De'Longhi Stock

Good afternoon. This is the Chorus Call Conference operator. Welcome, and thank you for joining the De'Longhi's First Quarter 2026 Consolidated Results. [Operator Instructions]

At this time, I would like to turn the conference over to Mr. Fabio de' Longhi, Chief Executive Officer of De'Longhi. Please go ahead, sir.

Thank you. Good afternoon, ladies and gentlemen, and thank you for joining the De'Longhi Group conference call for our first quarter 2026 results. With me on the call today are Nicola Serafin, Group General Manager; Stefano Biella, CFO; and Samuele Chiodetto Investor Relations Director, M&A Manager. I'm pleased to announce that we have consolidated our recent excellent results with a solid start to the year driven by exceptional momentum in the Professional Division and positive organic growth in the Household segment. Despite the market environment characterized by volatility and geopolitical uncertainty, we remain fully confident in the group's agility and responsiveness, which have allowed us to navigate recent challenges effectively. The resilience is reflected in our consistent track record marked by significant revenue expansion and a steady improvement in profitability.

Moreover, over the years, we've been able to further strengthen our global leadership company by successfully capitalizing on the structural growth, premiumization of both the home and professional markets, while simultaneously seizing strategic opportunities in key categories such as nutrition and ironing.

Starting with the outlook for the Professional Division, the strategic combination of La Marzocco and Eversys continue to generate exceptional value, they're delivering outstanding performance and increasingly reaffirming the rationale behind the deal. As the market shifts towards premiumization and specialty coffee, our portfolio is perfectly aligned to capture these structural trends. This positioning has enabled the Professional Division to maintain its present momentum, steadily delivering revenue growth in excess of 40% for 3 consecutive quarters, all while sustaining superior profitability.

During the quarter, Eversys completed the acquisition of its Dutch distributor, a strategic move designed to elevate service standards and provide an integrated experience for our local partners and customers. This initiative aligns with evolving European coffee landscape, where Eversys and La Marzocco remain key players and where we aim to accelerate regional growth through an expanded direct presence.

The Household division delivered positive organic growth for the period, with trends improving after the absorption of excess market inventory during the opening weeks of the year. Excluding January, the division would have achieved a solid mid-single-digit growth at constant exchange rates, driven by positive performance across coffee and nutrition categories.

Over recent quarters, the new social media hub has become a strategic pillar of consumer engagement, ensuring maximum impact for all communication initiatives and supporting all marketing activities through an integrated, paid and earned media ecosystem that is driving significant engagement across the entire consumer journey. Our participation in Milan Design Week offered an excellent opportunity to execute this strategy, expanding our reach and deepening the connection between the coffee industry and the world of design and lifestyle.

The smallest coffee shop at home in a regional collaboration with miniaturist that Simon Weisse transformed the 5 De'Longhi machines into iconic coffee shops from all around the globe, from Paris to Tokyo. The results of over 1,500 hours of meticulous craftsmanship. This activation captured global attention, turning the miniature coffee pop-up into a viral media moment with a combined reach of over 12 million people.

Now let me focus on the results. On the first quarter of 2026, the group growth at constant exchange rates was broad-based across all geographic regions with a significant contribution from the Americas and Asia Pacific. In more details, Europe recorded a 1.4% increase in revenue during the period. The Professional division achieved a double-digit growth, while the Household segment was essentially flat. Within the latter, stronger expansion in markets such as Poland, Benelux and the Iberian Peninsula, offset weakness in some areas such as Germany, which were impacted by the reabsorption of market excess inventory during the period.

The EMEA region, Middle East, India and Africa, achieved 4.2% growth at constant exchange rates, driven by significant expansion in the Professional Division. Conversely, the Household division recorded a decline in revenue, weighted down by the market on favorable exchange rate effect and macroeconomic challenges in the Gulf countries. The Americas region recorded 18.2% growth at constant exchange rates, supported by the robust performance of the Professional Division and a mid-single-digit organic growth of the Household segment. Regarding the latter, the excellent performance of the coffee machines more than offset the contraction of the blended market.

Finally, the Asia Pacific region achieved an 8.7% increase in revenue despite a significant negative currency impact, plus 17.2% at constant exchange rates. Specifically, the Professional Division delivered an excellent performance across nearly the entire region while the Household segment maintained a growth trend at constant exchange rates, consolidating the strong results of the previous year.

The Professional Division demonstrate broad-based growth with a widespread double-digit momentum across our key geographies and primary product categories, recording EUR 139 million of sales, a 40% increase compared to 2025. The premium positioning of Eversys and La Marzocco supported by a robust product portfolio enabled the group to capitalize effectively on the special premiumization trend, meeting the demands of consumers increasingly focused on premium quality. Reflecting this, La Marzocco Consumer segment continues to drive significant expansion. Increased volumes, combined with premium positioning allow the division to protect and strengthen profitability for both brands.

The Household Division achieved a turnover of EUR 641 million, representing a slight decline of 2.4% on a reported basis but an increase of 0.8% at constant exchange rates. Home Coffee, recorded low single-digit growth at constant exchange rates, driven by manual machines and espresso products alongside significant expansion in coffee accessories. Nutrition, the low single-digit contraction at constant exchange rates is mainly attributable to destocking activity recorded in January. Net of this effect, the segment showed a positive trend in the subsequent months.

Conversely, Kenwood brand kitchen appliances saw a significant acceleration in performance compared to the same period last year. Other categories, the Comfort segment, portable heating and air conditioning recorded mid- to high single-digit growth year-on-year, while Home Care maintained moderate growth at constant exchange rates.

The first quarter of 2026 delivered a further improvement in the group margins, driven by volume growth and a favorable sales mix underpinned by the excellent performance of the Professional segment. In details in the quarter, adjusted EBITDA amounted to EUR 126 million or 16.2% of revenues, an improvement of 80 basis points compared to the previous year. This improvement was mainly supported by strong growth of the Professional division, which carries margin above the group average.

As for the Household Division, the price/mix contribution was slightly negative due to selective price repositioning aimed at increasing market support, while investment in media and communication remained stable as a percentage of total group sales. During the quarter, we experienced a slightly negative impact from additional tariffs in the U.S. market, approximately EUR 4 million, while we're not in effect during the previous year.

As of March 31, 2026, the group net financial position was EUR 721 million, a significant improvement over the EUR 483 million reported in the prior year period. Regarding cash generation, free cash flow before dividends, share buyback and acquisitions was a negative EUR 44 million for the quarter. This was driven by the typical seasonality in net working capital, specifically the restocking of inventory following sales in quarter 4. On a trailing 12-month basis, free cash flow before dividends, share buybacks and acquisitions reached EUR 464 million, a remarkable achievement that allows us to maintain a flexible and attractive capital allocation strategy.

In summary, our first quarter results reinforce our long-term trajectory of growth and margin expansion, overcoming market uncertainty. While the geographical landscape requires us to remain vigilant regarding potential inflationary pressures on cost and consumer behavior, underlying business trends have remained resilient over the recent months. And we remain focused on rigorous cost management to navigate these external factors.

