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.

Ladies and gentlemen, we will now begin our Q&A session.

If you have a question, we ask that you please use the raise hand function at the bottom of your Zoom screen. Once your name has been announced, you can ask a question. If you want to withdraw your question, please lower your hand using the raise hand function in the Zoom app. Thank you. Our first question comes from Nicola Tang with BNP Paribas. You may now unmute your line and ask your question. Hi, everyone.

Thanks for taking the question. I think I'll start on the advanced orders. I guess no surprise to be asked about this. I think you mentioned, or you estimate a 1% impact group for Q1, if I heard you correctly. I was wondering if you could help us understand, I suppose, how you're calculating that. And secondly, you mentioned it's mainly in consumer fragrance. Can you help us understand why? Is it because people are most worried about the supply chain there? Is it where you're implementing the biggest price increases? I would have thought that customers might be more concerned about areas like fragrance ingredients or beauty ingredients or maybe even vitamins, stuff where the industry supply is quite concentrated in Asia. So do you see advanced ordering in these areas or can you explain why not? And then maybe the second one, could you help us understand what assumptions you're making in terms of pricing and input inflation within your reiterated guide. Just help us understand a bit more, you know, the basket of inputs and, you know, how quickly you expect to implement that pricing. Thanks.

Thanks for that question, Nicola. I think the last one will be taken by Rob. Let me give you a bit of a context on the pre-buying. That challenge, how can you define pre-buying? Well, basically, none of the orders which are filled in are being said, this is pre-buying, this is not pre-buying. This is more like looking at the order pattern, and therefore, we define this as pre-buying. We saw a bit of an acceleration of the order pattern for delivery towards the end of March, which is out of the ordinary, and predominantly in consumer freight. I will try to explain a little bit why that is. So we assume that is a part of pre-buying compared to the normal seasonality we have seen. Now, the majority of customers are more into concerned supply chain issues and not so much yet in pricing. I mean, pricing in Q1 would hardly impact it, only on freight and a little bit on energy as Ralph was saying. And that was very transparent and not new. What you will see in the consumer fragrance, if you have launched a big product and you cannot deliver because you don't have the solutions we offer with the ingredients, then obviously there's a lot at stake. So these customers, these big branded customers are not taking any risk and therefore some of them have pre-bought, pre-commodated consumer fragrance. And that's what we have seen and that we saw that. We estimate, so it was not a guarantee, but we estimated that had to be more or less maximum 1%. Secondly, be aware that you mentioned pricing, the pre-buying on pricing. That's not the case. Remember that in our business model, pricing is only a minor part of the overall cost. The biggest concern is the security of supply. They make their margin on their end product, so they can't supply the ingredient that is at risk. Last but not least, you know our business model by now a little bit. Our model is not allowing any massive pre-buying. We have tailored products. We have customized products. We have more than 5,000 ingredients which need to be customized and such. A lot of makes to order. So, even if people want to pre-buy massively, our model is not capable in doing that. So, I hope that gives a little bit of background. And then maybe for you, Rolf, a little bit how much you impacted on what we have assumed.

I'm happy to take that. So, overall, what Dimitri was highlighting as well, Nikola, we've seen some upward pressure around the supply chain and energy. To put things in perspective, we indicated that our energy bill is around 1% of top line, a little over that. So give or take around 100 million, we've seen some upward pressure. The same on logistics, obviously impacted with costs going up. We're passing that on with surcharges. Q1 has seen a bit of an impact. given the time lag of passing that through. Overall, in our outlook, we assume CO10s of millions of impact, and that is something that we're confident in offsetting. At the same time, you see somewhat inflationary pressure building around some of the raw materials. We're keeping a close eye on that. In all fairness, in the short term for Q1 and Q2, it was more concerned around security of supply. Take, for example, glycols. We've been focusing on securing that to make sure that we can fully deliver to our customers, and we've been successful in that. But given the nature of the industry, we will be able to pass that fully on. Let's see how it overall develops going into the quarter. I think there's still a bit of questions around that. We're therefore sourcing a bit more shorter term. to keep track on those developments. And if we see that come through, we will be fully pricing that onwards towards our customers over time. The business is fully on that and monitoring it, but short term, focus very much on ensuring the delivery and that we've got all the material that we want in order to look at the supply. If you then translate that into the outlook, because I think that's the underlying questions overall, with a good start in Q1 and a solid start in Q2. We'll see a bit of support on the OSG from pricing as well. Obviously, margin, as I said, we expect a gradual build-up throughout the year, so that will require a bit more work with the inflationary environment and the ethics where we're heading today. Ethics was predominantly strong in Q1, with about 40 million of impact. We see somewhat around a little over 20 in the second quarter, so bringing that impact to about 60 million and a half. And then there's another 10 to 15 per quarter in Q3 and Q4. So that will level off on that front as well. And on cash, we've got a few leaders to manage. So hopefully that gives a bit of color on what we've baked into the outlook.

