Q2 2026 Eurocash SA Earnings Call

August 27, 2026

Speaker #1: The termination of those agreements has resulted in something like 110 million of cost reductions over the next quarters, in total rent liabilities on our end.

Paweł Surówka: Particularly the termination of those agreements has resulted in something like EUR 110 million of cost reductions over the next quarters in total rent liabilities on our end. It also reflects some EUR 75 million of negative contribution that was with us still last year with those stores that have already been closed and that we have taken out of the P&L by closing those stores. We believe that this is a real economic reality that will also impact the P&L of our group in the coming quarters. That is why the adjustments were only done by restructuring costs not covered by reserves, and we will come to that later. The other number that obviously we would want to focus on is the EUR 279 million of cost that we have already secured.

Speaker #1: And also, it reflects some negative contribution of 75 million that was with us still last year, with those stores that have already been closed.

Speaker #1: And that we have taken out of the P&L by closing those stores. So we believe that this is a real economic reality that will also impact the P&L of our group in the— in the coming quarters.

Speaker #1: That's why the adjustments were only done by restructuring costs, not covered by, reserves, and we will come to that later. The other number that obviously we would want to focus on is the 279 million of cost that we've already secured by me— by secured we mean, 200 million is delivered and done, 79 million is in action, which is mean it is recogniz— it is, you know, currently enacted, and we don't see any risk of it not occurring.

Paweł Surówka: By secured, we mean EUR 200 million is delivered and done, EUR 79 million is in action, which means it is recognized and is currently enacted, and we do not see any risk of it not incurring. The remainder of EUR 400 million is obviously still in the plan. I just wanted to remind you that the entire cost-saving plan was timed to go until beginning of 2027. We are now in less than half of the time than we wanted to allocate to this task, but we have already secured more than two-thirds of the savings, and we are confident that we will be able to deliver the entire EUR 400 million planned. We will come to that in more detail later. Also something that we would like to highlight is the EUR 343 million of adjusted operating cash flow. How is it adjusted?

Speaker #1: The remainder of the 400 million is obviously still in the plan. I just wanted to remind you that the entire cost-saving plan was scheduled to continue until the beginning of 2027. So we are now in less than half of the time that we intended to allocate to this task, but we have already secured more than two-thirds of the savings, and we are confident that we will be able to deliver the entire 400 million planned.

Speaker #1: We will come to that in more detail later. Also, something that we would like to highlight is the 343 million of adjusted operating cash flow.

Speaker #1: How does it adjust? So, it was 312 million after changes in net working capital, but this is after incurring some 30 million of cash restructuring costs.

Paweł Surówka: It was EUR 312 million after changes of net working capital, but this is after incurring some EUR 13 million of cash restructuring costs. That shows that year-on-year, the company has delivered more than EUR 100 million more of operating cash flow. I think that shows the discipline that we have had in managing the cash conversion cycle, in this quarter, particularly, on the inventory and payable side. This resulted also in a reduction of the adjusted net debt to EBITDA to 1.6x. So that is the highlights that we would like to obviously bring out in this results. But the details should also follow swiftly. To the strategy execution.

Speaker #1: So that shows that, you know, year on year the company has delivered more than 100 million more of operating cash flow. I think that shows the discipline that we have had in the cash— in, you know, managing the cash rotation cycle in this quarter particularly, you know, on the inventory and payable side.

Speaker #1: And this resulted also in a reduction of the adjusted net debt to EBITDA to 1.6 times. So that's—that's the highlight that, you know, we would like to obviously bring out in these results.

Speaker #1: But the details should also follow swiftly to the strategy execution. So, as you remember, the core part of our strategy allowing us to reach our target of €600 million EBIT was to deliver €400 million of cost savings, split between head office and channel optimization, logistics, and own store restructuring.

Paweł Surówka: As you remember, the core part of our strategy, allowing us to reach our target of EUR 600 million EBIT, was to deliver EUR 400 million of cost savings, split between head office and channel optimization, logistics and own store restructuring. Where are we now? What have we done in order to up this? The overall cost-saving buckets, they sound pretty easy. Obviously, we need to fire people, we need to close unprofitable stores. But this slide that we are now showing is something that is very important to me, because I think it is difficult to underestimate the scale of the change that Eurocash has undergone, and particularly in the last three months. Just to highlight this, and I think, it is really something that I would like investors to dwell upon for a second.

Speaker #1: Where are we now? And, you know, what have we done in order to up this? And, you know, the overall, you know, cost-saving buckets—they sound pretty easy.

Speaker #1: Obviously, you know, we need to fire people, we need to close unprofitable stores. But, you know, this slide that we're now showing is something that is very important to me, because I think it is difficult to underestimate the scale of the change that Eurocash has undergone.

Speaker #1: And particularly in the last three months. So, just to highlight this—and I think it's really something that I would like investors to dwell upon for a second.

Speaker #1: So, in the last couple of months, when we went into this change—still at the beginning of this year—we had five different buying departments.

Paweł Surówka: In the last couple of months, when we went into these changes, still at the beginning of this year, we had 5 different buying departments. Cash and carry, distribution, Delikatesy Centrum, Duży Ben, Sieci Partnerskie had their allocated buying departments, and that means that buyers specialized in those banners were dealing with suppliers directly, negotiating margin from them. Today, we have one buying group, and we have one buyer representing Eurocash, effectively being the only gatekeeper to the Eurocash Group. What did that allow us? On the one hand side, and probably this is the smallest impact, we have reduced 35% of people in those departments, but that is not why we did it. The reason why we did it is that now we have one buyer, having the leverage of the scale of the entire Eurocash Group when negotiating with their suppliers.

Speaker #1: Cash and carry, distribution, Delicatessen Centrum, and large partnership benefits had their allocated buying departments, and that means that buyers specialized in those banners were dealing with suppliers directly, negotiating margin from them.

Speaker #1: Today, we have one buying group, and we have one buyer representing Eurocash, effectively being the only gatekeeper to the Eurocash group. What did that allow us?

Speaker #1: On the one hand, and probably this is the smallest impact, we have reduced 35% of people in those departments. But that's not why we did it.

Speaker #1: The reason why we did it is that now we have one buyer, having the leverage of the scale of the entire Eurocash Group when negotiating with their suppliers.

Speaker #1: And also, we have full visibility about the investments of our producers across the different business units that have been engaged in the Eurocash Group so far.

Paweł Surówka: Also, we have full visibility about the investments of our producers around the different business units that have been engaged in the Eurocash Group so far. We never had a full inventory of our different investments and contractual conditions between the different business units. They were negotiating separately from each other. Right now, that visibility, we believe, creates a lot of opportunity also in terms of our buying department to negotiate the best possible conditions for our entire group, taking into consideration each condition of each business unit and trying to harmonize, obviously, in a best of all approach. That is a huge change. That meant that not only did we reduce buyers by 35%, but that means that every buyer had to learn their job anew, because still at the beginning of the year, they were negotiating for just one business unit.

Speaker #1: We never had a full inventory of our different investments and contractual conditions between the different business units. They were negotiating separately from each other.

Speaker #1: Right now, that visibility, we believe, creates a lot of opportunity also in terms of our buying department to negotiate the best possible entire group.

Speaker #1: Taken into consideration, you know, each condition of each business unit and trying to harmonize, obviously, in a best-of-all approach. So that is a huge change.

Speaker #1: That meant that, you know, not only did we reduce buyers by 35%, but that means that every buyer had to learn their job anew, because still at the beginning of the year, they were negotiating for just one business unit.

Speaker #1: Now they represent all business units, and they have to both cover the overall margin, but they also have to cover retail services and the like.

Paweł Surówka: Now they represent all business units, and they have to both cover the overall margin, but they also have to cover retail services and the like. That is something that is generally new and has created a lot of change in that department. Change that, as I said, is fundamentally very positive and we believe will create a lot of opportunity going forward. But in the short term, and particularly in the 2 months after we have enacted that change, meaning April and May, has created also some disruption in that department, which is, I think, something that could have been expected. We will talk about this a little bit more in a second. Likewise, we have also combined 5 different operational structures into one.

Speaker #1: So that is something that is generally new and has created a lot of change in that department—change that, as I said, is fundamentally very positive, and we believe will create a lot of opportunity going forward.

Speaker #1: But in the short term, particularly in the two months after we enacted that change—meaning April and May—it has also created some disruption in that department, which I think is something that could have been expected.

Speaker #1: We will talk about this a little bit more in a second. Likewise, we have also combined five different operational structures into one. So, still at the beginning of the year, we had separate and completely independent operational structures for the Wholesale Department, for Delicatessen Centrum, for Duże Ben, Factoria Win, and sieci partnerskie.

Paweł Surówka: Still at the beginning of the year, we had separate and completely independent operational structures for the wholesale department, for Delikatesy Centrum, for Duży Ben, Faktoria Win and Sieci Partnerskie. We had sales representatives being organized by banners. Each operational network having their regional structures, their sales support structures, and their stores. Sometimes they would go to the same store, several of them, representing the different aspects of the Eurocash Group. Today, we have one common operational model that allowed us, on the one hand side, to reduce 20% of headcount in that space. But most importantly, we now have a much more efficient operational setup where we have one representative per store, and we are also able to allocate stores to each business representative based on geography, just simply making him or her cover the stores that are closest to him or her.

Speaker #1: So we had sales representatives being organized by banners, each operational network having their regional structures and their sales support structures. They were going to their stores; sometimes several of them would go to the same store, representing the different aspects of the Eurocash Group.

Speaker #1: Today, we have one common operational model that allowed us on the one hand side to reduce 20% of headcount in that space, but most importantly we now have a much more efficient operational setup where we have one representative per store, and we are also able to allocate stores to each business representative based on geography just simply making him cover him or her cover the stores that are closest to him or her.

Paweł Surówka: Today, we have one common operational model that allowed us, on the one hand side, to reduce 20% of headcount in that space. But most importantly, we now have a much more efficient operational setup where we have one representative per store, and we are also able to allocate stores to each business representative based on geography, just simply making him or her cover the stores that are closest to him or her.

Speaker #1: That means that our salespeople simply spend less time in the car, more in the stores, and they can focus on the tasks to be done in each store.

Paweł Surówka: That means that our salespeople just simply spend less time in the car, more in the stores, and they can focus on the tasks to be done in each store. However, that also meant that the entire operational structure had to learn their job from new, and 70% of the salespeople had their client base change. That means that we had also, again, a huge change, where business representatives had to visit new stores, learn new stores, and also learn new skills as they are now covering different banners. They had to learn the needs and tasks for stores covering different banners in a very short time. Going forward, creating a lot of opportunity for the company. Not only less people, but more efficiently, and we will be able to deliver both wholesale sales and retail execution from those combined operationals in a much more efficient way.

Speaker #1: However, that also meant that the entire operational structure had to learn their job from new. And 70% of the salespeople had their client base change, and that meant that, you know, we had also again a huge change, you know, where business representatives had to visit new stores, learn new stores, and also learn new skills as they are now covering different banners.

Speaker #1: They had to learn the needs and tasks for stores, covering different banners in a very short time. So again, going forward, you know, creating a lot of opportunity for the company—not only fewer people, but more efficiency—and we will be able to deliver both wholesale sales and retail execution from those combined operations in a much more efficient way.

Speaker #1: But in the short term, particularly again in April and May, when people had to learn—sorry, most, starting May and June—when people had to learn their job and their client base, and new, also created some disruption, particularly here on the sales side.

Paweł Surówka: But in the short term, particularly again in April and May, when people had to learn, sorry, mostly starting May and June, when people had to learn their job and their client base anew also created some disruption, particularly here on the sales side. We have changed the logistics, something that we have also announced on the last quarter. Now we have effectively gone from 15 logistical warehouses to 10, closing five distribution centers. That is obviously also going much more. That means not only closing those warehouses, but that means we had to reallocate clients. We had to build milk runs and the routes to deliver to our clients from new. We had to acquaint clients with new assortment, because the assortment of warehouses is not the same. Again, a very, very big redesign of the entire company, and that in a very short time.

Speaker #1: We have changed the logistics, something that we also announced in the last quarter. So now, we have effectively gone from 15 logistical warehouses to 10, closing five distribution centers.

Speaker #1: That is obviously also, you know, going much more. That means not only closing those warehouses, but that means we had to reallocate clients, we had to build milk runs and, you know, the routes to deliver to our clients from new.

Speaker #1: We had to acquaint clients with the new assortment, because the assortment of warehouses is not the same. So again, a very, very big redesign of the entire company, and that in a very short time.

Speaker #1: When doing the logistical changes, we have also, at the same time, reduced SKUs per warehouse, aligned in line with our strategy that also has foreseen that we will try to go for efficiency also by managing the long tail of our low-rotational SKUs.

Paweł Surówka: When doing the logistical changes, we have also, in that same time, reduced SKU per warehouse in line with our strategy that also has foreseen that we will try to go for efficiency also by managing the long tail of our low rotational SKUs. We went down from 13,000 SKUs to 10,800 per warehouse. That, again, creates efficiency. We are absolutely certain that 10,800 SKUs per warehouse is more than enough to cover the needs of our clients and be still a wholesaler and a franchise retailer with a very, very broad assortment of goods. But obviously, cutting those SKUs, that will give us efficiency going forward, has also had impact on the sales of the group going forward. We have created a new consumer department, which is again in line with our strategy that foresees that we will go from a simple wholesaler to a franchise organizer.

