Firmenich International SA (DSFIR) Earnings Call Transcript & Summary

I'm getting the sign. So a warm welcome to everyone on the live webcast as well. It is a shame you were not able to join us in this room. We have here over 150 guests in an amazing venue, the Paris old stock exchange. And not only are we here altogether but there's an amazing booth showing what Firmenich does, all the taste, the smell, the ingredients. But I don't want to make you too jealous so I will pause there. Thank you very much for joining us this afternoon or maybe morning or evening depending on where you are. Now the presentation has been posted online. We will be, of course, projecting it as well here. I will point to Slide 2 first, and that is the disclaimers. A little bit tedious but these are all the legal disclaimers. Please notice that we will take it as read. And if you haven't read it, then have a quick look at it. Now the agenda. We have what is hopefully going to be a very exciting, interesting, informative few hours together. And the intention is to have 2 parts. Part 1, discover Firmenich. Now of course, as a privately owned company, it's a name that's very well known in this industry but not so well known as a company. So a big chunk of today is going to be about discover Firmenich. Now of course, Gilbert will be leading us through that with your team, and you will introduce them yourself. So that is part one. Now we will pause for Q&A at that point for any questions around Firmenich and what they do, et cetera. Then there will be a break. Then we move to Part 2, which will be basically a bit of an update on the DSM businesses and what does the merger mean for the businesses as well. And then we will go into the vision of the merger, which we announced a couple of weeks ago, and some of the details, synergies, et cetera. At the end of that, a second moment for a bit of Q&A and interaction. And throughout all of the pauses, the booths will remain there so you can go and test for yourself what it's all about. Now as said on May 31, we announced effectively the combining of 2 iconic companies, 2 companies with a deep heritage, with a deep passion for science, with a deep passion for purpose. And I think you will be feeling that throughout the next few hours. But before we take you into this world, I definitely want to invite my 2 CEO colleagues to come and join me here on stage to give a chance to say hello to you as well. So Dimitri and Gilbert, if you could come and join me, that would be great. And given that we've done, obviously, quite a journey to get here today, but also after 2 weeks post announcements, quick little question, Dimitri, what does this merger mean for you?

Yes. Fantastic to see you all here. What does it mean to me? I was clearly instructed to remove my badge, but I'm reluctant in doing so because it says something about DSM-Firmenich, 2 iconic companies coming together, which is almost like a dream come true. I really think this is a truly dream combination, and that's also how I strongly feel about it. Being 32 years with DSM, I started my career as sales manager, and the first customer I visited as a young boy, 23 years old, was Firmenich. So it's almost like a circle being closed. So I'm extremely proud to be here today, together with Gilbert and with Geraldine to tell you a little bit about how we see this dream combination work. And we've got very positive response from our employees and also a few of our customers we called just before we sent out the information. And I can tell you that after I informed them under strict confidentiality, the evening before, most of the customers [indiscernible] for 1 or 2 seconds. And then they used the word, wow. So how do I feel about it? Wow.

Very nice. Thank you, Dimi. Gilbert, now you're going to take us into Part 1 in a second and discover the world of Firmenich. But if you'll indulge us, what does this merger mean for you, first?

It's a very good question and obviously, it's emotional. It's a combination of pride and excitement. Pride, I've been for 8 years in the industry and for the last 8 years, I know DSM. I've interacted with the leadership of DSM. And I've uncovered how much things we have in common: values, passion for science, passion for customers, doing the right thing, leading the industry in ESG. This is why, as Dimi has said and you just mentioned, it's a dream coming true. And I feel extremely proud that we worked hand-in-hand to bring this outstanding news to the market and share it with everyone 2 weeks ago on the 31st of May. Excitement for the future. And the best -- we are B2B companies. When I shared it with customers, like you shared it with customers, overwhelmingly positive response. And that says it all, [indiscernible] reacted very positively. Thank you. Very important also for all of us as long-term committed shareholders. At the same time, very positive reaction from our people saying, wow. Like you said, our people said, you've surprised everyone, you surprised our competitors. And at the same time, our people are very excited. So it's extremely promising, and that's why I'm very excited for the future.

Gilbert, thank you for that. And we're not going to hold back any longer. The floor is yours to [ now ] discover Firmenich.

Thank you. Good afternoon, everyone here in the room and the people who are joining us on webcast from Europe. Good morning for the people joining us from North America, and good evening for the people who are joining us from Asia. About today. And as I just mentioned, today is a day of pride and excitement. Why? Because I want to welcome you to the world of Firmenich, introduce you to our private world, and at the same time, I'm going to share with you my passion, my excitement about the potential for DSM-Firmenich. Now I guess most of you when you walked in here and for the people that are in the room, you saw some of the brands that we [indiscernible] and we flavor. Can I see a show of hands for the people who [indiscernible] they know and they use and they were surprised to see them fragrance by Firmenich? 80%, 85% of the room. This is why Firmenich stands out. Firmenich touches every day, 4 billion consumers around the world. We are the intel inside all of these brands [indiscernible] every single day. Everything that has to do with smell and taste, this has been our [Foreign Language] for the last 127 years. And what we are trying to bring you today in 10 slides and in the emotion and the passion of my colleagues that are managing the booth to share with you their passion and [indiscernible] is all about. And you will understand by the time you walk out, why Firmenich is called the hidden jewel of the fragrance and taste industry. Now in order for me to [indiscernible] a little bit my messages, can I see a show of hands for the people that are here in the room, for the people who are invested in fragrance and flavors? 50%, 55%. And for the people who are passionate and committed for this industry, and this industry has given them good returns? Okay, even a higher proportion. Now what I can tell you is that now you could tap into Firmenich because so far, you have been speaking [indiscernible] Firmenich, they used to downplay us. And now you see why we stand out and why we have outperformed our key competitors over the last 10 years. And to join me, I have my outstanding colleagues who will help me to convey our success. I will be followed by Sarah Reisinger, our Chief Research Officer. She will be followed by Ilaria Resta, the President of our Perfumery business; and then by Emmanuel Butstraen, who is the President of our Taste & Beyond business. And my colleagues will join [indiscernible] with our CFO Benoit Fouilland, later for the Q&A. Why do we stand out? Because we have been a company that has been doing good [indiscernible] behind this business for the long term for the last 127 years. We are a science company that has been passioned to innovate with our customers. Who are our customers? All the global companies that you know, all of the regional companies that you know, most of the local successful companies and [indiscernible] startups. And we managed to design a business model where we win with the winners. There is not a single customer in the world that has a core list that doesn't have Firmenich as a core list supplier. You will hear from Ilaria. We launched 52,000 new fragrances every year. We give 50,000 Taste & Beyond briefs every year. This is the scale of our company. And what we do with our customers, we have an intimate long-term relationship with them. We are the custodian of their brands. We look after their business. We are very passionate about their brands. We know their brands as much as they know them. And at the same time, we have the opportunity to tap into 50 years of consumer insights. Our company has 50 years of consumer insights that we've packed around 40 of the biggest markets in the world. And this, we put at the disposal of our strategic customers. Most importantly, we also co-create with them. We don't have the not invented here syndrome. You will hear this from Sarah later when she will be presenting, we co-create with our customers. And we have built an ecosystem around science, around co-creation, one of the most powerful in the world. Now secondly, what we do, we lead our industry with differentiated and proprietary ingredients. That is core to the differentiation that we bring in creativity and in solutions. Let me put it in perspective. In fragrance ingredients, we are 3 to 4x bigger than our nearest competitor. And our nearest competitor also in geography in Switzerland. It gives you an idea of how important this is. So you'll ask me, why are ingredients important? What type of differentiation they bring? We are the company that has invested [ in molecules ] discovery for fragrance and taste for the last 127 years, and we create these proprietary molecules that we call captives. Why is this important for our customers? Today in 2022, you could take a bottle of shampoo or a bottle of detergent, you put it in the GC machine and the GC machine will tell you what is in there. So the big global companies that invest millions in advertising, they can be copied by a very small player anywhere in the world by just buying a GC machine. And these GC machines [ aren't expensive ]. How do we protect the brand integrity of our customers? By having the captives that nobody finds in the market. So when you put these shampoos and these detergents into this GC machine, you will see a gray area. You could see some formulas that you could buy from the trade, but you could see [indiscernible] 30%. And you say, what is in there? I don't know. So this formula cannot be read. So first, it's brand protection and our [indiscernible] and who invests in [ invention ] and in discovery of new molecules? The most in our industry is Firmenich, 3 to 4x larger than our next competitor. Besides brand protection, what do we bring? Differentiation. What does differentiation means? You met Marie Salamagne, you met Haresh, you met some of our perfumers and some of our flavorists here. Why do they [indiscernible] in unleashing their creativity? What do they do? Because they work with the broadest and the widest palette of ingredients. And this is what we have at Firmenich, from synthetic to naturals, to biotech, to biodegradable, to renewable ingredients. Let me give you an analogy. Think about a painter who wants to do a nice painting. What is the palette ingredients are the colors for painters and as much colors that you could give them, they can unleash their creativity. And some of these colors are not privy to perfumers and flavorists working for competitors. So that's why when we recruit perfumers and flavorists from competitor companies, when they look at the palette, for them, it's Disneyland. They say, Oh my God! Now I can unleash my creativity and I can bring this magic signature to the 52,000 perfumes that we launch every single year. So this is why ingredients are so important. So I talked about differentiation. I talked about brand protection. What is the third element that is very important, especially now in 2022? Supplier resilience. When you are -- when Firmenich is the most integrated -- vertically integrated company in ingredients in our industry, 3 to 4x bigger than our next competitor, which means that we control our own destiny and, at the same time, we have control to our -- on our sourcing, and at the same time favor in-house. So we need to favor perfumery, we favor taste. And this has given extreme security to our customers over the last 2.5 years, where every one of you knows supply chain has been a nightmare. What has Firmenich done? Firmenich maintained an OTIF rate of above 90% for our customers throughout the last 2.5 years and at the same time, didn't force them to reformulate or dilute their formulas, although all our competitors have done so. So it gives you an idea why with us being the most vertically integrated player and really invested in ingredients makes a significant difference and gives us a significant competitive edge over our competitors. Now all of this doesn't mean anything if it doesn't drive outperformance. And at the end of the day, numbers don't lie. And when we talk about performance, this is a company, yes, we are family-owned, but we combine the best of both worlds: the rigor and accountability of publicly quoted companies; and the passion and long-term investment of private companies. And when we talk about performance, we are extremely passionate about performance. Just to give you an idea about performance, we have outperformed our most comparable competitor, Givaudan, in EBITDA margin in 6 out of the last 8 years. So our model works and translate into outperformance in profitability. And also to build on this, and you will hear it from Ilaria and Emmanuel later, over the last 8 consecutive quarters we have outperformed Givaudan in top line growth in Taste & Beyond, and we have outperformed the industry on top line growth in 6 of the last 8 quarters. And at the same time, we have outperformed our industry in top line growth in perfumery over the last 4 quarters. And also, as you know, we are a company that is defined by values. We walk the talk and we lead our industry in ESG. Now just to put this a little bit in numbers. By the end of December, we closed our calendar year -- last calendar year with EUR 4.5 billion in net revenue Over the last 3 calendar years, we grew our business in a CAGR of 5%, mid-single digits solidly with a margin of 20% EBITDA. And as I mentioned, higher margin than Givaudan for 6 out of the last 8 years, and we are a leader in our industry. And we invest more in R&D as a percentage of net revenue than any of our competitors. And this gives us superior growth and superior margin throughout the cycle. We are also a global player. We operate in over 100 markets around the world with 47 manufacturing facilities. And you know that being able to have your manufacturing facilities everywhere in the world gave us agility, gave us nimbleness and gave us the intimacy to be able to service our customers during the pandemic in a very strong way. And you will see here our Sustainalytics rating. Our latest Sustainalytics rating was 7.5. We were ranked 37 around the world out of 15,000 companies. If you want to compare the Sustainalytics rating with Givaudan, for example, their rating is 19, 7.5 versus 19, and this matters for our customers. Now let me dive in a little bit into the businesses so you could understand how we have a competitive advantage and why we can win bigger in these key businesses. When you start with fragrance and ingredients, we are the leading supplier of 4 of the top 5 FMCG companies in the world. At the same time, we are #1 in fine fragrance, #2 in personal, body & home care, and obviously #1 in ingredients. And the ingredients are the backbone, not only of our company, but also of our industry. You met some of our master perfumers and master flavorists. These are the genius that brings creativity, that brings magic to the brands you consume, when you eat your yogurt, when you wash your hands with your soap, when you put your parfum, eau de cologne, this is what they do. They bring this magic touch. And you will hear from my colleagues later, we have over 200 of them. But just to put it in perspective, you have more astronauts in the world than you have perfumers. So it gives you an idea of how refined and sophisticated these matter is. Now moving to Taste & Beyond. Taste & Beyond is another part of the business where we are winning. We are winning, and as I just mentioned, we're outperforming our key competitors. And here also, we are making a significant difference because our business is differentiated. Just to give you an idea, 75% of our ingredients in Taste & Beyond are natural. What is the moment of truth? The zero moment of truth in perfumery, when you go to your supermarket, you want to buy your soap, your shampoo, your perfume, you open it, you smell it. You like the smell, you buy it. It has no impact yet on efficiency. Now this is the zero moment of truth in perfumery. What is the zero moment of truth today in food? You go into the supermarket. Before you taste it and you buy it, you turn the back label and you look at the ingredients. The fact that 75% of our ingredients business is naturals, this is the brief that we received from our customers. It's all about clean label, it's all about naturals, it's all about natural extracts. And it is a business also where we have invested for the long term. What did we do differently than our key competitors? Yes, we operate in savory, we operate in sweet goods, we operate in beverages. And you saw most of the beverage, sweet goods and savory brands in the world, they are flavored by us and also by some of our competitors. But where we lead, we have invested ahead for the categories of the future. You let me mention one of them. Sugar reduction. Suddenly post-COVID, sugar became public enemy #1. People realized your immune system is weak, you have diabetes, you are more vulnerable. And there is a witch hunt against sugar. We have, and you will hear from Sarah and from Emmanuel later, we have the most developed ecosystem in the world for sugar reduction. And that's a category where we lead our industry. Just to put it in perspective, last calendar year, we've removed 1.8 trillion calories from the food that you eat. We've removed 440,000 tons of sugar. It gives you an idea of the leadership that Firmenich has in this space and at the same time, the role we are playing in the diet transformation that is so critical. Another part that I will focus on is plant-based protein. I was mingling with some of you and I saw people extremely passionate, tasting the generation, we call it 7.0 of plant-based burgers that our outstanding chef has prepared, [ Nicola Lumere ]. And people were surprised that this is not meat. We have been investing in plant-based protein for over 7 years, and there is no player in plant-based in the world, global, start-ups, local, that doesn't have Firmenich as a core supplier because we have the capabilities and we have invested ahead in building these capabilities. And Emmanuel, obviously, will expand more on this one, and you will see how we lead in this space. I want to make a few comments on the key markets in the world. The #1 market of Firmenich is the U.S. This is where we have over 2,000 employees. This is a market where we are the #1 in perfumery in the world and ingredients. And this is a market where we are #3 in Taste & Beyond, gaining market share year-over-year. I was in the U.S. reviewing the business with the team last week, and year-over-year we gained market share and outperformed the market. Our second biggest market in the world is China. When you look at China, China also we are outperforming the industry. We are gaining market share. And in China, we are #2 in our industry. When you turn to India, that is our fourth biggest market in the world. And we know how critical are these countries. In India, we are #1 in fragrance and taste. And this is another market where we are beating the competition and outperforming the industry. Now this is old news because this is our first half results, but I want to point you to a few areas here. First, you will see that we managed to grow our top line double digit, grow significantly our profitability in a very competitive market environment, which means that we are gaining market share, beating the competition. But most importantly is that we grew double digit in India and China. These are a critical markets for the future where we have scale, where we have all our manufacturing facilities, a top team that is winning every single day, gaining market share. And even in North America, we grew high single-digit market share in a market that was not growing that much. Most importantly, I want to point you to the categories of the future. We have grown our e-commerce business by 50%, our renewable fragrances by 45%, more than doubled our plant-based protein business and our sugar reduction from a high base, keep growing solidly by 25%. So it gives you the idea about the potential that this company has in the future. And here, I have not talked about combining our capabilities with DSM, where Ivo, Patrick and Emmanuel and Philip will talk later about the synergies and the opportunities to drive more top line growth and accelerate top line growth. Numbers don't lie, and that's why I like numbers. If you look at the last almost 10 years, since 2013 to 2021, we grew our top line on an average by 5.4%, higher than Givaudan, higher than IFF. And we do this because all our investments in science, all our special connection and intimacy and partnership with our customers and innovating ahead for them pays off. If you look on the right hand of the slide, you will see over the last 9 months, we grew double the rate of Givaudan organically. Why did we do this? Because what we have done, our vertical integration enabled us to maintain an OTIF level of over 90%. And at the same time, our customers are shifting us more business because they felt that we were more reliable. Now let's look at the trajectory over the last 10 years. So here, we could see that organic CAGR of 5% mid-single digits -- solid mid-single-digit top line growth, outperforming in an industry that grows more or less in-line with global GDP and at the same time, the innovation that we bring to the market is taking a very positive response from the market. And it gives you an idea that innovation pays out, investment pays out and the strength and the diversification and the resilience of our business has weathered the challenges of times. And the fact that we have designed this business model to win with the winners, globals, regionals, locals and startups, where we could identify the key players and invest with them for the future, have managed to secure the sustainable performance, and I would rather say, outperformance of the industry over the years. Now the backbone of our company is science, and this is a key single competitive advantage for us. You saw that we invest more than any one of our competitors in percentage of our net revenue behind the business. And it's not only the investment. I like the competitive edge of it. And here, I'll take you to the LexisNexis global research outcome. They've run their research, they issued their publication a few months ago. And what came out of it is that Firmenich was the only fragrance and taste company in the world that was selected part of the top 100 companies in the world. No one from our key competitors in taste and fragrance was part of the top 100. And we were extremely proud to be with Googles and the Apple of this world in this top 100 most innovator company list. And what stood out here is the relevance of our investments because it was targeted and it was effective. Because the way they have assessed this is how effective your investment is, how creative this investment or how competitive it is. And because they do this assessment around your patents. Why science is so important for us? We are a proud receptor of a Nobel Prize back in 1939. So it sets the bar so high on us, on our creators, on our R&D scientists because that's where they aspire. And it's not only in 1939, Dave McCallen -- Dave MacMillan, who was a co-receptor of a Nobel Prize last year is also one of the scientists that is intimately involved with Firmenich over the last 12 years. And here in this space, and Sarah will expand more on it, we are industry leaders in fragrance encapsulation, in sugar reduction, in malodor control, in sensory receptor-based technology. And even sensory receptor-based technology was acknowledged by the Bill & Melinda Gates Foundation for the leading work that we have done on malodor control. Now what about digitalization? The world in which we live is being transformed. What we have done as a company, we have always led our industry in digitalization, but we have turbocharged our investment behind digitalization back in 2018. We've set up a partnership with the d-lab at the [indiscernible], where we have young scientists, bright scientists coming to work with us. And at the same time, we are leveraging 50 years of consumer insights. So this is what we have in our digitalization toolbox. We were the first in our industry to launch artificial intelligence perfume and artificial intelligence shampoo, artificial intelligence soap and, obviously, artificial intelligence beef flavor that you might have sampled over lunch. Ilaria will expand on this one later. We were the first in our industry to launch an e-commerce platform back in 2018. We have 250 million today on e-commerce. And we've launched this e-commerce platform in the key markets where it matters, in China, in India, in the U.S., in Europe. And since 2018, going strong. And at the same time, we were the first in our industry to launch a digitally enabled platform to be able to service people who are interested, small customers, medium customers, for perfumery. And Ilaria will have a video on it later. It is called Scentmate. And I encourage you to go on scentmate.com and to see how powerful is this tool, and we are launching this very quickly in China and in the U.S. because of the success that we had with Scentmate in Europe. And Ilaria will talk also about Path2Farm later. And this gives our customers the ability to trace the origins of their ingredients and therefore give them lots of comfort around traceability but, at the same time, around human rights. Now let me move to naturals. Why are naturals important? Well, you know, go back to the back label, go back to clean labels, go back to naturals. Everyone wants to get closer to the source. And this is where Firmenich is also an undisputable leader in our industry. We have in our palette, 480 different botanical varieties. It gives you an idea about the opportunity for creativity in our natural palette. At the same time, we have a sourcing agreement with 250,000 farmers around the world. We've created this platform called Naturals Together back in 2014. You can Google it. It's a model that will give us exclusivity in sourcing. That is important because then you guarantee the sources of supply for you, and at the same time, you give comfort to your customers. Also, we will create our naturals. You will see later, and maybe I think Sarah will expand on it, what we have done with proprietary tools around creativity in natural smell and taste with FIRGood, that is a revolutionary gentle extraction technology for natural ingredients that is proprietary to Firmenich. And also, we have enabled our customers in this space to be more creative. We came with the EcoScent Compass and EcoIngredient Compass. Both of them will be able to manage -- to measure the environmental impact of the fragrance and the ingredients that are in your formulas, which is the level of transparency that consumers expect in today's world. And also, we have partnerships with Jungle on vertical farming, where we could bring different flowers and different taste and flavors, naturals to our customers, where they can [ spin ] more claims and also more storytelling and more creativity. Let me now move to ESG. ESG, we are known to be the leader of the industry in ESG. And we are extremely proud. I mentioned our Sustainalytics rating. When you look at CDP. CDP, there are only 2 companies in the world, L'Oréal and Firmenich, that received AAA 4 years in a row. When you look at EcoVadis, we have a score of 88 over 100, Givaudan will have 68. So it gives you an idea of how committed we are to ESG. Why is it important? Why does it matter? It matters because it's the right thing to do. But also, it matters for our customers because let's not forget that we are the Scope 3 emissions of our customers. So when our customers have core lists, they will look at your ESG credentials. Why? Because we are their Scope 3 emissions. And at the same time, it matters for our people. Because today, in the world of war for talent, we could attract the best talent because the best talent want to work for responsible companies. With this, I will wrap it up. I hope that I managed to convey to you our excitement, our commitment and why Firmenich stands out in our industry. Why Firmenich is the hidden jewel of our industry and why Firmenich is extremely excited about the future potential and partnership with DSM. We have very strong connections with our customers, globals, locals, regionals and start-ups, and this combination with DSM will propel the business to new heights. And at the same time, what we have done on leadership in naturality, leadership in ESG, leadership in science, leadership in creation puts us in a great position to win bigger in the future. I want to thank you for listening to me, and I will hand it over to someone that is smarter, brighter and has a higher IQ than me, our Chief Research Officer of Firmenich, Sarah Reisinger. Sarah, over to you.