Regarding the Professional segment, we are leveraging our strong and unique proposition to expand the consumer market and tackle the out-of-home area, achieving above-market results. To drive this performance, we are further strengthening our product portfolio, highlighted by the recent launches of Eversys Plus, which has allowed us to target the convenience store and coffee service segments and the introduction of any new colors in the La Marzocco Home Line, including green, blue and brushed steel. We also continue our extensive communication activities and participation in trade shows and lifestyle events, further strengthening engagement with our community and partners.

On the Household front, we're currently benefiting from recent launches such as Eletta will turn in coffee, then large portfolio of Kenwood food preparation and Braun's ironing. We are advancing our new product launches designed to align with evolving consumer desires and investing in strategic marketing campaigns to draw global attention to our brands, supported by an integrated social media strategy.

Furthermore, we're driving the group towards a technological frontier by intensifying investment in key strategic projects across various fronts as presented in the business plan. These include operational excellence, where AI-enabled customer service has moved beyond the first two pilot geographies and is now being prepared for a potential extension -- extended rollout. Talent acquisition with a new social officina in London, scaling up our social media capabilities and digital transformation where we completed the implementation of a global sales force e-commerce platform, which is now fully operational across markets.

In light of our progressive improvement during the first quarter confirmed by a favorable start to the second quarter and normalization of exchange rates will reaffirm our full year 2026 forecast. We expect revenue growth at a mid-single-digit rate and an adjusted EBITDA in the range of EUR 640 million to EUR 660 million. We now welcome your questions. Thank you.

[Operator Instructions] The first question is from Niccolo Storer of Kepler Cheuvreux.

Thanks for taking my three questions. The first one is about your guidance. Last time we spoke, you said that your guidance for 2026 did not include any impact from the war in Iran. Now you are confirming basically the numbers but are now this including any impact from the geopolitical chaos we are witnessing?

The second question is about margin evolution. I was trying to understand how much of the EBITDA expansion was linked to the professional coffee performance. And in particular, you show in the EBITDA bridge a negative price/mix impact notwithstanding the plus 40 versus plus 1 of professional versus Household. So this probably implies a very negative price/mix on household products, if you can discuss a bit about this.

And very last is about the stocking actions that you have mentioned taking place in January. I was wondering if this were basically affecting both the food preparation products and coffee or if they were just limited to food preparation products.

Your question, first one about the guidance, yes, we confirm the guidance. We -- in our guidance, we take into account what's happening in the graph, but we expect a rather quick solution still. I mean we think that if the solution will happen in, let's say, I don't want to say next month, but in the next 2 or 3 months, we are able to confirm our year-end guidance. Obviously, if decision gets worse, then we have to reconsider. But for the moment, we say -- we think that we can confirm guidance as said.

The second is -- yes, before moving to the second question, I think that the trends in the underlying business have remained resilient after January. So we -- I say we -- January was a bit tougher. We spoke about overstocking at trade level, in particular, I think that the trend is getting better and also for the household division, in particular, for the Household division. And also April will be positive for the Household division. So we think that we are back on track after a weak January, and we are back on track to meet our year-end goals.

With regards to margin, I would say that, yes, the growth in the expansion of margin is thanks to Professional. Margins were a bit weaker on Household. I would say that almost entirely due to the tariffs that were not in place last year in the first quarter and maybe slightly on a slight weakness in January, in particular, on Espresso, which was a bit overstocked. But again, it's back to growth in the following months.

And just to summarize what maybe I've already touched on in the first two questions. Stock probably has almost normalized. So now we feel comfortable that selling sell-out will more be aligned in the next months.

The next question is from Isacco Brambilla, Mediobanca.

Two questions on my side, the first one is on Americas under a geographical standpoint, I would say the bright spot of the reporting, could you give us a bit more color on the drivers of the strong organic performance between volumes and prices?

Second question is on Household's coffee. We're not used to see flattish trends for this segment. Could you help us better understand the underlying demand trends in fully auto machines and which are the drivers of the, say, temporary slowdown whether this is a theme of timing of product launches, a comparison basis or maybe any sign of down trading by customers you are recording across the market?

Thank you, Isacco, for the question. USA was a strong at Professional, very strong professional. Quite strong coffee for Household and negative, unfortunately, on Nutrition for NutriBullet, which has been obviously offsetting the positives of Household Coffee.

I don't know, Nicola, if you want to add maybe some color around the U.S. market, in particular, maybe with coffee and...

The coffee trend overall in the -- also in the U.S. in the beginning of the year, there was a bit of overstock. So the trend also in January was also for the U.S. a bit, let's say, below expectation. But overall, in the quarter, the overall coffee was positive while the situation in Nutrition in the market, in particular in blending for [indiscernible] is still weaker. And obviously, this is a bit of putting in a negative trend overall, the U.S. for the Household slightly negative, while it's super positive for the Professional. But overall, the trend is a bit reversing as we speak. So it's becoming stronger for coffee and its normalizing also in nutrition that current trading. So we have a not positive outlook. Obviously, we are looking and a lot can depend on the next tax policy because as we speak, this is still an element to consider.

So in simple words it was about -- coffee, which was -- which has not grown for the first time in quarter 1, I would say if we exclude January for a moment, February and March were pretty good with a high single-digit growth also for Household coffee. I think that January has been more like a tail to last year, at the end of last year rather than signaling what is the potential trend for 2026. I think [indiscernible], we had a pretty good year and a very strong year-end last year. Black Friday was strong, indicating a strong also maybe end of December.

In the end of December, say, sell-out was pretty weak and resulting in higher inventory that we have now managed in January. So I would say that, yes -- visually, yes, there is no growth in coffee. If we go more, we dig in, we understand better the underlying trends with destocking and then, let's say, sell-in, I would say, I feel more comfortable from what I'm seeing in January and February -- sorry, February and March and now also being confirmed by the sales results in April.

Next question is from Andrea Bonfa of Banca Akros.

Fabio, congratulations again for the results. Some of my questions have actually been answered. Maybe if I can start in to further begin on the Professional coffee performance. It seems that you mentioned double-digit growth in Europe, but looking at the 40%, does it take that most of the growth was from the U.S. or the rest of the world? If you can elaborate on that.

And if you also can comment on the training environment in this very precise moment from a geographical standpoint. We -- I presume that the Gulf countries are negative, if you can elaborate more on the macro region. Thank you very much.

Yes. Okay. Professional actually was strong with the growth in Europe also around 30% with MEA above close to 50% in the Americas in the area of just below 40%. So I would say that the Professional division performance has been really super strong across all regions across all brands and also strong in traditional bar equipment and home consumer equipment.

So second question is about the impact of the war -- second part of the question. Yes, probably MEA, now we need to consider that will be slower in the next months. But again, as I said, the region is about 6%, but more specifically, the Gulf countries represent only 3% of the total sales for the group.

And if I may, a follow-up question on the Professional, can you comment on the performance between overseas and La Marzocco? Was it more one of the two? Or were they almost [indiscernible] from this standpoint?

