DSM-Firmenich AG ($DSFIR)

Good morning, and thank you for joining today's call. I'm sitting here with Dimitri de Vreeze, our CEO; and Ralf Schmeitz, 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 Ralf's opening comments, we will open the line for questions as usual. Important to remind also, as usual, sell-side analysts who want to ask questions, have to register with 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 for joining this call, and I will start with a few brief introductionary remarks and then hand over to Ralf, who will talk you through. We'll keep it short. Got plenty of time for questions. So DSM-Firmenich made a solid start for 2026 in its continuing business against a highly volatile macroeconomic backdrop. We delivered like-for-like sales growth, which was entirely volume-driven, and this represent really good performance across the group, especially in Perfumery & Beauty. We've also announced today that we will have a dual listing of the shares on the SIX Swiss exchange as of May 21 of this year. And with a fully good start of the year, we have maintained our outlook for 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 an 11% to 12% cash conversion. We've seen with a solid start of the year with a good quarter 1 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 Ralf for a little bit more color on the business performance.

Alright, 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 FX 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 within Capital Markets Day. So happy with that performance, we'll zoom in into the businesses in a minute. Overall, looking at a margin, we learned at the quarter at a 19% 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 cost 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 margin. And as said, we'll expect a gradual improvement throughout the year. Let's then turn to the businesses. On the next page, starting with Perfumery & 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 were a little higher in Perfumery & Beauty concentrated in our Consumer Fragrance space. Ingredients performed in line with expectations. And as guided for at Capital Markets Day, overall, we expect a low single-digit growth with -- which is normalizing throughout the year, and 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, largely in line with Q1. No big moving pieces 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 & 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 & Health, synergies continued 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, Ralf, you're talking about a 3%, I see on the page only 2%. There's about 1 minus 1 from Bovaer that doesn't necessarily come evenly distributed throughout the year. That's a bit chunky. We now reported in Taste, Texture & Health. It had a negative impact of about 1% on top line and about 0.5% on the margin, but we expect that to be fully neutralized on the half and we'll see a good 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, margin is about 1.5% lower. As I said, 0.5% is coming from [indiscernible], 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 the 20% level in Taste, Texture & Health. So also here, an encouraging start of the year. Then last but not least, on the next page, please. Health Nutrition & Care. Also here, good growth, 4% like-for-like growth in the year, strongly driven by early life nutrition, good momentum in HMO. We've seen that buildup 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 [ RA ] 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, i-Health to see cautious behavior in that sense. So 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 the FX is the biggest. Overall, it negatively contributed around 0.7% on the margin. Adjusting for that, we would be at the 20% and 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 idea. And with that, let me keep it short and with time for Q&A. So the why don't we open the call for --

[Operator Instructions]. With that operator, we can start.

[Operator Instructions] Our first question comes to Nicola Tang with BNP Paribas.

I think I'll start on the advance orders, I guess, no surprise to be asked about this. I think you mentioned 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 that -- 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 or the basket of inputs and how quickly you expect for that pricing?

Thanks for that question. Nicola, I think the last one will be taken by Ralf, let me give you a bit of a context on the prebuying indeed fair challenge. How can you define prebuying? Well, basically, none of the orders which are filled in are being saying, this is prebuying. It is not prebuying. This is more like looking at the order pattern, and therefore, we define it as prebuying. 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 frame. I will try to explain a little bit why that is. So we assume that is a part of prebuying compared to the normal seasonality that 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 have be impacted only on freight and a little bit on energy, as Ralf was saying, and that was very transparent and not new. What you will see in the Consumer Fragrance become is that if you have launched a big project, 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 prebuying predominantly in the consumer fragrance. And that's what we have seen and that we spelled out. So we estimate, so it was not a guarantee, but we estimated it had to be more or less maximum 1%. Secondly, be aware that you mentioned pricing, in the prebuying 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 products, so if they can't supply the ingredients 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 prebuying. I mean we have tailored products. We have customized products. We have more than 5,000 ingredients, which need to be customized as such, lot of make to order. So even if people want to prebuy massively, our model is not capable of doing that. So I don't think it's a little bit of background. And then maybe for you, Ralf, how much impacted and what we have assumed.