Yeah, that's great. Thank you. I'll toss it on.

Our next question comes from Alex Sloan with Barclays. You may now unmute your line and ask your question.

Yeah, hi, morning all. Thanks for taking the questions. Two from me, please. First one on early life nutrition within HNT. Nice performance there and you're flagging ARA already as a tailwind. I think that the investor day in march the message was that that tailwind really was going to build probably from q2 so i just wondered whether that was still still the case and how we should think about the kind of the magnitude of the potential revenue opportunity in ara as a result of the recalls and whether users expect that to be kind of a permanent chair gain or more of a kind of a one-off tailwind this year. That's the first one. Second one, just on the follow-up, really, on the pre-buy comments, thanks for the clarification on the scale of that. Should we be expecting a reversal of that one-point tailwind at some point this year? Or, you know, I guess, yeah, when might we expect that? Thank you.

Let me take the other one and then we'll comment on the pre-buy. So on the R, thanks for that, Alex, question. Indeed, we expect that to come through in Q2. Now, obviously, given the need of our customers, we went all the way to free up as much material as we could to support them. At Capital Markets Day, I indicated that the tailwind for the year is expected to be around 1% on top-line growth. for H&C for the year. That still stands. At the same time, you're spot on in terms of your question, will we see some further benefit in the years ahead? And obviously, that's part of the conversations with our customers as well, where we basically see a request for further volume also in 27 and 28. So at the same time, we're concluding longer-term agreements around that. We're looking at to see how we can create more space in our plans to support them where needed. But for 26% and about a percent of top line on HSE on the back of the benefits from ARA.

Yeah, I reckon maybe on the reverse pre-buying. So in a world where there is accumulated uncertainty and where there is a very low visibility in what's happening, We don't expect on the short term reverse rebuying. On the other hand, I mean, there's a reason why there's reverse rebuying because you're concerned about getting access to your solutions. So in a perfect world, that will reverse. Now, you hear me say that we also had a solid start in 2022. So we don't see that effect yet. And it's very difficult to forecast when that will happen. It will be more or less the same if you ask me to forecast when the world becomes a little bit more certain place with a little bit more practical predictability. And I've stopped making any remarks on that phase. So that should be the answer to your good question on reverse pre-buying. Yeah, that's fair. Thank you.

Our next question comes from Lisa Denise with MS. You may now unmute your line and ask your question.

Hi, good morning. Thank you for taking my questions. I have two. The first one is on a dual listing. I mean, it would just be great to hear your thoughts on why you're pursuing that dual listing right now and what are the goals of pursuing this, but also what what you aim to achieve with this and whether over the very long term you aim to sustain your Amsterdam listing. That's my first question. And secondly, back to perfumery and beauty. I mean, you delivered very strong performance. Can you just share to which extent that's already driven by the new wins you've obtained in fine fragrance and how we should expect that to last for the year, whether actually these volume strengths will continue for the year? Thank you.

So I think that your listing, your PMVs are Thanks for the question. Now, it's something that we wanted to pursue already a bit longer. We've been working on that in the background at the same time we said, that let's also pursue that once we've transformed the company to DSM Firmenich going forward. So following the completion of the sale of A&H, that is something that we wanted to do. Now the additional work resulting from that, given that we've got the listing in Amsterdam, was limited. That was a condition to us as well, that we wanted to basically create additional traction and also basically access a market where we have a strong home base, I mean, if you look at the company, there's a strong heritage in both the Netherlands and Switzerland, and we want to capitalize on that. So, hence, the pursuit of the second listing. It gives us access to an investor base that we can't have access today. And with that, we expect sort of volume flow in the stock at basically a limited effort. Now, it's clearly a dual listing, so we have no intent to withdraw from Amsterdam. So it will be something that we have active in both places, coupled also with an ADR program in the U.S. So we basically optimize our offering to our investor base and make use of all the available capital through that support flow of the stock. So it's been part of the plan, but was kind of put on hold until we've completed the transformation, which we can then actively roadshow also in the Swiss market, which is an interesting space for us as well, given the strong presence in both countries.

