Corbion NV

Welcome to the Corbyn Q1 2026 Results Conference Call. Following the opening remarks, there will be an opportunity for questions. Please note that this call will be recorded. I would now like to hand over to Mr. Alex Sokolovsky, Head of Investor Relations. Please go ahead, sir.

Thank you, Operator. Good morning, and welcome to Corbyn's first quarter 2026 Interim Management Statement Conference Call. This morning, we published our Q1 2026 Results. The press release and presentation can be found on our website, www.corbion.com, Investor Relations, Financial Publications. Before we begin, please note that today's discussion will include forward-looking statements based on current expectations and assumptions. These statements involve risks and uncertainties that may cause actual results to differ materially from those expressed. Factors beyond our control, including market conditions, economic changes, and regulatory actions can impact outcome. Corbian does not undertake any obligation to update statements made in this call or contained in today's press release and presentation. For more details on our assumptions and estimates, please refer to our annual reports. This is Alex Sokolevsky, Head of IR, and with me on the call are Olivier Rigaud, Chief Executive Officer, and Peter Kazius, Chief Financial Officer. Now, I would like to hand the call over to Olivier. Olivier?

Thank you, Alex. And good morning, everyone. And thank you for joining us today for Carbion's first quarter 2026 earnings call. Let me get straight to the point. As we are flying in February, the first quarter reflects phasing effects, primarily nutrition, and a very strong comparison base in functional ingredients and solutions. Against that backdrop, We deliver group sales of nearly 294 million and an adjusted EBITDA of 37.8 million with a margin of 12.9%. While this is below last year's exceptional start, it's fully in line with our expectations, and importantly, it doesn't change our confidence in the year ahead. In fact, what we are seeing now is encouraging. April trading confirms that momentum is building, and we expect a clear acceleration in both volume and earnings, as we move through the year. Let me highlight what is driving that momentum. In functional ingredients and solution, we delivered stable sales of 236 million against a very strong prior year. Underneath that, volume and mix were positive, supported by continuous strong demand for natural preservation solutions and the solid growth in biochemicals and lactic acid to PLA. While margin who are temporarily impacted by mix, we expect a steady improvement from Q2 onwards. This will be supported by lower sugar costs and disciplined cost reduction execution. Growth will continue to be driven by structural demand for food safety solutions and increasing adoption of PLA, particularly in 3D printing and as dynamics in fossil-based plastics evolve. In health and nutrition, Q1 sales of nearly 58 million reflect phasing into the remaining of the year. The fundamentals here are strong. Demand remains robust. Fish oil prices are going up. Our contract positions are intact, and we expect a normalization of sales and volume growth from the second quarter onwards. Our bimaterial business continues to build momentum and delivers a second record quarter in a row, delivering growth across orthopedics, drug delivery, and aesthetics. On the total energies carbon joint venture, we also achieve organic growth, and our divestment process is progressing as planned. At the group level, margins were impacted by mixed effects and temporarily lower operational leverage in Q1. These are timing-related factors, and we expect a clear improvement as volume ramp up and cost measures take effect. This brings me to cost discipline. In a microeconomic environment that remains volatile, particularly with the well-known geopolitical tensions, we are acting decisively and have implemented a focused cost reduction program. Turning to cash flow, Q1 free cash flow was negative at 15.7 million and as expected given seasonal patterns. We remain fully confident in delivering 85% to 90 million for the full year. Looking ahead, we fully reaffirm our 2026 outlook. We continue to target 3% to 6% organic sales growth and adjusted EBITDA margin of around 17% and strong cash generation with performance weighted towards the second half. This will be driven by sustained demand in natural preservation, normalization in nutrition, improving PLA market conditions, and disciplined execution of our cost reduction initiatives. While uncertainty in energy and input costs remains, we have robust mechanisms in place and are actively managing volatility through pricing, edging, sourcing, and operational control. So let me close with this. Q1 reflects timing and conversion effects, not the strength of our underlying business. Our fundamentals are strong, momentum is building, and we are existing with discipline and focus. We are confident in our ability to deliver on our commitment for 2026. With that, let us move now to questions.