Happy to take that. So overall, what Dimitri was highlighting as well, Nicola, we've seen some upward pressure around supply chain and energy. To put things in perspective, we indicated that our energy bill is around 1% of top line a little lower than that. So give or take around EUR 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 tens of millions of impact, and that is something that we're confident in our setting. 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. Like, 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 question 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 said, we expect a gradual buildup throughout the year so that will require a bit more work with the inflationary environment and the FX where we're heading today. was predominantly strong in Q1 with about EUR 40 million of impact. We see somewhat around -- a little over 20% in the second quarter. So bringing that impact to about EUR 60 million and then [indiscernible] has 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 levers to manage. And so hopefully, all that gives a bit of color on what we baked into the outlook.

Our next question comes from Alex Sloane with Barclays.

Two from me, please. First one on Early Life Nutrition within HNC, nice performance there, and you're flagging [ ARA ] already as a tailwind. I think at 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 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 you would expect that to be a kind of a permanent share 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 prebuy comment. Thanks for the clarification on the scale of that. Should we be expecting a reversal of that in tailwind at some point this year? Or I guess, when might we expect that?

Let me take the [indiscernible] one and then we'll comment that on the prebuy. So on the [indiscernible], 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 as 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 AMC for the year. That still stands. At the same time, you're spot on in terms of your question, will we see -- have 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 and we have -- we're looking at to see how we can create more space in our plans to support them where needed. But for '26 [indiscernible] about 1% of top line on HNC on the back of the benefit from [indiscernible].

Yes, Alex, and then maybe on the reverse prebuying. So in a world where there is accumulated uncertainty and whether it's a very low visibility on what's happening -- we don't expect on the short-term reverse were buying. On the other hand, I mean, there's a reason why there's reverse prebuy because you're concerned about getting access to our medium-term solution. So in a perfect world that will reverse. Now you hear me say that we also had a solid start into Q2. 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 [ dividend ] predictability. And I stopped making any remarks on that phase. So that should be the answer to your good question on reverse prebuy [indiscernible].

Next question comes from [ Lisa Demi ] with [indiscernible].

I have 2. The first one is on the 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 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 then secondly, back to Perfumery & 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 through the year, whether actually these volume strength will continue through the year?

So I'll take the delisting new P&B. 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 [ ANH ], 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 how we wanted to basically create additional traction and also basically act as 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 further 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 the [ float ] of the stock. So it's been part of the plan, but it was kind of put on hold until we've completed the transformation, which we can then actively road show also in the Swiss market, which is an interesting space for us as well, given the strong presence in both countries.

And then maybe on the wins, thanks for that question. I think we have a very strong brief pipeline. Remember, [ Emmanuel ] was on stage during the Capital Markets Day, presenting that also remember that there were questions like, okay, if that strong regional pipeline is there, when do we see that back into organic sales growth? Well, I think we had that time radiated quite some confidence, and I'm very happy that we could report a very strong quarter 1 and 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. We're very successful because we have launched new innovative new ingredients, which we own ourselves, as part of our business model in going forward. So yes, I think a very strong start for perfumery Beauty predominantly because of the good brief pipeline, but above all, also because of a very good win percentage on this brief going into Q1 with confidence for the rest of the year.

Our next question comes from Georgina Fraser with Goldman Sachs.

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 time frame 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 demand into the second quarter by region?

