Givaudan S.A.

Ladies and gentlemen, welcome to the GIVODOWN 2025 Half-Year Results Conference Call and Live Webcast. I am Moira, the Chorus Call Operator. I would like to remind you that all participants will be in listen-only mode and the conference has been recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Gilles André, CEO. Please go ahead.

Thank you. Dear ladies and gentlemen, welcome to our 2025 Half-Year Results Conference Call. Stuart Harris, our CFO, is sitting next to me on this call today, and we will take you through the presentation before answering your questions at the end. All relevant documents related to the 2025 half-year results, including the slides we are presenting now, have been published this morning and are available in the results center on our Givaudan website. So, we are very pleased with our continued strong financial performance in the first half of 2025, despite an environment with ongoing geopolitical and macroeconomic challenges. sales remain strong with good growth across all business segments, all geographies and customer groups against very strong prior year comparables. These results once again demonstrate the value that Givaudan brings to its customers through our highly specialized products and solutions. Now, let me give you some details with the performance highlights on slide four. In the first half of 2025, the group recorded sales of 3,864,000,000 Swiss francs, an increase of 6.3% on the like-for-like basis. As a reminder, prior year was 12.5%, and an increase of 3.4% in Swiss francs. Like-for-like growth was mainly volume-driven with a very slight contribution of pricing. The strong sales growth was achieved across all business segments, geographies, and customer groups, supported in particular by the continued outperformance in fine fragrances, the high-growth markets, and the sustained strong growth with local and regional customers across the two divisions. Our comparable EBITDA amounted to 973 million Swiss francs, leading to a record comparable EBITDA margin in a half year of 25.2% up from 24.8% in 2024. The net income amounted to 592 million compared to 588 million last year. The free cash flow in the first half was slightly negative. This is due to the timing effects of capital expenditures and tax payments, but we remain very confident to achieve our mid-term target of an average free cash flow greater than 12% for the five-year strategic cycle ending this year. Now, before Stuart will share more details about the operational performance, let me give you some more details. In the first half of 2025, sales remained strong with good growth in all business segments, geographies and customer groups, against the very strong comparable of 2024. The group's like-for-like sales growth was 6.3%, mainly volume-driven, while the contribution of pricing plus FX pricing was below 1%, a similar level in both divisions. Fragrance and beauty sales were 1,955,000,000, an increase of 8.6% on the like-for-like basis. As a reminder, the prior year was 15.3% and 7% in Swiss ranks. Taste and well-being sales amounted to 1,909,000,000, up 4.1% on the like-for-like basis. Prior year was almost 10%. And it was flat in Swiss francs. Well, we have not yet seen performance from our peers for the first half. We have clearly outperformed them during the first quarter by showing, on average, a life-or-life growth twice as fast. And despite the fact that we have been facing a much tougher comparison base. As you can see on slide six, High-growth markets continue to outpace mature markets by a multiple of three times, leading to an almost equal absolute size in sales in the first half year of 2025. Key growth markets such as India, Brazil, the Middle East market, and China continue to contribute to the strong performance of the high-growth markets. We also achieved a solid growth in mature markets of almost 3%, led by the continued solid performance in Europe and a sequential improvement in North America. Let's now have a look at the regions in more granularity on the next slide. We have seen a continued strong growth in LATAM of 9.4% on the like-for-like basis, driven by the underlying strong volumes growth as the FX pricing is abating. The largest region, Europe, Africa and the Middle East, EME, sustained a strong growth of 8.6% on top of the double-digit growth recorded in the prior year. Asia-Pacific grew by 5.3% on the like-for-like basis, with strong growth in Japan and China. And finally, North America continued to be volatile, but showing a sequential improvement in