Thank you, Gilbert, and good afternoon to everyone. When I joined Firmenich in 2018, I did it for the opportunity to leverage the high-caliber science to positively impact the world. So I can only imagine if you can see how excited I am about the potential of this new opportunity we've been talking about to have an even bigger impact on the world. But today, I'm going to be talking to you about Firmenich. A little background about me. So I got my PhD in microbiology from the University of California, Berkeley. And then I spent most of my career in biotechnology, working in companies such as Ginkgo Bioworks and Amyris. And I'm very excited today to have the opportunity to talk to you about our world-class research and innovation. At Firmenich, we view science as the engine of our differentiation. And today, I'm going to focus the time to introduce you to our R&D strategy and discovery platforms. The differentiation that we bring to our customers is powered by 6 key R&D capabilities. You'll see them on the left-hand portion of this slide. With biotechnology, natural extraction and green chemistry, we provide the tools to deliver unique, sustainable ingredients and products, some of the captives that Gilbert was speaking about. We use chemosensory sciences to decode our senses and emotions. We're endeavoring to truly understand the human experience of taste and smell. We're using material science to develop high-performance technologies and microbiome solutions and leveraging our microbiology and skin biology knowledge to identify unique benefits for hygiene, skin care and microbiome solutions. With analytical science, we have the best-in-class capabilities, which are discovering the hidden treasures in nature and solving the toughest characterization challenges. And we're using data science and AI to change the way we do research, accelerating discovery and augmenting creation. These capabilities underpin our R&D strategy, a 3-pillar strategy to meet the needs of the business today and differentiate our solutions in the market now and in the future. So in the next few minutes, we're going to dive deeper into each of these strategic pillars, providing examples of how Firmenich innovation is generating value to the business. So the first pillar is differentiated creation. Differentiated creation is all about delivering performance, performance by developing technologies, ingredients and tools for our creators. Here, I'm going to talk about 4 examples of innovation that highlight the breadth of the different innovations we're delivering in this pillar. The first is models for creation. So Gilbert spoke about moments of truth at the grocery store when you smell some cap of the shampoo. But actually, there's many key moments of truth for products and not all of them happen in a store. It's about a time and a place when consumers make purchase decisions. So for shampoo, that actually happens also not just in a store, but also when you're in the shower in something called bloom. And for a fine fragrance what's happening when you're walking like the silhouette of this woman, the trail of the fragrance behind you. What we did was we used computational fluid dynamics to predict the performance of ingredients at these key moments of truth, which provided tools to our creator to win more with customers. We're using AI in receptor biology, and it's changing the way we're discovering new ingredients, both in terms of accelerating our discoveries and opening up new spaces that we would not have come up without these tools. We're developing a technology to recreate meat-like texture in plant-based foods, as some of you may have tasted in the panel back there. And then we're leveraging our receptor biology and fragrance creation to deliver solutions for malodor. And now I'm going to go deeper and to a few examples to help you understand a bit more about what we do. So Firmenich has the industry-leading receptor biology platform for both taste and smell. And here, in this example, we're using our technologies to deliver superior performance in malodor control. So when you walk into a room and you sell something bad, hopefully, not right now, you've seen all of our beautiful perfumes. But when you walk into a room and when you smell something bad, what is happening is that malodor molecule is binding to a receptor in your nose, activating that receptor, which is resulting in a perception of malodor. Now with our technology, we're actually able to prevent that perception. In a project we did with the Bill & Melinda Gates Foundation, our technology delivered a 90% reduction in the perception of latrine malodor. It also performs significantly better than a non-malodor control fragrance solution. Now this is the differentiation that we're targeting with our innovation products, right? Game-changing. You don't smell bathroom. That's amazing. And this receptor-based platform also has many applications for our business well beyond sanitation to deliver perceivable benefit to consumers. So changing to a Taste & Beyond application to also highlight our differentiated creation for our toolbox for plant-based proteins. So plant-based proteins need to deliver a superior eating experience for people to want to have them repeatedly. And there are 2 challenges that I'm going to talk about today: both delivering the aroma, the smell at the right time; and recreating the meat juiciness with vegetable fat. And our Dynarome technology addresses these 2 major moments of truth. So the first moment of truth is all about when you want to smell like it's cooking. When you cook a beef burger, you start smelling that it's cooked during the cooking process on the griller and your stovetop. When you take a plant-based burger out of your refrigerator or freezer, you don't want it to smell cooked before it's cooked. You want it to smell cooked at the right time. And that is what our Dynarome TR technology does. It actually waits to release that aroma into the temperature of application of heat. And then the second technology, the second moment truth is about eating, right? Even if it smells great, if it doesn't taste good, if it's not the right experience, you're not going to buy it again. And so this is, again, where our technology, the Dynarome SR comes into play because it's simulating the juiciness of beef fat. Vegetable fat is great in many ways. However, its melting temperature is very narrow. And so using our Dynarome technology, we more closely mimic that melting profile of beef fat. So together, the Dynarome SR and TR technology allow you to recreate authentic consumer experience in a plant-based burger. All right. So that was all about differentiated creation, that first pillar. The second pillar, sustainability. As you heard from Gilbert, Firmenich has an impressive ESG record that I personally am very proud of. And we're driven to have a positive impact on the world. And R&D is focused to deliver solutions needed for the planet and, frankly, all of our shared futures. Three examples of research we're doing in this pillar include discovering new ingredients using sustainable processes leveraging cutting-edge natural extraction technologies such as FIRGood that Gilbert spoke of, biotechnology and green chemistry. We're also converting our existing palette, leveraging renewable and upcycled materials. And the final example is all about delivering long-lasting performance in a sustainable way. So let's go deeper now into long-lasting performance and talk about laundry, which is a major important consumer market. And consumers want long and lasting performance. They want reassurance of clean and fresh at key moments of truth in the laundry cycle, wet, just dry and over time. When you take your wet clothes out of the washer, you may not even realize it, but you smell it before you dry it. And when you take your towels out of the closet or you change your sheets days or even weeks later, you want that reassurance that they're clean. However, the needs of consumers and our customers are evolving, and they still want that long-lasting performance, but along with that, sustainability. So at Firmenich, we've developed a complementary suite of technologies to deliver true performance for long lasting over the entire laundry cycle. First, profragrances, which the fragrance ingredient is released upon a trigger. And second, we've developed differentiated biodegradable encapsulation technology that delivers that long-lasting performance. We call it PopScent Eco, and Ilaria will speak about it in the Perfumery & Ingredients talk. So our new eco-friendly encapsulation technology has been really praised by key customers for delivering both that performance and sustainability that's wanted. A second example of Firmenich leading in sustainability is in biotechnology. This is a critical field for the future and one that I personally have end-to-end expertise in. Firmenich was a pioneer in biotechnology, investing over 20 years ago. In 2014, when Firmenich launched CLEARWOOD, a fragrance reminiscent of patchouli, it reshaped the industry. It showed the power and potential of biotechnology to deliver sustainable new perfumery ingredients. Since then, we've launched several additional ingredients, including AMBROX SUPER and Z11, which are 2 iconic ambery perfume notes as well as, most recently, DREAMWOOD, a sandalwood-like note. All are 100% biorenewable. And the successful launch of these ingredients has further secured our leadership in biotechnology in the field. Firmenich will continue to leverage this platform to deliver sustainable and differentiated ingredients in the future. All right. Our final pillar of the strategy is about wellness. And in the current world context, in a post -- a stressful post-COVID environment, many of us, I know myself included, is much more focused on not just the physical but also the mental well-being. Here, I'm going to highlight 4 impactful innovations as examples of our work in this pillar. First, we're leveraging Firmenich's proprietary taste receptor platform to develop new sweet enhancers and maskers for the diet transformation that Emmanuel will speak about. We're identifying secondary benefits of our perfumery ingredients, such as antibacterial properties for use in hygiene. We're also developing tangible links between fragrance and emotional benefits and then discovering ingredients with unique microbiome and cosmetic benefits. In a fitting example to -- of our efforts to uncover secondary benefits of our perfumery ingredients, I want to dive deeper into DREAMWOOD, the biotech ingredient I spoke about earlier. And of course, you can go look at the booth and smell it and see it in fragrances for those of you in the room today. So clinical studies showed DREAMWOOD has a significantly positive effect on skin repair over 48 hours. And also, it has a soothing effect on skin, reducing redness. This is the first ingredient in the Firmenich palette that has demonstrated skin benefits and highlights the potential for multifunctionality. We're continuing to build out our platform here with a focus on delivering proprietary active benefits for perfumery, and we're really excited about the potential with DSM's active benefits portfolio as well. So I trust the examples I've provided to you today helps you visualize the tremendous power of our discovery platform to deliver breakthrough innovation for our business and our customers. We live in a rapidly evolving environment, and our broad capabilities and best-in-class technologies allow us to remain -- allow us to answer to our business' most critical needs. But rapid evolution means we also must remain agile and anticipate future market opportunities. And to that end, we have built a robust and balanced pipeline to ensure not only delivery today but also sustained differentiation in the future. Thank you all so much for the opportunity to share about our strategy for delivering value-generating research and innovation at Firmenich. And I now have the pleasure to introduce Ilaria Resta who will be speaking to you about Firmenich Perfumery & Ingredients business.

