IMCD N.V.

Hello, welcome to the IMCD's first three months, 2026 results conference call hosted by Marcus Jordan, CEO and Hans Koimans CFO. For the first part of this call, all participants will be in listen only mode and afterwards there will be a question and answer session. If you wish to ask a question, please press pound key five on your telephone keypad. I would now like to give the floor to Marcus Jordan. Mr. Jordan, please go ahead.

Thank you very much. Thank you all and a warm welcome. I'm Marcus Jordan and I'm here today with our CFO, Hans Coymans, for the first three months 2026 results, which we published in a press release earlier this morning. I'm going to keep my opening brief to allow sufficient time for Q&A as we have our AGM immediately after this meeting and so have a hard stop at 10 o'clock. For our first quarter, our first quarter of 2026 delivered solid results against a strong Q1 2025 comparable. and I'm happy to report an increase in free cash flow and a robust cash conversion margin. During the previous full-year call, we referred to positive conversations with our suppliers and customers regarding the demand outlook and green shoots potentially coming our way. Since that full-year call, a lot has happened, as there have been some reversals in tariffs following the court ruling that deemed the tariffs illegal, an introduction of other tariffs, and then the conflict in the Middle East which has created further uncertainty and quite some changes in the market dynamics. Focusing on the Middle East, since the conflict began, we have seen a significant amount of price increases, which can be broken down into two categories. Firstly, the direct impact of fuel increases on transportation costs, and secondly, an increase in the cost of the product itself. as the cost of the raw materials and energy costs needed in the manufacturing processes have both risen. As we have done in the past, we are able to quickly identify and pass on any of the increases we receive. With the large number of increases we have and are receiving, the situation is quite often compared to what we saw post-COVID, but I think important to highlight that those post-COVID increases were primarily driven by pent-up demand, which is not necessarily the case now. During the first quarter, we didn't observe significant pre-buying, but we do see some indications of this as we enter the second quarter. The increase we see is, however, relatively modest as we believe our customers learned some lessons from the post-COVID years in which they pre-bought too much inventory at a high price. The key question going forward is how will the conflict impact end consumer confidence and thus demand, which ultimately is the biggest driver of our business. We are therefore cautious in the outlook. Moving on to the first three months of 2026 numbers, you will find a summary of our financial results on slide four. We reported gross profit of 312 million euros, up 1% on a constant currency basis. EBITR was lower than last year at €130 million, whereby our lower cost in the first three months of 2026 could not fully compensate for the decline in reported gross profit. I'm happy to report that we increased our free cash flow to €121 million, leading to a cash conversion margin of almost 91%. If we now look at M&A, we completed two acquisitions in the first three months of this year, Firstly, Dongyang FT in South Korea, a company active in beauty and personal care with 14 people and 34 million euros in revenue. This is our second beauty and personal care acquisition in South Korea within a year, and it further strengthens our position in one of the most innovative and largest beauty and personal care markets in the world. The second acquisition was Willow's Ingredients in the UK and Ireland, a company active in food and nutrition, with 26 people and 30 million in revenue. This is an exciting acquisition as it strengthens our capabilities in specialized health, sports, and animal nutrition. To end my part of the introduction, in these unpredictable times, it's critical to remain a reliable partner for both customers and suppliers and to ensure that we quickly adapt to changing market conditions. We remain focused on the things that we can control to deliver long-term growth to our partners and stakeholders in the years ahead. I would now like to hand over to our CFO, Hans Kooijmans, who will give you an update on the numbers.

