Symrise Ag Ord

Ladies and gentlemen, welcome to the Zimrise Q1 2026 Trading Statement Conference Call. I'm Sergan, the Chorus Call Operator. I would like to remind you that all participants will be in listen-only mode and the conference being 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. Conference must not be recorded, publication or broadcast. At this time, it's our pleasure to hand over to René Weinberg, Head of Investor Relations. Please go ahead.

Thank you. Good afternoon, ladies and gentlemen. Welcome to our first quarter 2026 call. Thank you for joining us today. All related documents are available in the financial results section on our website. With me today are our CEO, Jean-Yves Parizeau, and our CFO, Olaf Jünger. After the remarks, we will open the line for questions. And now, I hand over the call to Jean-Yves.

Thank you. Thank you very much, René, and thank you all for joining us today. Today, we will review the first quarter of 2026, provide an update on our one-team rise strategy and our one-team transformation journey. And we will conclude with our full year 2026 outlook. Let's turn to slide four and our first quarter 2026 highlights. We delivered a solid start to the year, with first quarter performance ahead of expectations, with a year-on-year organic sales decline of 0.4%, compared to our expectation at our full year 2025 goal. This reflects the strength of our business, despite a continued weak macroeconomic backdrop and changing prior year comparisons. At the same time, we are taking deliberate actions to position the company for the next phase of growth. As part of our transformation, we are accelerating significant structural cost savings and efficiency gains to unlock organic growth opportunities through strategic reinvestments. Innovation remains a core strength, and we continue to bring customer-driven solutions to market, including important new product launches within our care and wellness division. From a geopolitical point of view, Impacts related to the Middle East conflict have been manageable and do not affect our underlying growth algorithm. While there is some elevated uncertainty around input costs, largely due to freight and logistic inflation, we are implementing pricing actions to offset this headwind. Based on our performance and outlook, we are today reaffirming our full-year guidance. Let's move to slide 5 on our first quarter 2016. sales performance. Q1 sales came in stronger than anticipated, driven by food and beverage, pets and fragrance, with strong momentum towards the end of the quarter. At the group level, organic sales declined 0.4% year-on-year, driven primarily by positive volumes of 0.3%, and negative pricing contributions of 0.7%. Foreign exchange remained a headwind, largely due to the stronger U.S. dollar in 2025. Performance across segments was mixed, but consistent with the underlying dynamics we anticipated. Taste, nutrition, and health delivered solid organic growth of 1.7%, driven by volume growth of 1% and pricing of 0.7%. This reflects continued strengths in our leading food and beverage business. where we had a low single-digit organic sales growth against comparables. This growth was led by naturals and savories, both delivering mid-single-digit growth, while beverages also grew at low single-digit rate. In pet food, organic sales grew low single-digit. This was driven by low single-digit growth in pet palatability and a slight organic decline in pet nutrition, as volumes were positive, while prices continued to normalize. Organic sales in the sentient care segment declined 3.4%, reflecting negative pricing of 2.7%, and lower volumes of 0.7%. Our grants continued to perform well, with low single-digit organic sales growth against strong year-on-year comparables, supported by mid-single-digit growth in consumer fragrance and low single-digit growth in fine fragrance. Care and wellness, organic sales declined low double digits, primarily due to a double-digit decrease in UV filters against an elevated prior year base. Aroma molecules, organic sales declined mid-single digits and tough comparables, while special fragrance ingredients performed well. As a reminder concerning aroma molecules, we are moving well on our Tepe ingredient process. We are in a constructive dialogue with a strong group of bidders, and we will provide you with an update as soon as appropriate. Overall, our results reflect the strength and balance of our portfolio, and the durability of our core end markets emits a dynamic operating environment. Let's move now to Q1 regional results on slide six. Organic sales in North America were up 1.9% year-on-year, with Latin America up 2.8%, reflecting solid customer demand and strong commercial execution. Asia-Pacific grew 3.4%, supported by broad-based momentum across key markets. This was offset by IMEI, where organic sales declined 4.9%, mainly due to strong comparables a soft regional macro environment, and the impact of the UV filter business. This overall performance highlights the benefit of our balanced geographic footprint, with growth in giants in Latin America and Asia-Pacific, helping to offset regional headwinds in EME. Let's turn now to our execution highlights on slide 7. This quarter, we made meaningful progress against our strategic priorities, with actions that reinforce both our near-term delivery and long-term growth algorithm. In pet food, we expanded capacity with the opening of our new facility in Querétaro, Mexico. This investment strengthened our local manufacturing footprint in a high-growth market, enhances service level for regional customers, and supports profitable growth over time. We also took an equity stake in Bound Pet Food as a US-based biotechnology company, underscoring our confidence in the long-term potential of pet food market. This partnership provides early exposure to precision fermentation technology, positioning us to participate in the evolution towards more sustainable protein solutions, and positions us as a first mover in a structurally growing innovative segment. Innovation remains a core driver of value creation in our care and wellness division. We continue to advance the pipeline of value-added, science-based solutions aligned with key customer needs, including longevity and inner beauty. At the InCosmetic Global 2026 trade show, we introduce three new cosmetic ingredients and early-stage concepts that reinforce our leadership in differentiated applications. Customer