Thank you for that question. And indeed, you referred to the experience of legacy DSM, but I can also remind you that the legacy Firmenich also have quite some experience in handling COVID an inflationary context. So I think we're well set, like Ralf 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 Ralf was also saying, what we have seen is some increases in raw material costs. We saw that in [ like ], and we immediately took actions there. So I think it's -- this is about agility. I think nobody knows with type of derivatives from oil will hit the most. The only thing is that you need to prepare yourself to act with agility and 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 local, which is a key raw material in the core consumer respects and you can see that in our organic sales growth. So I think it's more about attitude and agility, which we have on the organization is and fine. And secondly, on your North America space, very interesting, indeed, we flagged 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 & Care, which has a big exposure in North America because of biomedical and health and the like. We don't see it deteriorating, but we don't see a pickup either. So the consumer behavior, which is still cautious. But in that context, we've taken actions. i-Health has seen slight role in that in that cautious consumer behavior. Biomedical doing relatively well. So I think we also have 2 actions to do what is needed to drive growth in a difficult course behavior consumer context. We don't expect any change towards the next coming quarters unless it will become the saver and easier place going forward. So we feel we're well positioned, but [ fair ] North America is cautious consumer behavior, Europe, stable and Asia could be okay.

And if I can add to that, keep in mind also the comps in both TTH and agency when we saw a very strong Q1 last year with 7% and 6% growth with a strong Dietary Supplements that we called out at the time. That's to be seen in that light as well.

Our next question comes from Chetan Udeshi with JPMorgan.

I just wanted to dig a little bit in your PNB margin, very strong volume growth, 8%. I was just trying to do some math, I would assume this is a business probably with the highest gross margin. So if I take 45% gross margin on your incremental volumes, that should be something like $35 million EBITDA uplift, even after FX, we should be close to $20 million. A bit puzzled with the lack of operational leverage in the P&B business. So maybe if you can just help us sort of bridge the 3 moving parts. You talked about cost, but they don't see that big in the context of 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 guys expected to see better margins there from that volume? Second question, when you talk about solid start, are we to interpret that to be similar to Q1 4% growth in Q2? And any color on how we should think about margins in Q2 should be similar to Q1? Or would you expect the progression, sorry, from Q1?

All right. I'll take the P&B margin and then maybe give a voice over a bit the start of the second quarter, we expect that -- 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 cost coming through that we're passing on as indicated with the 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 witnessed at P&B. We've seen that. We've highlighted that also last year that we're setting ourselves up for continued growth in the [ France ] 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 and the [indiscernible] that. So you see the operating leverage but at the same time, offset by a few things that we're either passing on or is it a liberate choice at our [indiscernible].

And then to your second question, let me give an outlook per quarter for every business, but we earn outlook for the year 2% to 4%. You hear me say that we had a solid start also into Q2. So we feel confident on that outlook for Q2, 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 HNC will bring and then in terms of the margin, overall margin, I think, TTH, like Ralf was saying, I would plan to reemphasize that, a bit of boar 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 HNC and P&B and remind you that for the group, the negative FX effect was the biggest in Q1, obviously alluded to that, and it will be slightly less in Q2 and then I think it will be phased out throughout the second half of the year with only a minor effect. So with that, I think we made the link to our outlook and maintained, therefore, the outlook we're confident with what we see.

Our next question comes from Matthew Yates of Bank of America.

A couple of questions, please. Maybe just to follow up on that margin progression point, Ralf, 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?

Indeed, good question. It's a trading update, so we do want to give [indiscernible] the details on the really reconfirm what we said and what we said in the [indiscernible]. The dairy segment is a fast-growing segment on the back of consumer to be more linked to health. But also the GLP-1, I said it in the CMD. This is something where I think the dairy segment has seen is a very positive contribution to it. Obviously, with [indiscernible] probiotics is an interesting product for us. So no, I would like to reconfirm that dairy is a winning segment. I think just to remind you that we are definitely the leader in the dairy segment in the TTH space and we benefit from it.

All right. Then on the margin trajectory, I mean, overall, from the group, we anticipated that. I think 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 Q1, Matthew, I mean, TTH has an impact on the overall margin from the group as well. So if you were to adjust for those one-off costs in the bits and pieces that we will be passing on. And with that neutralized into the second quarter and onwards, and also adjust for the impact of [ over ] and 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 I expect a gradual improvement. So 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 had a diverse impact of a couple of million, coupled with [indiscernible] in TTH will fade out and expect that gradual increase to be in line towards the guidance that we gave.