Thanks for the introduction, Marcus, and good morning, ladies and gentlemen. I'm happy to give you a short summary of IMCD's first quarter trading update. I'll start on page six of the analyst call presentation. Markers already refer to challenging market conditions and comps of last year, and as explained during our 2025 full-year analyst call in February, these challenging conditions coincided with significant currency headwinds. As shown on this slide, the negative translation impact of foreign exchange is reflected in a notable difference between reported and forex-adjusted figures. You may also recall that when comparing Q1 this year with Q1 last year, the weakening, particularly of the US dollar, had an adverse effect on sales values across several regions. Given these conditions, we are certainly not satisfied with the reported outcome. It represents a solid start to the year. As you can see, Forex suggested revenue increased 6% and growth profit increased 1% in the first quarter of this year. This growth profit increase was a combination of 4% organic decline and 5% as a result of the first time inclusion of companies acquired in 2025 and 2026. The gross margin percentage in the first quarter is 24.6%, and as you can see, it's 1.2% below Q1 last year. About half of this decrease in percentage is the result of recently acquired companies with, on average, lower gross profit margins. This first quarter gross margin percentage, the 24.6%, is slightly higher than the 24.2% reported in the second half of last year. This increase in percentage compared to the second half of last year was a combination of changes in product mix, changes in local market circumstances, but also internal gross margin improvement initiatives that helped to further increase the margin percentage. Then Forex adjusted operating EBITDA that decreased 2% to 130 million and the operating EBITDA margin decreased to 10.2% and the conversion margin dropped to 41.6. Lower organic own cost in the first three months of 2026 could not fully compensate for the decline in reported gross profit. And when talking about own cost reduction, you could see on the bottom of this slide that we increased the number of people with 112 employees, an increase of 2%, and this increase is the result of acquisitions. As anticipated by Marcus and myself on previous calls, on a like-for-like basis, we slightly reduced the number of employees compared to last year. Forex adjusted net result decreased 3% to 63 million, and later I will come back on free cash flow, which is really healthy for a first quarter. Q1 cash earnings per share is €1.46, a reported decrease of 6% compared to last year, but when normalizing for forex impact, the cash earnings per share would have been similar to last year. The next slide, slide 7, you will find a few key figures from P&Ls per operating segments, and as usual, with a focus on gross margin and EBITDA development. I already mentioned the currency headwind, and as you can read from this slide, the negative translation impact is most significant in the Americas and APEC. EMEA is the only operating segment reporting modest gross profit and EBITDA growth. The gross margin in EMEA decreased by 0.9% to 26.6%. When I would normalize for the impact of the recent acquisitions in EMEA, the gross margin percentage would have been slightly higher than the first three months of 2025. Organic-owned costs in EMEA were slightly lower than last year in Q1, and the small organic decrease in EBITDA in EMEA was as a consequence the result of differences on other P&L lines, like doubtful debt provisions, other operating income, and slightly higher third-party costs. As a consequence, EBITDA-related ratios all slightly decreased compared to the same period of last year. In the Americas, there we report a substantial negative organic growth on gross profit and EBITDA. It's amongst others a combination of the more industrial and volatile business mix and a very strong Q1 in 2025. You might remember last year, Marcus and myself had to explain how we could grow our EBITDA in the Americas more than 20% organically. I'm a bit afraid that you will ask us now to explain the 20 plus percent decrease during the Q&A, and you can imagine that I prefer to explain a double digit growth here, but unfortunately that's not the case so far. Then Asia Pacific in the third column, where you can read that the positive impact of acquisitions is more than wiped away by negative currency impact. Organic EBITDA and gross profit were more or less stable compared to last year. And then in the last column, you will find under holding companies, all non-operating companies, including the head office in Rotterdam. In Q1, we spent 0.6% of revenue on holding costs compared to 0.8% last year. On page 8, a summary of IMCD's free cash flow. As mentioned before, free cash flow in Q1 was $19 million better than last year, and when taking into account the typical working capital cycle during the year, a Q1 cash conversion ratio above 90% could be considered very healthy. The decrease of adjusted operating EBITDA of $11 million was more than compensated by lower working capital investment. CAPEX of $1 million was slightly lower compared to last year. Page 9, short update on net debt and leverage. Reported leverage ratios and leverage ratios based on the definitions in the loan documentation were similar to 2025 year end numbers. at 2.8 and 2.7 times LTM EBITDA. And then last but not least, on page 11, you will find our outlook. And I assume you already read it yourself when reading our press release. And in summary, as Marcus also mentioned, we are positive but cautious. So far, the short summary of our financials. And Marcus and myself are happy to answer your questions. So back to Bart Jan.