This year, I would say that both performed extremely well, both. So they're pretty, pretty aligned. Maybe -- I would say maybe Eversys is a bit stronger. Maybe you -- we have to also recall that last year -- I mean, two years ago, it was a weaker year for Eversys and the first quarter of last year was still -- was improving, but still below expected results. This year, so probably Eversys had a better performance also because it has an easier comparison versus La Marzocco, which has been expanding sales more consistently across the years and the quarters since, say, the business combination.

The next question is from Alessandro Cecchini, Equita.

The first one actually is on the consumer business of La Marzocco. So in my idea, it's roughly 30%, maybe I am wrong, but it could be, I guess, 30% of La Marzocco sales more or less. So going forward, so not just this year, do you have maybe internal plans so -- which can be the size of this business can double, can trouble. So just to understand your internal expectation for this part of the business that is pretty new for La Marzocco, but is extremely supportive. This is my first question.

My second question is instead about M&A. You know that you are -- I mean excluding any kind of consideration for your internal Professional business. But looking around, you see other opportunities in the Professional business, also given the sizable cash that you have in your balance sheet?

My third question is you said about the product launches in Household Coffee, if you see an acceleration over the coming quarters? Finally, it's a small part of the business, but over the last two years was very negative. And at least in Italy, it seems sunny. So probably if you can elaborate a little bit more on the air conditioning business that was, I mean, for two years, very negative. And so this year, probably you have the restocking effect.

Yes. Okay. Thank you, Alessandro. First question on consumer. Long term, I believe that consumer for La Marzocco should become more relevant, more important and the largest part of the business. At the moment, as you are correct in referring to is 30% is more or less 1/3 of the La Marzocco business is home consumer. I was expecting a stronger also growth for this year in consumer machines at La Marzocco, which is happening, which is happening. But also professional is so strong that for probably this year, let's say, the percentage of, say, the incidence of consumer on total La Marzocco sales won't change just because it's an exceptional performance also within the bar equipment.

But then in the long run, I expect that the bar equipment should normalize and progressively with La Marzocco becoming more visible to consumers, the marketing initiatives, the events, the social media campaigns and activities will support a strong acceleration of Household -- La Marzocco, which is already happening, but will be more visible and will probably -- the trend -- let's say, the trend will rebalance, let's say, the weight of home on total La Marzocco sales in going in the direction that we were hoping where Home becomes more relevant than Professional.

Having said so, M&A, yes, professional, there are some areas where we can perform M&A. Our priority probably will go now to see if there is an opportunity to buy out the minorities. I think that this is probably an area where we feel more comfortable with the performance of professional. And we know well the companies. The companies are doing extremely well. So probably this is an area where we can start focusing more. And obviously looking into other alternatives in professional. There are product segments where we are not present at the moment, which are potential for us. And the third area where we are looking at is geographic expansion. Probably at the moment, the U.S. market is very difficult because of the tariffs and all the complexity that has been caused by the tariffs and the pressure on margin. But this might result in opportunities that we want to look very serious.

So I would say 3 areas: minorities, either acquisition in professional and North America, again, in household more specifically. With regard to household coffee and new products, we have a number of new products. And Nicola, maybe you can want to handle and talk about what are the innovation for the year.

Yes. In terms of products, definitely in coffee, we have an unprecedented pipeline of new launches for the year. We have 4 new model of fully automatics. One is just came in the market. It was launched in April that is our premium model Ultra metal -- and then we have 3 launches that will happen across the next month. It will be Magnifica Duo, Rivelia starting, a second model of the Ultra range. And more is coming also in the first half of next year. Definitely, we have a robust pipeline, probably one of the strongest ever. That is backed also from a couple of new launches also in the range of bean-to-cup more traditional machine.

We have La Specialista Duo that we launched across the summer. And we have another compact solution of bean that will come by late this year, early next year. About the air conditioning trend, obviously, we need to acknowledge that air conditioning in this moment is more or less 3% of our business. But definitely, we have a favorable outlook with definitely the last 2 years has been the worst year probably ever for the category. So we have expectation for a double-digit growth of the category, but we need also to knowledge that is on the base of 3% of impact in our total revenue.

Yes, because we have decided that we want to limit the risk in air conditioning. So we consider this segment as segment as we want to maintain and improve, but never have an excess risk on the growth, which may result in negative years or inventory buildup if the market will not absorb the product.

As we speak, obviously, we do not have a sales potential higher than the stock that we have already own at this point of time. By the way, the presales of it has been, let's say, good with a good trend. As we speak, Europe is a bit chilled cooled down. So this is not definite February. Let's see how it will be June.

Okay. Finally, if I may, on Eversys, probably is my perception, but just asking, it seems to me that the growth of the business is also due to an enlargement of the customer base probably to bigger change to a new league. I mean, for overseas that probably was not the case last year or two years ago. So just to know if is also this part of the game, so to have also an additional client base that is more change, so a larger business.

Well, the growth of Eversys is coming from expansion of our Chinese business, particularly with the high-end stores where equipment with high productivity is required. New customers in Europe, in both in, let's say, food chains or coffee chains, the Blank Street coffee in London or in Europe or in North America. We are now also expanding to also convenience stores. We were already present in convenience store when 7-Eleven in the past, but now we are expanding with a very important customer across Europe.

And then also the new products, which are Legacy Plus. These products are more, let's say, designed for the OCS and these convenience stores. So we expect also this product to help keep growing in this segment. And then obviously, we are doing very well in America with more chains. I would say that we were sort of new kid in the block. I mean, the company was founded about 12 years ago. It was very small when we acquired the first stake and is starting now to be more visible. And therefore, we are winning new customers, thanks to the successful deployment in key customers and the great delivery in terms of quality in the cup and the robustness and let's say, also the service capabilities, thanks to our connectivity, which are also fundamental in order to keep down the servicing cost and the maintenance cost for the companies.

Next question is from [ Luca Orsini, Orsa ].

Just have a couple of question. The first one is on the price/mix going forward, just thinking about this year, do you expect the price/mix to remain negative throughout the year? Or do you think that there will be an improvement in the price mix effect? And if yes or no, also why, of course, which is as important as the answer. And the second thing, you're talking about acquisition in Professional Coffee. Are you more looking in the area of the -- in the La Marzocco camp or you're more looking in the camp of the fully automatic Eversys to expand? Which range do you think deserves to be expanded with another brand and another company?

The first question -- sorry, first question is price/mix and Nicola may be -- but my feeling is that maybe we will continue to see promotional initiatives in key moments of the year. But I think that mix will be positive. So I expect maybe more pressure in certain time of the year, but we think -- I think that we will continue to grow faster with the fully automates with our coffee machines with good mix, also Braun, certain, Ironing systems, maybe will be a bit sharper in certain time of the year in the very promotional times. But in general, I don't see a negative trend on price/mix or just no...