Maybe on the winds, thanks for that question. I think we have a very strong, brief pipeline. Remember, Emmanuel was on stage during the Capital Market Day presenting that. I also remember that there were questions like, okay, if that strong pipeline is there, when do we see that back into organic sales growth? Well, I think we at that time radiated quite some confidence, and I'm very happy that we could report a very strong 4-to-1. It has to do with wins we've got in 2025 and now result in business in 2026. Let me also remind you that we had low single-digit growth on ingredients, the fragrance ingredients. And I think in the broader context, that's an important element to the wins. I can tell you that the last wins we've made in 25, but also into 26, were very successful because we have launched new, innovative, new ingredients, which we own ourselves as part of our business model. in going forward. So, yeah, I think a very strong start for pre-breed beauty, predominantly because of the good breed pipeline, but above all also because of a very good win percentage on these briefs going into Q1 with confidence for the rest of the year.

Thank you. Our next question comes from Georgina with Goldman Sachs. You may now unmute your line. Hi, good morning, everyone. Thanks for taking my questions. My first one is, honestly, as a team, I think you're really well placed to manage the supply chain issues that we're seeing on the back of the Middle East conflict because of the experience that you've had in the old DSM portfolio and also still in discontinued operations in vitamins. I would really love to hear your read on the challenges that we're actually seeing today. Are we facing potentially risks of shortages of products? And what would be your timeframe for that related to the closure of the Strait of Hormuz? And then my second question was, you flagged U.S. consumer weakness around dietary supplements in particular. Could you give us your read on the health of consumer demands into the second quarter by region? Thank you.

Sure. Thank you for that question. And indeed, you referred to the experience of legacy PSM, but I can also remind you that the legacy firm also had quite some experience in handling COVID and inflationary context. So I think we're well set. Like Ralph was saying, in Q1, we saw freight and energy costs going up, and we immediately took action and priced that in with full compensation in Q2. Like Ralph was also saying, what we have seen is some increases in raw material costs. We saw that in glycol, and we immediately took actions there. So I think this is about agility. I think nobody knows which type of derivatives from oil will get the most. The only thing is that you need to prepare yourself to act with agility in going forward, and that's what we've done. I think glycol is a good reference. I think we did not miss an order because we didn't have access to glycol, which is a key raw material in the whole perfume space. And you can see that in our organic sales growth. But I think it's more about attitude and agility, which we have on the organization. And secondly, on your North America space, very interesting indeed. We plant North America cautious consumer behavior. Europe, in all of this, is still relatively stable. with, I think, a good context in Asia. Now, we flagged it predominantly because of health, nutrition, and care, which has a big exposure in North America because of biomedical and eye health and the likes. We don't see a deterioration, but we don't see a pickup either. So the consumer behavior, which is still cautious, but in that context, we've taken actions. Eye health has seen slight growth in that context, in that cautious consumer behavior. Biomedical is doing relatively well. So I think we also have actions to do what is needed to drive growth in a difficult cautious behavior consumer context. We don't expect any change towards the next coming quarters unless the world becomes a safer and easier place going forward. So we do a well position, but fair enough, America is cautious consumer behavior. Europe's stable and Asia could be okay.

And if I can add to that, keep in mind also the comms in both PTH and HNC where we saw a very strong Q1 last year with 7% and 6% growth with a strong dietary supplement that we called out at the time. So that's to be seen in that light as well.

Thank you very much. Our next question comes from Chaitanya Deshi with J.P. Morgan. Please unmute your lines. Please unmute your line by pressing the microphone button at the bottom left-hand corner of your Zoom screen.

Hi, can you hear me now? Yeah.

Good morning.

Yeah, morning. I just wanted to dig a little bit in your P&V margin. You know, very strong volume growth, 8%. I was just trying to do some Matt, you know, I would assume, you know, this is a business probably with the highest gross margin. So, you know, if I take 45% gross margin on your incremental volumes, you know, that should be something like 35 million EBITDA uplift. Even after FX, you know, we should be close to 20 million. I'm a bit puzzled with the lack of operational leverage in the P&B business. So maybe if you can just help us, perhaps, you know, bridge the the key moving parts, you talked about cost, but they don't seem that big in the context of the lack of operational leverage that we saw in Q1. Nothing to take away from the strong volume performance, but perhaps you were expected to see better margins there from that volume. And the second question, when you talk about solid start, are we to interpret that to be similar to Q1 focus and growth into Q2 and any color on how we should think about margins, you know, in Q2 should be similar to Q1 or would you expect a progression from Q1? Thank you very much.

