like to keep foreign currency balances, and we prefer to have our balance sheet more or less breakeven on currency exposure. So we maintain usually the foreign currency balances in relation to the total exposure on the balance sheet. However, currently, as we are looking for regional expansion, we need to keep some additional dollars for the planned investment, and this is why we currently have these $20 million.

Speaker #2: So we usually maintain the foreign currency balances in relation to the total exposure on the balance sheet. However, currently, as we are looking for regional expansion, we need to keep some additional dollars for the planned investment.

Speaker #2: And this is why we currently have these $20 million.

Speaker #5: So when the so so given the you this is expansion plan, is it fair to assume that you will maintain the strategy until 2027?

Varuna Kumarage: Given the aggressive expansion plan, is it fair to assume that you will maintain this strategy until 2027?

Waruna Kumarage: Given the aggressive expansion plan, is it fair to assume that you will maintain this strategy until 2027?

Speaker #2: No, once we start investing in the regional expansion plan, then these balances will significantly go down and have a neutral balance sheet in terms of exposure—more or less neutral.

Sameh Naguib: No. Once we start investing in the regional expansion plan, then these balances will significantly go down and have a neutral balance sheet in terms of exposure. More or less neutral. Yeah.

Speaker #2: Yeah.

Speaker #5: Oh. Oh. Thank you very much, and we wish you all the best.

Varuna Kumarage: Oh. Okay. Thank you very much, and wish you all the best.

Waruna Kumarage: Oh. Okay. Thank you very much, and wish you all the best.

Speaker #2: Thank you.

Speaker #3: Thank you everyone.

Sameh Naguib: Thank you.

Speaker #1: Okay. As a reminder, to ask a question, you can type it in the chat or click on the raise hand button. I'll take questions from the chat.

Hani Berzi: Thank you very much.

Hatem Alaa: Again, as a reminder, to ask a question, you can type it in the chat or click on the raise hand button. I will take questions from the chat. There is a question from Salma Abdel Hai. Your guidance for 2026 CapEx was EGP 4 billion. Given that the reported CapEx in the H1 2026 was only EGP 1 billion, has the full year guidance been revised downwards, or should we expect the remaining CapEx to be incurred in the H2 of the year?

Speaker #1: There is a question from Selma Abdulhai. Your guidance for 2026 CapEx was EGP 4 billion. Given that the reported CapEx in the first half of 2026 was only EGP 1 billion, has the full-year guidance been revised downwards, or should we expect the remaining CapEx to be incurred in the second half of the year?

Speaker #2: We will.

Speaker #3: Thank you. Please go ahead. Yes, we will definitely spend the CapEx. But Samer, please elaborate in detail.

Sameh Naguib: We will

Hani Berzi: Thank you. Please go ahead. Yes. We will definitely speak to the CapEx, but Sameh, please elaborate in detail.

Speaker #2: Sure. We still maintain our four billion, more or less, target CapEx for 2026. As you expect, the production lines will take a long lead time.

Sameh Naguib: Sure. We still maintain our EGP 4 billion more or less target CapEx for 2026. As you expect that the production lines will take a long lead time, we placed our orders since end of last year, beginning of this year. We expect to receive most of these lines by end of this year, which will show the remaining 60% to 70% balances to be paid on these lines by year-end. This is why we still expect to close the year close to EGP 4 billion. Additionally, what we did so far, as we reported, is EGP 700 million out of the EGP 4 billion in our CapEx. However, as well, we have on our advances to our fixed asset suppliers another EGP 700 million. So this will bring the total for the H1 around EGP 1.4 billion. This is why we believe that we are still on track.

Speaker #2: We've placed our orders since the end of last year and the beginning of this year. We expect to receive most of these lines by the end of this year, which will show the remaining 60–70% balances to be paid on these lines by year-end.

Speaker #2: And this is why we still expect to close the year close to 4 billion. Additionally, what we did so far is we reported the 700 million out of the 4 billion in our CapEx.

Speaker #2: However, as well, we have on our advances to our fixed asset suppliers another 700 million, so this will bring the total for the first half to around 1.4 billion, and this is why we believe that we are still on track.

Speaker #2: Almost 40 percent, or 50 percent, of the spending is already done in 2020 and in H1 2026. Thank you, Selma.

Sameh Naguib: Almost 40% to 50% of the spending is already done in H1 2026. Thank you, Salma.