the second quarter, leading to an 1.7% increase in like-for-like for the first half. Turning on a divisional view on slide 8, starting with fragrance and beauty. Sales amounted to 1,955,000,000, up 8.6% on the like-for-like basis, again reminding the comparable of 15.3%, and 7% in Swiss francs. The strong like-for-like growth remained broad across all segments, regions, and customers with particularly strong performance in the high-growth markets and with local and regional clients. Fine fragrances continued its strong growth momentum at an impressive 18%, and while we continuously said that we shouldn't expect fine to continue to grow double-digit on top of a double-digit, We like to be proven wrong again. The remarkable success in this segment is underpinned by an over 12% growth cager since half year of 2019. In fact, we achieved almost as much sales in the first half of 2025 as we did for the entire year in 2019. In other words, we doubled our fine fragrance business in the last five years. The consumer products business maintained a strong performance despite the challenging comparison base of 17.3%. The 6.1% like-for-like growth aligned closely with the long-term CAGR for the segment, which is what has been around 6% to 7% from 2018 to 2025. Fragrance ingredients and active beauty cells increased 5.7% on the like-for-like basis, with continued strong double-digit growth in active beauty, but which was offset by a softer performance in fragrance ingredients. This reflects an overall softer demand from the market. Let's move now on the taste and well-being division on slide 9. Sales for the division amounted to 1,909,000,000, up 4.1% on the like-for-like basis and about flat in Swiss francs. the good growth was broad-based across regions and segments. On a regional basis, particularly Samia, South Asia, Africa, and Middle East, continued to show an impressive growth of 12.7% on the top of a similar high growth in the same period last year. Positive as well to mention that North America, where after a soft start in Q1, The growth momentum has sequentially picked up, leading to a 2% growth for the first half. Europe and Latin America continue to show solid growth of 4.2% and 4.1% on the like-for-like, respectively. Asia-Pacific experienced a more modest growth of 2.1% like-for-like. The prior year was 9.3%. And while we have seen a continued good growth in key markets such as China and Japan, this reflects the high comparison base from the previous year, particularly in the Southeast Asian markets such as Indonesia and Thailand, which are the two largest markets in Southeast Asia. Now let's shift from the financial highlights to key innovations which support customer needs and key consumer trends as shown on slide 10. Innovation is core and essential to us, enabling us to create unique solutions that tackle our customers' challenges while leading in biotechnology sustainability or digitalization. Our R&D efforts equip our creation and development teams with cutting-edge technologies and distinctive ingredients, ensuring that the tailored solutions we develop resonate with both our customers and the end consumers. Let me highlight just a few examples. MyRomi is an innovative tool developed by Givaudan, leveraging advanced technology to enhance fragrance creation processes. It combines artificial intelligence with deep consumer insights to help perfumers design unique and personalized fragrances that resonate with consumer preferences. As consumers increasingly seek natural options, particularly in the U.S., EverZero, Galderia stands out by offering vibrant, sustainable color solutions derived from nature. Notably, it has received FDA approval ensuring its safety and compliance for use in food and beverage applications. This aligns perfectly with the current regulatory changes and the growing demand for clean label products. With the new ingredient Sherry Scents, we empower perfumers to craft captivating scents that evoke sensuality in their creations. By blending artistry with advanced technology and a commitment to sustainability, we enable them to explore new dimensions of fragrances. And finally, last but not least, related to our active beauty business, Éve & Nartille transforms fresh algae into a high-precision beauty ingredient that combats skin aging and promotes youthful skin. This innovative formulation harnesses the power of nature, delivering exceptional benefits that enhance skin vitality and resilience. And with that, I now hand over to Stuart for more details on the operating performance.