Our next question will come from Artem Chubarov with Rothschild.

yes. I've got one on Bovaer, please. Just trying to understand the technicalities really. So just to make sure I understand that 1% was the impact on organic sales in TTH for memory, this is about what the business represents in total sales. Does that mean that the entirely quarterly volume was shifted in another quarter? And is that typical -- obviously, you never reported that with DTN before it was by any more attrition. So just trying to understand if this is something we can expect going forward? Or is it something extraordinary, maybe generally for Bovaer, how do you see sales progressing for the rest of the year? And maybe we see profitability for this business because I think you mentioned that it was operating at a breakeven given that the volume is obviously very low. So when do you see profitability getting from here?

Yes. Thanks for that question. Indeed, Bovaer, it is [indiscernible] differ by quarter, but it basically will not differ for the year. We caused a few year quarter. So -- last year, we had [ 14 ] million sales. This year, we expect maybe even slightly higher. In this case, we are sold out because we're building that factory will be kind of complete to the [indiscernible]. So this year, we will see around that same sales number of EUR 40 million to EUR 45 million. Last year, in '25, we had just to be precise, about EUR 13 million of sales and EUR 7 million in quarter 2. We've seen EUR 7 million this year in quarter 1, and we have the orders in for Q2. So now it's more or less reversed, so that's part of the deal for the whole year, you can expect EUR 40 million, EUR 45 million with indeed about breakeven on results because that's something where we are in the intermediate phase. So no surprises there, only some changes throughout the quarter.

Our last question comes from Charles Eden with UBS.

I just wanted to ask on [ A&H ] and midterm input. I appreciate this is a continuing ops update, but [indiscernible] prices have obviously spiked I guess, costs have also gone up, particularly energy in Europe. But is it fair to say the move is advantageous to profitability for -- and I guess, cash flow for this year given you still got 100% of the cash flows. So that was my one question. And then just a very quick clarification, a bit specific. You talked about strong double digits in Fine Fragrance, to strong double digits for [ DSME ] mid-teens, just sort of -- I don't want the exact number, but just an idea of what strong double digits mean.

Let me take the discontinued and then Dimitri will give you the exact number on [indiscernible]. No, absolutely right. I mean you've seen have 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 from 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 costs go up in Europe, whereas I think this is more a global development where China is impacted. So we're happy to see the 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 [indiscernible] in as well for free for [indiscernible] we clearly indicated that we hadn't anticipated weaker start of the year, but we expect a strong pickup in the quarters ahead on the back of the improved pricing.

[indiscernible] very funny that you still so much [indiscernible] with vitamin, appreciate your question. I'm pretty sure you also follow [indiscernible] 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 Ralf said, we're happy to see that the vitamin prices are normalizing. It's okay. Now then going from one end of the range to the other end in the range, you really go on [ vitamin animal nutrition ] to the top end Fine Fragrance, indeed double digit. But my preference is that it's mid-teens, even maybe high teens, but it has been low teens. Remember that [indiscernible] normally guide towards the high single-digit or right now quarter low teens, double digit. Very happy with that. We'll need to see how that continues to rethought the year. But we clearly indicated that we have a strong brief pipeline and good wins. But to your question, it has been well [indiscernible].

Yes, we took at the end of the Q&A session. We don't have anybody in the queue anymore. So operator, I suggest we close this session we move on.

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

Yes. 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 Markets Day. We focus, we accelerate and we execute, we grow what we have with an organic sales growth for the outlook, 2% to 4%. We anchor what we do. implementing our cost programs, focusing on the cash with the EBITDA quality about 20% and deliver on our promises. And I think we had a solid start into the year with a good quarter 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.

Yes. 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, we conclude today's webcast. So operator, back to you.