Speaker #1: Okay, thank you. Some questions from Natalia Zabrodina. I think the first question you mostly addressed, but I'll read it out properly: Please provide more color on operational updates and the general outlook for the Iraqi business operation.

Hatem Alaa: Okay. Thank you. Some questions from Natalia Zabrodina. I think the first question you mostly addressed it, so I will read it out. Could you provide more color on operational updates and the general outlook for the Iraqi business operation? Do you expect any headwinds or tailwinds in the near to midterm? The second question is, could you elaborate on the reasons behind the volume drop in rusks, wafer, and biscuits? It looks like the price increases in those segments outpaced inflation year-on-year. Was price the only driver, or were there other factors behind the volume decline?

Speaker #1: Do you expect any headwinds or tailwinds in the near to midterm? The second question is: Could you elaborate on the reasons behind the volume drop in rusks, wafer, and biscuits?

Speaker #1: It looks like the price increases in those segments outpaced inflation year on year. Was price the only driver, or were there other factors behind the volume decline?

Speaker #3: Thank you, Natalia. I think we have covered the first part of the question on Iraq—whether we will face headwind or tailwind. I mean, this is unpredictable.

Hani Berzi: Thank you, Natalia. I think we have covered the first part of the question on Iraq, whether we will face headwind or tailwind. I mean, this is unpredictable. We hope nothing will alter our plan because as we mentioned, we have a very aggressive plan for Iraq and we are very ambitious about the potential of the market. So hopefully nothing will disturb that. For the second part of the question, I will leave Ahmed Samy to report on the rusks. But mainly rusk, if I may answer, rusk, we are running at full capacity of the two lines. The volume have dropped probably because of moving toward higher price point SKUs rather than selling smaller pouch. But, Ahmed, I think you can elaborate further on this question. Please, further.

Speaker #3: We hope nothing will alter our plan, because as we mentioned, we have a very aggressive plan for Iraq, and we are very ambitious about the potential of the market.

Speaker #3: So, hopefully nothing will disturb that. For the second part of the question, I will leave Ahmed Samy to report on the rusks. But mainly, rusks—if I may answer.

Speaker #3: Rusks were running at full capacity on the two lines. The volume has dropped, probably because of moving toward higher price point SKUs rather than selling smaller pouches.

Speaker #3: But Ahmed, I think you can elaborate further on these questions. Please, go ahead.

Speaker #1: Thank you, Henny. You're absolutely right. Specifically, when it comes to salty snacks, we've actually encountered a drop of around 20% in volume. This reflects the upsizing and uppricing that we conducted in this category.

Ahmed Samy: Thank you, Hani. You are absolutely right. Definitely, specifically on salty snacks, we have encountered a drop actually of around 20% in volume, and this reflects the upsizing and uppricing that we conducted on this category. However, we are fully utilized in terms of capacity, and we are planning to do more of asset sweating in order to be able to even produce more volume going forward. That is why we see that we were able to capture the value still with this kind of drop in volume. Same goes for wafers, where we have had an increase in this quarter by 15% versus same period last year. However, we had a drop in volume by almost 8%, which was a result from the fact that we exited completely from the price points of 2 EGP and 3 EGP, and our starting price point is currently at 5 EGP.

Speaker #1: However, we are fully utilized in terms of capacity, and we're planning to do more asset sweating in order to be able to even produce more volume going forward.

Speaker #1: And that's why we see that we were able to capture the value still, even with this kind of drop in volume.

Speaker #1: The same goes for wafers, where we've had an increase this quarter by 15% versus the same period last year. However, we had a drop in volume by almost 8%, which was a result of the fact that we exited completely from the price points of 2 EGP and 3 EGP, and our starting price point is currently at 5 EGP.

Speaker #1: And the main driver for the value growth was the recent introductions on the EGP 10, 15, and 20. These are much higher in propositions and offerings than the average price point for this category.

Ahmed Samy: The main driver for the value growth was the recent introductions on the 10 EGP, 10, 15, and 20 EGP, which are much higher in the propositions and offerings than the average price point for this category. Hence, we started seeing some sort of recovery when it comes to the gross margins of wafers versus the previous quarter. We are expecting this improvement to remain the same going forward till end of year. Last but not least, if we look into biscuits, we have had a growth in value of around 32% versus same period last year, again accompanied by 9% drop, which is mainly due to the fact that we moved almost completely from the 5 EGP price point, and we have now most of our portfolios placed at the 10 EGP price point.