We have an outlook with a positive category mix, so fully outdoor and coffee and also kitchen machine, as we speak, has been pretty brown. So we have a category brown also with Ironing. So we have a positive category mix. And also within the category, the launches that I've mentioned before are all launches that are going in the upper quartile of our range. So this is where we are pushing to bring a positive mix and also pricing -- a bit of pricing ability. Said that the competitive landscape and the promotional windows in the market are definitely expanding. When we're speaking of Prime Day, it is not anymore Prime Day of Amazon is becoming a retailer and an industry Prime Day. So there is a bit of trade-off on this. But we are acting with countermeasures in terms of category mix and product within the category to have a favorable mix to offset this pricing effect. That is more specific on for the same SKUs.

Yes. On professional, difficult to be more specific on what are the targets as also Professional coffee is not a huge segment. But I would say that maybe it's the need and or, maybe it's not fully out or is equipment which will be more complementary to our current range. But certainly, professional is one of our key priorities. And I would say also, as mentioned before, yes, we have already an asset which we own at 62%, which is performing very well. And probably this is also, at the moment, could be our first priority.

Yes. I was more asking outside buying out the minorities, which is obviously the most logic thing to do. We don't have to convince that.

The next question is from Niccolo Storer, Kepler Cheuvreux.

Yes, me again, thank for taking my follow-up question. On Professional coffee. Basically, if I annualize your plus 40% of Q1, you already got to high single-digit growth for the year. You guided for low teens, if I'm not wrong. So you just need mid-single-digit growth in the remainder of the year to get there. So a sharp deceleration versus Q1. I understand that the comparable basis is going to become tougher, but don't you see this as a sort of a conservative target at this stage? What is your backlog suggesting?

I think that if we had this call, maybe a couple of months ago, it was quite difficult to give and confirm maybe an expectation for the guidance that we gave because January was weak and February was going in the right direction. So I would say that it's a very complex environment. I don't want to, for the moment, to modify any guidance, not even considering the strong performance of Professional. We also to see that last year, the second half of Professional was already very strong and growing at around 30%. So I would say, for the moment, let's keep at it is. It's -- I think we are more encouraged by the current development for both divisions, but it's not time for us to revise the guidance even if I understand that the performance has been better than maybe expected, and I acknowledge that. And this is encouraging myself, encouraging the team. So we feel more comfortable about achieving the year-end results.

The next question is from Francesco Brilli, Intermonte.

A lot have been answered, but just a quick one on advertising and promotion. If you can recall or just provide some more color on the phasing of advertising and promotion expenses throughout the year and across quarters. See the first one, you mentioned it's quite flattish compared to last year. So just if you can explain the trading for the next quarters and for the full year. Thank you.

Thank you, Francesco, for the question, Nicola, do you want to handle this one?

Yes. As we speak for the quarter, we have just, let's say, a flat level compared with last year, considering also that the incidence on turnover was higher because of the lower top line. But in particular, we have a strong plan for the second and third quarter that is correlated also with the new product launches that we have -- I've mentioned before. And we have also more to come in terms of both social media activation and media campaign by year-end. So definitely, you can expect, let's say, a more robust plan of investment in the months to come.

The next question is from Hela Zarrouk of ODDO BHF.

So first one is on the bridge of the EBITDA, we can see that in other costs, we have lower product cost. Could you please give us more details about this? And how should we expect this item in general, the cost base to develop during the year?

My second question is on current trading. If you can making update on current business trading over April and start of May. And did you see any slowdown in your main market segments? Maybe third question on U.S. stories. If you can give us the impact on Q1 and your expectation for the whole year.

Sorry, can you rephrase the last question that we maybe are not sure of it. That's right.

Yes. For it's the impact of U.S. tariffs on your -- on the profitability in Q1, the amount? And maybe if you can give us your expectations for the full year, the impact of U.S. tariffs on the profitability for the full year?

Nicola, do you want to handle the...

In terms of cost, definitely, we had a favorable carryover of the trends that we have already experienced in the second half of last year due to a lot of industrial efficiencies and material trends, something that we are holding for the first quarter of this year. We are keeping in this moment, but it's very likely to change if the overall general geopolitical situation do not change in the next weeks, if not months. So what we can expect the outlook of the year, it can be something that we can have a carryover as it is if the situation will normalize or we will have an inflationary pressure if the Middle East situation will not normalize.

In terms of current trading, as we have already mentioned, April was more in direction of recovery. We had a very -- a weak January, but the situation was improving across February and March and then April is a bit normalized on our expectation. In terms of the impact of the U.S. tariffs, as we have mentioned, we have more or less EUR 4 million of impact in the first quarter. As we speak, the tariffs that are enforced are the global 10% addition to the old tariff scheme. And this is something that the information that we have is what is publicly available. So it is there until the end of June. What will happen after June, we do not have any information, privileged information on this.

[Operator Instructions] The next question is from Luca Bacoccoli, Intesa Sanpaolo.

Yes. Just two questions from my side. So the first one is a clarification on the trading update in April. So you were referring to a normalizing trend. So I was wondering if the trend in the professional that you saw in the first quarter is still continuing in April and the first -- in the few days of May? And the other question is on CapEx, reaching the first quarter where quite significantly lower than last year. So is there any phasing effect? Or should be expect a significant decrease throughout the coming quarters?

So I would say that to be a bit more clear on April, Household has grown mid single-digit at constant exchange rates while Professional is growing as previously. So again, no change actually in April. In the midterm, I would say, the second half, the comparison for Professional will be with a very high base because last year in the second half, Professional grew at 30%. So therefore, this current program has to take in account the tough comparison versus last year. With regard to CapEx, it is under control, Nicolas, you want to cover what is the expected CapEx for the second half of the year and the remainder of the year?

We have, let's say, as we speak, obviously, considering the overall landscape, we are trying to have a wide allocation as we speak. And obviously, this can vary based also on the outlook of the business. But I would consider this more a phasing than something structural.

Sorry, Nicola. So just a follow-up on this. Let's assume a short-lived conflict on crisis in Middle East, the CapEx for the full year 2026 should be in line with last year or now, lower?

Yes. Let's say, let's say that we are expecting something that will be normalized on the level of last year that on average was, let's say, the level of investments that we're -- we have been sustaining in the first few years. Already last year was a CapEx control year, and it will be challenging to go below that level. So for the next part of the year, we are expecting more or less the same level of last year.

The next question is a follow-up from Alessandro Cecchini, Equita.

Just a follow-up on your ability to manage costs. I presume that in this moment, you are not adopting special measures to contain costs. It's right at this point? And secondly, if I understood correctly, so if, of course, this is a basis that we continue to have this kind of 10% global tariff, et cetera, it seems to me that this EUR 4 million is already a big chunk of your EUR 10 million for the year. So you are digest now, I mean, the tariff because last year, as you said, starting from the third quarter, you had a tariff or just to have more qualitative color on these 2 points.

From operating -- non-product operating costs and labor costs, we have, in this moment, a strict policy in terms of cost control. That is definitely what is providing benefit to offset also and digest part of the impact that we have on the other side from tariffs as we speak. If the current level of tariffs would be confirmed by year-end, this is what we have somehow incorporated in the current guidance.