Speaker #1: So we went down from 13,000 SKUs to 10,800 per warehouse. That, again, creates efficiency. We are absolutely certain that 10,800 SKUs per warehouse is more than enough to cover the needs of our clients and still be a wholesaler and a franchise retailer with a very, very broad assortment of goods.

Speaker #1: But obviously, you know, cutting those SKUs will give us efficiency going forward. It has also had an impact on the sales of the group going forward.

Speaker #1: We have created a new consumer department, which is again in line with our strategy. That foresees that we will go from a simple wholesaler to a franchise organizer.

Speaker #1: That means we have to support our clients by helping them to organize, to understand consumer trends, manage categories, manage assortment, and retail prices, and promotions, and marketing campaigns in a way that they can hold their ground compared to the retail competition, like Dino, Biedronka, Żabka.

Paweł Surówka: That means we have to support our clients by helping them to organize, to understand consumer trends, manage categories, manage assortment, and retail prices, and promotions and marketing campaigns in a way that they can hold their ground compared to the retail competition like Dino, Biedronka, Żabka. This consumer department is now up and running. We have hired new category managers, and this department focused solely on the retail side and support of our stores is now created. In the head office, we have done what we have foreseen, which is we have reduced 30% of the head count in the centrals. Thanks also from the fact that we have combined the central head offices and head offices of the different business units that I have named before. Overall, that led to some 118 million of annualized overhead savings enacted already in that time that we are speaking about.

Speaker #1: So, this consumer department is now up and running. We have hired new category managers, and this department is focused solely on the retail side and support of our stores.

Speaker #1: It is now created. In the head office, we have done what we had foreseen, which is that we have reduced headcount by 30% in the centrals.

Speaker #1: Thanks also to the fact that we have combined the central head office and head offices of the different business units that I have named before.

Speaker #1: So overall, that led to some 118 million of annualized overhead savings enacted already in that time that we’re speaking about. We have also increased the number of expansion of the expansion team, in line with our strategy to be growing in the franchise domain, and particularly by expansion.

Paweł Surówka: We have also increased the number of the expansion team, in line with our strategy to be growing in the franchise domain and particularly by expansion. That has happened a little bit later than we anticipated. But indeed, we have now stocked up our expansion team, and we expected to deliver results also to our expansion efforts in the coming months and quarters. When it comes down to the retail stores, we have closed 73% of those stores that we have said we will be closing. We have also transferred a big amount of our clients of the stores that we wanted to transfer to franchisees. There was 53 stores as of Q2 transferred to our franchisees. As of today, that is already 73 stores transferred. So we have done that, and we have done that faster and cheaper than we anticipated.

Speaker #1: That has happened a little bit later than we anticipated, but, indeed, we have now stocked up our expansion team, and we expect to deliver results also from our expansion efforts in the coming months and quarters.

Speaker #1: And when it comes down to the retail stores we have, we closed 73% of the stores that we had set we would be closing. You know, we have also transferred a big amount of our clients, of the stores that we wanted to transfer to franchisees.

Speaker #1: That was 53 stores as of Q2, transferred to our franchisees. As of today, that's already 73 stores transferred. So we have done that, and we've done that faster and cheaper than we anticipated.

Speaker #1: And the same is true for the cash and carry optimization. So, closing the unprofitable cash and carries—my bottom line here is just to say that these are very deep and structural changes that affected the entire group.

Paweł Surówka: Same is true for the cash-and-carry optimization, so closing the unprofitable cash and carries. My bottom line here is just to say these are very deep and structural changes that affected the entire group. I think there is not one Eurocash employee that had not the way he or she is working, affected one way or the other by these changes. We were able to do those changes not only by cutting costs and letting go people and closing stores and warehouses and central warehouses. We have done that particularly by redesigning how the company works altogether, because obviously the 30% of people that we have let go, they were not idle. They were not just sitting there over the last quarters. In order to be able to do that kind of reduction, we had to redesign the company, create processes from new.

Speaker #1: I think there is not one Eurocash employee who has not had the way he or she is working affected, one way or another, by these changes.

Speaker #1: And we were able to make those changes not only by cutting costs and letting people go, and by closing stores and warehouses and central warehouses. We have done that particularly by redesigning how the company works altogether.

Speaker #1: Because, obviously, the 30% of people that we have let go were not idle, they were not just sitting there. Over the last quarters, in order to be able to do that kind of reduction, we had to redesign the company, create processes from scratch. Sometimes we also had to invest in tools that helped to automate tasks and processes that had previously been done by people.

Paweł Surówka: Sometimes we had to also invest in tools that help to automate tasks and processes that have been done prior by people, and this kind of work on the efficiency is still ongoing. I am just trying to bring home the fact that it was really a very deep change, and most importantly, it is now behind us. It is something that we have enacted, and the biggest part of it is definitely done. Now maybe to pause for a second, I will ask Piotr to speak about the cost effect that has already been enacted.

Speaker #1: And this kind of work on efficiency is still ongoing. I'm just trying to bring home the fact that it was really a very deep change.

Speaker #1: And most importantly, it is now behind us. It is something that we have enacted, and the biggest part of it is definitely done. And I'll maybe pause for a second.

Speaker #1: I'll ask Piotr to speak about the cost effect that has already been enacted.

Speaker #2: Thank you, Paweł. Well, out of all the milestones Paweł described, referring to the previous slide, I think that the cost-cutting initiatives deserve a deeper dive.

Piotr Nowjalis: Thank you, Paweł. Well, out of all the milestones Paweł described, referring to the previous slide, I think that the cost-cutting initiatives deserve a deeper dive. So I would like to focus on costs at this time. What we describe as 279 million cost reductions achieved, we should split and treat in two in a distinctive way. From purely accounting point of view, 200 million is the annualized value of the cost-cutting reductions already initiated and completed until the end of Q2 2026. Remaining 79 we are referring to, these are the initiatives management board is 100% confident they will be delivered with a positive cost-cutting effect. So altogether, as of now, after six months of the current year, we are 100% sure 279 million of cost cuts affecting directly 2027 EBIT will be implemented.

Speaker #2: So, I would like to focus on costs at this time. What we describe as 279 million in cost reductions achieved, we should split and treat in a distinctive way.

Speaker #2: From a purely accounting point of view, 200 million is the annualized value of the cost-cutting reductions already initiated and completed until the end of the second quarter of 2026.

Speaker #2: The remaining 79 we are referring to are the initiatives the management board is 100% confident will be delivered with a positive cost-cutting effect.

Speaker #2: So altogether, as of now, after six months of the current year, we are 100% sure that PLN 279 million of cost cuts, directly affecting 2027 EBIT, will be implemented.

Speaker #2: Going deeper into the cost-cutting initiatives—the ones we described so extensively in December 2026—I need to provide you with the following update.

Piotr Nowjalis: Going deeper into the cost-cutting initiatives, the ones we described so extensively in December 2026, I need to provide you with the following update. As you probably remember, we have been describing quite well extensively the transformation process Delikatesy Centrum own stores will be subject to. Out of 332 own stores, owned as of the end of December 2025, 144 were supposed to be closed down by the end of 2026, and this process is faster than expected. We managed to close down as many as 105 stores until the end of Q2, which constitutes 70% of the total overall annual value. In respect of the other part of the story, I mean the transfer of the stores to the franchisees of the company. We were supposed to transfer 188 stores, and as of now, we transferred 53 of them, which is absolutely in line with the original plan.

Speaker #2: As you probably remember, we've been describing, quite extensively, the transformation process that Delikatesy Centrum-owned stores will be subject to. Out of 332 owned stores, as of the end of December 2025, 144 were supposed to be closed down by the end of 2026.

Speaker #2: And this process is faster than expected. We managed to close down as many as 105 stores by the end of the second quarter, which constitutes 70% of the total overall annual value.

Speaker #2: In respect of the other part of the story—I mean, the transfer of the stores to the franchisees of the company—we were supposed to transfer 188 stores, and as of now, we have transferred 53 of them, which is absolutely in line with the original plan.

Speaker #2: And in Q2 only, we transferred 49. So 37% of the target is being met. We also managed to close down 12 cash-and-carry stores in the first half of the year.

Piotr Nowjalis: In Q2 only, we transferred 49. So 37% of the target is being met. We also managed to close down 12 cash and carry stores in the H1. Additional 2 came in July. In terms of logistic optimization, which is very crucial for the success of the cost-cutting program, we closed down already 4 distribution centers. So the full target has been delivered for 2026. Last but not least, the painful decision, but providing us with quite a different cost base for 2027. More than 650 employment contracts were already terminated. It is roughly 93% of the 707 scheduled for the whole 2026. So right here, I would like to reassure you on behalf of management board, that this part of the strategy will be met without delays and obstacles. In respect of transfer of the stores, we might go slightly beyond December 2026.

Speaker #2: An additional two came in July, and, in terms of logistic optimization—which is very crucial for the success of the cost-cutting program—we have already closed down four distribution centers.

Speaker #2: So, the full target has been delivered for 2026. Last but not least, the painful decision—providing us with quite a different cost base for 2027—more than 650 employment contracts were already terminated.

Speaker #2: It's roughly 93% of the 707 scheduled for the whole of 2026. So, right here, I would like to assure you, reassure you, on behalf of the management board, that this part of the strategy will be met without delays and obstacles.

Speaker #2: With respect to the transfer of the stores, we might go slightly beyond December 2026. That was also communicated before.

Piotr Nowjalis: That was also communicated before.

Speaker #1: Mariam, just, one more note on, you know, the, the methodology and the rest of the savings that we anticipate. So, you know, the methodology that we, applied here is to say, you know, 279, these are savings that are either already done or are enacted, the remaining ones are are the ones that are still planned.

Paweł Surówka: Well, just one more note on the methodology and the rest of the savings that we anticipate. The methodology that we applied here is to say, 279, these are savings that are either already done or are enacted. The remaining ones are the ones that are still planned, but obviously we are confident that we will deliver the full 400 million, and they are in the pipeline for the coming quarters. Just to give you an example, for example, we have closed the warehouses according to schedule. The actual relief in terms of cost from the warehouses once we leave them is when we either sell the warehouses from our own warehouses, or we sub-rent them where we are renting those warehouses.

Speaker #1: But obviously, we are confident that we were delivered the full 400 million, and they are in the pipeline for the coming quarters. So just to give you an example, we have closed the warehouses according to schedule.

Speaker #1: The actual relief in terms of cost from the warehouses, once we leave them, is when we either sell the warehouses from our own warehouses or we sub-brand them where we are renting those warehouses.

Speaker #1: So in the case that a warehouse is, for example, if, you know, sub-rented, it would fall until, done in the case where, a rental agreement, you know, in a certain second party has been found and is, you know, positively negotiated and we know we are going to send it, it is in action.

Paweł Surówka: So in the case that a warehouse is, for example, if sub-rented, it would fall until done in the case where a rental agreement and a certain second party has been found and is positively negotiated and we know we are going to send it. It is an action in the case where, for example, a warehouse is abandoned, but we are still in negotiations and active pursuit of a party that will rent from us the warehouse. It is still in the planned part. That's a little bit the methodology that we applied here. I would just say that Adrian, who is pacing us here, is also, we are working with an external consultant that is helping us in managing that project and to give us an independent view of where we stand in terms of the realization of the project.

Speaker #1: In the case where, for example, a warehouse is abandoned but we are still in negotiations and in active pursuit of a party that will rent the warehouse from us, it is still in the planned part.

Speaker #1: So that's a little bit of the methodology that we applied here. And I would just say that Adrian, who is, you know, pacing us here, is also—we are working with an external consultant who is helping us manage that project and to give us an independent view of where we stand in terms of the realization of the project.

Speaker #1: And we feel confident that this 400 will be in effectively done and again after half of less than half of the time we have already done to thirds of the, of the work.

Paweł Surówka: We feel confident that this 400 will be ineffectively done. Again, after less than half of the time, we've already done two-thirds of the work.

Speaker #3: Thank you. So, Pablo, if you could please briefly comment on the market before we start with the financials.

Piotr Nowjalis: Pablo, if you could please briefly comment on the market before we start with the financials.

Speaker #2: yes. So, you know, obviously, the whole relevant market has been under pressure in the second quarter. there, there is a part of deflation there, but, you know, we have so the whole relevant market, I would, we would, we, we consider, is now, you know, on the one hand side, there are questions about the, the decline on the overall store count and then there's overall performance and, there is, there is deflation.

Paweł Surówka: Yes. Obviously, the wholesale relevant market has been under pressure in Q2. There's a part of deflation there, but we have the wholesale relevant market we consider is now on the one hand side, there are questions about the decline on the overall store count, and then there is overall performance and there is deflation. We have, on the one hand side, the reduction of the store count. We would assume that around a third of that wholesale relevant market decline can be attributed to a structural change on the number of stores. Then we obviously have natural decline of the market because the market in some spaces is actually retreating. It needs to be said that a pretty big part of the wholesale relevant market is made of small stores that are heavily dependent on categories like beer and alcohol.

Speaker #2: We have, on the one hand, the reduction of the store count. We would assume that around a third of that whole relevant market decline can be attributed to, you know, a structural change in the number of stores.

Speaker #2: Then we obviously have natural decline of the market because the market in some spaces is actually retreating. And it needs to be said that a pretty big part of the whole relevant market is made up of small stores.