All right, I'll take the P&B margin and then you may begin a voiceover with the start of the second quarter, what we expect there. So overall margin of 22%, it's somewhat above the average of last year. So we do see an improvement on that front. The leverage is a 5% step up in margin. Now a few bits and pieces. It's, I would say, a small impact across the board, whether it was FX, whether it was some additional costs coming through. that we're passing on as indicated with a time lag and at the same time we continue to invest for future growth I mean that is also something that we continue to do so that is also something that you witness at BNB we've seen that we've highlighted that also last year that we're setting ourselves up for continued growth in the front and with that all of those pieces have a little impact on the overall margin but We have the ambition to move up, but at the same time do it in a responsible way to make sure that we capitalize on the growth because ultimately that will be the driver for the profitability and that is something that we now see coming through. So it's a bit of those moving pieces across the board with the ambition to continue to improve the margin. So you see the operating leverage. But at the same time, it's offset by a few things that we're either passing on or it's a deliberate choice at our end.

And then the second question, you know, we have an outlook per quarter for every business, but we ran out of it for the year 2% to 4%. You hear me say that we had a solid start also into Q2, so we were confident on that outlook for 2% to 4%. I think it's fair to say that we expect P&B to be a little bit on the upper end of that outlook, and then a little bit better than what TTH and H&C will bring in. And in terms of the margin, overall margin, I think TTH, like Rolf was saying, I'm going to re-emphasize that, a bit of a bow-bear effect. We have the orders in for Q2, so you will see a step up on the margin of TTH into Q2. and that will move more towards the 20% with all the actions taken. So that is on TTH. I think for the rest, we were happy with the margins on H&G and TMD. And remind you that for the group, the negative ethics effect was the biggest thing. Q1 was alluding to that, and it will be slightly less for Q2, and then I think it will be phased out throughout the second half. It was only a minor effect. So with that, I think we made the link throughout, Luke. maintains confidence with what we achieve.

Thank you very much.

Our next question comes from Matthew Yates with Bank of America. Please unmute your line.

Hey, good morning, everyone. A couple of questions, please. Maybe just to follow up on that margin progression point, Ralph, you've called out a few moving parts here over the coming quarters. If you wouldn't mind just recapping how that margin is going to trend up over the coming quarters. It sounds like you're sort of catching up with the lag on cost and pricing, and then to some extent there's some mix and maybe some underlying cost actions. But if you wouldn't mind just sort of recapping so we can have confidence in that trajectory. And then the second question on TTH, in the press release, I didn't see any sort of discussion of different product categories. And in particular, I wanted to ask you about dairy, because it was something you highlighted at the CMD a month or so ago. We've seen some of your peers continue to report very good growth in dairy. Are you also capitalizing on those opportunities? Thank you.

Right. You want to start with Gary?

Indeed, good question. It's a trading update, so we didn't want to give all the details on the segments, but I have really reconfirmed what you just said and what you said in the CMV. The dairy segment is a far-wrong segment on the back of consumer being more linked to health. But also the GOP1, I said it in the CMV, this is something where I think the dairy segment is seen as a very positive contribution to it. Obviously, with calcium probiotics, that's an interesting product for us. So, no, I would like to reconfirm that dairy is a winning segment. I think, just to remind you there, that we're definitely the leader in the dairy segment in the TTA space, and we benefit from that.

All right, then, on the margin trajectory, I mean, overall, from the group, we anticipated that, I think, yes. One of the clear drivers is the FX, which had the strongest impact in the quarter. But as I said, that will fade out with half of the impact in Q2 and even less so in Q3 and Q4. Typically, we always see an improvement in the margin throughout that. But if you look at specifically at Q1, Matthew, I mean, PTH has an impact on the overall margin from the group as well. if you were to adjust for those one-off costs in bits and pieces that we will be passing on, and with that neutralized into the second quarter and onwards, and also adjust for that impact of Beauvais in TTH, you would see that actually the margin will be above the 19.5 towards the 20, and that is something that we see throughout the year. So expect to gradual improvements overall. We feel comfortable with the guidance that we gave. So we feel that that is balanced. But you'll see that coming through nicely with the actions that we're taking and passing that onward. So that a diverse impact of a couple of million coupled with Bover and TCH will fade out and expect a gradual increase to be in line towards the guidance that we gave.

Okay, thank you very much.

Our next question will come from Artem Chegorov with Rothschild. Please unmute your line.

Yes, thank you. Good morning, everyone. Thanks for taking my question. I've got one on from there, please. Just trying to understand the technicalities, really. So, just make sure I understand. So, 1% was the impact on organic cells in teaching agents from memory. This is about what the business represents in total sales. Does that mean that the entirely quarterly volume will shift in another quarter? And is that typical? Obviously, you never reported that with CTMH before. It was part of annual restrictions. So just trying to understand if this is something we can expect going forward or is it something extraordinary? And maybe generally for Bavaria, how do you see sales progressing for the rest of the year and maybe where you see profitability for this business? Because I think you mentioned that It was operating at a break-even, given that the volume is obviously very low. So, what is the profitability getting from here? Thank you.