Mr. de' Longhi, there are no more questions registered at this time. I turn the conference back to you for any closing remarks.

Okay. So thank you so much for attending the De'Longhi First Quarter 2026 Conference Call.

Ladies and Gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the De'Longhi Third Quarter 2025 Consolidated Results Conference Call.

[Operator Instructions]

At this time, I would like to turn the conference over to Fabio de' Longhi, CEO of De'Longhi. Please go ahead, sir.

Good afternoon, ladies and gentlemen, and thank you for joining the De'Longhi Group conference call for our third quarter 2025 results. With me on the call today are Nicola Serafin, Group General Manager; Marco Cenci, Chief Planning and Control Officer; Stefano Biella, Chief Financial Officer; Samuele Chiodetto, Investor Relations Director and M&A Manager; and Sara Mazzocato, IR Specialist.

Very pleased once again with a strong set of quarterly results delivered by the group, confirming the positive momentum of the recent periods and strengthening of our position as an industry leader. The solid performance in the quarter is evidenced by robust 11.5% growth at constant ForEx and a record adjusted EBITDA margin of 16%.

The Household division continued its strong trajectory, achieving 7.6% growth at constant FX and outperforming the market, while the Professional division further accelerated its expansion across both its brands. Providing a detailed breakdown, the Professional division again posted solid results with remarkable organic growth of over 40%. This was sustained by strong market dynamics for the business combination, reinforcing the position for both La Marzocco and Eversys as leading high-growth, high-margin companies in the mid-cap space.

The solid pace of growth seen over the recent quarters is the result of the ongoing premiumization of coffee quality and experience in the out-of-home market, where our portfolio leads along with the [indiscernible] and unique connection our brands have built within the coffee community over the years. This was clearly demonstrated by our enthusiastic reception for Eversys versatile innovations launched at Host, particularly the next-generation legacy machine capable of brewing cold coffee, tea and matcha.

Further evidence was the outstanding success of La Marzocco iconic event out of the box, a celebration of coffee culture, design and innovation, which over the years has become an international and meeting point for the coffee community. The event was also an opportunity to celebrate key collaborations with partners like Porsche, Rimova and Aimé Leon Dore and featured new ones like the Victorinox for La Marzocco Barista tool.

The Household division maintained its strong momentum, growing 7.6% at constant FX in the quarter, consistent with the previous performance and outperforming the market despite a challenging environment. This positive performance was mainly driven by the coffee category, which is benefiting from resilient trends, including the growing penetration of espresso at home, expanding drinks variety and the continued premiumization of the range. These factors continue to foster growth in the market that, however, remains underpenetrated and underrepresented globally.

We are thrilled with the early results from our third Perfetto campaign. In just 2 months, we have seen a significant increase in social media mentions and search interest for the De'Longhi brand. This campaign marks the next step in our strategic evolution toward a full funnel marketing strategy, which manages the entire consumer life cycle from inspiration to post-purchase engagement. The campaign launch was supported by both activations over the last months at high-profile events, including Milan Design Week, the F1 movie Premiere in New York and the Venice Film Festival.

The objective is to generate a multiplier effect capable of balancing the weight of paid and earned media. The strategy is designed to move beyond simple audience reach, but inspires them to talk, share and create content themselves. These efforts are strategically aimed at accelerating market expansion while cementing De'Longhi reputation at the high-end quality benchmark in the coffee industry.

Now let me focus on the quarterly results. The group delivered an excellent performance in both divisions during the first 9 months and the last quarter with widespread growth across geographies. In more detail for the third quarter, the Europe area confirmed the positive momentum, growing 9.3%, plus 9.2% at constant currency, driven by both Home and Professional Coffee. Spain and Portugal, Belgium, Hungary and the Nordic continue [indiscernible] area achieved a mid-teen growth rate. MEIA was up 24.8% at constant currency in the quarter, supported by both divisions with Professional Coffee achieving sound results and Home Coffee and home care categories driving the growth for the Household business.

The Americas recorded an 8.2% increase in revenues at constant currency, led by the strong Professional and the Home Coffee performance with a negative currency impact from the weak dollar. Finally, Asia Pacific region achieved another positive quarter, growing by 20.2% at constant currency. Both divisions contributed positively to the growth with the Chinese market driving the region performance.

Regarding the divisions, we're very satisfied with the performance of both as they have realized a solid and resilient pace of growth in the recent quarters. Concerning the Household division, we highlight what follows. The Home Coffee segment confirmed once again its leading role in the division growth, posting a high single-digit increase, in particular, thanks to the contribution of pump machines and special products that reiterate the positive performance recorded in the first half.

The Nutrition and Food Preparation segment was down by a mid- to high single-digit percentage in the third quarter. This contraction is mainly due to negative currency effect and a challenging year-over-year comparison for personal blenders in the U.S. market, which had achieved significant double-digit growth last year. Regarding to the other categories, products in this group achieved a mid-teen expansion driven by Brown Ironing segment, which once again grew at a mid-teen rate, continuing its solid expansion over the last 2 years and the accessory category, a business mainly linked to coffee machines, which posted significant growth compared to last year. The Professional division delivered another strong quarter with revenue growth of over 40%.

These results bring the pro forma expansion for the 9 months to approximately 30%. The solid performance was widespread across regions and is driven by the continued premiumization of coffee quality and experience in the out-of-home market. The brand's high-quality positioning allows La Marzocco and Eversys to capitalize on the growing opportunities in this segment.

Looking now at the evolution of profitability. The group margin improved in the first 9 months of 2025, mainly supported by the growth of the Professional division and margins above group average. In details, in the third quarter, the adjusted EBITDA was equal to EUR 148.8 million, 17% on revenues, improving by 70 basis points with respect to last year, supported by increased volumes in both divisions and the better Household product mix.

Price/mix contribution was slightly positive in both the 9-month period and the quarter, while the currency effect was neutral. Investment in the Media and Communication increased in absolute terms but remained stable as a percentage of turnover for both the quarter and the 9-month period. In the quarter, we faced higher logistic costs and the negative impact stemming from the additional tariffs in the U.S. market.

As regards to tariffs, we displayed on Slide 6, we were able to manage this situation and minimize the potential net impact, thanks to our mitigation plan, which was based on inventory buildup, price increases and supply chain reorganization. We confirm our expectation of an approximate EUR 15 million net impact on adjusted EBITDA in full year '25, which is already incorporated in our full year guidance.

In September 2025, the group net financial position was positive at EUR 309 million, an improvement compared to EUR 266 million in September 2024. With regard to cash generation, the cash flow before dividends, buybacks and acquisition was positive for EUR 298 million in the 12 months. In the 9 months, cash flow before dividends, buybacks, acquisitions was negative EUR 482 million, mainly driven by a planned increase in inventory stemming from 2 factors: ordinary business seasonality and strategic buildup in the U.S. earlier this year to mitigate duty impacts.

The inventory level is expected to normalize during the next months as per usual seasonality, generating cash in quarter 4 as it did last year, in line with our expectations.