Thank you Sarah. Hello, everybody. I have been the President for this amazing division at Firmenich, the Perfumery division, for over the last 2 years. And prior to that, I spent my 23 years career at Procter & Gamble leading many business units like laundry detergents, home cleaners, beauty care in the U.S. and in Europe. And of course, I was so excited to join Firmenich because I experienced firsthand from the client side, the importance of fragrance in driving a choice at the first moment of truth and in driving delight. Actually, it's proven that investing in fragrance has a better return than investing in media. So it's a good insight to bring up. And I'm sure that this resonates with all of you because 67% of consumers before going to the cashiers and pay, they smell the product. In the next 15 minutes, I will take you through the business model of our Ingredients & Perfumery business that we combine because it's behind this interconnection that we generate value for our customers. We are the core leader and the fastest-growing player in the industry. Our sustainable competitive advantage is rooted in ingredients, innovation and the talent of our perfumers. On ingredient, Gilbert used a very nice analogy. Ingredients are like paint colors for artists. And this is truly the case. We offer such a broad variety of ingredients to our perfumery in terms of breadth of [ different countries ], price tier as well as quality. And this is a big asset in the hands of our consumers. And out of this, we produce every year and sell 52,000 fragrances. Innovation has been at length discussed by Sarah, is our core competence and area of superiority. We are born from science. We won a Nobel Prize, and we continue investing in research on upstream research as well as in the discovery of new molecules, new ingredients but also new extraction methods that can change the profile, olfactory profiles of ingredients. To the science of innovation we combined the art of our creations, and this is where our amazing perfumers come in the way. And you have on your table pictures of some of our 100 perfumers with some anecdote quotes. And today, you will have a chance to exchange with Marie and Haresh and maybe they will reveal some of their secrets to you. Now we are 100% obsessed on consumer understanding, but also on the consumer foresight and the analysis of future megatrend. This is fundamental, especially in a moment of big change like the one that we are living today. There are new trends that are shaping the industry transformation. We all know them. The rise of sustainability that implies more request on traceability of ingredients, on transparency, even on certification, in some cases, a reformulation if the formula is not compliant. Then there is a big fragmentation of the market because of the indie brands and small companies coming in, together with the need of more personalization from our consumers. Last month, not least, there is an encouraging trend for us in the industry, which is the rise of demand on active benefits. Consumers love smelling well, but what they want is active benefits associated to their fragrance. This shift brings new demands from our clients. But for us, it's a great opportunity because we are already well positioned to answer to all these new trends. We have an end-to-end approach in our creation and development process. And it's really all interconnected, one doesn't exist without the other. And we start from our gold mine, which is our breadth of assets of data. As Gilbert mentioned, that we record 50 years of consumer data. What is impressive is that this consumer data are really a wide spectrum covering each consumer group, each product in each region so we can predict what is the likeability of a certain perfume in any region of the world without even developing a perfume. We use this data to produce without human touch in artificial intelligence fragrances. But at the same time, this is a wealth of asset, a gold mine for our clients. None of them can see the world to the broad spectrum that we do from food all the way to cleaning products. And ingredient and technologies are in the hands of our perfumers to develop their creation. We look at the perfumers, like I do when I joined Firmenich, as these amazing creators. And they are, but they're also scientists. They can memorize thousands of ingredients. They know exactly the profile of the ingredients in order to deliver a certain performance. The brief they received from clients sometime is all about, "I want people to enter in the house, a smell and hygiene that is natural." They translate this type of brief in superior creation. And to do so, they need also to master technology and ingredients. In this moment of industry change, our position in ingredients is a critical competitive advantage. We are the leader of aroma ingredients. And not only we cover all the spectrum of ingredients from green to biotech, to naturals, but also we are the most vertically integrated, which is in moments like this, an asset of survival and competitive advantage for our clients. We supplied in the worst moment of crisis of raw material shortage every single client and none of them reformulated. This is a value that goes beyond the creation of only fragrances. That's why we believe ingredients and perfumery combined are an asset, and we need to protect this connection. On naturals -- I mean, Sarah covered biotech in a great way. On naturals, it's very important for you to know that we also nurtured an Innovation and Creation Center in Grasse, where we produce more than 500 metric tonnes of natural, from 180 families of biomass. This is huge, so big that very often we host the clients that come to co-design with us even new extraction methods or they blend different ingredients for their creations, they come and pick up flowers with us to use these flowers from their creation. So it's really, really -- our strategic partnership with clients goes all the way the co-creation, not only of the olfactive preference but also the ingredient composition of their formula. There is a fun fact that Gilbert shared with you about how many astronauts there are compared to perfumers, which tells you how rare are the talents of perfumers in this industry and which tells you how much is important for a company like Firmenich to attract, train and retain the best talents. We are lucky because we attract very strongly the talents in the industry because we have the best palette. But we also have the best tools of creation. Consumers use -- are very, very well digitally advanced, they use working creations, stations on iPads to simulate the variation of their formula without even compounding any oil, which is quite magic, how much is in the hand of these creators. But here they are the best performing in the industry and recognized as the best one by the external institutions. For example, The Fragrance Foundation in the U.S. awarded 4 perfumers in Firmenich out of 7 worldwide with the Lifetime Achiever award. Our mission is to lead the industry transformation to positive perfumery. And I'm very passionate about that. I call this strategy positive perfumery because I truly believe perfumers can -- perfumes can give a positive impact to people, to planet and the broader community of stakeholders we serve. We are accelerating the transformation in key 3 areas. On innovation, where we focus on performance and active benefits, and Sarah shared with you the example of PopScent Eco, which is an important innovation that combines the performance of encapsulation with a sustainability profile. And more and more, we will answer briefs that are not only performance, but performance and sustainability will go in hand in hand. And this is a challenge from an innovation and creation standpoint because it's very difficult to find a good balance between the two. But I'm very glad that on sustainability, we already reached the very high level of 95% of our ingredients to be biodegradable. Our ambitious target is 99%, but we're getting there. Digital transformation for us is an important strategic asset and is an area of big investment over the last few years, even before digital was a fancy word for all of us. Not only we are investing in our tools, all the way end to end from a consumer listening studies, recording the consumer preferences. We are also continuing using digital in the informed creation process with our perfumers and creative team all the way to sell it to customers and beyond because we keep testing fragrances even after we have launched in the market. Why? Because we need to keep the bar high and give no temptation to our clients to brief anybody back. So we have an obligation to continue testing. That's why having a wealth of data is an important asset and the gold mine for the future. On digital, we are very excited because we partner with external institutions. Gilbert mentioned the partnership with the EPFL University in Lausanne, where we are advancing our research on artificial intelligence. But at the same time, we are partnering in China, for example, with retailers such as Alibaba or [ Hermes ] in order to be on the forefront of the discovery of the usage of fragrances beyond the traditional application. Remember, and Dimitris gave us an example earlier at lunch. There are places where you enter, you smell a scent, and you are induced to buy. There are university using scents to induce concentration. So fragrances are well beyond the personal use for pleasure. They are becoming more and more an asset of well-being. We have -- our innovation strategy is rooted in 3 innovation platform: superior performance, active benefits and clean design. On the superior performance, to complement all the things that Sarah shared, we are putting a lot of effort on what we call the pro fragrances. These are molecules that depositor release gradually at different stages of development of the product. I'll give you an example. On laundry detergent, when you open the drum and the clothes is wet, the performance profile of the fragrance that needs to be specifically designed in a different way than when you iron, or you fold the clothes or you wear the clothes. This type of science comes from expertise and, again, data. On active benefits, I couldn't be more happy to stand under the log of these 2 companies because it was a dream come true to have -- and would be a dream come true to have a portfolio of active benefits that complement the Firmenich one and address one of the biggest needs of consumers. They want more than hedonics. They want hedonics then perform with real active benefit, especially in skin care. And this is where I see the [ SM ] portfolio, particularly strong. On clean design, not only we have set a very ambitious target in terms of ESG. But by 2030, we are committed to deliver 99% of our ingredients to be biodegradable, 100% of our fragrance renewable and to reduce 25% of our carbon footprint. Together with these ambitious goals, we have developed a set of tools that you see on the right-hand side of the chart in order to facilitate also our clients in the journey of sustainability. One example is the EcoScent Compass, which is basically a digital diagnostic tool that assess the DNA, green DNA of the fragrances we sell to our clients with a 360-degree approach. Not only we look at sustainability, biodegradable score, sourcing, but we go all the way to Path2Farm, where are they sourced? Are the firms employing women at the same level of salary of men? And they look at the whole chain also of responsible sourcing. This is a huge tool to maintain [indiscernible] do it. Our clients are prudent. But in the hands of clients, it translates into a tool to develop claims and to sell more and address the needs of clients who want to know more, who want to know what's behind the label of a brand. And in fact, we are submerged by requests on the EcoScent Compass. Another fantastic example for [ Firmenich ] is FIRGood, which is the pioneering extraction method solvent-free, so quite sustainable. It also allows to extract the sense of silent flowers, flowers that otherwise, we would never smell. Now if we look at the -- our innovation priority and agenda, I will not go through all of them because we discussed. Let me just point out the rising importance of emotional well-being, I think I went further, sorry, I'll go to [ Scentmate ]. I won't repeat what I already said. But going back to digital, there is one important digitally native business model that we have launched a year ago. And I'm incredibly proud of the progress so far and better showing a video than any words. [Presentation]

This is not a digital platform. This is a new business model powered by digital, and that's how we are approaching it, to look at serving new clients in a completely different way, but also developing new products and services that these type of clients, Indie brands, the small companies, the start-up do not have access to. They're basically outsourcing lots of work on marketing, the consumer trends, naming certification to us. And this is becoming a new stream of revenues for us. I could speak forever, but I already reached time so I will accelerate. Very proud of the financial performance over the last 4 years. We kept on growing also in difficult moments for the industry. And this is because, as Gilbert pointed, we are winning with the winners. We put our bets on the winning customers. We dial up the relationship strategically with winning customers. At the same time, we balance the portfolio by region to ensure we're present in the fastest-growing region as well. If I need to leave you with a final chart, I leave you with a very positive message, that I believe the future is incredibly bright for Perfumery & Ingredients. Why? Because we are uniquely positioned to win ahead of the market because we excel exactly in the capabilities that are needed by consumers today and tomorrow, and we are already advanced on all of them: sustainability, digital and performance. And in closure, I couldn't be happier to having seen this chart from DSM because it's a fantastic complement to the portfolio of ingredients and actives that we have at Firmenich. So we look forward to unleash even bigger potential of this partnership together. And with that, I will pass it on to Emmanuel Butstraen, President of Taste & Beyond.

Good afternoon, everyone. I'm the last presentation before the Q&A. So my target is really to keep the maximum attention for, I would say, the dream because I think both Gilbert, Dimitri, Geraldine were speaking about dream is coming through. And it's really what it is, the combination of those 2 nice logos coming together. And I think it's really a pleasure and more than a pleasure, an honor, to be in front of you today and to present for the first time ever, our Taste & Beyond businesses. I'm Emmanuel Butstraen. I joined Firmenich in 2018. And after several years in many companies, I would say, starting BASF for 17 years in animal nutrition, crop protection and biotechnology, but also at [indiscernible] Personal Care & Aroma business. So I'm very, very proud to have joined Firmenich and to lead for the last 3 years, the Taste & Beyond business, moving it from flavors to Beyond. And the Beyond side, I would say, the Beyond development is really part of the transformation. And it's exactly what I would like to spend some time with you to see how we move into the Beyond side, thanks to also our purpose, diet transformation that you have seen at the [ booth ], but also thanks to our customers, which [ accompany ] us in this transformation. So let me start with what we are, who we are, the heart of Firmenich in the viewpoint of our customers. First, I think Gilbert mentioned his passion about [ performance ] before. So I'm very happy to, I would say, yes, I need to move this slide. Is that right? Yes. I'm happy to -- I would say, to share with you and he said it already 2 times. So I will repeat for the third time and maybe for a fourth time [indiscernible] that we outperformed our peers 6 out of the last 8 quarters, which gives a lot of pride to our team. As you know, we are a historical player and a historical leader of the industry, understanding that from a pure flavor side in the Taste & Beyond world, we are #2. So the last 3 years, as I said before, we extended capabilities, technologies organically, M&A with innovation on the Beyond side with a great success. And I would say this merger between Firmenich and DSM is really the best we can have to go beyond the Beyond, means the far beyond. So for that standpoint, I'm -- as I said, I'm thrilled to be in front of you today. So now if we would summarize how our customer would see us. So first of all, we have the base. And the base is this customer intimacy, this long history of connecting with customers. We are part of their history. We are part of the brand. We are partnering with them to win on the marketplace. And the brand which, at the end of the day, bring the best taste. And as you know the taste is the catalyst of a branded success. And being a partner of our customers, I think it's really great. You can see, in fact, in the booth, in the entrance, everywhere, how many brands we are supporting every day. And Gilbert spoke about 4 billion consumers taking our products every day. It is really what we are. And we are very proud about this base. Second, foundation, Sarah presented our Science Foundation, focus -- having innovation -- having -- sorry, having the foundation and science is one thing. But making money, developing innovation and deploying innovation in the market is really great and its high part of our growth as we are. The third piece is, after the foundation and the base, is the engine. The engine is our chefs, our flavorists, consumer insight, our labs, which are there to really make a difference, in fact, whenever a brief is submitted to us, more than 50,000 has submitted to us every year. And this machine is very important to be efficient and to work together with our customer to deliver success. Fourth, as an industry leader in sustainability, and I bet you, each of the top management meeting that we have, that we used to have, are speaking about sustainability, which is very high in agenda. And it's an honor for me to have joined Firmenich as the leader of the industry in that way. And it's a very good base for us to -- at the end of the day, develop what we call our purpose, the diet transformation. This diet transformation paving new ways, engaging people, engaging our stakeholders, our customers, to bring together this diet transformation a reality. So what is our diet transformation? Diet transformation is, first of all, fully connected with our ESG targets, ESG commitment with people, nature and climate. We have 3 fundamental pillars. Not very different from what, by the way, Geraldine -- not Geraldine, Ilaria was presenting. First of all, 75% our products are natural. And we are there to accelerate the natural transformation of all the ingredients and to move them all over the world. We have, I would say, in this natural transformation, 3 important priorities: first of all, to have the best procurement standard; second, to build those tens of value chain, traceable value chain with the farmers to be able to, I would say, bring this traceability to our customers; and last, it's about monitoring the impact, the social impact, the environmental impact of all the ingredients that we're using. This was the first pillar, transform into natural. Second pillar is about better nutrition. Better nutrition, as you know, the world is suffering from poor nutrition, demand from healthier products, less sugar, less fat, less salt, less alcohol, better gut microbiome, a better gut microbiome which will boost your immunity, which will enhance your well-being. So this is what we are behind this pillar. And in fact, by the way, the new merger, DSM-Firmenich, will really make us bring a new step in that direction moving forward. Last, the plant-based revolution, the new, the young, the millennials and plenty of new consumers in the world moving into the flexitarian journey. This is a revolution. It is a revolution because we don't only at the moment try to copy some of the burgers, the nuggets that we have in the market through a plant-based product. But there is a lot of non-invented type of product that will come moving forward. And this is why we are so passionate about this revolution because it will make a real difference for the next decades to come. So this purpose is fully, as I said, aligned with our ESG commitment is fully embarking our people, our science, our customer, but also many stakeholders in the world to really walk the talk in terms of sustainability moving forward. And I wanted to share that with you because it's really a big pride of all the Firmenich team in that direction. So consumer obsessed. We are 100% consumer obsessed. And you will not be surprised because we are speaking about this 50 years' experience on consumer insight because this is driving, I would say, where we invest, our innovation, our understanding of all the local markets, which are so different in terms of consumer perception. And this machine is there to, I would say, guide us moving forward. And you will not be surprised by these trends, like, for example, the clean label, the food-minus, which are absolutely common for all of you. And also new one coming, especially after COVID, like supply chain disruption, which I would say we are taking in account to adjust our strategy on a regular basis. Strategy. Strategy, first of all, we delivered growth significantly over the last 8 quarters, as I was mentioning before. We are driven by the diet transformation, and we have 3 fundamental priorities or pillars in this space. First of all, the fortification of our flavor foundation. Remember, #2 position in the flavor side. And we are there to do 3 things. First of all, from global capabilities to local -- strong local businesses, teams, labs, creation labs to, I would say, answer to the local brands. And you all know, especially in the food sector that there is a deployment -- a development, a strong development of a lot of local brands and we are there to serve them. Second, innovation. There is a slide just after about it so I will not speak too much but being the best-in-class in innovation on our science foundation, Third, the expansion into natural, the transforming into natural that I was explaining just before. Those 3 will really strengthen our flavor powerhouse. But I would say the second part of the strategy, which is moving beyond flavor priorities, is really the, I would say, the heart and the core of our strategy. Moving beyond on this EUR 50 billion, EUR 60 billion market composed of many food ingredients which, I would say, combined together with our flavors in a nice way to answer all the briefs will really make a difference. And in this EUR 50 million, EUR 60 billion market, we need to be focused because we can be lost with so many opportunities. Focus on sugar reduction. We build an ecosystem which is the #1 in the world. Moving from flavors, modulation, extending into sweeteners and so many different technologies, which at the end of the day make a real difference and is driving the growth of our division. Second, as I said before, and Sarah, Gilbert had mentioned that several times, the plant-based. The plant-based is also building this ecosystem. Now you have to understand that DSM will bring on the top of our flavors, our maskers, our juiciness technologies, our textures, technologies that we have developed, so many additional building blocks to really build something together, which will answer to this revolution, which is in place. Last, it's about nutrition. It was emerging for us. And one more time, DSM-Firmenich together, this nutrition powerhouse from our taste and from basically all the technologies, the vitamins, all the different types of technology bought by DSM, put it together to really create a dreamy and really an avenue of growth moving forward. So that's in a nutshell what is our strategy. For sure, we don't forget that we need M&A to expand our capabilities. We need services also and competitiveness to serve our customer, and digital is also a big part of our transformation. Strategy was just what I've just mentioned before. I would like to give you 2 different slides, 1 about, I would say, innovation; 1 is about digital which are really key in the transformation moving forward. The first one, as you said, foundation on science. Our engine is the innovation. And I'm very, I would say, proud to say that we have been very successful based on the research capabilities focused on the innovation program, 7 innovation program, tonalities, but more importantly, also the deployment to our customers, deployment, which I would say, has been the time from development to deploy has been divided by 2. And we have been able to triple the delivery of innovation in the last 3 years, thanks to the end-to-end connection that we have with Sarah and the team with a very, very nice ecosystem in deploying innovation. Second, digital. I don't want to spend too much time on that, but it's really the heart, how we make our labs more efficient, how we can create from enhanced creation to informed creation. And I will spend more time in the future with you to explain what it means, really, this revolution moving forward. But at the end of the day, we'll drive the efficiency which answer to the briefs quicker, better, faster and answer to the demand of innovation that our customers are asking for. Last, digital e-commerce is also a fundamental pillar with EUR 100 million of our revenue in that space. Performance. Performance is, as I said, a key of our DNA, we overachieved competition. We maintain also profitability between 20% and 22% of EBITDA. And the Beyond is the growth machine, and the combination between the flavors and Beyond in a profitable model is the heart of this journey. And I have, as I said, full confidence that the new merger will continue to deliver this performance. Last, to conclude, leading growth momentum in going beyond based on our #2 position of flavor is really something which is a machine of growth moving forward. Don't forget this customer intimacy, the science, innovation, the digitalization and sustainability, which really make a difference into the marketplace. We had, I would say, the ambition to go beyond with DSM is going far beyond our expectation. And from that standpoint, it's really a dream for all of us. And I would like just to finish this presentation to do 2 things, thanks for the confidence of our customers over the last 3 or 4 years to move into their journey, trust in the diet transformation, but also, my last thanks will be for all the Taste & Beyond colleagues, which went into this transformation journey with a lot of energy and with a lot of change mindset to be able to move forward. And now I'm looking forward to integrate the -- with my new role, all the 2 pieces together. So thank you very much for your attention before Gilbert is coming on stage for the Q&A. Thank you very much.

Thank you, Emmanuel. Fantastic. So we have the flowers. Can I ask my colleagues to join me on stage, Ilaria, Sarah, Benoit? Fantastic.