Speaker #1: Hence, we started seeing some sort of recovery when it comes to the gross margins of wafers versus the previous quarter, and we're expecting this improvement to remain the same going forward till the end of the year.

Speaker #1: Last but not least, if we look into biscuits, we've had a growth in value of around 32% versus the same period last year. Again, this was accompanied by a 9% drop in volume, which is mainly due to the fact that we moved almost completely from the 5 EGP price point and now have most of our portfolio placed at the 10 EGP price point.

Speaker #1: So if we if we're if we're doubling the average price point or we're doubling the price point from 5 to 10 EGP and we're only getting a volume drop of 10 percent, that that definitely reflects positively on the brand.

Ahmed Samy: If we are doubling the average price point, or we are doubling the price point from 5 to 10 EGP and we are only getting a volume drop of 10%, that definitely reflects positively on the brand. We have seen that this was the main reason behind our gross margins surging from almost 6% or 7% in the same period last year to about 30% in this quarter. I think that now we have a more sustainable range across all three categories. Our portfolio is much stronger. We are sustaining our profitability and the next step is to continue on growing these offerings and range organically at these price points, which will definitely help us sustain our profitability at very decent levels. Thank you.

Speaker #1: And we've seen that that this was the main reason behind our gross margins surging from almost 6 or 7 percent in the same period last year to almost 30 about the 30 percent in this in this quarter.

Speaker #1: So I think now that we have a more sustainable range across all three categories, our portfolio is much stronger. We're sustaining our profitability, and the next step is to continue growing these offerings and the range organically at these price points, which will definitely help us sustain our profitability at a very decent level.

Speaker #1: Thank you.

Speaker #3: Thank you, Samy.

Hani Berzi: Thank you, Sameh.

Speaker #1: Thank you again. As a reminder, to ask a question, you can type it in the chat or click on the Raise Hand button. Last call for questions.

Hatem Alaa: Thank you. Again, as a reminder to ask a question, you can type it in the chat or click on the raise hand button. Last call for questions. There appears to be no further questions at this point. Thank you to Edita's management for your time today. Actually, sorry, there is a question that just came through. Follow-up from Natalia Zabrodina as well. Would you provide an update on the guidance for 2026?

Speaker #1: There appear to be no further questions at this point, so thank you to Edita's management for your time today. Actually, sorry, there's a question that just came through.

Speaker #1: Follow-up from Natalia as well: Would you provide an update on the guidance for 2026?

Speaker #3: Sameh, would you like to give an update on the guidance for 2026?

Hani Berzi: Sameh, you want to give an update on guidance for 2026?

Speaker #2: I think we are on track for our budget and the previously announced direction. Maybe a slight improvement on the top line, and the bottom line is still at the same percentages.

Sameh Naguib: I think we are on track for our budget and the previously announced direction. Maybe a slight improvement on the top line, and the bottom line still on the same percentages. I think so no real change versus the previous numbers. Still see the same direction, and we are on track to achieve it. Thank you.

Speaker #2: I think so. So, no real change versus the previous numbers. We still see the same direction, and we are on track to achieve it. Thank you.

Speaker #1: There is another question—sorry, that just came through. One second, from Waruna: What is the reason for the increase, I think, in overdraft in the second quarter of '26?

Hatem Alaa: There is another question, sorry, that came through. One second. From Varuna. What is the reason for the increase, I think, in overdrafts in Q2 2026?

Speaker #3: Okay, I know the answer, but I will leave that to Sameh.

Hani Berzi: Okay. I know the answer, but I will leave that to Sameh.

Speaker #2: Thank you, Henny. So, I think we have two reasons for the change in our overdraft in the past period. I think one part is related first to the increase in inventory, moving from 2.3 to 2.8 billion pounds.

Sameh Naguib: Thank you, Hani.

Sameh Naguib: I think we have two reasons for the change in our overdrafts in the past period. I think one part is related first to the increase in inventory, moving from EGP 2.3 billion to EGP 2.8 billion. While on the other side, the payables did not increase with the same amount, so we had slightly to finance it with the overdraft. However, the most important reason is that we invest most of our cash on T-bills yielding better than our overdraft rate. We tend and we have the preference to use the overdraft to finance the operation while still investing our own cash on T-bills. You will see both increase in overdraft and in cash position as well.

Speaker #2: While on the other side, the tables did not increase by the same amount, so we had to slightly finance it with the overdraft. However, the most important reason is that we invest most of our cash in treasury bills yielding better than our overdraft rate.