In summary, the third quarter continued on positive trajectory. We again confirmed and outperformed the market and sustained our industry-leading margins, delivering best-in-class results. Crucially, we also preserved our financial flexibility potentially -- for potential external growth or to optimize shareholder remuneration. The Household division continues to deliver on its medium-term goal, consistently achieving mid- to high single-digit growth.

As shown on Slide 5, we expect positive contribution from the division to continue in the fourth quarter despite a challenging comparison. This will be driven by structural trends, robust product launches and media investments, where our third Perfetto campaign marks a strategic shift towards a full funnel marketing approach. The Professional division was a key driver, delivering significant organic growth in the recent quarter. The performance was supported by strong market dynamics for both La Marzocco and Eversys as they capitalize on the premiumization of out-of-home coffee and a strong engagement of the coffee community as clearly demonstrated by the success of the brand's event participation.

Given our strong performance, we are raising our full year guidance even as we continue to closely monitor geopolitical uncertainties. We now project revenue growth for the new scope of operations to be between 7.5% and 8.5%, reflecting positive contribution from both divisions. Accordingly, we are raising our adjusted EBITDA guidance to a range of EUR 610 million to EUR 620 million, which is inclusive of the tariff effects and increase in average investment to support growth.

Now welcome your questions. Thank you.

[Operator Instructions]

The first question is from Niccolò Storer from Kepler.

Congratulations on results. The first one is on your new guidance, in particular on EBITDA. It seems implying a quite weak fourth quarter. So is there any reason why we could see margins decline in Q4? Are you planning to step up significantly your advertising and promotion? Or do you expect a mix which is very much different from year-to-date, in particular, related to, of course, Professional because we have seen this very strong performance, maybe a business which goes more in base and so we should expect or could expect deceleration in Q4?

Second question is on growth in the Americas. 8% in Q3. Could you tell us which is the price effect and the volume effect of this high single-digit growth? And more in general, which is the sentiment in the region?

Thank you, Niccolò. The new guidance -- I don't think it's a weak guidance on quarter 4. We don't look at quarterly results. We look at long-term sustainability, long-term sustainable growth. I would highlight a very tough comparison with last year. Last year was up 12% Second, I would remind that we're going to have a major tariff impact in the quarter. We had anticipated of EUR 15 million full year impact. We expect EUR 10 million alone to impact quarter 4. Number three, advertising phasing will be such that most of the Perfetto campaign will kick in, in the last quarter.

Also, I would like to say that the markets are probably even further participated from quarter 3 to quarter 4 advertising. So we're going to have a negative, let's say, comparison for the advertising growth. All in all, we have raised our guidance, which is suggesting that we are more confident than we were, although we raise already before their guidance for the year. We keep seeing a positive development of the De'Longhi growth, the success of our products, our market share expansion in general.

So I would say that I don't consider under all these circumstances, a weak quarter at all, just a final of the year in which we focus more on investing in the long-term growth pillars rather in watching to the short-term margin performance, which in the end is already above the initial plan and the former guidances.

And your second question was about United States, price/mix. Maybe I go into your question about the sentiment. The sentiment is not negative in North America. I would say that the consumer keeps buying. Probably we are witnessing more price pressure than we would have expected. I mean, we have all increased prices. But at the moment, this is a strong promotional initiative to maintain volumes, which is offsetting the positive effects of the price increases in the short term.

We've also seen 2 different dynamics in let's say, the traditional products where we also include the NutriBullet range and blending. We see consumers are more concerned, aiming more to lower prices and bargains and promotions. While on coffee, we still see a strong momentum, which is also suggesting the opportunity in the long term for the group to grow our presence in North America. Having said this, I would say there is a positive mix effect with coffee growing faster, positive price effect in coffee, probably neutral more was initially positive, is now going to neutral in full preparation to try to boost sales and support volume growth.

The next question is from Isacco Brambilla of Mediobanca.

I have 2. The first one is on Food Preparation and Nutrition. So without looking at the simple, say, quarterly performance, how should we -- how do you see directionally speaking, this division contributing to growth next year? So in 2026, just on a qualitative basis, should be possible for the division to come back to growth next year?

Second question is on Professional Coffee. Performance has been amazing, I guess, above any more optimistic expectation for this year. Can you walk us through the levers to deliver growth next year on top of this very strong performance of 2025?

Thank you, Isacco, for your questions. Absolutely, food can go back to growth next year. I think that we are witnessing unexpected or maybe an extraordinary event, which is major tariffs in the U.S. U.S. is a major market for NutriBullet. The tariffs have been really changing the market trends and the growth rate of nutrition. And therefore, has resulted in a negative year and in a strong sudden stop to our growth plans. However, we believe that next year, things will stabilize.

Once that United States will go back to normal, maybe even a weaker context, I think that we'll be able to fully exploit the international growth of our NutriBullet products. We're also seeing some positive signs from Kenwood with a return to growth for our kitchen machines. And we are also accelerating our acceleration plan with Brown in both hand blenders, which will probably materialize next year and continued growth in Ironing.

So we are a bit disappointed all in all, by our performance in food preparation after a positive year 2024. However, it's obvious that the magnitude of the tariff impact in the U.S. has been such that resulted in a major game changer in the U.S. market. But we are now more confident that once that this will be absorbed probably in the next quarter -- and next year, we'll maybe stabilize that and we'll be able to show our growth potential internationally.

Second question on Professional Coffee. Yes, it's going strong. Tremendous performance for La Marzocco in the coffee bar segment across all geographies. Incredible success with the home line also across the markets, super visibility, very successful partnerships is resulting in an amazing opportunity in the future. So on that, I wouldn't be surprised if in the long run, Home and Professional Coffee machines will enormously surpass the results of -- the really good result of our coffee machines for professionals in the bar.

So well, all well at La Marzocco. We understand that the compare will be tougher, but we are very confident about the prospects for the brand, which is also very strong. We have a great pipeline of products, and we think that the performance will continue in positive results will continue to be shown in quarter 4 and beyond. China, we have good prospects. United States is not slowing down and we see traction with the major distributors. So we don't see why we should continue with a double-digit growth with this Professional segment.

That's very helpful. Maybe just one follow-up on my side. Can you remind us even a broad split between house Professional Coffee and bar coffee machines as of now?

Value -- okay, La Marzocco is approximately 2/3 of the Professional division. We obviously representing 1/3 of the Professional division. Of the 2/3, the majority is still the bar machines. So probably, I would say, all in all, it's less than 1/3 of total Professional sales.

The next question is from Natasha Brilliant from UBS.

I've got 3. So my first one is just on current trading. If you can give us any color on how the business is performing into Q4, given the important holiday period and anything on sell-in versus sell-out rates?

My second question is just coming back to the upgraded guidance and particularly on the margins. Is it just better revenues that's kind of driving those better margins or anything on the costs as well that's coming down? Just help us understand that.

And then just on NutriBullet, if you can give us a bit more color or quantify the performance in the U.S. versus ex U.S. in Q3, so just so we can see the different performance there.