So I'll take the questions. I hope that over the last 1.5 hours or 2 hours, we managed to convey our passion, our excitement, and at the same time, share with you how we managed to not miss a turn, transform Firmenich, embrace the leadership in digitalization, in naturality, in ESG and at the same time, position our company for the future with, at the heart, science and an obsession of servicing our customers. So who will go first? And we will focus this Q&A on Firmenich, and we will have later a Q&A with Geraldine and Dimitri to talk about DSM-Firmenich. And we'll spend 15 minutes on this Q&A. Can we give the mic to the gentleman here with the blue shirt and red tie on this table, please? Yes. Can you please mention your name and the company before asking your question?

Gunther Zechmann from Bernstein Research. Can I just pick you up on the comment you made on the Perfume & Ingredients business? You spoke about pioneering pricing dynamics. Can you explain that more, please? How will you price your products compared to how you used to price them in the past?

Yes. I don't think I've said pioneering pricing. I said what we are pioneering is creation. So obviously, pricing is pricing, and where you have the opportunity when you have your captives, your captives is -- you've invested [ behind ] these captives for years and maybe decades before coming with these new molecules.

I'm looking at Slide 42. It's says, "pioneering dynamic pricing."

Is it on Scentmate?

Is it on Scentmate?

Yes, it is.

That's Scentmate. Okay. So this comes to you, Ilaria.

So that's an excellent question. So on Scentmate that we are using a dynamic pricing to adjust to briefs that are done online. So basically, we received a brief in terms of, I don't know, percentage of alcohol, percentage of fragrance they want, the type of application. And then we have an algorithm that is connected to the availability of raw materials. So it's a constant adjustment of prices on the go. This level of adjustment is not possible outside of an ecosystem like digital because we normally have contractual agreements from year-on-year or every 6 months. So with Scentmate, we have a chance to offer the price just in time given the context of that moment and the application they want.

I think what is interesting with Scentmate, it's an amazing model. First, because it's cash in advance. Second, it enables us to reach deeper into customers that usually we don't service because it's smaller customers. And at the same time, we managed to service them with pace. So within 48 hours, they get their samples. And within 5 days, 5 to 7 days, they get their final products. And at the same time, this is a business of higher margins because it's normally smaller quantities that we normally don't service as a company.

And because these are small entrepreneur, in the brief we ask them, how much are you willing to pay? Because depending on what they are ready to pay, we can adjust the quality of ingredients, the type of formulation. So we leave it open ended on the client side.

How much of your business would be via Scentmate with this pricing algorithm versus the traditional approach, please?

Well, we started Scentmate just 10 months ago. So -- and we serve only Europe at this stage. But all the prices that Scentmate manages are done with this tool.

And we're positively surprised with Scentmate. Obviously, Scentmate, we pioneered our industry in this space. Nobody has ever tried this model. We are extremely positively surprised with the reaction. And actually, we have a long queue of customers waiting on the checklist to be accepted, to be considered as customers. And because of the learning that we have picked up over the last 10 months, we've decided to roll out Scentmate to the U.S. and to China, which is in the process today, mainly because of the exciting potential that we have found out of Scentmate. And this is a business that has potential. It enables us to reach deeper and faster in a fragmented market because we are operating in a market that will be more and more fragmented as we go. And as you know, there is lots of best bulk. People want craft, want best bulk, want specific fragrances. And now everyone could go on this platform and purchase their scent. Next, can we get the mic here to the gentleman on the table, and then I'll come to you.

Andrew Stott from UBS. Not dissimilar theme, actually, just listening to some of the pricing comments. But thinking more broadly about inflation. Can you talk us through the levers that you have available to deal with inflation? I guess you learned a lot of lessons in 2011, '12, not all of you, but as a company. So maybe just share that. And then the second question was a bit separate from that. Can you let us into sort of migration of customers over the years? So what does your profile look like today versus, say, 5 years ago, the mix between multinational and local and regional.

Great. Look, this is a very good question. Let me start with the second one. If you look at our profile today, our business is 50-50 split between developing markets and developed markets, which is extremely encouraging. And our business, so just for example, if you look at the Taste & Beyond business, 2/3 of our business is more local and regional customers versus 1/3 being global. And so this dynamic has shifted considerably. And that's why I was mentioning about this model that we have cracked at Firmenich, where we are extremely proud to service global, local regions and start-ups, but also winning with the winners and we reallocate our resources accordingly. Now to go to your first question about inflation. Inflation is a reality. I think I was the first one where, over a year ago, I started talking about inflation is creeping up. People were like, "Oh, yes, we don't really see it." It's a reality. And inflation is not industry-related, sector-related. That's the reality that we are dealing with. And it's not only driven by raw material, you have cost inflation, energy inflation. And it's hitting the pocket of everyone. Now our industry have proved to be resilient with inflation, and we've learned it through the years. And at the same time, we -- because we are a small component of our customers, of the cost of the products. Let me give you an example. If you look at Fine Fragrance, we represent -- fragrance represent 5% of the cost. If you go to Consumer Fragrance, all the Taste & Beyond business, we represent 1% of the cost. So it is not significant for our customers. Now, obviously, like every other company in the world, we are increasing our prices to offset the cost of raw material. Now in our industry, as you know, covering our industry, there is a lag effect. But our philosophy on pricing has always been the following: price up like a rocket and price down like a feather. So yes, there is a lag effect at the beginning, but there is a benefit at the end, and that will compensate. The question for the gentleman here on the back, please.

Can you hear me? Chetan from JPMorgan. I had 3 questions. First one on...

Sir, where are you? I can't see you. Can you stand up? Okay. Perfect. Elegantly dressed, with a nice tie, JPMorgan.

Just on vertical integration into raw materials, can you give us any quantification of how you compare versus your closest peers in terms of percentage of raw materials coming from your own captive sources or something to just help us understand that advantage? The second question was in one of the slides, you talked about 480-plus botanical extracts. And I think there was a comment around exclusivity in sourcing. Can you maybe elaborate further on that topic? And in the bio -- just bottleneck to extract market, how do you see that from a supply resiliency in the future? Because it may depend on the availability of the crops, and that is weather-sensitive. Does that change the working capital requirement for the company going forward?

I could have paid you to ask me these questions. Thank you. Look, let me deal with the first one. On raw material, why we have more resilience than our key competitors, because as I tried to mention when I started my presentation, we are the most vertically integrated player in the industry. And we are 3 to 4x bigger than our next competitor in ingredients. And this gives us resilience. As a company, and actually I spent some time with my colleagues on this one over the last 4, 5 years. We've learned from incidents that happens in our industry back in 2018. Back in 2018, there were fires in 3 of our key suppliers. BASF is one of them, [indiscernible] is one of them, and DRT is one of them. And our biggest learning, and that was our aha moment is that this has disrupted significantly the supply chain and most of the people in the industry had to go through a reformulation. We've learned 3 things. First, we need to be more vertically integrated. And we've delivered against this one. We've acquired DRT. We have rethought our partnership with key manufacturers, and I'll share with you later what we have done differently on the botanical side. The second learning is to diversify our sourcing. So one of the key principles is that we will not have a sole supplier in any country, and we will have dual supplier or 3 suppliers of every ingredient in every continent. So this diversification of sourcing also protected us. And the third one is that we have decided to increase our buffer stock on some of the specific raw material ingredients that are critical for the industry. And we've taken an action of every 1 of these 3 areas. This is why we were more resilient than our key competitors during the last crisis. And that's why, as you heard from Emmanuel and Ilaria, we didn't force any of our customers to reformulate. And what we went through over the last 2.5 years as an industry was really -- and everyone else in the world with the disruption of raw material, et cetera. So for our customers, for a supplier to not come to them and to say, reformulate during this crisis with all the headaches they had. So just to give you an idea, and you know this, most of our customers have problems to find cattle box, caps, bottles, plastic caps, et cetera. So they have enough hassle. When they feel relieved that at least they have a supplier who have thought about these things, anticipated them and is protecting them with being the most vertically integrated. So that's one initiative where we stand out from our key competitors. Now let's go back to the botanicals. What we have done back in 2014, we've created something that is Naturals Together. And Naturals Together is proprietary to Firmenich, and you could Google and you could find it on our website and have enough information on Naturals Together. What have we done differently with Naturals Together? Naturals Together connects us directly with 250,000 farmers in the world. No one else in the industry has something similar. And what we have done with these farmers and corporate teams all over the world, we have done a fit-for-purpose agreements. But all of them gives Firmenich a competitive advantage on sourcing. So for example, so we have joint ventures where we have majority. We have joint ventures where we have minority. And at the same time, we have supply exclusivity agreements on some of these raw materials, which gives us a significant competitive advantage and, at the same time, guarantees the sourcing of these botanicals, that enables us to have this very rich natural palette and at the same time, continue to service our customers. Thank you. Can we give the mic to the gentleman here in the back that has been raising his hand for some time?

Sebastian Bray of Berenberg Bank. I just have 3 quick and quite quantitative questions. The first is category exposure in flavors. Can you talk about how much of your portfolio is sweet, savory, bakery related to plant-based? I appreciate I probably won't get a total answer to that question, but any tidbits that you can give me are welcome. Second question, compensation of sales team. To what extent does the sales team compensation at your organization depend on the, let's say, individual performance of business group versus the group as a whole? And finally, last one, how -- what level is staff turnover at the group at the moment?

Sebastian, thank you for your question. So your last question is about attrition, so what is the turnover in the company. Actually, we were having this review last week because we had our [ exec ] in the U.S. where we did a deep dive on the business and reviewed our business globally. Our attrition rate is around 10% to 11% now globally, which is acceptable in the world of great resignation in which we live. It's harder for us in the manufacturing facilities than on the creation side of the business. Now I will leave it to Emmanuel to comment on the remuneration of the team in Taste & Beyond. The way -- and let me handle your question about the business shifts that we have. If you look -- and you're right. We will not give you the full answer because we don't disclose this information. But when you think about beverages, sweet goods and savory, so you should assume that savory is the smallest part of this business and sweet goods is the biggest. Emmanuel, can you comment on the remuneration of your commercial team?

Yes. I think the incentives of the sale is really winning briefs. So it's about revenue and it's about profitability. So that's the 2 main indicator, and a portion also of the team outside of sales is very much connected with the cash flow, so the cash conversion. So that's what I want to say to you.

The way we structure our remuneration is definitely driven by financial components. And we have a 20% component that is all about leadership, leadership, culture, behaviors, et cetera, et cetera. So 20% soft, 80% hard driven by financial metrics, a combination of top line, bottom line and cash. And as we know, we don't take volumes to the bank. So that's why you don't see volume incentive. It's top line. Here, I'm saying revenue, EBITDA, which is cash and, at the same time, free cash flow. What else? Yes. Can we have the mic to the lady here, please?

Do you hear me now?

I can hear you very well.

It's Nicola Tang from BNP Paribas Exane. I wanted to ask a little bit about the concept of bringing the 2 businesses together. I think it's clear in terms of rationale and to quote you, I think you talked about this nutrition powerhouse that you're creating. If I look across the industry, I think through one form or another, we've seen various other players also kind of go down the route of broadening their portfolios. But when I look at your slides, clearly, you've been outperforming in terms of organic growth against some of your peers have been -- who have been moving in that direction. So I was wondering if you could talk about why you believe that this business model will drive -- will continue to drive superior organic growth and sort of why now in terms of the timing of combining the 2 businesses.

Great question. Look, we will answer all the questions around the merger in the second Q&A. But let me tell you -- answer specifically on Firmenich and also touch a little bit on DSM. The difference of DSM-Firmenich merger with any other competitors coming together, here, these are 2 iconic companies that are performing well. When you look at the performance of DSM, this is a company gaining market share, beating the competition, et cetera, et cetera, The same applies to Firmenich. So there is no urgency to do it because of cost pressure or because of underperformance. These are 2 iconic companies coming together because strategically, they thought that this is the right thing to do, and at the same time, they are extremely excited to build a powerhouse in science and innovation and an industry leader in nutrition, beauty and well-being. Now why now for Firmenich? The Firmenich shareholders have always put the company and our customers first. So the priority for the Firmenich shareholders is the [indiscernible] of the company. And with the way our industry is transforming, they see that now is the opportunity to partner, you know with a company like DSM, that shares our same values, our same passion for science and, at the same time, our same passion for customers and sustainability to be able to create this powerhouse for the future. And we believe that we have now put together 2 amazing companies that will be transforming the industry for decades to come. I will take one more question because I realize that we have a 20-minute break that we need to respect. And if you can get me the mic to the lady here, and that will be the last question before the break. And just for you to keep in mind, when we will do the Q&A later with Geraldine and Dimitri, we are happy to take questions on DSM-Firmenich and also on Firmenich. So if you still have questions on your mind for Firmenich, we're very open to take them. Yes?

Can you hear me?

Now I can hear you.

Isha Sharma from Stifel. I have 2 left, please. Could you tell us a bit about your recent acquisition of DRT? As I understand it, 40% is industrial exposure. Is it possible to separate that business and potentially divest it in the future? The second one would be on competition. You've mentioned that you see increased competition from local and indie brands. And since they also target emerging markets, which are higher growth, how do you plan to deal with that?

Can you repeat your second question? I got the first one on DRT. The second one, I couldn't hear it well.

How would you deal with competition from local and indie brands, which are also targeting the emerging high-growth markets?

Yes. Look, these are very good questions. The DRT one is very easy. We are -- we were bold to go and acquire DRT 2 years ago. And when we look at the performance of the business today, we are very excited that we have acquired this business. You have to take into consideration that most of the briefs that we receive from our customers what they want today, they want renewable ingredients. And renewable ingredients, this is what we have bought into DRT, and at the same time, proprietary biorefinery capability to be able to put all the ingredients that we have through the same funnel to turn them from synthetic into renewable ingredients. So we're very excited about this acquisition. Now the -- [ outside FNF ], do we call it, it's not all what you call industrial because you have agriculture, you have [indiscernible], you have gum, you have a taste business. So all of this is interrelated and we don't see today disposals to be done in DRT in this space. Your second question about competition with indie brands. We look at it as opportunity because at the end of the day, what's happening in the market today? With all the disruption that the industry went through and all the companies in the world went through, what does customer want even if they are start-ups, or they are small brands? What they are asking, they want reliable supply. And reliable supply, which means reliable ingredients, reliable creativity and reliable supply chain. That's why most of the customers that are -- even indie brands are coming to us. Some of them are coming to Scentmate. Most of the indie brands, if you look at who are our customers on Scentmate, they are indie brands. We see them also. We have modeled servicing them. We bought majority and control in a company in Turkey called MG. What they supply is indie brands. And all of these people come to us mainly because of our ingredients and superior supply chain and, at the same time, the supply security. So we are not intimidated at all. And that's why we're designing different business models, like the business model of Scentmate that is based on this digital platform, to be able to service more -- a more fragmented market that we see going forward because we see the market being even more fragmented between now and 2030. Okay. I want to thank you for your engagement. Thank you for your passion. Now you have a 20-minute bio break and benefit from the break, even to mingle and to go and visit the booth, and look forward to handing it over to Dimitri, who will take it over and take you through a deep dive into DSM after the break. Thank you. [Break]

Would be nice if I have the mic. Yes. Good to be back. We knew it would be difficult to get you back into the room because being out there is far more interesting than listening to us on stage. But well, it's good to have at least 90% back in this room. Very nice to see. I was just finishing my chocolate dairy product. Really good. Plant-based -- low in sugar and it tastes really intense. I mean this was when I met Gilbert, I think, a year ago on this specific topic. I was [ shocked ]. It is really fantastic. I'm a chocolate junkie, to be frank, right? I don't know about you, but if I open a box of chocolate, I finish it the same day. And I'm also very happy to see that Lindt, the Swiss chocolate, is also having branded and helped by Firmenich, so another reason to really support the merger of DSM-Firmenich. Nevertheless, I would like to get you through not only from one beautiful company, Firmenich, and I think Gilbert and his team did a fantastic job to explain you a little bit about DSM, although many of you know us already quite a while. So I will take it brief. But just to give you a bit of context, maybe a bit of refresher before we go into the merger of DSM-Firmenich. But let me give you a bit of a freshening up for DSM. Let me start with our transformation as a leader in health, nutrition and bioscience. You will see that our heritage is backed up by scientific expertise, expertise in Royal DSM, Gist-Brocades, but also Hoffmann–La Roche, where we acquired the vitamins business. We are in 2 decades of transformation, slowly moving out of the materials businesses into health, nutrition and biosciences. And what we have announced on the 31st of May was yet again a monumental day for DSM: on the one hand, finding a new home for our last material business and accelerating our journey in the health and nutrition space with announcing the merger with Firmenich. We were able to do so because we're banking on our business model, business model where we feel we're pretty unique in the world with global products, with a broad portfolio of ingredients, [ unparalleled ] broad portfolio, using our application expertise to offer solutions to our customers and banking on the next trend on digital, creating the new DSM for the future, building on precision and personalization. And while doing so, creating a fantastic innovation pipeline. So we're not only having a DSM, we have good performance over the last 5 years and good performance today, and we're also building the DSM of the future. That's who we are. That's what we've always been. And therefore, creating a growth company, being active in highly attractive market, an attractive market around people and [ planet ]. This is our one pager on the strategy. Any presentation Geraldine and myself or the executive committee is giving, this one pager is coming back. So on the one side, huge changes in the food system with huge innovation and opportunities for DSM, using our unique business model but also taking commitment for the world with our food system commitment while taking commitment for the ESG targets for DSM as a company, so for ourselves as well as for the world. And therefore, by anticipating on these trends in the world, using our business model, we have delivered on our strategic targets year after year after year. And there's some good news for you. We intend to continue to do so. Well, we wanted to anchor that strategy into our organization. And therefore, we have installed 3 business groups: 1 business group, which is all about more sustainable animal farming, that's the Animal Health & Nutrition business; then a business group, which is all looking at keeping the world's growing population healthy, and that's the Health, Nutrition & Care unit; and then remember, just in January, we brought 3 businesses together in the Food & Beverage unit, the hydrocolloids business, the Food & Beverage part of the then existing DSM Nutritional products and the DSM Food Specialties, creating a business group of EUR 1.3 billion, banking on these themes, banking on what's happening in the macro environment. Well, let me then introduce just for the first [ bit ]. Ivo Lansbergen is the President of the Animal Nutrition & Health business. Later on, we will invite on stage, Philip Eykerman, who is the President of the Health, Nutrition and Care business, and then we'll close off with Patrick Niels being the President of Food & Beverage. Ivo, may I have you on stage to present this fantastic business, which is called Animal Nutrition & Health?