Speaker #2: So we tend to have the preference to use the overdraft to finance operations while still investing our own cash in T-bills.

Speaker #2: You'll see both increase in overdraft and in cash position as well. Nevertheless, we would additionally as well, we during 20 during Q2 of 26, we had advances to our fixed asset suppliers and we have as well distribution of the 1.1 billion pounds of dividend to our shareholders.

Sameh Naguib: Nevertheless, we would additionally as well, during Q2 of 2026, we had advances to our fixed asset suppliers, and we have as well distribution of EGP 1.1 billion of dividend to our shareholders. Thank you.

Speaker #2: Thank you.

Speaker #1: Thank you. There are no further questions at this point. I think we can conclude. Thank you so much, Edita's management, for your time today.

Hatem Alaa: Thank you. There are no further questions at this point. I think we can conclude. Thank you so much, Edita management, for your time today.

Speaker #3: Thank you. Thank you, Hatim, and thank you, everyone, for joining today's call. Of course, we are all very pleased, as Edita management, with the performance for the first half of the year.

Hani Berzi: Thank you. Thank you, Hatem, and thank you everyone for joining today call. Of course, we are all very pleased as Edita management with the performance for the H1 of the year. We are also very confident that we are moving into our two best quarter, Q3 and Q4, even stronger. As we mentioned across the call and in our conversation today, we have taken into consideration capacity utilization in order to sustain the growth for 2027. We have already building additional capacity in order to be able to deliver our 2027 budget, which is already in progress at the moment.

Speaker #3: We are also very confident that we are moving into our two best quarters, Q3 and Q4, even stronger. As we mentioned across the call and in our conversation today, we have taken into consideration capacity utilization in order to sustain the growth for 2027.

Speaker #3: We have already been building additional capacity in order to be able to deliver our 2027 budget, which is already in progress at the moment. And we are not looking only at the top line, but we are also looking at our bottom line, making sure that our gross margins are maintained, making sure that we are on top of it because of the fluctuations that we have seen all the time, and we have been very well trained.

Hani Berzi: We are not looking only at top line, but we are also looking at our bottom line, making sure that our gross margins are maintained, making sure that we are on top of it because of the fluctuation that we have seen all the time. We have been very well trained to manipulate such, I would say myself and the team, such incident, whether when it comes to devaluation or whether to come to regional geopolitical instability. We are there always on tiptoes, making sure that we are adjusting our pricing, adjusting our portfolio to maintain the same gross margin. Eventually, we are very confident. As I mentioned in my previous call, we have a very ambitious plan for 2030. We want to reach $1 billion by 2030 as sales, and we are very confident that we can achieve that figure.

Speaker #3: I mean to manipulate such—I would say myself and the team—such incidents, whether it comes to the valuation or whether it comes to regional geopolitical instability.

Speaker #3: So, we are there, always on tiptoes, making sure that we are adjusting our pricing and adjusting our portfolio to maintain the same gross margin.

Speaker #3: So eventually we are very confident as I mentioned in my previous call we have a very very ambitious plan for 2030. We want to reach the 1 billion US dollar by 20 2030 as as sales and we are very and we are very confident that we can achieve that figure.

Speaker #3: We are also very pleased. I am personally very pleased with the performance of our stock over the past couple of days, and eventually things will continue with the same momentum, delivering more profit to our shareholders.

Hani Berzi: We are also very pleased. I personally am very pleased with the performance of our stock over the past couple of days. Eventually, things will continue on the same momentum, delivering more profit to our shareholder. Thank you very much. Once again, thank you for joining the call. I wish you for those who are still in summer holiday and vacation, a good end of summer holidays. Thank you very much and thank you, Hatem, for hosting today call once more.

Speaker #3: Thank you very much. I once again thank you for joining the call, and I wish those who are still on summer holiday and vacation a good end to their summer holidays.

Speaker #3: Thank you very much, and thank you, Hatim, for hosting today's call once more.

Speaker #1: Thank you so much, Henny and team, for your time today, and thank you, everyone, for participating. This concludes today's call. Have a good rest of the day, everyone.

Hatem Alaa: Thank you so much, Hany and team, for your time today and thank you everyone for participating. This concludes today's call. Have a good rest of the day, everyone.

Speaker #2: Thank you. Thank you, everyone. Thank you.

Sameh Naguib: Thank you. Thank you, everyone. Thank you.

Hani Berzi: Thank you.

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Q2 2026 Edita Food Industries SAE Earnings Call

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Edita Food Industries SAE

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