Yeah, thanks for that question.

Indeed, welfare, it can differ backwater, but it basically will not differ for the year, because you basically need to have your year quarter. So, last year we had 40 million sales, this year we expect maybe even slightly higher. In this case, we're sold out because we're building that factory, but we kind of completed with the end of the year. So this year, we will see around that same sales number, 40, 45 million. Last year, in 25, we had, just to be precise, about 13 million of sales and 7 million in quarter two. We've seen 7 million this year in quarter one, and we have the orders in for Q2. So now it's more or less reversed, 7 and 13 million. So that's part of the deal for the whole year. You can expect 40, 45 million with indeed about three even on results because that's something where we are an intermediate phase. So no surprises there, only some changes throughout the quarter.

Thank you.

Our last question comes from Charles Eden with UBS. You may now unmute your line.

Hi, morning. Thanks for sneaking me in. I just wanted to ask on AMH and vitamin price. I appreciate this is a continuing OPS update, but vitamin prices have obviously spiked. I guess costs have also gone up, particularly energy in Europe. Is it fair to say the move is advantageous to profitability for AMH? and I guess cash flow for this year, given you've still got 100% of the cash flows. So that was my one question. And then just a very quick clarification, a bit specific. You talk about strong double digits in Fine Fragrance. Do strong double digits for PSME mid-teeth? I don't want to use that number, but just an idea of what strong double digits means. Thank you.

Let me take the discontinued, and then Dimitri will give you the exact number on Fine Charles for the morning session. No, absolutely right. I mean, you've seen head vitamin prices go up 30%, 40% across the board, which is obviously helpful for overall achieving the results. Now, there is a cost component to it. You're absolutely right in that in terms of costs that will go into premix, but also at the energy side. But obviously, this is a much more balanced picture than what we've seen before. I mean, if you go back and rewind the clock a few years back then, We saw predominantly energy and cost go up in Europe, whereas I think this is more a global development where China is impacted. So we're happy to see prices go up. And as you say, we are still the owners of that business throughout the year. So it will help. We're managing the business for cash. That hasn't changed. And that is something that we're focused on. But obviously, this environment is overall supportive to the business in 2026. And In the Amex, we put the results for discontinued in as well, for reference and for model in, but we clearly indicated that we hadn't anticipated a quicker start of the year, but we expect a strong pickup in the quarters ahead on the back of that improved pricing.

Indeed, Charles, I mean, very funny that you feel so much in love with vitamins, because you appreciate them. I'm pretty sure you'll also follow feeding law and you see vitamin E prices went up from 5 to around 11. I think that's pretty much enough to compensate the slight cost increases. So like Ralph was saying, we're happy to see that the vitamin prices are normalizing. Now, then going from one end of the range to the other end of the range, you really go from vitamin E's animal nutrition to the top end fine fragrance. Yeah, indeed, double-digit. My preference is that it's mid-teams, even maybe high-teams, but it has been low-teams. Remember that I'm frequently normally guide towards the high single-digit model right now. In quarter-month, we had low-teams, double-digit. I'm very happy with that. We'll need to see how that continues to pass throughout the year, but we clearly indicated that we have a strong brief good wins. But to your question, it has been well-teamed.

Yeah, that brings us to the end of the Q&A session. We don't have anybody in the queue anymore, so Operator, I suggest we close this session and we move on.

This concludes the Q&A session. I will now hand back to Mr. Huizing.

Yeah, thank you, Operator. Dimitri, do you want to make some closing remarks?

Well, not really. I just want to remind you that despite what's going on out there in the world, we really focus on what we promised in the capital market today. We focus, we accelerate, and we execute. We grow what we have. We're not getting a sales growth for the outlook 2% to 4%. We anchor what we do, implementing our cost programs, focusing on the cash with the average quality, about 20%, and deliver on our promises. And I think we had a solid start into the year with a good quarter one, moving into a good start into Q2. And with that, I'm very happy to see that we maintained our outlook in a continuous crazy world. But I think we are very much geared up to that and hope to speak to you soon in the road or otherwise again during our half-year results. Thank you for that.

Yeah, thank you. And that brings us to the end of today's call. Thank you all for attending the call today. Please don't hesitate to reach out to us if you have any remaining questions. And with that, you complete today's webcast. So, operator, back to you.