Thank you, Dimitri. Very pleased to be here. Very pleased to be talking about Animal Nutrition & Health, I would say, a fantastic business within the DSM family, and of course, in the future of DSM-Firmenich. Let me just briefly introduce you to what Animal Nutrition & Health is all about. But before doing so, just a short recap on myself. My name is Ivo Lansbergen, I'm a bit of a veteran maybe within the DSM family. I was working for Human Nutrition & Health, and beforehand, material science. 25 years with the company, and still actually going now into the next frontier, joining DSM-Firmenich family. So very proud to be standing here. Just a small recap, and probably most of you have been seeing this slide before, but also for the Firmenich people here around, quite an important slide. Animal Nutrition & Health is really supported by 2 megatrends. On the one hand, you got, of course, growing population, going from 7 billion to 9.8 billion by 2050. So that's a 40% increase of today's population. They all need to be fat proteins, either plant-based or animal-based. But that's a very important trend, which is driving growth, Animal Nutrition & Health. The second one, not least important, I would say, is sustainability, doing this in a sustainable way. I come back to that point later on in my slides because this is a growing trend, and that is only accelerating today. Give you a little bit of flavor of the business, EUR 3.3 billion altogether, 65% is going through what we call as already introduced by Dimitri, local solutions. So we have global ingredients that have been sold internally through local solutions to our customers. We have a market share of roughly about 30%. And with that, we are clearly a market leader in many of the areas. We are active in multi-species, as we call them, species being chicken on the one hand, which, of course, a chicken meat, but also eggs. We also have beef, but we also have dairy fish, salmon, shrimp. And of course, swine, which actually is going to pork. So these are the animal protein sources we are looking into. And there's one very big bubble over there. You see the trend going from EUR 1.7 trillion, and I would like to point it out, EUR 1.7 trillion value 2020 in Animal Protein, and we expected to go to EUR 3 trillion by 2050. It's quite a significant jump still. And of course on the other hand you see also in the bubble, and that starts with EUR 2 billion and goes up to EUR 500 billion. So we do see both animal protein as well as plant-based protein to actually significantly grow also in the future, again, based on a growing population worldwide. Now this will mean a little bit further on to what being mentioned by Dimitri earlier, Global Ingredients. There, we have arguably one of the strongest portfolios in actually this value chain. On the one hand, vitamins, carotenoids, minerals. But also we have ingredients which are steering the microbiome, and we call them eubiotics. So they're modulating the microbiome for gut health purposes. On the other hand, we have ingredients which are helping to actually increase feed efficiency, quite important, of course, in today's world. We also have ingredients which are, of course, derisking the risk of microtoxin. So microtoxin risk management, and we have specialty vitamins as well. So give you a bit of a glance of the global ingredients we have in our portfolio today. And then complemented by again, a very strong portfolio of premix plants around the world, local solutions where we bring straight to the customer, the combination of ingredients because typically, a farmer and then consumer is not using one ingredient. They use a blend thereof, and that's exactly what we do. And now since 12 months, we complemented this with what we call Precision Services. Precision Services focused on health and nutrition, on the one hand, called Verax and you may have seen the news. And on the other hand, sustainability, Sustell, because we do believe that you will actually make an impact if you know where you stand. You can only actually improve what you measure. And that's exactly our view on Sustell, making local footprints of farms. Talking about sustainability, an absolutely key driver for growth in Animal Nutrition & Health. And these are the 6 platforms -- and I would like if there's anything as a takeaway from this presentation, this is the slide. We are focused on the one hand, antimicrobial resistance, i.e., the use of antibiotics, which is a very big topic, of course, in the animal space overall. But we are having ingredients which are reducing and replacing some of that. Second one, is reducing the impact of, of course, our animal protein consumption on marine biology and biodiversity. A very important trend there as well where we have our venture of Veramaris. You will have known or you will have seen that in the past. Make an efficient use of natural resources, so improving feed efficiency, again, trying to get more out of less. Reducing emissions is probably an obvious one, but this is not only about reducing emissions from a CO2 or greenhouse gas perspective. This is also about ammonia local emissions, having an impact on biodiversity in Dutch and in Holland, and you may actually have the same here in France, but definitely in the Benelux, Germany and many places around the world. We face challenges with local biodiversity, [indiscernible] ammonia emissions, et cetera. And then last but not least, improving lifetime performance of Animals, but also improving food quality. So take an act, for example, we have ingredients which increased the calcium absorption by [ laying hand ] and, therefore, reduce the food loss and waste. So to give you a bit of a flavor and a number actually here to it, what we think is possible, and I'm not going to go through all the numbers here. But in ruminants alone, we do think with today's technology available based on Sustell as well that we can lower overall generally in the value chain, the greenhouse gases by about 37%, which are quite significant, of course; poultry, 17%. So these are pretty impactful kind of interventions we can really just bring to the market and actually improve the sustainability of farming practices around the world. So to give you a bit of a flavor of the kind of examples we are talking about, one I already mentioned, Veramaris, Bovaer. I hope that you all actually know about Bovaer. We are launching it today. We have an approval in Europe. We have an approved in Brazil. We have an approval in Chile and it's actually rolling out and spreading around the world. It's reducing methane by about 30% and actually in beef applications even up to 80%. Methane being one of the most powerful greenhouse gas pollutants, you can imagine. It's about 30x more powerful than CO2. Last but not least, Sustell. Sustell is all about measuring the local footprints on the farm. So we make sure that you understand where you're standing from -- coming from and then actually improve that's the key here of Sustell. We are speaking here to financial institutions and farmers and of course, the value chain in general. Then what's actually in it for the DSM Firmenich deal? And yes, first of all, we're going to hopefully create a little bit of Clean Cow, and that was actually our code name for Bovaer. So therefore, you see here a bit of an anecdote but just joking aside, it's very clear that, of course, if you have access to flavors, you can also then actually make sure that the palatability of feed. Because at the end of the day, an animal and I don't want to make anyone feel the same, but an animal is a little bit like humans as well. They will eat if it smells nice, if it tastes nice. And that's also applicable, of course, they have slightly different taste buds than human beings. But they are already being used also in animal nutrition value chain as well. So palatability is going to be 1 of the key elements. The other one I would like to also complement also Ilaria here on is on Scentmate just accessing the small- and medium-sized customers is something I do believe it's going to be value in for Animal Nutrition & Health as well. So overall, I'm truly excited really now to see the future of DSM Firmenich coming really to life. And this is my last slide. I'm very proud of it because it says here, we make it possible. And what is it? It is all about making sure that animal protein is affordable, that people can afford animal proteins, eggs, dairy, milk, et cetera on the one end. That's affordability. Second, socioeconomic, making sure that animal farmers actually have a living. There are so many people around this world which earn a living based on animal farming. And third, not at the expense of this globe, sustainability. This is what we mean with we make it possible. And it says here, if not us, who? If not now, when? With that I would like to hand over again to you, Dimitri. Thank you.

Normally, you need to help Ivo a little bit to slow down his passion. Otherwise, we are here all day. But it's really truly a highly innovative field. I mean people who don't exactly know what Animal Nutrition & Health is all about. I really invite you to touch base with Ivo and all of their people because it's hugely, hugely innovative to generate health for planet. And I think, although I have to say that animals sometimes a bit easier to convince what is good for them than human beings because human beings still have their will on their own. And that's also why the combination is so [ beautiful ] because it needs not only be nutrition and healthy but also needs to [ taste ] well. But that was slated for Patrick. Let me invite on the stage, Philip Eykerman, to tell us a little bit that it's not only health for the planet, but we also care about health for people, and he is leading that fantastic business group.

Thank you, Dimitri. I joined DSM 11 years ago as the Head of Strategy and M&A. So you could also argue it took me a bit long to get to the point where we got now, but very happy that we finally got there. And so since a few years, I have also taken responsibility for, in first instance, pharma and our Food Specialties business and now the Health Nutrition & Care business. So Health Nutrition & Care in 10 minutes. That's not an easy task. It's about a EUR 2.6 billion business that we have organized in 10 segments, addressing a number of more niche specialty Human Nutrition & Care segments, ranging from early life nutrition, so infant formulas, maternal health. Also then our dietary supplements, which we have B2B and B2C to i-Health, pharma and medical nutrition. Nutrition Improvement, that's our business and the developments that we undertake for the malnourished in the world. So with the World Food Program with UNICEF, et cetera. Then our Personal Care business, focusing on sun care, skin care and hair care. Aroma Ingredients, which in our case, are derivatives or site products or of the vitamin A&E production and through which we already have a good relationship with Firmenich. And then last but not least, Biomedical, which is the remainder of the materials portfolio, all about materials that go into the body, a very nice growing and also synergistic business with the rest of the portfolio. Personal Care and Aroma will move out of the portfolio of HNC and move into Ilaria's business of fragrances and beauty where there are a number of synergies driven by having the same customers, but also leveraging the application capability that there is in fragrances with Firmenich to basically move into more market-ready solutions. So very nice synergy area and then, of course, also the biotech capability coming with our Aroma Ingredients. Now you could say what is the fit between all those businesses, and that fit is basically coming from the science backbone as well as the supply chain backbone, but also the purpose of our business. All these segments share the same purpose, that is keeping the world's growing population healthy through Nutrition & Care. Now given that we are mostly a B2B business, of course, we do that with our customers, and we want to be the end-to-end innovation partner for our customers. That means that we want to sell them health claims, health benefits that they can use front of pack and that are compelling to their consumers, their customers. Second, we want to deliver our products and our solutions in a way that they fit into the matrix, the product matrix that they're working with. And last but not least, we do that with all the services that come with that, especially in our case, the regulatory services but also the formulation and application services with, of course, sustainability at the core. What are our must-win strategic priorities? There are 6. And given that we start from an already very strong position with like Ivo 30% to 40% market share in most of the things we do. We have to grow by growing the pie. And growing the pie for us means innovating, basically bringing new products to market organically developed or expanding the portfolio by making partnerships with other players. Second, we have to grow along the value chain. We need to like in Animal Nutrition & Health, increasingly sell our products as premixes or even us market-ready solutions. And as you know, our i-Health business has been growing very nicely double digits year after year since we acquired 20 years - now 10 years ago. Last but not least, whilst this business group is roughly 1/3 in the Americas, 1/3 in Asia and 1/3 in Europe, there is still tremendous growth potential for us in China. And then like Ivo, we don't call it here precision, but primarily personalized nutrition. So we have set up eventually in that case, or to develop that business called hologram. Our goal is to come up with complete solutions, including a diagnostic, a recommendation app as well as a completely developed dietary supplement solution. Where can the combination with Firmenich help us in that strategy? Basically, on all these elements. Starting with dietary supplements, the Firmenich people have spoken about the 250,000 farmers that they are connected with. That is a tremendous source for us for new natural ingredients that basically come aside products of, for instance, the lemon citrus taste production and flavors production. So that's an opportunity for the dietary supplements. But also the fact that dietary supplements don't come any longer as pills. They come as gummies, they come as jellies, they come as [indiscernible], they come as sprinkles. And so that is where the Firmenich people with the taste experience can help us in a big way. Similarly, in our Pharma segment to mask the off taste of most of our products. And last but not least, we have a very nice position in medical nutrition, but it's small. And if we want to basically grow it, we have to expand in proteins and we have to expand into complete market-ready solutions. This is something we cannot do on our own. But with the combination, we can absolutely do. So quite the number of synergy areas, maybe starting with the product portfolio. I hope that some of you think when you think about innovation in my business that you think of Human Milk Oligosaccharides that you think of LG-based omegas and that sort of things. But what we're going to very much focus on in addition to all of that, and we are already is basically renovating the vitamins portfolio. So we already have the ampli-D that is basically a metabolic -- metabolite of the traditional vitamin D, but the idea is also to come with an ampli-C, which will be a liposome to come with modified products, but also the encapsulation technologies of Firmenich in fragrances can help us a lot and come with new applications. And so not only technologically but also from a naturals perspective, there are synergies in this field. This is an example of kids' vitamin. I don't know -- I mean, how many of you have kids and how many of you still manage to give pills to your kids, but I don't think there are many of you or many amongst you. Kids don't want that anymore. They want jellies, they want gummies. So they want stuff that has the right ingredients for the parents, but that also tastes well. Now we can make this sort of thing. This is not the most complicated form, but definitely, Firmenich can help us here with the texture and the taste. This is already more complicated. In fact, this is made by a confectionery producer for us. It's part of the product range of hologram. So it's a menopause product. There's a diagnostic with it that measures the hormone level. The results come on your app on your phone and then you're guided to a product, in this case, a pretty fancy gummy that has all the ingredients, but also, of course, needs to taste well, should not stick together, et cetera. Again, made by a confectionery producer but something where also the Firmenich capabilities in terms of texture and taste would help us a lot. Two more examples. This is a medical nutrition product for cancer patients that take chemotherapy. The issue is not what these people need to eat. The issue is to have them comply with it and make it taste so good that they're willing to take these products every day, right? And so the challenge here is all about taste, different based mask, et cetera. This is not something we can do today, but it is a fantastic opportunity for the combination. I've got another example here of Crohn's disease with kids where basically the only treatment is through nutrition, not through medication and another fantastic example where we can work together on compliance. So these were a few examples from the Health, Nutrition & Care business of where the combination will lead to revenue synergies. As you can see, there's quite a few Emmanuel will talk more about later on. But so very excited to get going on this. Thank you.

Okay. That was all about healthful planet, healthful people. But if it's nutrition and healthy, you also need to make it nutritionists, delicious, but also sustainable. And in that heart of the business is food and beverage. Patrick, I invite you stage.