Speaker #2: That are heavily dependent on categories like beer and alcohol. Categories that overall have been, in, you know, that are declining in the first half of the year in, in the total market.

Paweł Surówka: Categories that overall have been in, that are declining in the H1 of the year in the total market. They are being affected by that change, particularly by that reduction in volume in those categories. Then also we have, obviously, deflation in a lot of categories, particularly in the fresh and in fats, which are affecting the overall part of that market. In comparison to the wholesale relevant market and in comparison to the traditional market, our franchise stores are keeping up. They are defending their share in the overall market better than the rest of the traditional market. Particularly, they gain their share in the wholesale-relevant market compared to the wholesale-relevant market.

Speaker #2: So, they are being affected by that change, particularly by that reduction in volume in those categories. And then also we have, obviously, deflation in a lot of categories, particularly in fresh and in fats, which are affecting the overall part of that market.

Speaker #2: In comparison to the whole relevant market, and in comparison to the traditional market, our franchise stores are keeping up. They are defending their share in the overall market better than the rest of the traditional market.

Speaker #2: And particularly, they gained their share in the whole relevant market compared to the whole relevant market. So today, our franchise stores—the ones that we cooperate with—and again, we are the franchise organizer who has the best, you know, the most integrated form of cooperation with the franchise stores.

Paweł Surówka: Today, our franchise stores, the ones that we cooperate with, and again, we are the franchise organizer who has the most integrated form of cooperation with the franchise stores, most of which are connected with us through our POS sales platform. Today, they represent, in terms of overall share of sales, over 35% of the overall market. That means that they are performing better than the overall market, and they have been also able to keep their ground better than the rest of the market in terms of defending their market share. Which I think, when we also will come to the like-for-like differential between them and the rest of the market, speaks a lot because obviously in the rest of the market, particularly in the big organized chains, we also have a big factor of expansion that is less the case in the wholesale-relevant market.

Speaker #2: Most of which are connected with us through our POS sales platform. Today, they represent, in terms of overall share of sales, over 35% of the overall market.

Speaker #2: That means that they are performing better than the overall market, and they have also been able to keep their ground better than the rest of the market in terms of defending their market share. Which I think, you know, when we also—we'll come to the like-for-like differential between them and the rest of the market.

Speaker #2: ...speaks a lot, because obviously in the rest of the market, particularly in the big organized chains, we also have a big factor of expansion. That is less the case...

Speaker #2: In the whole relevant market. So I think that needs to be said. Overall, the market, obviously, this quarter has been relatively, you know, challenging for us, and it is driven mostly also by deflation, as said before.

Paweł Surówka: I think that needs to be said. Overall, the market, obviously this quarter has been relatively headwinds for us and it is driven mostly also by deflation, as said before. Like-for-like, however, albeit negative, we consider as actually a positive being given that it is very much in line with the market. We have seen competitors like Biedronka posting quite similar results in terms of like-for-like. As a matter of fact, when we plot the difference between discounters, for example, and the wholesale-relevant market over the last quarter, this is the quarter where the gap between our franchise banners and the discounters has been reduced significantly to almost zero. For us, that means two folds.

Speaker #1: Like-for-like, however, you know, outside, a negative, we consider as actually a positive, given that it is very much in line with the market.

Speaker #1: We have seen, you know, competitors like Biedronka posting quite similar results in terms of like-for-like. And, as a matter of fact, when, you know, when we plot the difference between discounters, for example, and the whole relevant market for the last quarter, this is the quarter where the gap between all our franchise banners and the discounters has been reduced significantly to, you know, almost zero.

Speaker #1: for us, that means two folds. One on the one hand side is that, you know, we feel, very much confirmed in our strategy to bet on franchise and to invest into our franchise stores because we believe they are structurally, bound to defend their ground and because they are simply needed in the Polish market and there's space for them and they will be able, to attract consumers going forward.

Paweł Surówka: One on the side is that, we feel very much confirmed in our strategy to bet on franchise and to invest into our franchise stores because we believe they are structurally bound to defend their ground, and because they are simply needed in the Polish market and there is space for them, and they will be able to attract consumers going forward. On the other side, we also see, and that is something that we have been persistently saying also in this forum, that the overall price war in the discount market and that taking of market share of discounters is structurally bound to be capped at some point.

Speaker #1: On the other side, we also see—and that's something that, you know, we've been persistently saying also in this forum—that, you know, the overall price war and the discount market, and that taking of market share of discounters, is structurally bound to be capped at some point.

Speaker #1: Particularly now, as we have, through deflation, the share of wallet for food expenditure for Polish households is dropping, and that means that people are simply less sensitive to price and are less prone to go out of their way to discounters to shop for price.

Paweł Surówka: Particularly now as we have food inflation, the share of wallet for food expenditure for the Polish households is dropping, and that means that people are simply less sensitive to price, and they are less prone to go out of their way to discounters to shop for price. They are more likely to go to the store which is closest to them, and that is, in a lot of cases, one of our franchise stores that also gives them now a better consumer proposition since we have been very actively working on the assortment of our franchise stores, on their price positioning, and also on their marketing and promotions. Also overall, it gives them a better experience covering more national brands, more fresh, and more locally adapted food.

Speaker #1: They are more likely to go to the store which is closest to them, and that is, in a lot of cases, one of our franchise stores.

Speaker #1: That also gives them now a better consumer proposition, since we've been very actively working on the assortment of our franchise stores, on their price positioning, and also on their marketing and promotions.

Speaker #1: And also, overall, gives them a better experience—covering more national brands, more fresh, and more locally adapted food. So, again, on the like-for-like front and on the pure consumer side, we believe that our strategy makes sense because we are betting on that part of the whole relevant market and the traditional market that is actually the most modern and the most, you know, sustainable one.

Paweł Surówka: Again, on the like-for-like front and on the pure consumer side, we believe that our strategy makes sense because we are betting on that part of the wholesale-relevant market and the traditional market that is actually the most modern and the most sustainable one.

Speaker #3: And now a quick glance at the revenue as we see them in the financial statements, led by segments. We’ll have a chance to take a closer look in the latter part of this presentation, but now let’s focus on three key reporting segments.

Piotr Nowjalis: Now a quick glance at the revenue as we see them in the financial statements, split by segments. We will have a chance to have a closer look in the further part of this presentation, but now let us focus on three key reported segments. As concerns wholesale sales, we posted a decrease in revenue by 7.5%, and the biggest contributor was distribution. We will elaborate on this more with a 16% drop in sales. Cash and carry segment, 13% drop, while Eurocash Serwis, our tobacco and impulse products distributor, was a stable revenue year by year. As concerns retail sales, before analyzing it, please consider, let me remind you that the red part, the Delikatesy Centrum own stores, is just about to cease to exist in the coming year.

Speaker #3: As concerns wholesale sales, we posted a decrease in revenue by 7.5%, and the biggest contributor was distributions. We'll elaborate on this more. With the 16% drop in sales, cash and carry segment saw a 13% drop, while Eurocash Service, our tobacco and impulse products distributor, was stable in revenue year by year.

Speaker #3: As concerns retail sales, before analyzing it, please consider—let me remind you—that the red part, the Delicatessen Centrum-owned stores, is just about to cease to exist in the coming year.

Speaker #3: And we are closing down existing stores, which must have affected, and obviously did affect, the sales and revenue in the last quarter—and obviously in the first half of the year.

Piotr Nowjalis: We are closing down existing stores, which must have affected, and obviously did affect the sale and revenue in the last quarter, and obviously in the H1 of the year. Nevertheless, it is worth mentioning that this part of Eurocash Group decreased its revenue by nearly 30%. Our joint venture decreased by 10.9%. Last but not least, we will have a chance to discuss it separately. Both Frisco and Duży Ben, those two companies, constitute the segment growth platforms and the results in terms of revenue, but also in terms of EBITDA, quite the opposite. Frisco, again, posted double-digit revenue growth, 11% last quarter, while Duży Ben, a negative trend continued with 9.9% drop in revenue. Now we will have a chance to walk you through the margin and sales details throughout the quarter.

Speaker #3: Nevertheless, it's worth mentioning that this part of Eurocash Group decreased its revenue by nearly 30%. Our joint revenue dropped by 10.9%. Last but not least, we'll have a chance to discuss it separately.

Speaker #3: Both Frisco and Dujiban, those two companies, constitute the segment "Growth Platforms." The results, in terms of revenue but also in terms of EBITDA, are quite the opposite.

Speaker #3: Frisco again posted double-digit revenue growth: 11% last quarter. While Dużyben, a negative trend continued, with a 9.9% drop in revenue. And now we'll have a chance to walk you through the margin and sales details throughout the quarter.

Speaker #1: Yes, thank you very much, Peter. We'll start by client segmentation. that's a view that, you know, we've also started to show, last quarter. It is important for us to, as we are now combining the business and, and really re-segmenting our client base and also optimizing our client base, to really bring home the fact that, you know, there's a core of our, of our sales that we want to focus on and that this strategy is built upon.

Paweł Surówka: Yes. Thank you very much, Piotr. We will start by client segmentation. That is a view that we have also started to show last quarter. It is important for us, as we are now combining the business and really re-segmenting our client base and also optimizing our client base, to really bring home the fact that there is a core of our sales that we want to focus on and that this strategy is built upon. There is a part of our sales that obviously we would like to keep, but we are less prioritizing. It is part of the cost-saving efforts to be allocating more of our resources to franchise and gain some savings by maybe not serving every single client in the Polish market, particularly if that client is not profitable for us on a unit base.

Speaker #1: And there's a part of our sales that, obviously, we would like to keep, but we are less prioritizing. And, you know, it is part of the cost-saving efforts to be allocating more of our resources to franchise and gain some savings by maybe not serving every single client in the Polish market—particularly if that client is not profitable for us on a unit basis.

Speaker #1: And where we have, simply and actively, also taken the risk of losing those sales. And that's the independent market. So that story, that our franchise core is sustainable and it's here to stay, I think is confirmed once again.

Paweł Surówka: Where we have simply actively also taken the risk of losing that sales, that is the independent market. So, that story that our franchise core is sustainable and it is here to stay, I think is confirmed once again. So in H1 2026, our sales to our franchise partners has been down only by 1.3% compared to the last year. That is a year in which, on the one hand side, there is a half a year, 2 quarters in which, again, we had massive deflation and we had a lot of categories that were strongly impacted by that deflation. We had an overall negative like-for-like of our retail stores. So still you can see that their loyalty to us is pretty much in line with our wholesale sales. Yes, we had also a very transformative quarter.

Speaker #1: So, in the first half of 2026, our sales to our franchise partners have been down only by 1.3% compared to last year.

Speaker #1: And that is a year in which on the one hand side, and there's a, half a year two quarters in which again we had massive deflation, and we had a lot of categories that, were strongly impacted, by, by these, by that deflation.

Speaker #1: We had an overall negative like-for-like of our retail stores. So still, you can see that their loyalty to us is pretty much in line with our wholesale sales.

Speaker #1: And, yes, we also had a very transactional and very transformative quarter. And despite the fact that there's been a lot of changes going on in that quarter—and obviously also changes that affected our clients—and like most people, our clients, not everybody likes change, and we had, you know, changed their operating people.

Paweł Surówka: Despite the fact that there has been a lot of changes going on in that quarter, and obviously also changes that affected our clients and like most people are our clients, not everybody likes change. We had changes of operating people. We had change their warehouses. Our clients have stayed with us, and they continue buying for us even in that very transformative quarter. So, as you can see, the overall franchise sales are down by only 1.3%, which we consider not only a success in that H1, but also a very strong sign and proof that this core of our sales is very much stable and sustainable.

Speaker #1: We had changed their warehouses. Our clients have stayed with us and they continue buying for us even in that very transformative quarter. So as you can see, the o-overall, franchise, sales are, down by only 1.3%, which we consider, not only a success in that, in that first half of the year, but also a very strong sign and proof that, this you know, core of our sales is, is very much, stable and sustainable.

Speaker #1: And, you know, we, we would like to emphasize that because a lot of the reports that we read about us and, you know, understandable, but, you know, a lot of analysts are, are simply very much concerned about, the structural sales decline of the wholesale relevant market.

Paweł Surówka: We would like to emphasize that because a lot of the reports that we read about us and it is understandable, but a lot of analysts are simply very much concerned about the structural sales decline of the wholesale relevant market and to which extent it will affect Eurocash's performance and outlook going forward. Our message is that, yes, the wholesale relative market as a whole is declining, but that decline is not evenly split within that market. There is a part of that market, particularly the smaller independent stores, not part of any franchise system and very much operating still in the old way that is slowly disappearing. We see those stores closing shop from year to year and also performing more poorly. But we also see a big part of that market integrating into small regional networks and franchise networks.

Speaker #1: And to where, to which extent, it will affect Eurocash's performance and outlook going forward. Our message is that yes, there's—the wholesale market as a whole is declining.

Speaker #1: But that decline is not evenly split within that market. There's a part of that market, particularly the smaller independent stores, not part of any franchise system and very much operating still in the old way.

Speaker #1: That is slowly disappearing and we see those stores closing up shop, you know, from year to year, and also performing more poorly. But we also see a big part of that market integrating into small re-regional networks and franchise networks.