Thank you, Gilles. I would like to add my warm welcome to all of the participants on this morning's call. On the following slides, I would like to give an overview of the group's operating performance and that of the two divisions, as well as the financial performance of the group. Let me start with the financial highlights on slide 12. As Gilles has already mentioned, group sales in the first six months of 2025 increased to 3,864,000,000 Swiss francs. an increase of 6.3% on a light-for-light basis and an increase of 3.4% in Swiss francs. The reported ABTDA increased to 945 million Swiss francs compared to 906 million Swiss francs in 2024, an increase of 4.4% in Swiss francs or 9.7% when measured in local currency. On a comparable ABTDA basis, the underlying ABTDA margin increased further to 25.2% compared to 24.8% in the first six months of 2024. Driven by this continued excellent operating profitability, the net income increased to 592 million Swiss francs, and the net income margin was 15.3% of sales. The free cash flow of the group was slightly negative in the first half year of 2025, mostly due to timing effects of investments and tax payments. The net debt to ABTDA was at 2.5 times at the end of June, compared to 2.9 times at June 2024 and 2.3 times in December 2024. Please turn to slide 13, which shows the overview of the exchange rate development so far in 2025. This slide shows the comparison of the key exchange rates in the first half of 25 versus the same period in 24. In the current year, the Swiss franc has again strengthened against all major currencies in which the group operates, with a corresponding impact on the group results in Swiss francs. However, the impact is mitigated due to our operational and geographical spread, providing good natural hedges, and our ABTDA margin remains well protected against currency fluctuations. Please turn to slide 14 for an overview of the operating performance of the group. The gross margin was stable at 44% in the first half of 2025 compared to 44.1 in the first six months of 24, with continued good operational leverage offsetting higher input costs, including those from global trade tariffs. The company is continuing to implement price increases in collaboration with its customers to offset such higher input costs, with a minimal mechanical dilution effect on the gross margin. On the ABTDA level, the ABTDA was 945 million Swiss francs in the first half year 2025, compared to 906 million Swiss francs in the same period last year, an increase of 4.4% in Swiss francs, or 9.7% when measured in local currencies. The comparable ABTDA margin after adjustment for acquisition, restructuring and project-related costs of 19 million Swiss francs and 9 million Swiss francs of costs related to the 2024 accident in Louisville was 25.2% compared to 24.8% in 2024. On the following two slides, I'll take you through the operating performance of the two divisions. And if you turn to slide 15, we'll start with Fragrance and Beauty. Cravenson Beauty recorded an ABTDA in the first half of 2025 of 525 million Swiss francs, compared to 500 million Swiss francs in 2024, an increase of 5.2%. The division incurred acquisition, restructuring and project-related costs of 15 million Swiss francs, compared to 14 million Swiss francs in 2024, mainly due to costs incurred in relation to the ongoing Competition Authority's investigations. The comparable ABTDA margin of the division was 27.6% in 2025 compared to 28.1% in 2024, a continued excellent result despite higher input costs and growth-related investments. If you would now turn to page 16, I will take you through the operation performance of Taste and Wellbeing. Taste and Wellbeing recorded an ABTDA of 420 million Swiss francs compared to 406 million Swiss francs in the same period in 2024, an increase of 3.4%. The division recorded expenses of 9 million Swiss francs in relation to the Louisville accident which occurred in November 2024. Acquisition, restructuring and project-related costs amounted to 4 million Swiss francs and were mostly related to some remaining costs for footprint optimisation. the benefits of which supported the solid improvement in the taste and well-being margin. As a result, the comparable ABTDA margin improved to 22.7%, compared to 21.7% in the first half of 2024. Please turn to slide 17 on the net income of the group. The net income before tax was 713 million Swiss francs in the first half, compared to 700 million Swiss francs in the corresponding period last year. The effective tax rate was 17% compared to 16% for the first half in 2024. The net income rose to 592 million Swiss francs in the first six months of 2025 compared to 588 million Swiss francs in the same period in 2024. The net income margin was 15.3% in 2025 compared to 15.7% in the corresponding period. Basic earnings per share was 64%. Swiss francs in the first half compared to 63.76 Swiss francs for the same period in 2024. Please now turn to slide 18 which shows the free cash flow performance. In the first half of 2025, the group generated free cash flow of minus 16 million Swiss francs or minus 0.4% of sales compared to 5.3% of sales in the corresponding period in 2024. with the difference largely driven by timing effects related to investments and tax payments. The net investments were 169 million Swiss francs in the first six months, representing 4.4% of sales, notably higher than the net investments of 3.4% of sales in the prior period. Net working capital was 27.1% of sales in the first half of 2025, compared to 29.1% in 2024, demonstrating our continued strong focus on the effective management of all aspects of working capital. Please now turn to slide 19. This slide shows that the group continues to have a well-balanced and stable debt profile, with interest rates which have been secured at attractive rates. At the end of June 2025, the net debt was 4.5 billion Swiss francs, with a weighted average interest rate of 1.9%. compared to 1.75% in December 2024 and 1.96% in June 2024. At the end of June 2025, the net debt to ABTDA ratio was 2.5 times, compared to 2.3 times in December 2024 and 2.9 times in June 2024. The improvement in our leverage is a result of our sustained focus on the balance sheet. whilst continuing to invest in the growth of our business and in shareholder returns. This concludes my section of the presentation. I would like to thank you for your attention and hand back to Gilles.