Okay. Yes. On the current quarter, I think October has been a positive month from a sales perspective, in line guiding -- to achieving the year-end guidance. I would also underline that we have negative ForEx, which now is getting closer to 3% probably for quarter 4. And then we have this tough comparison with last year where we grew about 12%. But happy about sell-in.

Sell-out, I would say that, yes, we're still confident to -- again, we're very confident in achieving the guidance for the year. It's a bit too early to -- I think the fall will -- we can get more visibility after probably November. But we feel comfortable about achieving the quarter 4 guidance.

In terms of margins, Nicola, you want to handle this?

I would say that this quarter -- okay, in terms of growth, obviously, it has a strong comparison with the high growth that we had last year. So in terms of margin, what is mainly affecting and incorporating the guidance is a bit of extra advertising investments compared with last year as we are pushing a bit of investments on the Perfetto 3.0 campaign. Obviously, it's incorporated in the guidance a bit of the effect of the tariffs in the U.S. because as Fabio has mentioned before, there is a bit of price pressure on the promo, in particular on NutriBullet coming also to your third question, Natasha.

And so there -- we are expecting a bit of more net effect of tariffs in the fourth quarter than it has been in the third quarter. And about NutriBullet, definitely, the international growth of NutriBullet is progressing, but it's not enough to offset the negative impact as of today in the U.S. NutriBullet was sitting on a great growth, robust double-digit growth last year. And we are -- let's say, we are a bit going back on this growth this year. And mostly, this has been driven by the segment softening of the market impacted by the initial price increase that most of players have put in the market. But now it has been pulled away from -- in particular, from the promotion of the Black Friday. So let's see in the next weeks how the market will react also to this situation.

Next question is from Gianluca Pediconi from MOMentum Alternative Investments.

I have just a quick question, which comes from how confident and happy Fabio was about the performance of Professional Coffee. And the question is, have you come up with any further thought that obviously you can share with us on how and when to unlock the true value of this business?

Gianluca, thank you for the questions. No, very happy about the performance of the Professional division. We've been working very hard for -- in the last years to create this division. I'm super proud of the quality of our brands and the superiority of our products. And this year is putting really under the spotlight the incredible potential of the division. So really super happy. I think that in a way, also this exceeded our expectations.

But then rationally, I think that looking into the opportunity offered by the Home segment for La Marzocco and the opportunity that we have with Eversys, which through -- its range and its products can really elevate the quality of espresso and cappuccino and capture also opportunities in the cold segment will offer many chains, the opportunity to upgrade their equipment. We see the penetration in the U.S. despite all the concerns about the U.S. market and the weakness that we've seen in the U.S., the result is brilliant. And therefore, we think that we will continue to perform well with our division. And the visibility for the remainder of the year also is suggesting this.

The second question, thank you for the tricky question. But it's an incredible opportunity. When we combine the businesses with De'Longhi, it is because we like to be global players. At the same time, there was an agreement with the partners and shareholders to have an exit for them. And that was clearly stated also in our PR and in our communication that going public was an opportunity. We think that at the moment, that's the plan. It's not in the short term. But also, we have to really consider from a holistic point of view, what's best for all the shareholders.

And for the moment, it's a bit too early to say. We can be open to several options. I would say that the important is that both divisions performed very well for the moment. I'm very glad with this. And fundamentals and the business perspectives are more important than, let's say, financial aspects. However, we think that we certainly have an opportunity to exploit better the potential -- thanks -- the fact that the Professional division tend to have a much higher multiple and La Marzocco and Eversys due to their margin profile and growth profile should also have premium multiples compared to the Professional peers. And I would like really to -- I mean, the shareholders of the group to benefit from -- fully benefit from the potential offered by our businesses.

I have just a quick follow-up because I know there were some M&A deal -- private deal in the Professional Coffee business. Can you just confirm if you heard that they were in the mid-teens in terms of EV to EBITDA, so say, 15, 17 and even more times?

Marzocco acquisitions.

No, no, no. Other deal in the industry, yes, in the Professional Coffee business.

Yes, yes. Yes. If we look back, probably the largest M&A transaction was WMF, which also was including a major portion of cookware and that was a deal that, yes, probably a multiple which was above 15% for the Professional business and a low single multiple for the cookware division. But -- and very often, yes, I think also Wilbur Curtis for SEB was in that range and many other deals. Yes. Also Lelit was acquired by Braville at a similar multiple.

Yes, I can confirm it.

The next question is from Alessandro Cecchini of Equita.

The first one is on Nutrition business. So you expect for 2026 to return to growth of the division. Can you elaborate a little bit more on potential new products, new categories, new activation in order to support, I mean, the return to growth. So I know that personal blender, you are leaders, et cetera, kitchen machines. But maybe just if you can share if you are planning to broad or to enlarge the category also from a product point of view? This is my first question.

The second question is instead on logistic costs. This year, you are highlighting that there is some headwinds, I believe, also due to some negotiation that at the beginning of the year. So just if you can elaborate a little bit more if you can spend for the next year, I mean, some costs to -- maybe to slow down a little bit, also consider plastic, et cetera, could be helpful.

And finally, my understanding is that in this context, M&A activity is so not sparkling. So targets -- like the targets that you follow probably are not for sale or it's not the right moment to buy. So you made already extra dividend. So I go to the point. So why not buyback are you considering given the valuation of the stock?

Okay. So maybe I can handle the third question first. And then I -- yes, I give the word to Nicola. We'll get back to you on Nutrition U.S. and the cost and the logistic costs. No. On M&A, yes, we are always chasing opportunities. For the moment, there is nothing that will be announced shortly. And so our priority will go to improve our capital allocation through buybacks and extra dividends. Yes, so I don't rule out that you might see in the future more buybacks.

I think that there will be -- first of all, it's the cheapest acquisition we can make, maybe with no synergy, but definitely a cheap acquisition. At the same time, has been highly appreciated in the -- from the market because helps creating more liquidity, can be counterintuitive because we are just slightly reducing our free float, which now is around 46%, but it's creating more volumes traded on a daily basis. So that might potentially bring us to new indexes.

Indexation is becoming a very important element for fund managers, and we think that we have to take this in consideration and try to more relevant as a company under that perspective. Alternatively, yes, paying back dividends to our shareholders will continue to be a tool that will be used. But as I said, no M&A in the short term, but you can trust that we keep working on M&A opportunities, and that is strategically our first option always. I think...

Something about the Nutrition business and why we are confident on 2026 to be back on growth. So definitely, we are -- we have a robust plan of -- on the international expansion of NutriBullet. So this is definitely a growth driver that will continue on 2026. But obviously, this year, as I mentioned before, it was a bit offset by the declining in the U.S., where we are confident that the pipeline of products that we have just launched or in the launch phase in the next few months will reboost growth also in the U.S.

We have just launched -- we had an important launch of portable blenders that has happened just this month and next year will be there for all year is an important segment still growing where we were not fully present with a full range. And then we have also a launch on full-size blenders, where that is still an underrated segment for NutriBullet where definitely in blending NutriBullet has a ring potential.