Speaker #1: And the majority of them, as you have seen, over 35%, are integrating into our networks. Our mission and our vision within the strategy is to maintain our franchise core and to keep those sales and grow them, most importantly by growing their like-for-like sales and making sure that they grow together with the Polish FMCG market.

Paweł Surówka: The majority of them, as you have seen, over 35%, integrating onto our networks. Our mission and our vision within the strategy is to maintain our franchise core and to keep that sales and grow it alongside by most importantly, by growing their like-for-like sales and making sure that they grow together with the Polish FMCG market. Also to recruit as many of the potentially the independent stores with the highest potential to our franchise departments. When we looked at the independent stores, we have segmented them. We have identified those stores that we consider to be high opportunity stores that we see on the one hand side as a market for our wholesale business. But then also, most importantly, as a potential resource pool of growth for our franchise business.

Speaker #1: ...but also to recruit as many of the, you know, potentially, you know, the independent stores with the highest potential to our franchise departments.

Speaker #1: And so, when we looked at the independent stores, we segmented them. We have identified those stores that we consider to be high-opportunity stores.

Speaker #1: That we see on the one hand as a market for our wholesale business, but then also, most importantly, as a potential resource pool for growth for our franchise business.

Speaker #1: We would like to, you know, by working with the stores, convince them to eventually become part of our franchise. And then, we have a part of that market where we have considered that, you know, this market will probably not be sustainable and probably not become our franchise.

Paweł Surówka: We would like to, by working with those stores, convince them to eventually become part of our franchise. Then we have a part of that market where we have considered that this market will probably not be sustainable and probably not become our franchise, and we therefore would like to limit the kind of investment that we would like to put down in that market, also by taking into consideration the churn that we in effect do see. That's why we have actively taken the steps of deprioritization part of our client portfolio. That's not a small part of it, that's a couple of thousands of stores, but those were the stores that had the most minimum impact of our sales and also on our margin.

Speaker #1: And we therefore would like to limit the kind of investment that we would like to put down in that market, also by, you know, taking into consideration the churn that we, in effect, do see.

Speaker #1: And that's why we have actively taken the steps of deprioritization, part of our client portfolio. That's not a small part of it—it's a couple of thousand stores—but those were the stores that had the most minimal impact on our sales and also on our margin.

Speaker #1: And as you remember from our strategy, our goal was to prioritize our franchise part, but also the most, yeah, I would say, you know, important part of the franchise of the independent market, which is the stores that we see as highest potential.

Paweł Surówka: As you remember from our strategy, our goal was to prioritize our franchise part, but also the most, I would say, important part of the franchise of the independent market, which is the stores that we see as highest potential. So that's why, as you can see, the sales dynamics here being quite uneven, -0.13 on the franchise, -35 in the independent store count. Now we come to the sales split of Q2 and of the, sorry, for H1 2026. Here, the message that we would like to give is that, yes, there's been a 6.1% drop in sales for that H1. Obviously, that's a lot. That is also more than we would consider to be the trend of Eurocash.

Speaker #1: So that's why, as you can see, the sales dynamics here are quite uneven: minus 0.13 on the franchise, minus 35 in the independent store count.

Speaker #1: And now we come to, you know, the sales split, of 2000 of the second quarter. And of the—sorry, for the first half of 2026.

Speaker #1: And here, the message that we would like to give is that, yes, there's been a 6.1% drop in sales for that first half, and obviously, that's a lot.

Speaker #1: that, you know, that is also more, than we would consider, to be the trend of Eurocash. And, you know, we, we, we see that obviously there is structural, sales decline in the wholesale relevant market, but only part of that decline is under, you know, is explaining the 6.1%.

Paweł Surówka: We see that obviously there is structural sales decline in the wholesale relevant market, but only part of that decline is explaining the 6.1%. Probably 2% of that would be what I consider sales decline within the wholesale relevant market. The rest of it are other factors, and most importantly, 60% of that decline, EUR 533 million, we associate with steps that we have taken within that quarter that were detrimental to sales. But on the other hand, we're building the kind of value that we were showing you before. Most importantly, just walking you through the bridge one by one, EUR 169 million of sales, that is sales lost due to the closure of the own stores. That is obviously sales closed, but as you know, we are closing stores with negative contribution.

Speaker #1: Probably 2% of that would be what I consider sales decline within the wholesale relevant market. The rest of it are other factors, and most importantly, 60% of that decline—533 million—we associate with steps that we have taken within that quarter that were detrimental to sales. But, on the other hand, we're building the kind of value that we were showing you before.

Speaker #1: Most importantly, just walking you through the bridge one by one, PLN 169 million of sales—that is, sales lost due to the closure of our own stores.

Speaker #1: That is obviously sales closed, but as you know, we are closing stores with negative contribution. So, as I mentioned already before, the stores that we have closed amount to a total negative contribution – or amounted to a total negative contribution – in 2025 of €75 million EBITDA.

Paweł Surówka: As I mentioned already before, the stores that we have closed amount to a total negative contribution, or amounted to a total negative contribution of 2025 of EUR 75 million EBITDA. There are good reasons why we got rid of that sales, let's say it bluntly. We had EUR 100 million linked to what I would call a one-off of supplier negotiations. We had a situation with one supplier where, let's say we did not agree on changes in our conditions, and we had a certain time where we did not cooperate that had impact on our sales, had impact also on the sales of that relevant party. It had quite substantial impact for the results of that quarter. Luckily, those negotiations are now for some time already terminated and we are friends again, and everything has come back to normal.

Speaker #1: So, there are good reasons why we got rid of that sales. Let's say it bluntly: we had 100 million linked to what I would call a one-off of supplier negotiations.

Speaker #1: We had a situation with one supplier where, let's say, we did not agree on changes in our conditions. And we had a certain period where we did not cooperate.

Speaker #1: That had impact on our sales, had impact also on the sales of that relevant party, so had, you know, quite substantial impact for the results of that quarter.

Speaker #1: Luckily, those negotiations are now, for some time already, terminated. And, you know, we are friends again and everything has come back to normal. Unfortunately, those situations have to exist also in a competitive market—that is, the retail and wholesale market.

Paweł Surówka: Unfortunately, those situations have to exist also in a competitive market that is the retail wholesale market. That is a one-off situation that simply took place. I mentioned the client segmentation a while ago, so that is linked to deprioritizing part of that independent part of client portfolio. That means, for example, that for those stores, we have allocated higher minimum drops. We are visiting those stores less often or not anymore, but our sales representatives were not performing the kind of logistical services that we will do to what we call the tier 1 clients. By deprioritizing those clients, we took the risk and we knew that we are going also to simply some of those stores will simply go away, and that's the part of that sales that is lost here. The last part of that bridge is the SKU reduction.

Speaker #1: But that is a one-off situation that simply took place. I mentioned the client segmentation a while ago, so that is linked to the prioritizing, part of that independent section of the client portfolio.

Speaker #1: That means, for example, that for those stores, we have allocated higher minimum drops. We are visiting those stores less often, or not anymore. Our sales representatives are not performing the kind of logistical services that we do for what we call the Tier One clients.

Speaker #1: And, you know, by deprioritizing those star clients, we, you know, took, the risk and we knew that we are going also to simply some of those stores will simply go away.

Speaker #1: And that's the part of those sales that is lost here. And the last part of that bridge is the SKU reduction. As you have seen from my previous slide, we have reduced the overall SKUs per warehouse by more than 2,000.

Paweł Surówka: As you have seen from my previous slide, we have reduced the overall SKUs per warehouse by more than 2,000. On the overall group, that's several thousand of SKUs less. There is a concrete benefit from that because we are becoming more efficient, particularly on the productivity of our warehouse staff by having less of that tail in SKUs. But it is true that in that very quarter, these SKUs had some sales associated with them, and this sales was not there anymore as we stopped trading those goods. But over the mid and long term, we believe that the sales will spread among the SKUs that we do have. We see a very high loyalty of our franchise stores to us, and in general, our wholesale, our retail partners are trading the goods that we provide them.

Speaker #1: On the overall group, that's, several thousand of SKUs less. there is a concrete benefit from that because we are becoming more efficient, particularly on the, on the, on the productivity of our warehouse stuff by having less of that tail in SKUs.

Speaker #1: But it is true that in that very quarter, these SKUs had some sales associated with them. And these sales were not there anymore, as we stopped trading those goods.

Speaker #1: But, over the mid and long term, we believe that sales will spread among the SKUs that we do have. We see very high loyalty of our franchise stores to us.

Speaker #1: And in general, our wholesale and retail partners are trading the goods that we provide them. And that's why we believe that, as I showed you, 10,800 SKUs are in our active distribution right now.

Paweł Surówka: That's why we believe that, as I showed you, 10,800 SKUs are in our active distribution right now, and we think this is more than enough to cover the needs of all our clients and maintain that. These are factors that really affected our sales this quarter, and we believe either will not come back or they are deliberate decisions like, for example, the own store closures. Then we have market factors. 126 million of that overall market decline we attribute to deflation. Obviously, it's difficult to give an exact number here because it's a question of the sales mix, but that's also in line with the market data that we have, our best estimate. Then EUR 430 million will be what I consider to be market performance.

Speaker #1: And we think this is more than enough to cover the needs of all our clients and maintain that. So these are factors that really affected our sales this quarter.

Speaker #1: And we believe, you know, they will either not come back, or these are deliberate decisions, like, for example, the own store closures.

Speaker #1: Then we have market factors — 126. So, you know, 126 million of that overall market decline we attribute to deflation. Obviously, it's difficult to give an exact number here because it's a question of the sales mix.

Speaker #1: But that's also in line with the market data that we have—our best estimate. And then, 430 million will be what I consider to be market performance.

Speaker #1: Probably 300 million of which, probably, is linked—again, here exact numbers are a little bit more difficult to get—but I would consider to be linked to the reduction of overall store count.

Paweł Surówka: Probably 300 million of which probably is linked, again, here exact numbers are a little bit more difficult to get, but I would consider to be linked to the reduction of overall store counts. That means that of the -61% of overall sales decline that we had, around one-third, maybe 2%, are really actually linked to the structural decrease of the market. The other two-thirds are linked to our decisions and then also to deflation, which we also not consider to be structural, and that will be here to stay. When I was just commenting the sales picture, I just wanted to say, and maybe just tying it back to the strategy again. I think, it needs to be said that, as I tried to explain, in Q2, we really completely focused on the cost side.

Speaker #1: That means that, of the minus 6.1% overall sales decline that we had, around one-third—maybe 2%—is actually linked to the structural decrease of the market.

Speaker #1: The other two-thirds are linked to our decisions, and also to deflation, which we also do not consider to be, you know, structural and that will be here to stay.

Speaker #1: When I was just commenting on the sales picture, I just wanted to say—and maybe, you know, just tying it back to the strategy again—I think, you know, it needs to be said that, as I tried to explain, in the second quarter we really completely focused on the cost side.

Speaker #1: Again, a lot of, the analysts covering Eurocash, when we announced the strategy set, that's probably a good strategy. I think the tr the, you know, a lot of you wrote that, you know, you agree with the trajectory and the, and, and, you know, the overall ambition of the strategy.

Paweł Surówka: Again, a lot of the analysts covering Eurocash, when we announced the strategy, said, "It's probably a good strategy." I think that a lot of you wrote that you agree with the trajectory and the overall ambition of the strategy, but a lot of you have marked execution risk on our side. Are we really going to perform the kind of deep and structural change that we have announced we would do? That's why I can say, it took us a little bit on our ambition. We really wanted to enact everything, and we kind of swallowed that frog up front, and we took the most important steps, particularly on the cost side and the redesigning side, very early on in that year to make sure that we will deliver them. I would now characterize it in the sense that the worst is behind us.

Speaker #1: But a lot of you have marked execution risk on our side. Are we really going to perform the kind of deep and structural change that we have announced we would do?

Speaker #1: And that's why I can say, you know, it took us a little bit on our ambition. We really wanted to enact everything, and we kind of, you know, swallowed that frog up front.

Speaker #1: And we took the most important steps, particularly on the cost side and the redesigning side, very early on in that year to make sure that we really deliver them.

Speaker #1: I would now characterize it in the sense that the worst is behind us. We have taken the most important steps now in the first half of that year.

Paweł Surówka: We have taken the most important steps now in H1 of that year, and that H1 of the year was mostly about the cost and about the redesigning of the company. The H2 of the year will be about sales. Obviously, we are a sales company. We always try to sell. But I think, even for a person outside of the company, that it's quite understandable to understand that when you are retraining your entire sales force for a new task and you are putting them to new clients, that is affecting sales. Our task in the next quarter will be, we are now set up in a new model. We have a completely new set-up. We are a new company. In that new set-up, we are now done with that, I would say, remodeling phase. We're done with the transformation.

Speaker #1: And that first half of the year was mostly about the cost and about redesigning the company. The second half of the year will be about sales.

Speaker #1: And, obviously, you know, we are a sales company. We always try to sell. But I think, you know, even for personal, outside of the company, it's quite understandable to understand that, you know, when you are retraining your entire sales force for a new task and you are putting them through new clients, that is affecting sales.

Speaker #1: And our task in the next quarter will be—now that we are set up in a new model, with a completely new setup—as a new company.

Speaker #1: And in that new setup, we are now done with that, I would say, remodeling phase. We are done with the transformation. Our goal now for the second half and the quarters going forward will be really to use that much more efficient machine that we have built, to go for market share, to go for sales.

