Dsm Firmenich Ag

Good morning and thank you for joining today's call. I'm sitting here with Dimitri de Breze, our CEO, and Rolf Smeijts, our CFO. We published this morning our trading update for the first quarter, which you can find on our website. Here you can also find our disclaimers about forward-looking statements. Following Dimitri's and Rolf's opening comments, we will open the line for questions as usual. Important to remind. Also, if you yourself have analysts who want to ask questions, you have to register via the questions link, which they can find on our website in the Financial Calendar. And with that, Dimitri, you can start.

Thank you, Dave. Thank you, Dave. Thank you for joining this call. And I will start with a few brief introductory remarks and then hand over to Ralph, who will talk you through. We'll keep it short. but allowed plenty of time for questions. So, Deezer and Fimley's made a solid start for 2026 in its continuing business against a highly volatile microeconomic backdrop. We delivered a 4% like-for-like sales growth, which was entirely volume-driven, and this represents really good performance across the group, especially in perfumery and beauty. We've also announced today that we will have a dual listing of the shares on the six Swiss Exchange as of May 21st of this year. And with a fully good start of the year, we have maintained our outlook for the full year 2026. Now, talking about the full year outlook 2026, if you go to the next slide, just as a reminder, the outlook is 2% to 4% organic sales growth, about 20% EBITDA quality, and 11% to 12% cash conversion, we've seen with a solid start of the year, with a good quarter one, and also a solid start into Q2, we feel that with that start, we feel confident in maintaining the outlook for the full year. And with that, I hand over to Rolf for a little bit more color on the business reports.

All right. Thanks, Dimitri. If we move to the next slide, please. Good morning from my side as well to everyone. Good to see you virtually online again. As Dimitri said, we made a good start to the year. Overall 4% volume growth across our portfolio, fully volume driven. On the slide, you'll see the full walk on sales, whereas we've had a solid start with a 4% organic growth. The reported sales was impacted by an adverse impact from a fix of about 6%. and a 1% from M&A, which reflects the sale of our agro-ingredients business that we managed to complete in Q1 in line with our commitment as well as the last step of the tuning actions as communicated in Capital Markets Day. So happy with that performance. We'll zoom in into the businesses in a minute. Overall, looking at a margin, we landed the quarter at a 90% margin for the quarter. largely in line with expectation. We expect a gradual buildup throughout the year. Keep in mind that the FX impact is about 0.4% on the margin, bringing it largely in line with last year. We did experience some buildup of costs in terms of energy and logistics on the back of the Middle East, which we started to pass on to customers, but Q1 was impacted by a couple of million on the back of that, explaining the margins. And as I said, we'll expect a gradual improvement throughout the year. Let's then turn to the businesses on the next stage, starting with perfumery and beauty. A very beauty start of the year, a strong performance with an 8% step-up in volumes, a very strong performance in fine fragrance with a strong double-digit growth. We've seen the buildup of momentum that we've seen building up in the second half of the year. Growth continues in that space, and we're capitalizing also on the wins that we see nicely coming through. Consumer fragrance saw a high single-digit growth in the quarter. Here, we also see some acceleration of orders from our customers, contributing overall to, it's always difficult to estimate, we think about an impact of up to 1% on Overall group results with a little higher in perfumery and beauty concentrated in our consumer fragrance space. Ingredients performed in line with expectations and as guided for Capital Markets Day. Overall, we expect a low single-digit growth which is normalizing throughout the year. We've seen that in Q1 with a low single-digit growth in that space. Worth noting here is that on the UV filter side, albeit at the low end, we're back to positive growth, which is something that we were anticipating as well, and it's good to see that that comes through in the first quarter too. Looking then at the margin, overall margin came in at 22%, a little above average of last year, marginally in line with Q1, no big moving piece on this front. A nice step up in absolute, but obviously also here we've seen a few million of costs coming through, which we started to pass on to our customers as well, and that will be neutralized fully in the second quarter. Then moving on to taste, texture, and health. On the next page, please. Also here, a solid start of the year. Overall, a 3% volume growth in both our taste and ingredient business in taste, texture, and health. Synergies continue to contribute positively as well, as usual. It almost becomes boring. We see a little over 1%, between 1% to 2% contribution on that front. Overall performing very nicely, and the pipeline continues to build well on that front. Now you'll say, Ralph, you're talking about the 3%. I see on the page only 2%. There is about a 1-1 from Beauvais that doesn't necessarily come evenly distributed throughout the year. So that's a bit chunky. We now report that in taste, texture and health. It had a negative impact of about 1% on top line and about half a percent on the margin. But we expect that to be fully neutralized on the half. And we'll see the contribution in the second quarter. Overall margin, TTH, started a little lower in the year. We anticipated that on the back of FX, adjusting for, if you look at it versus prior year and in line with the average of last year, the margin is about 1.5% lower. As I said, 0.5% is coming from Bovair, 0.5% is coming from FX, and also here we've seen a few million of costs come through, which we're passing on to our customers and For the second quarter onwards, we expect to be back at a 20% level in taste, texture, and health. So also here, an encouraging start of the year. Then last but not least, on the next page, please, health, nutrition, and care. Also here, good growth, 4%, life-for-life growth in the year. Strongly driven by early life nutrition, good momentum in HMO. We've seen that. build up following the approvals that we got, and that is nicely continuing into the year. Obviously, Q1 also saw a bit of a tailwind from the ARA sales, where we're obviously working with our customers to help them as much as we can, and as indicated at Capital Markets Day, we expect a bit of tailwind throughout the year on the back of that, but also longer term, this will translate into a good contracting in that area. Overall, our U.S.-based businesses, dietary supplements, eye health, continue to see cautious behavior in that sense from a regional perspective, to give you a bit of color on that. And then translating that also to the margin development, a nice continued step up in margin overall, 19.3%. I do want to call out the same as I did at Capital Markets Day. The impact of VFX is the biggest overall. It negatively contributed around 0.7 on the margin. Adjusting for that, we would be at 20% in line with what we've seen throughout last year. On the other news on the quarter, no slides on that, but the guidance that we gave in Capital Markets Day around the housekeeping still stands. No surprises on that front in Q1. So that can continue for modeling for the rest of the year. And with that, let me keep it short and leave time for Q&A. So Dave.