Thanks, Dimitri. Good afternoon, everybody. My name is Patrick Niels. I've -- I run DSM Food and Beverage. I've been with the company for 30 years. I worked in the pharmaceutical side of the business. I work on the material side of the business and now I work in the nutrition side of the business. And there's one thing, one thing I would like to share with you that at least comes for me is I'm extremely excited where we, as a company, are today. This is the most exciting time for DSM. Before I go there and before I share with you some of the opportunities I see in food and beverage, I would like the time to just take a step back and share with you where we are now today with DSM Food and Beverage. We're on a journey where we want to address the food system challenges. The food system charges on a high level, when you look at it from a food and beverage perspective, are the following. First of all, more and more people are living on the planet. We need to make sure we can feed everybody, 8.5 billion people in 2030, EUR 10 billion in 2050 and do it in such a way that food is also affordable for everybody. However, however, food has much more function than just eating and filling up. So food determines very much also your well-being. So more and more customers are aware of the importance of nutrition, especially after COVID. But last but not least, food has to taste well. Taste is King. Taste is as we heard earlier in the presentation for Firmenich. It's the zero moment of truth at the moment you bite in something at the moment you take your first sip. So we need to create food that is actually delicious, nutritious and sustainable. All 3 need to be addressed. And we, as DSM, feel we've on a journey to address that. So what did we say we do? We bring together today in DSM Food & Beverage, taste, texture and health and sustainable solutions. Therefore, also our slogan enjoy at all. It is possible to enjoy at all, well, eating things you like, doing, eating things that are actually healthy as well as not overly burdening the planet. And I'll give you the example of a plant-based program, a plant-based [indiscernible] will come back in a little bit. We create, first of all, the basic taste with our process flavors, yeast extracts. With that, we created a taste. Now on top of that, we also creates texture. We have texturizers, we have a canola protein. We've recently acquired Vestkorn, the texturized vegetable protein producer in Norway. So we also create the texture. And last but not least, we also impact and severely can deliver on the health aspects with our vitamin and other nutritional components we can put in our product offerings. Now interesting example we have of a digital tool, Fortifull, that is a tool that determines based upon the customers' regulatory environment where in the world is he or she active. If you combine that with the nutritional value of the product itself, it creates a route for our customers to deliver front-end claims based upon their alternative protein products. So that is where we are today. And as I said, we do provide taste, but it's more of the basic taste and not the refined taste solutions that Firmenich offers, but I'll come back to the later. Now what kind of business is it? It's as Dimitri said, EUR 1.3 billion; dairy, savory and beverage are the bigger segments. We have a very broad portfolio of products ingredients that deliver functional impact on the customers. We have an overall market share, if you look at our attainable market of about 10%. But if you really drill down, of course, on our targeted segments, we have significantly higher market shares. And we are active in attractive markets. This is the Food & Beverage market is a scattered market, which allows you to get our margins, which also supports an accelerated growth. Now taste, texture, health, just to substantiate a bit and to substantiate the fact that our ingredient portfolio is broad. There's an overview of everything we offer in taste, texture and health. We also say we offer solutions in process and preservation and that impacts very much the environmental footprint also of your products. This is us. This is DSM Food & Beverage. Now, as I told you earlier, I'm very excited. Very excited because the opportunities that this merger of DSM Firmenich actually delivers for us. I'd like to share with you how I feel we can get those opportunities and also where I feel we can get them. First of all, if you look at the how, both Firmenich and DSM have a very strong customer base. But together, we have much more breadth in our customer portfolio and also much more depth in the relationship with our customers. Secondly, concept selling. You've seen the portfolio of DSM. You know the strength of Firmenich and the whole flavor taste and also the texture platform. If you bring that together, concept selling becomes a much easier but also a much more trusted step by your customers because you actually provide stuff that you make yourself that you can offer in an integrated solution to your customer. And last but not least, enhance innovation. You are today speaking about the brief, specifically for the flavors. Now the great thing about briefs is it starts the innovation process early on. So the flavor companies, Firmenich, is very early on in the innovation process most of the times. That's not always the case, but the brief, that's very often the case [indiscernible] are involved in innovation process. Second the [indiscernible] going on. And co-creation, we do very often with the brand owner. Again, a great moment to add additional value proposition of the overall Food & Beverage portfolio that we have to offer. Now those 3 house are supported by I think 2 fundaments on the right side, the people, both of DSM as well as Firmenich, I've met many of them. And I think we have extremely passionate group of people, knowledgeable group of people. But secondly, also a fantastic complementary toolbox. And what do I mean by that? For instance, if you talk about the plant-based dairy, there are off notes in it. We try to solve it as DSM before we work together with Firmenich. We try to solve that with our enzyme portfolio, but there are many different ways to address off notes. And of course, Firmenich is an expert in that, putting those 2 technologies and capabilities together will bring tremendous advantage for our customers. So our extensive complementary toolbox is an extremely important foundation for both of our companies to grow. Where are we going to grow? First of all, in functional nutrition. Customers need more and more products that actually add to them. Emmanuel called it Food plus. Customers are looking for Nutritional products included in the products. We have those nutritional products. We have a lot of knowledge about what they do to you. But we do not have to strength and the capabilities to really drive that into a specific, very well-tasting end product. So a lot of synergy there. Plant-based foods. I think I gave you a couple of examples where we see a lot of synergy by leveraging the capabilities of both companies, our enzymes, our texturizers are our basic process flavors, our nutritional product portfolio, combined with the taste and texture platform of Firmenich. Dairy, if you look at dairy, specifically, if you look at the yogurt space, what you see is that DSM has a lot of strengths in creating the wide mass, the base product. Now the superior flavor component on that is something where Firmenich can add a lot of value. If you put those together and you combine that with the nutritional offerings of DSM, in vitamins, on probiotics, on lactase enzymes, you can imagine you can really drive a full integrated value proposition towards your customers. On savory, we see a lot of additional growth possible by our 2 companies because DSM has a strength in basic savory taste and process flavors combined with a very strong tonality capabilities of Firmenich. Also, as you know, we recently bought First Choice Ingredients. And there is also a lot of synergy in expanding the growth of First Choice Ingredients under the savory platform. Last but not least, there's an opportunity that will take a bit longer, and that's the pet food. Today, our pet food offering is an offering on a nutritional portfolio. But the pet market, as you all know, is a very interesting market, growing very well, having a very interesting profitability. And we have the ingredients, a lot of the dynamics are similar to the human food business. So we have the capabilities, and we have the portfolio jointly with Firmenich, which has some technologies in-house that they have not rolled out with the pet food industry because of not having a dedicated to market. When we combine that, there, we see also a lot of growth. Now 2 examples, just to give it a bit meat on the bone. A flavored fortified probiotic milk drink with a claim of supporting immunity. DSM can offer the dairy ingredients. We can offer the differentiated nutritional attributes. On the other hand, the real premium taste -- the real premium taste Firmenich can add, sugar reduction technologies Firmenich can add and last but not least, I talked about earlier about off taste of protein, specifically plant-based proteins. This can be very well masked with taste maskers. Now we don't just sell a product, we sell more. So deep consumer insights of Firmenich is also something that will benefit our growth, our joint growth. And DSM can, of course, offer the health claims, the ability to, for instance, know when and how can we help our customers on health claims to build front-of-pack claims as well as regulatory setting of our nutritional products. Now application is synergetic. So it's great that we have a full coverage of application networks around the world. And last but not least, the agile creation cycle with the [ briefs ]. As I mentioned earlier, can also help us in this segment. Last example, I come back to a burger and because I think it reflects very nicely of what we can do together. It's the base taste that DSM provides. The full pellet of the more finer, finer taste directions to complement the basic taste is supplied by Firmenich. The mouth fill and juiciness comes partly from the protein that we supply, comes partly from the texturizers. But as you heard from Sarah this morning, also very nice tools to create the release of fat both during the cooking and aromas as well as during the biting, so synergy there. The pros efficiency with your enzymes and clean proteins from DSM and of course, the nutritional toolbox. Now all of that, combined with state-of-the-art consumer insights, nutritional excellence of DSM. And as I mentioned earlier, a network of application centers. I'm not the only one that's excited. We got so many calls from customers. They don't see this as something that threatens them. They see this as something that can help them to accelerate their innovation cycle. So we are extremely excited about the opportunities, and we look very much forward to growing and building a great food and beverage business as DSM Firmenich. Thank you.

Indeed nutritious, delicious, sustainable, fantastic, right? So before we go to DSM Firmenich, let me rehearse a little bit how you can help us. So first of all, let's go back to the consumer ingredients business. So what you could do is just test the perfumes on your table and then tomorrow, buy your own brand with Firmenich ingredients, obviously, right? So choose and write down the name. One. Secondly, on the Taste & Beyond business. I think it's clearly indicated that if you buy a plant-based burger or this nice plant-based chocolate, right? Sugar -- low in sugar, you will help us also there. Thank you for your business. And Animal Nutrition & Health. It will be great if you eat a lot of salmon and then preferably sustainable salmon, who is fed by algae-based fish oil right? Not an important algae-based fish oil not that we fish the ocean empty. But then we have a sustainable solution for salmon. Fourthly, Health Nutrition & Care, I hope you take your dietary supplements every morning. Please do. It's good for your health, and it's good for DSM. And fifthly, on Food & Beverages, I think I would clearly advocate the parts of the plant-based burger where you help both companies at the same time, it's good to take your probiotic containing milk. It's good for your good health. It's good for your immunity. And in today's world, where we're coming out of COVID virus are still there. So prob, you'll take milk. Thank you very much. So that is a bit of a rehearsal on how you can help us. Then let's go to the combination. I think -- I mean, maybe I'm slightly biased as the future Co-CEO of the combination, but I think it's unparalleled, unique combination, right? And even if I step back a little bit, I would say the same because the combination of these companies is like Gilbert said during one of the Q&As. This is a choice out of strength. Both companies made a choice out of strength, 2 iconic companies made a choice out of strength. And the combination creates so much synergy that, like Patrick was saying and the others, customers really see the value. So let me make it visual for you because I'm apart from lots of slides. Let's assume this is DSM. This is Firmenich, right? DSM is really good at health and nutrition, sustainability at its core and everything they do is backed up by science. Firmenich is a master in taste and fragrances with sustainability at its core with a fantastic natural ingredient portfolio, backed up by science. Could you imagine a company where these 2 competencies will be brought together? That's what we just decided. That's what we have announced on the 31st of May. This unique combination of capabilities. This is the story. I have 10 slides just to tell a story. I can stop here. There's nothing more. It's nothing less. Okay. Let me run you through. We will focus on creation and innovation linked to the customer. We will copy part of that customer obsession, consumer obsession into that new company. And we do that by organizing ourselves market-related. We will have our eyes and ears open for the market, and we do that in 4 leading businesses: Perfumery & Beauty; Food & Beverages/Taste & Beyond, bear with us for a new name, but that will be the combination; Health, Nutrition & Care; and Animal Nutrition & Health. We will listen to the market, we'll be geared towards the market. And we do that with a few things which will empower these 4 businesses. First of all, it will be with unparalleled science. Both companies are based on an enormous broad science undisputed. Check around in the world, everybody would say, "Wow, those our science powerhouses." We bring that together and we will have an unparalleled science-based also for biosciences for naturals and the like. It will be really geared around co-creation and innovation. So we're not only going to build the company for today, tomorrow, no, for the next 5 to 10 years with a fantastic creation and innovation pipeline. And we're going to use the new dynamic of the world, digitally-enabled. I think it's fantastic to see that in lots of businesses in Firmenich, but also DSM, we are already having pilots there. In fact, we already have running business because of it. We are going to accelerate that because it creates a differentiating factor for the combination in the future. Gilbert mentioned it, Firmenich has outgrown competition also because their OTIF rates was far above what competitors could do. The same is valid for DSM. So could you imagine that if these 2 vertically integrated supply chains will be brought together, we can create a reliable service to our customers when they really need it. And in today's world, that is a huge differentiator. Ilaria talked about the natural ingredients. That know-how is usually synergetic for all of the 3 businesses. And we're going to elaborate on that. And then last but certainly not least, I hope you sense the passion, the intensity, not only from the co-CEOs and from Gilbert, but from everybody that you've spoken to at the booths. This is a fantastic bunch of people. They breathe the business. They radiate. They like this business, and that's exactly why the combination of DSM Firmenich was really a nice combination because they share the same passion. Very interesting to see, I think Patrick said it, we already had some joint development. It was very easy because we speak the same goal-to-roll language. We love and radiate passion. So it's backed up by the people component. So how do we bring that together? I mean this is the slide, but you can also remember the 2 bottles. It will be merged into 1. And we merged into 1 because we're going to use health and texture on one side with the taste and application on the other side. We're going to use the Biosciences platform, and we're going to use the digital enabling. All backed up by the fact that we breath and radiate the same passion and the same language bringing the company forward. Four business groups, backed up and pulled together and benefiting from the enormous science base, which we create, really, technology platforms globally applied for the 4 units. Vertically integrated supply chain and certainly the best-in-class support functions. We have the critical mass of a company, which is EUR 11 billion to EUR 12 billion in size to really be pure excellent also on the global support and the service functions for these businesses. Let's go back a little bit. Let's check what's going out there in the world. And if we see what's happening here, you see on this slide a few words, which is coming out: natural, sustainable, environmental, nutrition, clean label, reduced calorie, reduced sugar. And if you then apply what we see in the outside world with the combination, this is exactly in the core of what DSM Firmenich is going to apply. Listening to the market, middle; linking it to the trends we see from a consumer perspective; and fully backed up for all 4 businesses in the science platforms, in the creation, innovation and application capabilities as well as all the people breathing and radiating that is purpose like. Within Firmenich, they were always saying business for good naturally. Within DSM, we're seeing brighter science, brighter living. A perfect fit. Science, a huge leverage. One of the key reasons why we think we can differentiate ourselves for the future. We have the broader science functions if you look at the total portfolio. If you look at the number of employees, if you look at the patents and the IP, it is unparalleled. But we're also going to use that to create functional solutions for our customers to create formulations for our customers to be there to protect their brands. And that needs application know-how, it needs creation, it needs innovation. And that's basically what we're going to bring together and that will continue. The combination itself is investing about EUR 700 million plus on a yearly basis on R&D. And there's a commitment from our side to continue that because we're going to build a company not only for today, not only for tomorrow, but we're going to create a company for the future. Perfumers and flavorists will help us to differentiate ourselves and we need differentiation. And we've got to fulfill that journey because I think in many of the presentations you've seen that the uniqueness gives us that different value proposition. That uniqueness is also because we are locally co-creating and innovation in almost all key markets. And you see here a bit the regional split. We are there where it matters, where the market is growing, we are there. And then also, in terms of the global footprint gives us a huge advantage. And like I said before, a few examples of what we already do on the digital-enabling business models. This is not only just e-commerce. This is thinking through how digital empowerment can help the differentiation of our business. How can we help our customers to differentiate. It's a different mindset than just applying digital. And I hope you understood a little bit on what type of business we already have in these digital empowered business models. And if we do, it's very difficult to copy because we have the data, we have the know-how, and we have the [ access ]. Let's pause here for a minute. Maybe pre-COVID, everybody was assuming that a well-organized vertically integrated supply chain is an enabler. I can tell you, it's not an enabler today. It's a differentiator. And we are actively working on it to make sure that we keep it a differentiator. And I think the combination of DSM Firmenich makes it almost unparalleled in the world. We will have 40 creation centers. We will have 78 application labs. We will have 70 premix sites around the world. We have 88 manufacturing sites who could back up for each other, who could basically make sure that whatever our customers are needed, we can back them up. And we are actively working on it because it creates credibility, reliability and therefore, a partner of choice. All our people I told you a little bit the reaction of some of our customers we called. It's almost an exact copy of the employees' reaction. On the Firmenich side as well as on the DSM side. It was, in most of the cases, wow, I really want to be part of that. Very interesting small anecdote. I was at Kaiseraugst, in Switzerland together with Geraldine, we're doing coffee and chat sessions. The first thing they we're asking me? Dimitri, when can we have the new business cards because I'm so proud that I can work for a company which is called DSM Firmenich. Not only because of the business is sensible, but also the value and the purpose and the integrity both companies bring together. Last but not least, we will and we are a purpose-led company. The combination will be -- is going to be a purpose-led company. And it's not because the leadership team think that's a good idea. It's because all the people, all the 28,000 people working for this combination DSM Firmenich is requiring the leadership to create purpose because there are not many people in the world today who just want to do their jobs, they want to contribute to a better world. And I think certainly, leaders who have been leaders in the sustainable field, in the purpose field when we stopped their neck out when purpose was almost not being accepted, 10, 15 years ago. I think Firmenich did so. DSM did so, and the combination will even be stronger and more passionate about purpose than any other company in the world. And with that, I think it's time for some governance stuff. The financials. Geraldine, please.

Okay. I hope everyone online is still with us, and we just have a few last pieces of the puzzle to put together before we will have a break and then the final Q&A. And these pieces of the puzzle are partly answering some of the questions that we have heard, but of course, some of the structural aspects of what does the merger look like and how do we put it together? So let me run through those pretty promptly because partly you're familiar with it, but it's worth a recap. So first and foremost, of course, the leadership of the company does matter. The word here is experience. If you look at the Board of Directors of the future DSM Firmenich, it will be made up of 12 very experienced Board members. The Chairman Thomas Leysen is the current Chairman of DSM. And as Vice Chairman, it will be Patrick Firmenich, who knows everything that is to know about Firmenich. Now if you go back to the 12, it's also good to know that there will be 3 representatives of Firmenich on the Board of Directors and 9 independents. So here, you can be guaranteed of not only top experience but best practice already implemented in both companies to continue going forward. Now when it comes to the executive team, now we announced on the 31st of May, some of the names. And firstly, I have to say, Dimitri and I are extremely excited and you've probably got that by now, so I'm not going to repeat it to be continuing in our co-CEO model with our additional heads, so CFO for myself, COO for Dimitri and continuing that going forward. And Emmanuel, who will be joining me shortly will be actually leading the integration of the 2 companies, bringing a lot of competence and knowledge of the space, which is very helpful. Now also, you may not have noticed, maybe you were traveling as well. We announced this morning the composition of the rest of the executive team. And in fact, you have now seen on stage today, 8 out of the 10. In addition to the 3 phases that you're seeing on the slide, you, of course, had Ilaria, Philip, Patrick, Ivo, the business heads, Sarah, the science. And we will also have Mieke Van de Capelle, who will be the CHRO. She is currently CHRO of Firmenich; and Jane Sinclair, who is with us today as our Chief Legal Officer -- Chief Legal Counsel, sorry. So that's the composition. Now probably worth pausing a second, what is that saying? Well, it's basically saying 5 and 5. It is saying merger of equals, it is saying a lot of talent. And I will stand here even if I'm part of that 5 and 5 with a resounding confidence in the quality of this top team that is being put together. So that is the leadership. Now if we go to how is deal going to be put together. Well, the term merger of equals here equally applies. And just a quick reminder, this is going to be a tender offer. So basically, when we're saying the creation of a new company, it is the creation of a new company. So DSM Firmenich NewCo will be there, and the intention is to tender have a share of DSM in exchange for share of the NewCo, same with Firmenich and of course, in that case, a EUR 3.5 billion of cash as well. So that is the structure -- and sorry, the small prints, this was the deck that was circulated. So if you can't read it from the back, don't worry and you have the information. So that is the how we put the company together. Now where is it going to be? Well, this entity will be in terms of legal domicile Swiss domicile. So the seat of the principle is in Switzerland and the headquarter is a dual headquarter partly in Kaiseraugst, in Switzerland, partly in Maastricht. Now why that? Because we are here very determined to leverage the strengths of the 2 companies when we create this new company. It's also going to be listed on the Dutch Stock Exchange. So in the Netherlands on the Euronext as also an important feature of finding this very healthy balance of preserving a lot of the DNA and quality and talent of both organization of finding the right balance here. When it comes to the 4 businesses that Dimitri just referred to, we're going to be leveraging the historical strengths of the businesses in terms of where they will be led from. So HNC and Animal Nutrition out of Kaiseraugst, perfumery and beauty out of Geneva. And as you noticed, the area where there is going to be the more construction, which will be Food & Beverage/Taste & Beyond will be led out of Delft in part also because the global biotech bioscience hub is there, but it's also here bringing together the 2 organizations. So that's when it comes to the structure. Now also on this slide, we're referring to the ultimate ownership after the tender offer. And this will mean that DSM shareholders will end up with 65.5% and the various Firmenich shareholders with the 34.5% as an overall structure. Now the rest, I think, has been picked up over the last few days. Now maybe on this slide, which is also quite busy, but I will -- I've already talked about the governance. So let me just focus on the time line of the process. Now this is a tender offer, which is a bit of a lengthy process. But what you can expect is that we will be publishing the prospectus and the tender documentation somewhere probably Q4-ish. And then there is a tender period. During that period, there needs to be an EGM of DSM. That EGM is there to make sure that we get approval of our shareholders, many of you in the room or on the line for the different mechanics that go with the tender. And then, of course, they will be the tendering itself. Now from a time point of view, we will do everything that's in our hands to get this to go as fast as possible. We are indicating here that it should close in the first half of 2023. Now of course, that's a rather broad definition and that's because there's lots of moving parts that aren't always in our control, a number of regulatory things and documentation, et cetera. But that is the time frame that you can expect in terms of putting this company together. Now the next topic, which we know you're very interested about and that is synergies. Now deliberately, we have hoped -- we hope that you have been picking up throughout the afternoon that there are so many areas of opportunity and synergy that this is not going to be a struggle to find the opportunities. In fact, we were discussing with the team. Probably the biggest challenge is going to be prioritizing, which ones we go after. Now when we looked at, of course, the value creation of bringing these 2 companies together, we did do some quantification. And here, what you're looking at is a real growth story. We're really looking at EUR 500 million of sales synergies as a number that we're very confident in and that we're going to go after. And of course, that contributes to an EBITDA synergy of EUR 350 million. That's a combination of the contribution of the synergies coming from the top line. But of course, cost synergies as well. Now when you bring 2 companies together, 2 strong companies together, you still get more scale. So for instance, one of the first areas of synergies needs to be things like sourcing, direct, indirect, looking at our supply chain and all of those elements. So that will happen. And of course, when bringing 2 companies together, we will leverage all of the talents of both companies in the global enabling functions, but they will be efficiencies there to be gained as well and that is part of the game. So a lot of underpinning on the cost synergies as well. To extract those synergies does require to spend a bit of money. There is a cost to that. We're estimating that to be EUR 250 million over probably a couple of years or so to get through the process. That includes, of course, system development. It includes some support and some of the design work, et cetera. So this is effectively the big picture on the synergies. Now as you heard, Emmanuel will be leading the integration process. And therefore, I think it would be nice that we make use of the fact that he is with us today to maybe wrap up, bring together and build a bit on those revenue synergies that you have seen coming through? So Emmanuel, if you will join me.