Paweł Surówka: Our goal now for the H2 and the quarters going forward will be really to use that much more efficient machine than we have built to go for market share, to go for sales, and to go for clients. That's something that we are very much committed to and is my commitment to you. So yes, we have actively shed some sales in this quarter, some of it deliberately, some of it linked to the fact that we simply had to do some steps in order to enable the cost. But our main focus in the coming quarters will be about making sure that we provide sales. I see, going forward, that a lot of those one-offs that we have shown here are not going to repeat themselves in the next quarters.

Speaker #1: And to go for clients. And that's something that we are very much committed to. And, you know, it's my commitment to you. So yes, we have actively shed some sales.

Speaker #1: In this quarter, some of it, you know, was deliberate. Some of it was linked to the fact that we simply had to take some steps in order to enable the cost.

Speaker #1: But our main focus in the coming quarters will be on making sure that we provide sales. I see, going forward, that many of those one-offs we have shown here are not going to repeat themselves in the next quarters.

Speaker #1: And I see the minus 6% is not being the structural level of sales decline that Eurocash has. I was mentioning, you know, the kind of one-off costs that we consider to be the price of the changes that we have enacted.

Paweł Surówka: I see the -6% as not being the structural level of sales decline that Eurocash has. I was mentioning the kind of one-off costs that we consider to be the price of the changes that we have enacted. One part of it is a short-lived decline in margin. That is why I described a little bit more in more detail than I normally would the changes that also were happening in the buying department. I think that it should be understandable that when we did these kind of deep cuts in the overall number of buyers and then retraining them for a completely new job, it did create a moment where this buying team has been a little bit less efficient. Even so, we had conditions that allowed us to go for a higher level of margin.

Speaker #1: One part of it is a short-lived decline in margin. That's why I described a little bit more, in more detail than I normally would, the changes that were also happening in the buying department.

Speaker #1: I think that, you know, it should be understandable that when we did these kinds of deep cuts in the overall number of buyers and then retrained them for a completely new job, it did create a moment where this buying team has been a little bit less efficient.

Speaker #1: And even though we had conditions that allowed us to go for a higher level of margin, they were not able, particularly in the month of April, to really get hold of all the conditions and all the additional investments that we would normally do with the suppliers.

Paweł Surówka: They were not able, particularly in the month of April, to really get hold of all the conditions and all the additional investments that we would normally do with the suppliers. That is visible in the graphs here. Obviously, because we are in a very competitive market, we are not showing the exact level of our cash margin in the different segments. But overall, in that wholesale sales segment in April, we had a 1.5 percentage point lower margin than we would normally have based on last year. Even though that is something that we did not want to happen, we think there are good reasons why it happened, and we think that there is a big value from doing the changes that we did on the other side. I think that the most important message here for us is how that trend evolves.

Speaker #1: and that's, visible in, you know, the, the graphs here. Obviously, you know, because we, we are on a very competitive market, we are not showing the exact level of our cash margin and the different segments.

Speaker #1: But, overall, in that wholesale sales segment, in April, we had a 1.5 percentage point lower margin than we would normally have based on last year.

Speaker #1: And, you know, even though that's something that, you know, we didn't—we didn't want to happen, it's—we think there are good reasons why it happened.

Speaker #1: And we think that there's a big value from doing the changes that we did on the other side. And I think that the most important message here for us is how that trend evolves.

Speaker #1: You can see that, you know, in May, so, you know, we came from January where we had pretty much the same margin that we had.

Paweł Surówka: You can see that in May, we came from January, where we had pretty much the same margin that we had last year. Then we enacted most changes in the buying department in March. The biggest, I would say, impact was in April. You always have something of a lag in the buying department. In May, we came back, and in June, we were effectively on the level of last year in terms of the cash margin, showing that while the team was kind of relearning its skills for some time, by June, it was set up again to go for the entire investments that we would normally expect. Without wanting to give a formal guidance for Q3, I can say that going into the third quarter, we can see that that stabilization of our margin is indeed continuing.

Speaker #1: Last year, we enacted most changes in the buying department in March. The biggest, I would say, impact was in April. You always have something of a lag in the buying department.

Speaker #1: In May, we came back. And in June, we were effectively on the level of last year in terms of the cash margin, showing that while the team was kind of, you know, relearning its skills for some time, by June, it was set up again to go for the entire investments that we would normally expect.

Speaker #1: And without wanting to give a formal guidance for Q3, I can say that, going into the third quarter, we can see that the stabilization of our margin is indeed continuing.

Speaker #1: So we are confident that this was a short-lived loss in margin, linked to the restructuring of the buying team, and not to be repeated in the future.

Paweł Surówka: We are confident that there was a short-lived loss in margin linked to the restructuring of the buying team and not to be repeated in the future. That is not, I would say, the new normal linked to our company.

Speaker #1: And that's not, I would say, you know, the new normal linked to our company. The transformation Pavel described in detail obviously affected EBITDA in Q2.

Piotr Nowjalis: The transformation Paweł described in details obviously affected EBITDA in Q2, and we feel obliged to provide you with details which segment was affected, how, and by which means. As we mentioned before, the biggest impact on Q2 EBITDA had wholesale segment with 111 decrease in EBITDA, resulting from internal factors, mostly in buying department, gross margin contraction and deliberate decision on decrease of focus on independent clients. On the opposite, in the retail segment, we had positive EBITDA, EUR 77 million, affected by what many of you may see as one-off. From our perspective, it is not a pure one-off. It is the IFRS impact of closing down Delikatesy stores, Delikatesy Centrum stores in Q2. Why, and this is not only my personal opinion, why we see it as not purely one-off. Because this decision and this process will have a long-term impact on cash flow and profitability of the company.

Speaker #1: And we feel obliged to provide you with details on which segment was affected, how, and by which means. As we mentioned before, the biggest impact on Q2 EBITDA was in the wholesale segment, with a 111% decrease in EBITDA.

Speaker #1: Resulting from internal factors, mostly in the buying department: gross margin contraction, and a deliberate decision to decrease focus on independent clients. On the opposite side, in the retail segment, we had positive EBITDA of 77 million.

Speaker #1: affected by what many of you may see as a one-off. From our perspective, it's not a pure one-off; it's the IFRS impact of closing down Delikatesy Centrum stores in Q2.

Piotr Nowjalis: From our perspective, it is not a pure one-off. It is the IFRS impact of closing down Delikatesy stores, Delikatesy Centrum stores in Q2. Why, and this is not only my personal opinion, why we see it as not purely one-off. Because this decision and this process will have a long-term impact on cash flow and profitability of the company.

Speaker #1: Why—and this is not only my personal opinion—we see it as not purely one-off, because this decision and this process will have a long-term impact on the cash flow and profitability of the company.

Speaker #1: Thanks to the stores closed in Q2 and basically across the whole first half of the year, we managed to achieve our long-term goal in terms of reducing low long-term obligations related to rental contracts.

Piotr Nowjalis: Thanks to the stores closed in Q2 and basically across the whole H1 of the year, we managed to receive long-term goal in terms of reducing long-term obligations related to rental contracts. The decision made in Q2 and having this precise impact of PLN 59 million on the retail segment, this decision in respect of Delikatesy Centrum stores closure, while it will have an impact of approximately PLN 110 million, it is approximately PLN 6 million per quarter in respect of reduced cash outflows. So, obviously, from pure accounting point of view, it is a one-off, and it deserves to be treated this way. But on the other hand, it was a decision that will have a long-term, very positive impact on the company, starting from this very quarter. In respect of the gross profit segment, the impact on EBITDA was not material.

Speaker #1: The decision made in Q2 had this precise impact of 59 million zloty on the Retail segment. This decision, in respect of Delikatesy Centrum stores closure, well, it had an impact—it will have an impact—of approximately 110 million Polish zloty.

Speaker #1: It is approximately $6 million per quarter in respect of reduced cash outflows. So, obviously, from a pure accounting point of view, it's one-off, and it deserves to be treated this way.

Speaker #1: But on the other hand, it was a decision that will have a long-term, very positive impact on the company, starting from this very quarter.

Speaker #1: In respect of the Growth Project segment, the impact on EBITDA was not material. It was negative, minus five million, and it had two components.

Piotr Nowjalis: It was negative, -5 million, and it had two components, a positive in EBITDA of Frisco and increased negative EBITDA of Duży Ben. Last but not least, in other segments, the EBITDA contributed positively to the overall EBITDA of the company by PLN 11 million. Last but not least, discussing off IFRS EBITDA, we need to deliver some comment on pre-IFRS, so-called management EBITDA, which did not have this positive IFRS 16 impact. So we observed the decrease from PLN 111 million in Q2 2025 to PLN 35 million in Q2 2026. If I can, yeah. Now, going from reported EBITDA to what we call adjusted EBITDA for Q2. We strongly believe this distinction is justified by the fact that the costs of PLN 49 million were incurred in Q2, and they will not repeat again in the future.

Speaker #1: Positive in, EBITDA of Frisco, and increased negative EBITDA of Dužiben. Last but not least, in the Other segment, the EBITDA contributed positively to the overall EBITDA of the company by 11 million Polish zloty.

Speaker #1: Last but not least, discussing post-IFRS EBITDA, we need to deliver some comment on pre-IFRS, so-called management EBITDA, which did not have this positive IFRS 16 impact.

Speaker #1: So, we observed the decrease from 111 million Polish zloty in Q2 2025 to 35 in Q2 2026. If I can—yeah. And now, going from reported EBITDA to what we call adjusted EBITDA for the second quarter.

Speaker #1: We strongly believe this distinction is justified by the fact that the cost of 49 million zloty was incurred in Q2, and that it will not repeat in the future.

Speaker #1: These costs are related to payroll costs for employees that were given termination notices. It's obviously a negative contribution to EBITDA from own stores closed down in the second quarter of the year.

Piotr Nowjalis: These costs are related to payroll costs for employees that were given the termination notices. It is obviously negative contribution of EBITDA from own stores closed down in Q2 of the year, and the contribution margin impact that Paweł described before, related to internal issues connected mainly with commercial team integration that happened mostly in Q2. So starting from reported EBITDA 202 through a group of real and true one-offs that will not happen in the future, we come up with the number of 251 million. That is, in the opinion of the board, the true adjusted EBITDA for 2026 Q2. What has been commented, noted, and what we were praised for today after the Q2 release, were obviously the costs.

Speaker #1: And the contribution margin impact that Paweł described before related to internal issues connected mainly with commercial team integration that happened mostly in the second quarter.

Speaker #1: So, starting from reported EBITDA of 202, through a group of real and true one-offs that will not happen in the future, we come up with the number of 251 million. That is, in the opinion of the board, the true adjusted EBITDA for the second quarter of 2026.

Speaker #1: What has been commented, noted, and, well, what we were praised for today after the Q2 release were obviously the costs, because compared to last year, we had 90 million less costs in Q2 2026.

Piotr Nowjalis: Because compared to last year, we had 90 million less costs in Q2 2026. The biggest contributor in terms of group of costs were third-party services with a decrease of more than 50 million Polish złoty year by year. It is the continuous trend company will be delivering across this year as a clear path towards the 400 million EBIT contribution, EBIT impact of cost-cutting initiatives, cost-cutting reductions that will happen fully and in full scale in 2027. Now if we could analyze a little bit more the wholesale sale, as we mentioned before, minus 7.5% drop of sales of the whole wholesale segment. In this very segment, Eurocash Serwis posted flat results in terms of sales. The big negative contributors was cash and carry revenue, minus 146 million, and distribution, minus 298 million.

Speaker #1: And the biggest contributor in terms of group of costs were third-party services, with a decrease of more than 50 million Polish zloty year over year.

Speaker #1: It is the continuous trend the company will be delivering across this year, as a clear path towards the €400 million EBIT contribution. The EBIT impact of cost-cutting initiatives—cost-cutting reductions—that will happen fully and in full scale in 2027.

Speaker #1: And now, if we could, let's analyze a little bit more the wholesale sales. As we mentioned before, there was a minus 7.5% drop in sales in the wholesale segment.

Speaker #1: And, in this very segment, Eurocash Service posted flat results in terms of sales. And the big negative contributors were—was—cash and carry revenue, minus 146 million.

Speaker #1: And distribution: minus 298 million. The reasons behind this, as you heard before from Paweł’s comments, are especially related to the deliberate decision of the Management Board to defocus on some client groups and some sales in the wholesale segment.

Piotr Nowjalis: With the reasons standing behind them, as you heard before from Paweł's comments on especially deliberate decision of the management board to de-focus on some of the client group and some of the sale in this wholesale segment. As a result, reported EBITDA in wholesale segment was lower by 45%, from 246 million last year to 135 million this year. If we are to discuss retail segments, I think we have said it very clearly that it needs to be analyzed, in the opinion of the board, through the perspective of the closing down the Delikatesy Centrum stores and the overall transformation of this part of the business. Let me remind you, 144 stores to be closed down completely, 188 to be transferred.

Speaker #1: As a result, reported EBITDA in the wholesale segment was lower by 44.5%, from 246 million last year to 135 million this year. If we are to discuss the retail segment, I think we've said it very clearly that it needs to be analyzed, in the opinion of the board, through the perspective of the closing down of the Delikatesy Centrum stores and the overall transformation of this part of the business.