engagement was strong, validating both the commercial relevance and the scalability of our innovation efforts. This is translating into external recognition. Our best-tasting Nutri-Cosmetic beverage received the Taste Bar Award at InCosmetics, and our product Mindera was honored with a Silver Fountain Award as PCHI 2026 in the Green and Sustainable Ingredients category. These achievements underscore our ability to convert scientific expertise into commercially viable, differentiated solutions that resonate with customers. Overall, these actions demonstrate disciplined execution against our strategy, investing in attractive end markets, scaling innovation platforms, and building capabilities that support durable, profitable growth over time. Now let's move to slide 9 for a strategy execution update. One theme transformation phase 2 is progressing very well, and we are picking up the pace, reinvesting cost savings to unlock organic growth opportunities. Over the past two years, we have shown that disciplined execution drives results at theme rise. Since 2023, we have delivered approximately 100 million in cumulative savings and expanded margin by 280 basis points. That gives us a solid foundation to build from. We are now sharpening and accelerating the transformation to unlock the next phase of profitable growth. Our priorities are very clear. Increase speed, focus resources on the highest return opportunities, and scale what is working. With these foundations in place, we are now transitioning to growth activation. We are accelerating the delivery, the transformation drive to step change in organic top-line improvement and 80-day margin expansion. As we continue to execute at pace, we will scale into a true global champion. We are leveraging our strengths as a science-driven organization operating with more agility and increasingly embedding digitalization, including AI to drive productivity and innovation. This put us on track over time to return to 5 to 7% organic growth. We will provide more detailed target in H2. The key message today is straightforward. We have built the foundation and we are now accelerating from a position of strength. Let's move to slide 10. Within phase two, we have completed the first stage, setting the ambition and direction. This included establishing our operating framework, defining guiding principles, and identifying value potential. As a result, we are operating with clarity and alignment. We are now in the second stage. During the first half of 2026, We are validating potential through detailed business cases, prioritizing initiatives, and sequencing actions with clear dependencies. And at the same time, we are preparing the organization to move efficiently into implementation. In the second half of the year, we will focus on driving results across four focus areas. Innovation, commercial excellence, scale benefits, and digitalization. funded by our efficiency gains. Additionally, we will scale new ways of working across businesses, tracking all progress against defined milestones. In summary, the roadmap is in place, validation is well underway, and we are preparing to execute at space. Let's move now to slide 11 to discuss the four focus areas I just mentioned that define how we will win. First, differentiated innovation. We are accelerating our pipeline and improving how we translate science into customer-relevant solutions. We are focusing resources on high impact, scalable innovation bets, prioritizing high growth markets where we can leverage our differentiated capabilities. Second, commercial excellence. We are driving faster, more consistent go-to-market execution, improving win rates and commercial processes across all divisions. For example, we are progressing a distributor initiative to unlock additional sales channels, and we have launched a go-to-market acceleration program to increase engagement, speed, and effectiveness in our sales teams. Third, scale benefits. We are unlocking efficiency through stronger group-wide alignment by centralizing key capabilities and reducing operational complexity. A clear example is procurement. We have streamlined and centralized processes across direct and indirect spend, shifting procurement toward a more strategic value creation role. We are capturing on overall spent. We are now looking as well into tailspin optimization, complexity reduction, and supplier consolidation. And for finishing, the fourth, digitalization. We are enabling seamless execution through integrated systems and automation, connecting planning, operations, and commercial activities to enable faster and better decision-making. Together, these focus areas sharpen our go-to-market approach, strengthen execution, and improve how we scale across the group. These focus areas form the foundation of our next phase of value creation. Let me conclude with our outlook in slide 13. We are reaffirming our full-year 2026 outlook and mid-term targets. For the full year, we expect organic sales growth between 2% to 4% and an adjusted EBBA margin between 21.5% and 22.5% and an adjusted business free cash flow margin above 14%. Looking ahead, we expect the impacts from the Middle East conflict to remain manageable with no change to our underlying growth assumptions. We are seeing elevated uncertainty on input costs particularly related to freight and logistics. This is something we are actively addressing with a strong focus on our customers, reliable supply chain execution, and targeted pricing actions to offset incremental cost pressure. At the same time, we expect a sequential improvement in organic growth over the coming quarters. From a phasing perspective, year-on-year comparables are more challenging in the first part of the year, and will moderate as we move into the back half. Growth is supported by accelerated execution of our transformation, solid momentum on key customer projects, and a very strong innovation pipeline and resilient end markets. Beyond 2026, we remain confident in our ability to deliver against our mid-term targets and outgrow our reference markets. This confidence is underpinned by structural tailwinds such as evolving regulation, increasing demand for clean label solutions, reformulation, and growth in emerging markets. Accordingly, we reaffirm our 2025 to 2028 targets of 5% to 7% organic sales growth, an EBITDA margin between 21% and 23%, and a business free cash flow margin of above 14%. With that, let's open the floor of questions. Thank you.