So this is -- and on top of this, we have also a product that will come along next year, probably in the second part of the year in frozen preparation ice cream making. So this is a bit of the plan for Nutrition in the U.S. and beyond. And on top of this, another growth driver that is there, and we do not mention as much is the performance of Ironing where we have a robust double-digit growth for the second year in a row, and this is something that will progress also next year as we have a robust pipeline of innovation coming in the market.

About logistic costs, there is softening a bit the freight, but what we are experiencing now is the road transportation is definitely increasing, warehousing costs are increasing. There is a lot of pressure also because of, in general, retailer behavior, there is a bit of concentration of orders along the promotional events where, let's say, distribution is becoming a bit crowded and there is an extra cost that is going there, and we are experiencing a bit of logistic cost headwinds. I wouldn't say that in raw materials, I see headwinds. It's too early to say if there will be tailwinds, but something can be there.

Okay. And finally, it's on -- just to go to historical performance of the -- it's a small business, but air conditioning is probably second year, 2 years of negative business. So it's -- the rule of thumb is 2 negative, 1 good. So next year could be some, I mean, restocking by clients. It's correct my interpretation that given the bad weather condition on 2024.

I would say that last year was negative. This year was still low, let's say, not positive. We are ready to capture opportunity. Are we ready to overinvest because it's a seasonal product that can have also a lot of inventory risks, but we are ready to capture opportunities if they will be there.

The next question is from Andrea Bonfa of Banca Akros.

Most of my questions have been already answered. So I got a curiosity on the Professional. Will -- sorry, when the new products that you presented to us with Eversys will contribute to your revenues? Is that from Q4 or from '26?

And the second one, if you can give us some more color on the top line performance of the 2 brands, Eversys and La Marzocco.

Sorry, what do you mean by color on the 2 brands? I mean, more on the sales side or on the marketing?

On the sales side, and if you can remind us what's the EBITDA margin combined. You mentioned 26% in the first half, but with a 40% like-for-like increase might be higher now, I don't know.

Okay. So with regard to the Professional, the launch, it will be legacy. Legacy is a product that will allow the group to enter in a price band where the group is not playing yet at the moment. So this is highly potential. I think that you will probably see that we will fully exploit this product probably in 3 years. I think that also given the experience we had in the past, all new product introductions must be done very, very slowly and carefully. These are high performance products, which need to properly work if any issue may arise may result in a major drawback from customers. Therefore, next year would be just the beginning, I would say, in 3 years, we will reach full potential.

It can become potentially even the most meaningful product line for Eversys because it's entering a segment where we are not present. We'll probably open the doors also to Germany, which is a market where Eversys is underperforming and which is probably -- is the largest fully automatic coffee machine -- Professional Coffee machine market and also the most aggressive in terms of price positioning. So we opened the door in a new segment in potentially new markets, and this can, in the midterm become the most relevant, most important product line for La Marzocco -- for Eversys.

I would also highlight that this product is also aimed to have more versatility. We mentioned cold and matcha. So you will see that we are starting from -- capitalize from the results of the developments of the venture with [indiscernible], which in the end didn't result in a product extension, active product extension, but is resulting in know-how that we can now start capitalizing on our existing products.

For La Marzocco, La Marzocco, I would say that the incredible opportunity with the existing range. We're going to launch also extension in the grinding business, which is small to us, but it is new. And then also innovation will be with the extension of the Strada and upper-end Professional equipment. Major, major business growth to capture with the Home line, although you don't have to expect new launches in the short term, but just capitalizing on the existing range, which is performing extremely well. For margins, margins above 25%. So given the volumes, slightly above 25% very, very healthy margins.

The next question is from Luca Bacoccoli from Intesa Sanpaolo.

Can you hear me?

Yes.

Okay. Good. So a few questions from my side. The first one is a follow-up on the profitability of the Professional and the Household. You said that the EBITDA margin is very healthy, above 25%. So I was wondering what is the EBITDA margin trending in the third quarter for the Household division on a stand-alone basis?

Then the other question is on tariffs. If you can please refresh your guidance on what should we expect the headwind from tariffs in 2026?

And then on the nutrition in the U.S., it seems that there's a strong elasticity to the pricing in this category and you are promoting the products in order to sustain the volume. So what should we expect in 2026 on this side? I mean, can the carryover effect of the price increase this year being fully offset by the promotional activity?

And finally, on the free cash flow generation last year in the fourth quarter, the free cash flow generation was really amazing, close to EUR 400 million. You mentioned in the press release some normalization of the inventory level in that part of this year. So the straight question is, can the EUR 400 million free cash flow generation in last year being replicated in 2025?

Okay. Okay. Luca. So the first question is about the Professional division.

Right.

Yes. The Household, I would say that you should expect for the remainder of the year, the profitability to fairly in line with last year for the Household division.

With regards to Professional, we said before, it would be north of 25%. So very strong contribution from the Professional division.

With regard to the tariffs, EUR 15 million for this year, maybe I would say we gave a guidance of 0 for next year. Maybe there is some carryover, but would be very, very small. The issue is probably what you mentioned is about the promotional initiatives. I would say that probably we will have some margin compression due to the tariff impact on the lower pricing, but we're going to have probably positive volumes. So all in all, I don't expect a major change in the absolute term contribution. But we will probably be more keen on having more volumes and maybe at a slightly lower margin, but still with accretive margins for the group.

First question on free cash flow. We expect a strong -- I'm not sure we had a EUR 400 million cash flow next year. Maybe Samuele can check it. But I think that we should expect between EUR 250 million and EUR 300 million cash flow for the year, which will materialize almost entirely in the last 3 months. Why? Why? Because if you recall, we had excess inventory in 2022. And basically, that absorbed the cash and the normalization of the inventories resulted in creating -- generating extra cash in the following 2 years.

So last year was still benefiting from this normalization of inventories. This year, we had a different curve. The curve went higher. We had more inventories also to anticipation to the U.S. in the peak. So we expect to -- probably this has pushed back a bit the cash generation to the last quarter. And we expect to have a generation not dissimilar from the one that you have seen in the last quarter of the year -- of last year.

The next question is from Francesco Brilli of Intermonte.

Can you hear me?

Yes, we can.

A lot of answered already made. Just a quick one on -- going back to the answer and the efforts on the valorization of Professional business. Within this context, you mentioned that the Home and Professional on La Marzocco has a huge potential and wide room to grow. In the case of valorization of the Professional, should we imagine this segment still within the Professional perimeter or should be -- should flow within the Household?

Yes. I mean it's part of the core range of La Marzocco. Those are products that are sold directly from La Marzocco going the homes, but our Professional equipment to the full extent. And in some cases, those products also are used by the Professionals. In particular, Linea Mini goes in restaurants, small restaurants, small cars, small coffee bars across the world.

[Operator Instructions]

Fabio de' Longhi, there are no more questions registered at this time.

So as there are no more questions, I want to thank you all for attending the third quarterly De'Longhi results. Thank you.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.