Speaker #1: Let me remind you, 144 stores are to be closed down completely and 188 to be transferred. As a result, no later than June 2027, this part of the business will cease to exist, but with a positive contribution—both through the lack of negative EBITDA contribution, and a positive effect through the transfer of part of the stores to the franchisees, as well as a positive effect on the wholesale sales to our franchisees.

Piotr Nowjalis: As the effect, no later than June 2027, this part of the business will cease to exist, but with a positive effect, both through the lack of negative EBITDA contribution and positive through the transfer of part of the stores to the franchisees and a positive effect on the wholesale sale to our franchisees. Going into details, we observed quite a stable sale in Arhelan company, dropped from 194 to 181. In the supermarkets, own and joint venture companies dropped from 882 to 726. In the Delikatesy franchise, a decrease in sales from 634 to 564. As mentioned before, positive effect of EBITDA of this very segment on the overall performance of the group, because of the positive impact of 59 million złoty on this quarter results. So EBITDA on the retail segment increased from 97.1 million to 156.73.

Speaker #1: Going into details, we observed a quite stable sale in Arhelan. The company dropped from 194 to 181. In the supermarkets—own and joint venture companies—this dropped from 882 to 726.

Speaker #1: And, in the Delikatesy Centrum franchise, decrease in sales from 634 to 564. As mentioned before, positive effect of EBITDA of this very segment on the overall performance of the Group.

Speaker #1: Because of the positive impact of 59 million zloty on this quarter's results, EBITDA in the retail segment increased from 97.1 million to 173 million.

Speaker #1: It was also mentioned that, pre-IFRS, EBITDA on the retail segment increased to 68 million from 43 million last year, because, obviously, there was no impact from IFRS 16.

Piotr Nowjalis: It is worth also mentioning that pre-IFRS EBITDA on the retail segment increased to 68 million from 43 last year, because obviously of the lack of this IFRS 16 impact. Just a few words on the sales in the growth platforms. We continue to deliver double-digit growth at Frisco. It was a 17 million increase year-by-year. In Duży Ben, the sale decreased by 12 million in the second quarter. So the overall segment showed the difference of 5 million in sales. As concerns the EBITDA, lower in the second quarter of the year because of the negative impact and widened loss of Duży Ben in last quarter. Pre-IFRS EBITDA of the segment decreased by another 5 million Polish złoty to reach 11.8 as of the end of second quarter.

Speaker #1: And just a few words on the sales in the growth platforms. We continued to deliver double-digit growth at Frisco. It was a €70 million increase year over year.

Speaker #1: in Dujiben, the sale decreased by 12 million in the second quarter. So the overall segment showed the difference of 5 million in sales. As concerns the EBITDA, lower, in second quarter of the year, because of the negative impact, and widened loss of Dujiben in, last quarter.

Speaker #1: Pre-IFRS EBITDA of the segment decreased by another 5 million Polish zloty to reach 11.8 million as of the end of the second quarter.

Speaker #2: Yes. And then maybe, you know, just, closing up on that segment, you know, on the Frisco and Dujiben story. So by Frisco, you know, I think that, you know, the one point we would like to really point out is that, you know, Frisco, has, delivered a positive quarter compared to a negative one last year, and is very much in our view, on track to what we have, already committed to this year, which is to be break even for the entire year.

Paweł Surówka: Yes. Maybe just closing up on that segment on the Frisco and Duży Ben story. By Frisco, I think the one point we would like to really point out is that Frisco has delivered a positive quarter compared to a negative one last year and is very much, in our view, on track to what we have already committed to this year, which is to be break-even for the entire year. We think it is a big milestone for Frisco and something that really builds the value of that company very strongly going forward. I think it is really important to show that Frisco delivering much, much higher than the market sales growth of 11%. As we now progress into Q3, we can see this trend actually growing.

Speaker #2: We think it's a big, you know, milestone for Frisco. And something that really builds the value of that company, very strongly going forward. I think that, you know, it's really important to, to show that, you know, Frisco, delivering, you know, much, much higher than the market, sales growth of 11%.

Speaker #2: As we now progress into the third quarter, we can see, this trend actually, growing. Is, heavily, impacted by deflation, because, for the rest of the FMCG market, the retail sales are supported by a category that has, you know, grown, quite a lot on, you know, the headline price, albeit not on volumes, which is cigarettes.

Paweł Surówka: It is heavily impacted by deflation because for the rest of the FMCG market, the retail sales are supported by a category that has grown quite a lot on the headline price, albeit not on volumes, which is cigarettes. Cigarettes that obviously had a 15% excise tax hike at the beginning of that year. For a lot of retail players, the tobacco products have been a very strong positive contributor to their sales figures, offsetting the deflationary pressure from the other categories. Frisco, which obviously does not sell cigarettes and also is less overweight on other categories that have been driven by excise tax like beer, is actually very much about fresh categories. It is a big portion of their basket. They have experienced real impact from deflation. Despite that fact, they have posted a double digit much over the market growth.

Speaker #2: Cigarettes obviously had a 15% excise tax hike at the beginning of that year. And for a lot of retail players, tobacco products have been a very strong positive contributor to their sales figures, kind of offsetting the deflationary pressure from other categories.

Speaker #2: Frisco, which obviously doesn't sell cigarettes, and also is, you know, less overweight on other categories that have been driven by excise tax, like beer.

Speaker #2: is actually very much about fresh categories. That's a big portion of their basket. And so they have experienced real, impact from deflation. And despite that fact that they have posted a double-digit, much over the market growth, and as we say, we, we can see their sales growth actually progressing in the, in the, as we enter Q3, and we see that company really up, to a very, good year.

Paweł Surówka: As we say, we can see their sales growth actually progressing as we enter Q3, and we see that company really up to a very good year. Unfortunately, the same cannot be said about Duży Ben. Duży Ben here very strongly impacted by the two categories that it is pretty much about, which is strong alcohol and beer. Unfortunately, obviously both categories this year are down in overall sales numbers. Even though they are supported by excise tax hikes, we see volumes actually being down, and that means that Duży Ben, which is pretty much only about that alcohol categories, has been strongly impacted by that. As you know, we are also right now as a team pretty much building on refocusing on the concept of Duży Ben, turning it into a franchise concept. That is something that is underway right now.

Speaker #2: Unfortunately, you know, the same cannot be said about Dujiben. Dujiben here is very strongly impacted by, you know, the two categories that it is pretty much about, which are alcohol—strong alcohol and beer.

Speaker #2: Unfortunately, obviously, both categories this year are down in, you know, overall sales numbers. But then, you know, even though they are, you know, supported by excise tax hikes, we see volumes actually being down. And that means that Dujiben, which we know is pretty much only about that alcohol category, has been strongly impacted by that.

Speaker #2: As you know, we are also, right now as a team, pretty much building on and re-focusing on the concept of Dujiben, turning it into a franchise concept.

Speaker #2: And that is something that is underway right now. So, you know, we obviously observe those sales trends, and we will also react if we see them accelerating.

Paweł Surówka: We obviously observe that sales trends, and we will also react if we see them accelerating. For the time being, we are very much focusing on delivering the franchise transformation of Duży Ben and recalibrating its position, as we believe that those changes in the alcohol market do not put into question the very existence of a convenience store built around the alcohol category.

Speaker #2: But for the time being, we are very much focusing on delivering the franchise transformation of Dujiben and recalibrating its position, as we believe that, you know, those changes in the alcohol market, you know, do not put into question the very existence of a convenience store built around the alcohol category.

Piotr Nowjalis: A few words on the financial situation in terms of indebtedness and key financial ratios. We were quite active in terms of inventory management in Q2 of the year. It resulted, and you clearly saw it in the financial statements, in the statements of cash flow operations. You've seen it that cash flow from operating activity improved significantly in Q2. It was EUR +312 million positive impact of cash flow in Q2 only, which helped us to reverse the negative impression you might have after Q1. It obviously had a lot to do with inventory management and payables management as well. As a result, company improved cash conversion cycle by one day, quarter-to-quarter, and by four year-over-year. As of the end of Q2, it is as good result as 29 days negative.

Speaker #1: A few words on the financial situation in terms of indebtedness and key financial rates and ratios. We were quite active in terms of inventory management in the second quarter of the year.

Speaker #1: It resulted, and you clearly saw it in the financial statements—in the statements of cash flow operations. You've seen that cash flow from operating activity improved significantly in the second quarter.

Speaker #1: It was a positive impact of 312 million on cash flow in Q2 only, which helped us to reverse the negative impression you might have had after Q1.

Speaker #1: It obviously had a lot to do with inventory management and payables management as well. As a result, the company improved the cash conversion cycle by one day quarter over quarter, and by four days year over year.

Speaker #1: And, as of the end of the second quarter, it is as good a result as 29 days, negative. As concerns financial expense, obviously they were lower year over year because of the interest rates reduction.

Piotr Nowjalis: As concerns financial expense, obviously they were lower year-over-year because of the interest rates reduction. But also quarter-to-quarter, it was EUR 7 million less in terms of net effect on financial activity. What we reported was EUR 312 million in terms of cash flow from operating activity. However, we find it justified to show you the real number adjusted by cash outflows related to restructuring processes. Additional EUR 30 million should be taken into account, and then we see the real impact of Q2 activities having resulted in improvement of cash flow from operating activity by PLN +100 million positive. Obviously, we are very happy to show you this number, keeping in mind market's reaction after the Q1 release. In terms of financial indebtedness, the net debt as of the end of Q1 was PLN 640 million. Now as of the end of last quarter, PLN 500 million.

Speaker #1: But also, quarter to quarter, it was €7 million less in terms of net effect on financial activity. What we reported was €312 million in terms of cash flow from operating activity. However, we find it justified to show you the real number, adjusted by cash outflows related to restructuring processes.

Speaker #1: An additional 30 million should be taken into account, and then we see the real impact of Q2 activities, having resulted in an improvement of cash flow from operating activity by 100 million Polish zloty—positive, obviously.

Speaker #1: We are very happy to show you, this number, keeping in mind market reaction after Q1 release. in terms of financial indebtedness, the, net debt as of the end of first quarter was 640 million Polish zloty, now as of the end of last quarter, 500 million.

Piotr Nowjalis: Nominal drop of PLN 140 million in net debt was associated with the improvement of the qualitative ratio, which is net debt to EBITDA. Adjusted last 12 months EBITDA, compared with the net debt, shows the ratio of 1.6 after Q2, compared to 1.8 last year. Obviously, these are the figures for pre-IFRS reporting. Post-IFRS company was always on very stable, sound, and healthy level. Nothing changed in respect of this quarter results. It's 2.4 versus 2.3 net debt to EBITDA post-IFRS result. I think that shows quite a work that was done in Q2, especially in terms of inventory management and payables. That was obviously done through several new processes implemented and a lot of negotiations and discussions with the external world as well. But we are happy to deliver what you see today in terms of liquidity, financial indebtedness and operating cash flow.

Speaker #1: A nominal drop of 140 million in net debt was associated with the improvement of the qualitative ratio, which is net debt to EBITDA. Adjusted last 12 months EBITDA, compared with the net debt, shows the ratio of 1.6 after the second quarter, compared to 1.8 last year.

Speaker #1: And obviously, these are the figures for pre-IFRS reporting. Post-IFRS, the company was always on a very stable, sound, and healthy level. Nothing has changed in respect of this quarter's results.

Speaker #1: It's 2.4 versus 2.3 net debt to EBITDA post-IFRS result, and I think that shows quite a lot of work that was done in the second quarter, especially in terms of inventory management and payables. That was obviously achieved through several new processes implemented, and a lot of negotiations and discussions with the external world as well.

Speaker #1: But we are happy to deliver what you see today in terms of liquidity, financial indebtedness, and operating cash flow.

Speaker #2: And with that, I would suggest that we jump right into Q2. I think the numbers, we don't need to repeat them—everybody has them. You have updated your models, and you have seen the report.

Paweł Surówka: With that, I would suggest that we jump right into Q2. I think the numbers, we don't need to repeat them. Everybody has them. You have updated your models, and you have seen the report. I would say, in the interest of time, I'm sorry we took a little bit more than we anticipated, but there's a lot to be said about that quarter. A lot of things happened, so we needed to also explain it. But now we are happy to answer your questions. Adrian.

Speaker #2: So, I would say, in the interest of time—and I'm sorry we took a little bit more than we anticipated—but there's a lot to be said about that quarter. A lot of things happened, so we needed to also explain it.

Speaker #2: But now, we are happy to report and to answer your questions. So, Adrian.

Speaker #1: Okay. We have received a good set of questions. You mentioned that approximately $200 million in savings has already been realized. How much of these savings have already been reflected in the first half of 2026?

Operator: We have received a good set of questions. You mentioned that approximately 200 million in savings is already realized. How many of these savings have already been reflected in H1 2026? I guess we already covered it. It was 56.

Adrian Skłodowski: We have received a good set of questions. You mentioned that approximately 200 million in savings is already realized. How many of these savings have already been reflected in H1 2026? I guess we already covered it. It was 56.

Speaker #1: I guess we already covered it. It was 56.

Speaker #3: 50, 56 million, yes, exactly.

Piotr Nowjalis: 56 million. Yes, exactly. Mm-hmm.

Speaker #1: Mm-hmm. Could you reconcile the company's adjusted EBITDA of, of this $49 million?

Operator: Could you reconcile the company's adjusted EBITDA of this 49 million?