Thank you, Geraldine. Thank you for taking me the opportunity to wrap up, to recap all that has been said by my dear colleagues, by Patrick, by Philip, Ivo, Ilaria about synergies. So I think I would like before I go maybe more into the detail, the notes are not on the screen, but I don't need notes just for you to know. So thank you, thank you very much. So I think it's about the synergy, it's about going beyond, beyond taste, Taste & Beyond. Beyond perfumery, another step going beyond. Second, it's about combining the building blocks, the technologies, the innovation coming from the 2 companies. And third, it's about increasing the reach in some segments where DSM is very present and where in some others, Firmenich is very present. So I would summarize, I would say, the entire synergy by these 3 main pieces. So if you go more now in details in the Food & Beverage. Food & Beverage will represent, I would say, 60% of the synergies. Just for you to know, Patrick and I, we know ourselves for quite a while. We tried already to combine our 2 powerhouse together in contracts, et cetera. So we are more than educated together to, I would say, to jump into those synergies that make them happening as fast as possible. But we summarize it with 5 different, I would say, segments, I would say. The first 1 is the functional nutrition. Functional nutrition is going in many segments, beverage, energy drinks, diet and nutrition, cereal bars, et cetera, where we combine, I would say, the taste, the [indiscernible], the texture with all the technologies coming from DSM. So I think it's a great opportunity, and we saw that all over the space. Second, it's about, I would say, plant-based food is the same thing, combining the 2 technologies of 2 companies in one hand and onshore to the more and more complex brief, which are coming from our customers. As I told in the past, a local customer are making bigger in this space. They're asking more and more complex briefs and being able to answer to the complexity of the brief is very important. Third, it's about dairy. DSM is a leader in the dairy space. By the way, we wanted to go more in the dairy space for the dairy analogue business. So combining those 2 together create a very big machine to potentially lead the space and bring the 2 technologies together. Fourth, it's about savory. Same thing. Gilbert said this morning, we were among the 3 category, it was not the biggest one. We invest a lot in that space. I think DSM did the same. Combining those 2 will bring, for sure, additional synergy moving forward. And last it's about a new segment for us. My dear colleagues from Firmenich will be happy because I didn't want to speak about pet food in the past because we didn't have the reach now with the acquisition in the vitamin business and more -- far beyond technologies in vitamin, we will be able to work together in that space. So this is 60% of the synergies. For sure, Philip mentioned that very, very much [ deep ], I would say, bringing the taste in all the different segments is in, but also being part of a very big powerhouse in the dietary and nutrition segment is key. And last, I would say, the last 15% for Ilaria is you want to do more, don't hesitate going beyond with beyond perfumery with those actives in the cosmetic active on the top of what has been done already with Dreamwood that has been nicely presented by Ilaria, and also looking forward for bringing even more capabilities to go beyond that space. So that would be in a nutshell, Geraldine, how I would recap, summarize all the different, I would say, synergies, synergies which we are more than willing to go for moving forward.

Thank you, Emmanuel. There we go. Thank you, Emmanuel. Please don't move, one more question for you, which I know is in the mind of people in the room because we've been hearing it. And that is actually about the integration. So yes, revenue synergies, et cetera. But if you think about how are we going to integrate these 2 companies, what first comes to mind?

So first, we want -- we will deliver synergies. Okay. I think it has been clearly defined, clearly been said but I want to repeat that. This is really our first priority for this merger. Second, is to create also an agile customer-centric operating model for the company. And we have a lot of things to do coming from the 2 legacy knowing that, in fact, out of the 4 businesses, 1 will have to merge together, which is F&B and T&B together. And I think we know well enough for both of us, Patrick and I, his experience from the food ingredient side, our ingredients, our experience from Taste & Beyond side to know how potentially to combine profitably the 2 legacies together and create really the avenue for the future. Third, it's about culture. As you know, a new company will exist, will really live based on the new culture. I think it has been said several times, a lot of common foundation on science and sustainability and, in fact, putting those foundation together to create a new culture for the 28,000 people of the new assemblage, I think it will be a great story. So that's how we see, I would say, the first viewpoint, [ helicopter view ] of what we will do very, very fast in the integration.

Thank you very much, Emmanuel. Appreciate it. And I'm sure we'll get questions in the Q&A on that. Thank you very much.

Thank you. Thank you, Geraldine. Thank you very much.

Okay. Last 2 slides and then it will be break time. Very quickly, of course, the financials. When you have a look here, the scale of this company is clear. And you see here, obviously, the impact of the synergies when you aggregate the company, we're looking here at a EUR 12 billion top line company, very profitable. The 2 points I would just like to highlight here is not only profitable, but with a very good cash generation history and a very strong reason to believe that, that will continue to be the case. The other thing in terms of your modeling, for those of you who are doing the models, in terms of the tax rate, you can expect the NewCo to be pretty similar to DSM as it is today. Now when it comes to midterm financial ambitions and of course, this is something that we all care about. Here, you have 2 companies that have systematically been growing above market. Generally speaking, both DSM and Firmenich have been talking about a mid-single-digit organic growth. Now you have just heard throughout the afternoon how much the synergy value is and where it's coming from. And that should, of course, enable us to grow a bit faster. So this is why we're indicating a midterm growth of 5% to 7% for the combined company. Now when it comes to margins, of course, the contribution of the cost synergies will kick in. And this is why here, we're looking structurally at midterm 22%, 23% type company, knowing that here, we're really in the mindset of creating a company for the future. So it's not about extracting every ounce of synergy that one can. It's really about shaping a company, and reinvesting as well in this company as we integrate and as we move forward and really capture a much bigger pie of the market out there through the synergies. Importantly as well, this is a deal because of its structure, which will basically mean a very good balance sheet for the NewCo. A lot of mergers are structured differently where the starting company is very much at a high leverage is immediately having to think about divestments and things. In this case, everything is core, the balance sheet will be solid, healthy and enabling us to invest into the future, which, of course, is not unimportant as well from a promise when it comes to dividends. You know that as DSM, we have had a very strong promise of stable, preferably rising. The Firmenich history is to have reinvested a lot of their profits. And you saw that through the percentage of reinvestment in R&D, for example. But here, you're seeing an indicated policy of 40% to 60% payout ratio, which will be very much in line with the past performance of both companies. So something we're very confident as well. Now when it comes to value creation, I mean there's many ways of doing this. And 2 weeks ago, I was talking about EPS accretion, et cetera. I know many of you in the room did your own calculations. Now it goes without saying that this deal is EPS-accretive. If you take NewCo on synergies versus DSM of today, clearly EPS-accretive. If we say, well, if we take NewCo and DSM minus materials, we're in double digit. And if you play with whatever permutation you want, this is very value-accretive for shareholders. Why? Because you're bringing 2 very strong companies together and creating this fantastic synergetic opportunity, thanks to the complementarity of our capability sets, our cultures, our science, and you've heard all about it today. So with that, it basically brings us to the Q&A. And we hope, all of the team here, that you have found the presentations very helpful. Now the Q&A will not just be the 3 CEOs, it will be the whole team. So what we propose is a 20-minute break, and we will see you back here to finish off the afternoon in a conversation. Thank you very much. [Break]

Thank you for coming back. I know the booths are very nice. So thank you for rejoining us. And thank you as well online for bearing with us during this break. I hope you also got to make yourself a coffee maybe. Q&A, we're putting a little bit more light in the room and please bear in mind that we do have the webcast going on still. So when you want to ask a question, if you could, a, put your hand up, the mic will come your way. To help us, if you could maybe stand, introduce yourself and to make sure that we have enough time to cover the different questions, if you could maybe restrict yourself to 2 questions to start and then we go around. I don't know how many hands we're going to see, but that should be helping us. Now the good news is there's the 3 of us here, but the intention is to make use of the whole team and all of the speakers. So this is firstly a hint to the team to get ready to come to the podium so that the webcast can see you when you answer. But also, if you have a specific question you'd like to address to any of our colleagues, please feel free as well. So there we go. That's a little bit the format for the Q&A. So feel free and whoever wants to raise their hands, on we go. Okay. Just to break the mold, we won't start on the first row. Let's go -- I saw a hand in the middle of the room. Yes, lady -- yes, if you stand up, the mic will come to you. Exactly, that will be easier. Perfect. Thank you.

Isha Sharma from Stifel. I just have a couple. In the last 10 years, we have seen DSM made around 30-odd acquisitions, if I'm right, and you had a very strong focus on cost. If I look at Firmenich and the cost buckets that they have, they are actually quite lean. And I must say that they are either better or equivalent to the other F&F players. So do you think that there is scope of doing further in that direction? That would be the first one. And on the second one, what do you think was the reason that during the integration phase of IFF and DuPont, we saw IFF lose market share. And what is it that you can do differently to avoid that, especially during the integration phase?

Okay. Thank you very much. Let me start with the cost synergies, and then I'll hand over to one of you there. Okay. So on the cost synergies, I hope that it came across very clearly that our predominant focus here is to build a growth company. And so we spend 95% of our time really focusing on where the synergy is going to come from, how are we going to capture them, how do we go to market, how are the customers going to react, et cetera, et cetera. So a lot of confidence and really genuinely the funnel of opportunities is very big, and it will be all about focusing. Now when it comes to the cost synergies, we're also showing here a mix of 50% to 60% revenue synergies, 40% to 50% cost synergies. Now as we do the work, we will, of course, see how far it goes. Currently, we feel that this is a good estimate of where we are going to land, partly also because we want to be in a position to reinvest. So we're not really into a story here of maximizing to the nth degree, the cost savings. In fact, it's about really also keeping enough space to invest into the future and not compromising, for example, at all anything to do with science, innovation, et cetera. So that's really how we look at the cost synergy picture. But maybe to your question then on IFF-DuPont, do you want to?

Yes. Happy to answer this question. And I think this is where you need to take into consideration that the merger between DSM and Firmenich is very different. If you look at IFF-DuPont indeed, they lost market share because the disruption in their business was significant. And if you look at the churn they had in leadership roles, that was significant. And the merger risk was higher. So -- and these were 2 companies that were underperforming, their key focus was on cost. Here, you look at 2 companies that are performing strongly, gaining market share, growing fast, well-invested businesses. And second, very low-risk merger because these are complementary businesses with low overlap. And when we have pitched the deal to the notation agencies, Moody's and S&P, what was the feedback that we got? Low-risk merger. There is 1 overlap in 1 business, that is the Taste & Beyond and the Food & Beverage. And if you look at the way we have set up the exec for the new DSM-Firmenich, there is no disruption in 3 of the business units. They are still run by the same people. Ivo running the Animal Nutrition & Health. Philip is still running his division. Patrick will be running the Food & Beverage and the Taste & Beyond. Ilaria is still running Perfumery & Beauty. And Emmanuel, who is running today the Taste & Beyond becomes the Chief Integration Officer of the firm. So therefore, the business leaders are hands on to make sure that there is no disruption. So that's why I'm very confident, and it's a different situation.

Thank you, Gilbert.

Can I add one thing?

Sure, go ahead.

Building on what Emmanuel said on the synergies. So let's be very clear that priority #1 would be cost synergies on the sourcing, purchasing supplier side, right? So I mean, for all suppliers who are listening into this fantastic webcast, we will ask for your support to be part of the success of this company. And we're going to do that already now between now and when we have the closing date, all within clean rooms and legal boundaries, et cetera...

Planning, the planning.

Do our plan within the legal boundaries itself with a clean room, et cetera. So the moment that the closing is there, we can push the button, that's one. Secondly, priority will be top line. And that we will do when we all get the agreements in and then I think Gilbert already announced that we have 2 very competent leaders who'll make that work. And then the rest, we will look from a risk mitigation perspective. So I think it's already the wrong comparison with IFF-DuPont because we are a completely different company. But also in our approach, we will do it far more risk mitigated than what we've seen normally. We will do that risk mitigated step-by-step where only the majority of the company will be touched in the Taste & Beyond and Food & Beverage area.

Okay. Front row, ladies first.

It's Georgina Fraser from Goldman Sachs. I've got two. The first one is if you could give us a bit of color around how you determined the R&D guidance that you've given us. What were the assumptions behind the appropriate investment level for the combined entity? And my second question is now that customers who would previously go to Firmenich and then to DSM and back to Firmenich can go to a combined entity. Are you saving customers' development steps? And if so, how many?

Okay. And Dimi, do you want to do the R&D? .

Sorry, on the first or the second?

R&D.

The first. .

The first. R&D, yes. I think I've clearly indicated that it's R&D-intense businesses. I think it's clearly [ understated ] that the combination will continue the track record of EUR 700 million year-on-year. And also [ that being said ], we are building a growth company. So we will review on a yearly basis, how much needs to be reinvested. But it's clearly stated that this is a growth company going forward. So the R&D, the science, remember, the 2 businesses together, coupled by science, it's the glue of why this company is going to work and why the 4 businesses can make a differentiation. So we will continue to invest on that science of foundation, and we gave a bit of a guidance on the slide that is at least EUR 700 million. And we'll review it obviously on a year-to-year basis. Not on a year-to-year basis as such, but on a long-term basis, what is needed year-on-year, right? Because innovation started tomorrow doesn't bring results except for the week thereafter. We need to have a long-term view, which both our companies had.

Now to your second question, I think a lot of our colleagues would like to jump in. But maybe Gilbert, you want to have a first few words. I don't know if you want to invite Emmanuel and Patrick.

And then I'll ask Emmanuel to build on it. With our customers on steps, it's not one size fits all because globals operate different than regionals, locals and start-ups. Some customers will be delighted. It's -- they will come to you and say, "Look, I don't have the capabilities. This is what I need from you." And the new combined company can offer everything, which would be also an opportunity. And for some of the global customers, they might still prefer to take the pieces based on the creativity for the first year before having the confidence of combining them together. So it's not a one size fits all. And that's why when you saw the presentations, it's very well identified, the steps and how all of this will come together in order to come with a solution where the new DSM-Firmenich will tap into a higher part of the value chain of these products. Emmanuel, you want to build on this?

Yes. Another angle I wanted to add to all what has been said is I think the last 2 weeks, I spoke with 156 different customers around the globe, okay, about the deal, about what they think about their feedback, et cetera, et cetera. And I'm sorry to say but I have not had 1 negative feedback coming from them. So the question is how we will combine those technology together, the building block together, that's all what we will have to do with Patrick moving forward, at the right speed by creating value, by making it profitable because sometimes putting portfolio too fast in the same basket may be destructive. But we have an avenue of synergies in terms of building blocks of technologies moving forward at customers. And the reaction of the customer is the best answer that you can have from the market overall.

Right, because every customer is rethinking their supply chain and their way of working, especially with all the disruption that people have been through over the last 2.5 years. And we are very pleased that we had an overwhelming positive response. Why? Because the 2 companies, DSM and Firmenich were stood there to support their customers with a high OTIF level during the period. So it's an opportunity for us to say, okay, can we look at this model differently as long as we could leverage what Dimitri shared with you, the 88 manufacturing facilities that we have all over the world, the 78 application labs, the 40 creation centers and the 70 pre-mix. So this is music to the ears of our customers because then they see the reach that we have. This will give them the comfort around supply chain and at the same time, gives us and the future company, the nimbleness, the agility and the proximity that we need to continue serving them with a higher share. Yes?