Adrian Skłodowski: Could you reconcile the company's adjusted EBITDA of this 49 million?

Speaker #3: It was on a slide. I think slide number 15. Yes, precisely. So, it's a negative contribution from stores closed in Q2.

Piotr Nowjalis: It was on the slides. I think slide number-

Paweł Surówka: Fifteen

Piotr Nowjalis: Yes, precisely. So it's a negative contribution from stores closed in Q2. That will never be happening again. It was a payroll cost of the employees that do not work for company anymore. And the internal issue related to-

Speaker #3: That will never be happening again. It was a payroll cost of the employees that do not work for the company anymore, and the internal issues related to that.

Speaker #2: You know, also, for example, costs related to external advisors that helped us in the restructuring process, and...

Paweł Surówka: Also, for example, cost related to external advisors that helped us in the restructuring process.

Piotr Nowjalis: These are in the other group that stands for EUR 8 million here. So this is the one-off costs split in two categories.

Speaker #3: These are in the other group that stands for $8 million here. So this is one of the costs split into categories.

Speaker #1: Is it recurring?

Operator: Is it recurring?

Adrian Skłodowski: Is it recurring?

Speaker #3: Well, the.

Piotr Nowjalis: Well, the

Paweł Surówka: I definitely know.

Speaker #2: By definition, no.

Piotr Nowjalis: It is obviously not, because these are one-off, so they will not happen again.

Speaker #3: It's obviously not, because these are one-offs. So, they will not happen again.

Speaker #2: The reason why, you know, the reason why we adjusted your—the result is that we believe that all those items are not recurring.

Paweł Surówka: The reason why we adjusted the result is that we believe that all those items are not recurring.

Operator: Could you explain EUR 70 million of other operating income? Please give us a statement.

Adrian Skłodowski: Could you explain EUR 70 million of other operating income? Please give us a statement.

Speaker #1: Could you explain the 70 million of other operating income? Please give us more detail.

Speaker #3: Well, it's 59 million of IFRS effect from closing down dedicated central stores. And we touched on this point a couple of times during this call.

Piotr Nowjalis: Well, it is EUR 59 million of IFRS effect of closing down Delikatesy Centrum stores. We touched this point a couple of times during this call. The biggest chunk of this EUR 70 million incurred in Q2 out of EUR 70 million was EUR 59 million related to store closures.

Speaker #3: But the biggest chunk of this $70 million, incurred in Q2—out of $70 million, $59 million—was related to store closures.

Speaker #1: And the next one, when will the cost savings be sufficient to offset the revenue decline, and what are you doing to stabilize sales?

Operator: The next one, will the cost savings be sufficient to offset the revenue decline, and what are you doing to stabilize sales?

Adrian Skłodowski: The next one, will the cost savings be sufficient to offset the revenue decline, and what are you doing to stabilize sales?

Speaker #3: Yes. I think

Paweł Surówka: Yes, I think that this is the question, obviously. I tried to go in that direction already within the presentation. So on the one hand side, the answer is yes. We have, at some point, shown you, I think at Q1, a little bit of what our model is when we think about the strategy. We have anticipated that strategy in mind where, obviously, the cost reduction that we are enacting is, to a certain extent, a downsizing of the company. We had a certain sales level in mind when we projected the 2027 and beyond figures, with a margin associated to that and a gross profit.

Speaker #2: That, you know, this is the question, obviously. And, you know, I try to go in that direction already within the presentation.

Speaker #2: So, on the one hand, the answer is yes. We have, you know, at some point, shown you—I think at Q1—kind of a little bit of what our model is when we think about the strategy.

Speaker #2: And we have anticipated that strategy in mind, where, you know, obviously the cost reduction that we are enacting is, to a certain extent, a downsizing of the company.

Speaker #2: And we had a certain sales level in mind when we projected the 2027 and beyond figures, with a margin associated with that and a gross profit.

Speaker #2: And then, you know, we, we considered that, you know, the franchise the bulk of our franchise, sales and, the independent client base that we want to preserve is the kind of sales level that, we consider to be, where we want to fall upon and where we consider sustainable.

Paweł Surówka: We considered that the franchise, the bulk of our franchise sales, and the independent client base that we want to preserve is the kind of sales level that we consider to be where we want to fall upon and where we consider sustainable. Based on that, with the margin that we would normally get from that kind of business, we have adapted ourselves to that. We are still not at that level that we have projected, so we have even, within our 2027 numbers, projected that sales can and will decline even further in our optimizations. With that in mind, if we take into consideration the kind of sales that we think does not need to drop because it is this kind of franchise core that I have spoken at length about, then our EBIT story and our profitability holds firm.

Speaker #2: And based on that, with the margin that we would normally get from that kind of business, we have adapted our sales to that.

Speaker #2: And we are still not at that level that we have projected. So, even within our 2027 numbers, we have projected that sales can and will decline even further.

Speaker #2: In our optimizations, but with that in mind, if we take into consideration, you know, the kind of sales that we think do not need to drip-drop because it's just kind of franchise-coded and that, yeah, I've spoken at length about, then our EBIT story and our profitability hold firm.

Speaker #2: So, on the one hand, we can still lose a big portion of the independent client portfolio and still end up being much more profitable than we were in 2025.

Paweł Surówka: On the one hand side, we still can lose a big portion of the independent client portfolio and still end up being much more profitable than we were in 2025, thanks to the cost savings that we have enacted. That is the one answer. For that time being, we do not see any reason why we would not be able to sustain the sales that we have projected, based on the performance of our franchise stores and the franchise core that I mentioned. On the other side, as I also said, this quarter is really quite exceptional when it comes down to sales performance, for two reasons. On the one hand side, as I said, we have enacted a lot of elements that were detrimental to sales for good reasons, like closing the own stores, like reducing the SKUs, and we had this battle with one supplier.

Speaker #2: Thanks to the cost savings that we have enacted, that's the one answer. And for the time being, we do not see any reason why we would not be able to sustain the sales that we have projected.

Speaker #2: Based on the performance of our franchise stores and the franchise core that I mentioned—on the other side, as I also said—you know, this quarter is really quite exceptional when it comes down to sales performance.

Speaker #2: for two reasons. On the one hand side, as I said, we have enacted a kind of a, a lot of elements that were detrimental to sales, for good reasons, like on closing the own stores, like reducing the SKUs.

Speaker #2: And we had, you know, this battle with one supplier. So these are things that will not come back. You know, it's up to you to decide whether deflation was one of those elements that are not going to be recurring, but that's in everybody's case.

Paweł Surówka: These are things that will not come back. It is up to you to decide whether deflation was one of those elements that are not going to be recurring, but that is in everybody's guess. On the other side, I also tried to openly say that it was really a quarter of big transformation in the group, and I think it would be not fair to say that we have been at our best, when it comes down to delivering sales in that time. It was really a very transformational quarter. Those changes are now behind us, and I can tell you that the entire company is now laser-focused to deliver sales and to go after clients, the clients that we have identified. We have now the new operational structure that is going to go after clients.

Speaker #2: On the other side, we are—you know—I also try to openly say that, you know, it was really a quarter of big transformation in the group.

Speaker #2: And I think it would not be fair to say that, you know, we have been at our best when it comes to delivering sales in that time.

Speaker #2: It was really a very transformational quarter. Those things, those changes, are now behind us. And I can tell you that the entire company is now laser-focused to deliver sales and to go after clients.

Speaker #2: The clients that we have identified—so, you know, we have now the new operational structure that is going to go after clients. And the big change that we have now done is that, you know, while in the past we've been only looking at sales, we are now working on a client level.

Paweł Surówka: The big change that we have now done is that, while in the past we have been only looking at sales, we are now working on a client level. From the independent client portfolio, we have really identified by name and by store address the clients that we want to keep. We are going to go after them, and we are going to secure that sales in the same way that we are also going after the franchise clients, where you can see we can hold our ground if we want to. We have now identified clear action plans of how to maintain that sales, how to go after those clients, how to increase store visits, give commercial incentives, work on promotions, and obviously communication to those clients to maintain and then rebuild and then grow our sales. We are very much tracking our loyalty.

Speaker #2: So, from the independent client portfolio, we have really identified—by name and by store address—the clients that we want to keep. We are going to go after them, and we are going to secure that sales, in the same way that we are also going after the franchise clients, where you can see we can hold our ground if we want to.

Speaker #2: So, we have now identified clear action plans for how to maintain those sales, how to go after those clients, how to, you know, increase store visits, and give commercial incentives.

Speaker #2: We work on promotions and, obviously, communication to those clients, to maintain and then rebuild and then grow our sales. We are very much, you know, tracking our loyalty, and most importantly, we are pretty confident that our franchise model—which, as you have seen, has been growing in the wholesale market—is one that will become more and more attractive to the rest of the market, and we'll be able to attract new clients.

Paweł Surówka: Most importantly, we are pretty confident that our franchise model that, as you have seen, been growing on the wholesale market, is one that will become more and more attractive to the rest of the market and will be able to attract new clients. Long story short, yes, the redesigning and downsizing of the company foresees that we will be more profitable, but we will be smaller but more profitable. For the time being, as I hope we were able to show in Q2, we are able to manage that slide. Slide, sales down and cost down. That slide doesn't need to be structurally never-ending because we think that we will fall upon a foundation of clients and of sales that are sustainable.

Speaker #2: So, long story short, yes, the redesigning and downsizing of the company foresees that we will be more profitable, but we will be smaller, yet more profitable.

Speaker #2: And for the time being, as I hope we were able to show in Q2, we are able to manage that slide—sales down and costs down.

Speaker #2: And we will, and that slide doesn't need to be structurally never-ending, because we think that we will fall upon a foundation of clients and of sales.

Speaker #2: That is sustainable. And again, that part of market decline this quarter, that is really structural, was 2%. It was linked mostly with independent clients that we hadn't really counted upon so much in our sales projection.

Paweł Surówka: Again, that part of market decline this quarter that is really structural was 2%, and it was linked mostly with the independent clients that we haven't really counted upon so much in our sales projection.

Operator: What's the current status of Stunt Network, and when do you expect to begin its rollout?

Adrian Skłodowski: What's the current status of Stunt Network, and when do you expect to begin its rollout?

Speaker #1: What's the current status of Stone's network? And when do you expect to begin its rollout?

Speaker #2: Yeah, so the Stone Stone's network, first of all, is not called Stone. We have found a new name and we're going to announce it pretty soon.

Paweł Surówka: Yeah. So the Stunt Network, first of all, is not called Stunt. We found a new name, and we're going to announce it pretty soon. But I also have to say that while we have now worked out the entire consumer concept, we have worked out the franchise value proposition and the business case, and we have also a plan now to deliver that network. Q2 was really about doing the costs, and this is what we were really focused about. So within the sales action plan that I have said then about the fact that the next quarters are all going to be about sales and about franchise, we are now going to very strongly focus our energy in developing the new franchise network that is supposed to integrate and stronger unite our franchise banners, and we are going to communicate about that in the future.

Speaker #2: but, you know, I, I also have to say that, you know, while we have now worked out the entire consumer, concept, we have worked out the franchise, value proposition, and, you know, the business case and we've also, a plan now to deliver that network.

Speaker #2: Q2 was really about doing the cost, and this is what we were really focused on. So, within the sales action plan that I have mentioned, and about the fact that the next quarters are all going to be about sales and about franchise, we are now going to very strongly focus our energy on developing the new franchise network that is supposed to integrate and, you know, more strongly unite our franchise banners.

Speaker #2: And we are going to communicate about that in the future.

Operator: What drove Frisco profitability improvement, and do you expect it to deliver breakeven this year?

Adrian Skłodowski: What drove Frisco profitability improvement, and do you expect it to deliver breakeven this year?

Speaker #1: What drove the fiscal profitability improvement? And do you still expect it to deliver break-even this year?

Speaker #2: So, you know, the, the, the answer is yes. We very much, expect it to deliver break-even this year. I think that, as, as I said in the past, that, you know, the, the modeling of risk goes pretty easy and the driving profitability is also pretty down to earth, in the sense that it is really all about, diluting fixed cost.

Paweł Surówka: The answer is yes. We very much expect it to deliver breakeven this year. I think that, as I said in the past, the modeling of Frisco is pretty easy and the driving profitability is also pretty down to earth in the sense that it is really all about diluting fixed cost. Frisco has been operating now. We have built a new automated warehouse here around Warsaw. We are now operating at something like 60% of capacity of that warehouse. As we are building sales, and as you can see, we are adding sales at a double-digit pace every quarter, we are diluting the fixed cost component of that warehouses.

Speaker #2: You know, Frisco has been operating now. We have built a new automated warehouse here, around Warsaw. We are now operating at something like 60% of the capacity of that warehouse.

Speaker #2: And as we are building sales—and as you can see, we are—adding sales that are set to double at a double-digit pace every quarter.

Speaker #2: We are diluting the fixed cost component of those warehouses. And, as we approach higher sales levels every quarter, the profitability at the EBITDA level is incrementally uplifting.

Paweł Surówka: As we approaching higher sales level, every quarter, the profitability of EBITDA is incrementally uplifting, and that is why we should be able to deliver a full profitable year and an even more profitable year going after that.

Speaker #2: And that's why we should be able to deliver a full, profitable year, and an even more profitable year going after that.

Speaker #1: Is it holding store count and the deliberate portfolio cleanup, or is it a structural franchise retention issue? I guess we partially covered it. Which one, sorry?

Operator: Is it falling store count and deliberate portfolio cleanup or a structural franchise retention issue? I guess we partially covered it.

Adrian Skłodowski: Is it falling store count and deliberate portfolio cleanup or a structural franchise retention issue? I guess we partially covered it.

Paweł Surówka: Which one? Sorry.

Speaker #2: Is the folding store count a deliberate portfolio cleanup or a structural franchise retention issue?

Operator: Is it the falling store count a deliberate portfolio cleanup or a structural franchise retention issue?

Adrian Skłodowski: Is it the falling store count a deliberate portfolio cleanup or a structural franchise retention issue?

Speaker #1: It is, you know, it is definitely, you know, it is a cleanup. It is also, you know, focusing on the stores that we believe are most strategic.

Paweł Surówka: It is definitely a cleanup. It is also focusing on the stores that we believe are most strategic. We have most of the segmentation done in the independent store network, but also within the franchise store network. We saw that there are stores that we really want to focus on and some that might be less strategic. There is also another element that needs to be said, which is that we have a certain seasonality in store numbers, in the sense that, normally when we have store churn, it starts at the beginning of the year as people, when they decide to close their store, they do it at the beginning of the year. Then we normally rebuild the number of our stores over the year. This year, we have done a lot in terms of changes.

Speaker #1: We have most of the segmentation done in the independent store network, but also within the franchise store network. We saw that there are stores that we really want to focus on, and some that, you know, might be less strategic.

Speaker #1: There's also another element that needs to be said, which is that we have a certain seasonality in store numbers. In the sense that, normally, when we have store churn, it starts at the beginning of the year, as people, when they decide to close their store, they do it at the beginning of the year.

Speaker #1: And then we normally rebuild the number of our stores over the year. This year, you know, we have done a lot in terms of changes.

Speaker #1: As I also mentioned, I didn't say that so much about, but we have also integrated our expansion team. So going from a banner, expansion team to a unified expansion team that is now going to go out and actually sell, all of our franchise concepts, out in, in, in the, in the market to attract as many stores as possible.

Paweł Surówka: As I also mentioned, I did not say that so much about, but we have also integrated our expansion team, so going from a banner expansion team to a unified expansion team that is now going to go out and actually sell all of our franchise concepts out in the market to attract as many stores as possible. But the implementation of that expansion team has taken us a little bit more time than we thought. There were so many things going on. So the expansion team now in bigger size is now up and running, and we expect it to deliver the expansion targets that we have given it over the next month.

Speaker #1: But the implementation of that expansion team has taken us a little bit more time than we thought. There were so many things going on.

Speaker #1: So, the expansion team now, in the, you know, in a bigger size, is now up and running. And we expect it to deliver the expansion targets that we have given it over the next month.

Operator: What trending trends are you seeing in July and early Q3, in terms of sales volumes and gross margin?

Adrian Skłodowski: What trending trends are you seeing in July and early Q3, in terms of sales volumes and gross margin?

Speaker #1: What trending trends are you seeing in July and early Q3 in terms of sales, volumes, and gross margin?

Speaker #2: You know, like, like every quarter, we are not going to give guidance for Q3. we never do that. all I can say, now, because obviously, you know, I understand that the trends here, are asking, you know, are posing a lot of questions.

Paweł Surówka: Like every quarter, we are not going to give guidance for Q3. We never do that. All I can say now, because obviously, I understand that the trends here are posing a lot of questions. All I can say about Q3 is that as we enter Q3, we do see stabilization on that margin part, and we do see that some of the one-offs that we have talked about in the sales part are not recurring in Q3.

Speaker #2: All I can say about Q3 is that, as we enter Q3, we do see stabilization on that margin part. And we do see that some of the one-offs that we have talked about on the sales part are not recurring in Q3.

Speaker #1: How would you think about free cash flows, working capital, and leverage in H2? Do you expect net debt to decline? Piotr?

Operator: How would you two think about free cash flows, working capital, and leverage in H2? Do you expect net debt to decline, Piotr?

Adrian Skłodowski: How would you two think about free cash flows, working capital, and leverage in H2? Do you expect net debt to decline, Piotr?

Piotr Nowjalis: Well, I would expect net debt to stabilize on this level. In terms of net debt to EBITDA ratio, we should not go beyond 2 in respect of ratios. As concerns cash conversion cycles, we expect to keep the trend as we delivered over the last two quarters.

Speaker #3: Well, I w I would expect net debt to stabilize on this level. And in terms of net debt to EBITDA ratio, we should not go beyond two in respect of, ratios.

Speaker #3: And, as concerns cash conversion cycles, we expect to keep the trend as we delivered over the last two quarters.

Speaker #1: Yeah, we, we didn't we didn't, you know, there's so much going on, but we, we didn't, you know, elaborate on that very much. But, you know, the, the discipline in the inventory has been really, quite palpable.

Paweł Surówka: There's so much going on, but we didn't elaborate on that very much. But the discipline in the inventory has been really quite palpable. Actually it was even bigger than the reports show because there was something of a one-off in the tobacco part, but in the wholesale and retail inventory part, we have reduced the overall inventory by more than 150 million. And obviously, as you could imagine, the reduction of warehouse number from 15 to 10 and the reduction of SKUs from 13,000 to 10,800, and the reduction of client numbers is all very much linked to higher efficiency on inventory. And we think that we will be able to improve inventory rotation in terms of days by a couple of days going further. That will also be linked, obviously, with the efficiency of our logistics.

Speaker #1: There was a, actually, it was even bigger than, than, you know, the reports show, because there was some, something of a one-off in the tobacco part.

Speaker #1: But in the wholesale and retail, inventory part, we have reduced the overall wholes the overall inventory by more than 150 million. And obviously, as you know, you could imagine, but the, the reduction, of warehouse number from 15 to 10, and the reduction of SKUs from 13,000 to 10,800.

Speaker #1: And the focus and the reduction of client numbers are all very much linked to higher efficiency on inventory. We think that we will be able to improve inventory rotation, in terms of days, by a couple of days going forward.

Speaker #1: That will also be linked, obviously, with the efficiency of our logistics. But I'm pretty confident that that's something that, you know, we'll be stronger working on in the, you know, coming months, particularly as you—some of you might have seen—the current report.

Paweł Surówka: But I'm pretty confident that that's something that we'll be stronger working on in the coming months, particularly as some of you might have seen the current report. We now have a new Head of Logistics, a dedicated board member, Adam Galek, who has joined us only yesterday. So it will be his task to now take a very fresh look upon that unified logistics, its supply chain, and particularly the inventory management. And I think he has a lot of space to still do his magic as we have really radically improved and simplified the inventory and the overall Eurocash setup.

Speaker #1: We now have a new Head of Logistics, dedicated board member Adam Galek, who joined us only yesterday. And so, it will be his task to now take a very fresh look at our unified logistics, the supply chain, and particularly the inventory management.

Speaker #1: And I think he still has a lot of space to do his magic, as we have really radically improved and simplified the inventory and the overall Eurocash setup.

Operator: In January, you decided about new bonds program, which, however, not started yet. Can we expect a new emission on the H2 of 2023?

Adrian Skłodowski: In January, you decided about new bonds program, which, however, not started yet. Can we expect a new emission on the H2 of 2023?

Speaker #2: In January, you decided about a new bonds program, which, however, has not started yet. Can we expect a new emission in the second half of 2020?

Speaker #1: Well, definitely. This year, we would like to analyze the conditions in the market. And I think that in Q4, we would like to check if there is an appetite for Eurocash risk.

Piotr Nowjalis: Well, definitely this year, we would like to analyze the conditions in the market. And I think that in Q4, we would like to check if there is an appetite for Eurocash risk. So definitely yes, this program is to be alive.

Speaker #1: So definitely, yes, this program is to be alive.

Speaker #2: So, we are almost there. The last question: What are the key transformation milestones that execute risk for the remainder of 2026?

Operator: So we are almost there. The last question, what are the key transformation milestones and execution risk for the reminder of 2026?

Adrian Skłodowski: So we are almost there. The last question, what are the key transformation milestones and execution risk for the reminder of 2026?

Speaker #1: So, you know, I would say that, in terms of our internal milestones, we have hit a lot of really essential milestones.

Paweł Surówka: I would say that, in terms of our internal milestones, we have hit a lot of really essential milestones. So obviously, as we said, we have either delivered or actioned upon, or in actioned 70% of the cost number. Obviously, our ambition and expectation and guidance is that we will hit all of it. So that means that we still have over 100 million of costs to be delivered. Part of it is also sitting on logistics. As you know, we have done some operational changes that now logistic has to translate into higher efficiency. So that is definitely work that we are still working on. And obviously, we are definitely not slowing down on our cost effort, and I think that by now we have some credibility that that is something that we know how to do.

Speaker #1: So obviously, you know, as we said, we are, we are, we have either delivered or actioned upon, or inactioned, 70% of the cost number.

Speaker #1: Obviously, our ambition, expectation, and guidance is that we will hit all of it. So that means that, you know, we still have over 100 million of cost to be delivered.

Speaker #1: Part of it is also sitting in logistics. As you know, we have reduced—we've done some operational changes that now logistics has to translate into higher efficiency.

Speaker #1: So that's definitely work that we are still, still working on. And, you know, obviously, we're definitely not slowing down on our cost effort. And I think that by now, we have some credibility that that's something that we know how to do.

Speaker #1: However, you know, and obviously, a very big part of what we're now focusing on is, as I said, you know, until now, I would very simply say that the first half of the year was about the cost reduction part and the redesigning part of the company.

Paweł Surówka: However, and obviously, a very big part of what we are now focusing on is, as I said, until now, I would very simplify that the H1 of the years was about the cost reduction part and the redesigning part of the company. The H2 will be about setting the company up to grow. And now that growth component will have a couple of elements. We have now redesigned the company that we are working on formats, and so we have the franchise format on supermarket convenience, and there is the independent clients. On the supermarket part, obviously for us, one very important element is to be working on the like-for-like and the market share component of our franchise stores. And for us, one very important element is the market share of our franchise stores in the total market.

Speaker #1: The second part will be about setting the company up to grow. Now, that growth component will have a couple of elements. We have now redesigned the company; we are working on formats, and so we have franchise format on supermarket, convenience, and there are the independent clients.

Speaker #1: On the supermarket part, obviously for us, one very important element is to be working on like-for-like and the market share component of our franchise stores. For us, one very important element is the market share of our franchise stores and the total market.

Speaker #1: And we are very happy to see that in the last month, the dedicated asset center was actually defending its market share and the total market.

Paweł Surówka: And we are very happy to see that in the last months, Delikatesy Centrum was actually defending its market share in the total market, and we would like to see all of our franchise banners to defend their market share in the total market. A very important milestone here. The second one is overall loyalty and building the wholesale supply chain for our clients. And obviously, we still see potential here to grow. We do not have 100% loyalty on all categories. There is still potential for us to grow as we work together with our clients, and we have a whole team dedicated to that. There is also the independent clients. You have seen a lot of decline there.

Speaker #1: And we'd like to see all of our franchise banners defend their market share and the total market. This is a very, very important milestone here.

Speaker #1: The second one is, you know, overall loyalty and, you know, building the wholesale supply chain for our clients. And obviously, we still see potential here to grow.

Speaker #1: We don't have 100% loyalty in all categories. There's still potential for us to grow as we work together with our clients, and we have a whole team dedicated to that.

Speaker #1: There's also the independent clients. You have seen a lot of decline there. Part of it was deliberate, but now with the clients that we retain, we really want to treat them as a separate segment that we are going to be working on. Making sure that we stop declining and actually start flattening and even growing in that segment is going to be very important for us.

Paweł Surówka: Part of it was deliberate, but now with the clients that we stay, we really want to treat them as a separate segment that we are going to be working on. Making sure that we stop declining and actually start flattening and even growing in that segment is going to be very important for us. Overall, regaining market share in the wholesale market will be the entire story of H2. Obviously, a very big part of what we still have to do with that strategy is that franchise component. An important milestone for us will be informing you about the emergence of our new franchise concept that some of you have been asking about. It is still on our to-do list, definitely.

Speaker #1: So, overall, regaining market share in the wholesale market will be the entire story of H2. And, obviously, a very, very big part of what we still have to do in that strategy is that franchise component.

Speaker #1: And an important milestone for us will be informing you about the emergence of our new franchise concept that some of you have been asking about.

Speaker #1: And it's still on our to-do list, definitely.

Speaker #2: Okay. We'll already covered. Everything.

Operator: Well, have you covered everything?

Adrian Skłodowski: Well, have you covered everything?

Speaker #1: Yes. So, thank you very much for, for your attention. As I said, you know, it was a very a very transformative quarter. I hope you brought that across.

Paweł Surówka: Yes. Thank you very much for your attention. As I said, it was a very transformative quarter. I hope we brought that across. It was all about cost and redesign. Now the next part of the year will be all about sales, delivering the sales, securing the margin, and working on the retail and on the franchisees. See you next time on the next quarter. Thank you very much.

Speaker #1: It was all about cost and redesign. Now, the next part of the year will be all about sales: delivering the sales, securing the margin, and working on the retail and on the franchisees.

Speaker #1: And see you next time in the next quarter. Thank you very much.

Operator: Thank you.

Adrian Skłodowski: Thank you.

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