Martin Roediger from Kepler Cheuvreux. Two questions. What is the benefit of having 2 headquarters, especially the 1 in Delft, it's not clear to me? And secondly, Firmenich owns a stake in Robertet, what will happen with that? Do you intend to sell that before the merger? Or will that be part of the merged company?

Dimitri, do you want to take that?

Yes. So we have two headquarters, not one Delft, one in Maastricht and one in Kaiseraugst. And the Food & Beverage, Taste & Beyond will be led out of Delft. So why do we have 2 headquarters? I think Geraldine said it more eloquently than I can say, but let's give me to try just to repeat what she just said. We want to build on the talent base we have, one. Secondly, we also want to have a balanced representation. So from the 2 companies, merger of equals, I think it's important to have 2 headquarters. Thirdly, I will add a new element to it. In today's world, hybrid working is part of the game. So it doesn't really matter where you work from. So we would like to maintain the talent we already have at these 2 locations. So those were the argumentations around the 2 headquarters.

Talent, ecosystems that have -- that exists, et cetera. Robertet, it's a very good question. Firmenich has a minority equity stake in Robertet. This will be part of the deal. And we are not planning to exit this equity in Robertet, and this would be part of the new deal. We've invested in taking this minority stake in Robertet. Robertet is a very good competitor. We saw this opportunity and we will maintain this minority shareholding for the future.

Thank you, Gilbert. Let's go a little bit to the left of the room maybe. Yes, someone standing up there, a lady here on the left. Thank you.

Lisa De Neve From Morgan Stanley. I have 2 questions. So thank you so much for carefully outlining revenue synergies, but having a question on integrated solutions, you've discussed -- it's quite clear to me what the volume opportunities are, but how should we think about the margin profile that comes from an integrated solution? Is there a possibility that if you're working with multinationals, they may want to discount from you because they're now working with both of you? And following on from that, my understanding is that Firmenich works with a pricing model mostly on a per kg basis and that the pricing model from DSM may be slightly different. So how will the pricing model towards your solutions evolve as a combined business? Sorry, this was a long question. Secondly, I had a small question on pet food. How will your market position evolve? And how will the growth profile of the pet food business look like when you bring in some of the palatability qualities of Firmenich into DSM.

Okay. So I think we may wish to invite Patrick, for instance, to comment on some of this. Maybe somewhat detailed questions at this stage, if I may say. But Patrick, do you want to have a go?

Thank you for the question. Let me address first the question on pricing. I'm not privy to the pricing strategy of Firmenich as you can imagine at this moment in time. However, also our pricing strategy is not necessarily on a kilogram basis by itself. It has to do really per product, what the added value of it is. We have -- you've seen the list of ingredients and depending on the application, depending on the ingredient but also the end market segment, we set pricing. That's not purely on a kilogram basis. We have diverse pricing strategies and that's also necessary to create the maximum value out of our portfolio. That's on the pricing. On the pet food, I think that's exactly a very interesting area to grow, the palatability. I think that's where the next step is for us to take a step in. Reflecting now where we stand today, the pet food business has only been transferred to Food & Beverage for January 1 of this year and the reason for that was inherently the dynamics of pet food are much more equivalent to the ones in human nutrition and in Food & Beverage than in animal health. That's why Ivo and I decided that this is fitted better with the Food & Beverage business. Now we're now looking at strategy to accelerate growth, that growth based on portfolio of DSM as such, we have there set as a target area the gut health, the pet gut health because we have a lot of capabilities in the gut health area due to our microbiome capabilities for the -- also for animals and for humans with the addition of Firmenich to DSM-Firmenich with the merger. Palatability is definitely the area where we are going to look at. Emmanuel mentioned some of the capabilities that Firmenich has that they've not brought to the market. And the reason for that was that they didn't have a dedicated route to market. Well, today, we do have that dedicated market.

Thank you, Patrick. Next set of hands, back to the middle front table. There were a lot of hands there. So either of you.

Gunther Zechmann from Bernstein. Can I ask about returns on capital of this deal, when do you expect to earn your cost of capital? And can you just describe the trajectory? And the second question, more specific on the Firmenich side. You had only 1 year of historic cost there. Free cash flow was very strong, around 14% of sales. Can you give us a longer average time frame maybe similar to the growth CAGR that you've given us?

Yes. So when it comes to the detailed modeling, we will provide more information, of course, in the prospectus with all the modeling, et cetera. In terms of the return on capital, the impact of the deal structure is something that we need to work through. Because it's a tender offer, we need to look at how that impacts the cost of capital. And that is one of the downsides of this kind of construct. It's a legal construct. It doesn't change anything to the economic realities that this is a good cash-generative picture overall. So in terms of the modeling, I'm afraid you're going to have to be a little patient in terms of doing all of that. But remember that here, we're bringing 2 companies, it's a merger of equals. So there's no premium paid. So what we're bringing together is effectively the capital base of 2 companies with similar cash generating capabilities. On top of that, of course, you have the synergy value that will come. So these are the different moving parts. And as we put all of that together more in detail, then we will be able to disclose that part. Now I think it was -- I didn't quite get your second question on the -- was it the free cash flow? Okay. The free cash flow of Firmenich, yes.

Benoit. Can you answer this one please?

Okay. I don't know if, Benoit -- yes, why don't you join us?

Yes. Thanks for the question. You're right. In financial year '21, we had a pretty strong free cash flow. There was some exceptional in this free cash flow. If you look at the historical conversion of EBITDA into free cash flow, historically, we've been converting at a rate of 50% our EBITDA into free cash flow, which is equivalent pretty much to a 10% rate on revenue from a historical standpoint.

Thank you, Benoit.

Thank you. Next hands. I see on the left middle of the room, the gentleman there. Thank you.

Chetan again from JPMorgan. A few -- couple of deal mechanics question. Firstly, the share count split between DSM and Firmenich, that's fixed. So that has no relation to DSM share price? Second, can you confirm the lockup period for Firmenich shareholders, if there is 1 post the completion of transaction? And third, more strategic question is, it seems the integrated solution is now the new trend, new fashion, new fad what you might call in this industry. How do you see that impacting the competitive dynamics in this market over the next 5 years in general?

Okay. So maybe let me start with the lockup. So indeed, the number -- the percentages at inception is part of the exchange ratio, and therefore, that does not get impacted by share price developments. This is truly a merger of equals. It's predominantly in nature an equity transaction. And so that is what it is. When it comes to the lockup period, they are very customary lockup period terms. This will all be in the documentation with the tender offer and their prospectus. But I think importantly, and that is probably the key message is that the shareholders behind Firmenich are really interested in being long-term investors in this NewCo. They see all of the value that you have seen today. So while there's a bit of monetization at the inception, the intention is to be in it for the long run and for the value creation that this is going to bring. So that's one part. There's the usual customary orderly marketing arrangements as well. So the whole deal is constructed with all the -- I would say, the bells and whistles that you would expect of this kind of a deal, but the fundamental is that, that is absolutely not -- the intention is not in monetizing. And I was sharing earlier with -- well, discussing that if we had approached the shareholders of Firmenich and said, assuming that we could buy you, it would be a no-go, no way. This is about creating a fantastic #1 company in our space. So that's really the dynamics there. Now your third question, did you catch that?

Yes, that's about the competitors. So let me just say that we are a consumer-focused and a customer-focused company. So I think you've heard all the synergies are more consumer, customer-related. And if that has an impact on the competitors, I'll leave that all up to you, but we are focused on the consumers and grow our market.

Next hands. Straight ahead. Middle of the room, if you stand up, then you will get the mic.

Cathal Kenny from Davy Research. Two questions. Firstly, on Firmenich. If we take the 2 divisions, can you give us some color on the levels of customer concentration within those 2 businesses? And my second question relates to revenue synergies and the role that the pre-mix platform within DSM plays in synergy attainment on the revenue side.

Okay. Thank you very much. So customer concentration, do we invite someone? Or do you take it, Gilbert.

I'm happy to have a go at it. Into perfumery, on consumer fragrance, there will be a higher concentration mainly because the top 5 or 6 companies in the world are the biggest, and you know who they are. But the concentration will be slightly higher than 1/3, not more than that. So it is far more fragmented than people think, especially in a world where local customers, regional customers and start-ups are gaining traction. You have far less concentration on the Taste & Beyond business.

Thank you, Gilbert. And Philip, would you like to comment on the role of the pre-mix?

Yes, there will be certainly benefits from DSM having 15 primarily dry blending pre-mix sites and then Firmenich having much more experience than we have in liquid blending, right? So I think the combination of those 2 technologies will be very synergetic as otherwise we would probably move into liquid blending and you would probably have moved the other way. So yes, that will definitely also be an area of synergy.

Great asset. Thank you, Philip. To the back, blue shirt. Yes, please stand up. Thank you.

David Price from Veritas Investment Partners. I'm probably primarily focused on the taste business. If we think about the opportunities from combining the 2 businesses, what level of reorganization of the go-to-market strategy or sales team, you think is required? And then a second minor question related to the integration, are the 2 companies in a similar IT system? That can often be a stumbling block at times.

Absolutely. So sales teams in taste. Do you want to take that, Dimitri, or should we...

Yes, let me ask -- we first ask Patrick and then we see how Emmanuel reacts.

I don't think this is -- we do work on it, that will be part of the integration.

Exactly, it's early days.

It's very premature. It's very early days.

Patrick, do you want to have a go?

It's very early days. And of course, it's all about the synergy, finding the synergy. So we have to have and go in discussion with both route to markets and see how to get synergy out of that. And the whole idea will be to be and remain customer-focused and regionally present. And I think those are the 2 things that will be the underlying fundament when we look at how to organize our organizations. But the businesses have some different dynamics, and we have to -- whatever we decide how to do it, we have to make sure to mitigate also downsides for some of the -- the downsides [ at the table ]. When we choose the model, we have to be able to also make sure that when some consequence where you make business different that we mitigate that because we said earlier, we do not intend to see -- and we want to make sure that there's no loss of business, as we shared earlier.

Let me clearly say that we go for 1 route to market and the work needs to be done when we are allowed to. So it's not that we have 2 routes to market, et cetera, but hey, that's why we have Patrick and Emmanuel, we're trying to find a way on how to best construct that, it will be part of the integration discussion. But to get the synergies in, we need to act as one company, right, one route to market, one face to the customer or maybe as background, but it's too early to tell how that exactly works out. What is clear, there's a lot of synergies to be gained. So we really need to think how we can bring that home the best and quickly as we can. Maybe then I'm looking also at Emmanuel whether he fully agrees. Do you want to add a bit on to it? Please do.

I just want to add one thing. The model between T&B, Taste & Beyond and Food & Beverage is different because one is more organized by product line globally, and we have a local business. By the way, 75% -- more than 75% of our business is with local companies. So also, there is one thing that we want to keep, which is a differentiator, and we will not kill that at all. We will even enhance that, it's the [ brief ] management, what I called this morning, the engine. We receive a brief, we receive 50,000 brief every year. We worked on 25,000 of those. And because of the company are becoming more and more local, they complexify the brief. In the past, a brief was just give me vanilla flavor, okay? Now give me a whole bunch of I want to have some texture, I want to have some functional nutritional fact. I want to have sometimes some color, X, Y and Z. So in fact, we will keep that machine and gradually integrating some of the core technologies of DSM to keep this profitable machine of briefs and at the same time, continue to be extremely efficient, extremely effective on the food ingredients side. And this is the heart of the -- what Patrick and us, we have to make.

Yes. Thank you very much, Emmanuel. And to your question on IT systems, I touched upon it briefly when we were discussing the cost of synergies. Now of course, when you bring 2 companies together, we have different DNA when it comes to systems. This is one of the areas where also the phasing really matters. Now we were discussing during the breaks what is going to be the most important element, and you triggered that thoughts in asking about systems. And that is that we need to fly the plane while we're integrating the businesses. And clearly, IT integrations are very necessary at some stage, but we have to be very smart in deciding where is it critical fast? And where can it come later? And how do we pace all of that? So it's embedded in the estimated EUR 250 million of costs but there will be some systems integration, of course. And beyond that, it's how do we do this in a very, very good way that we're not disrupting anybody, particularly in this world where I think you've heard several times, reliability of supply chains, OTIF, et cetera, is what keeps your customers happy, that needs to obviously be undisrupted as part of the process of IT integration. So that's where we are at this stage. And then I can tell you, the devil is in the detail that's in that area. Okay. Hands, front table.

It's Nicola Tang again from BNP Paribas Exane. I wanted to ask 2 things. You've referenced a couple of times the strength of the balance sheet straightaway. And I think on the call on the 31st of May, you talked a little bit about potential for bolt-ons post deal. I guess it's a little bit early to think about exactly what those areas might be, but perhaps you could answer on a stand-alone basis, which areas were of particular interest to you from a bolt-on perspective? And then the second question, I wanted to ask a little bit about sugar reduction or specifically Stevia. In the DSM slides, you referenced there's many innovation projects that we're pretty familiar with on the DSM side, including Avansya. And I noticed you didn't mention that earlier, but given that Gilbert earlier was talking about the strength of the sugar reduction side, perhaps you could just talk a little bit about the benefits of combining the 2 businesses in that specific area.

So I don't know if you want to give a heads up on the sugar reduction while I answer the first question. It will be Emmanuel. So I hold that there. When it comes to capital allocation, indeed, we're putting together because of the structure and the 2 companies, it's going to be a healthy balance sheet from the start. And again, I was asked, okay, what does that mean for capital allocation? And here, you're really looking at a picture where we will have the ability to continue to invest in a very similar capital allocation philosophy that you are familiar with when it comes to DSM, and that is basically investing in our organic growth and innovation projects, which means, of course, science as well. Then a very strong commitment to the dividend. Then maybe some M&A. And last, if we come to a position where clearly the balance sheet is not sufficiently utilized and we never say no to some returning of capital. Now we are also very mindful that we must not overburden the organization. So there are 2 big priorities, one is staying very focused on our business, our customers; and the other one is getting this integration right. Now on the other hand, of course, of the 4 businesses, we know that Food & Beverage / Taste & Beyond is where clearly most of the shaping will be happening. So is there maybe some opportunity for a bit of bolt-on, and I'm emphasizing a bit, could be in animal nutrition HNC or Perfumer & Beauty. But really, I would say, with a lot of caution because we don't want to bite off more than we can chew at the same time. So that's -- so I don't think it's really the moment to go into the what of, what kind of bolt-ons we would then do. I think, a little bit of letting dust settle first is probably better there. And then sugar reduction?

Okay. You have not seen sugar reduction as a list of the synergies before, okay? We have -- why? Because, in fact, at Firmenich today, as I said before, we built an ecosystem, which is composed of many technologies that we developed, we in-source to really create the momentum of sugar reduction, which is, we believe, the number by -- we believe, by far, the #1 in the market. And if you remember in what Gilbert said this morning, last 6 months was plus 25%. It's a continuous double-digit growth over the last 3 or 4 years. Now what DSM is bringing is some ingredients which can be used as a toolbox in the ecosystem that we are building. Now looking from a helicopter view, there is much, much more synergies looking at nutrition, plant base, dairy, future pet food moving forward. And by the way, we have plenty of extracts, which can go into the pet food beyond the palatability beyond this -- the sugar reduction opportunity.

Thank you, Emmanuel. Hands, any more hands. No? That's probably because the booths are very attractive, and we will be having a drink together so that is nice as well. But I'll just last scan of the room. One more hand.

Reg Watson from ING. A couple of questions for Gilbert. I noticed that your executive team is reasonably new to Firmenich, many of them 2 or 4 years tenure. You've gone outside the company to get expertise, bring in management expertise. I'm wondering what's attracted you to these people, what skills you were looking for?

Yes. Look, it's a very good question. The philosophy of Firmenich has always been meritocracy. And we've always worked extremely hard to attract the best talent into the company. And I feel very proud of the leadership team we have. If you look over the last 8 years, we've -- and here, I'm looking at my leadership team, the top 200 in the company, 70% of them were promoted into new roles. So it gives you an idea of the depth of talent we have. Now if I look at my exact, yes, we've managed to attract great talent from outside, but at the same time, we have great people who worked for the company for a long time. So Eric Nicolas, my COO, who is here. And Eric has been with the company for 11 years. He was my CFO when I joined the company. [indiscernible] that is not with us here today, has been with the company for and is also an exec. So it's a combination of the best talent, and I feel very proud I have 7 different nationalities and attracting outstanding talent as you saw from the team. And we have always had this philosophy of the combination, attracting the best from outside and at the same time growing talent from within and it gives you an idea of when you do this combination, then you can't miss a turn, and you saw where we are on the digitalization and naturality, we shifted the center of gravity of the company towards biotech, towards life science. And all of this has been done by the capabilities that you bring that will also open your eyes to these new important consumer opportunities that should not be disregarded.

Sorry. And just one final question to give you the floor, Gilbert. If we were to ask your competitors, what Firmenich does well and what it doesn't do so well, what do you think their answers would be?

Yes. Look, so far, obviously, they know that we are on the core list. They know that we are very strong in science. So they will definitely talk about science, talk about sustainability, talk about client intimacy. What they will say that we could do better, which is the reality. We have subscale in Taste & Beyond, we have a EUR 1.5 billion business. You heard from Emmanuel talking about the EUR 60 billion attrition opportunity. And at the same time, when you look at our perfumery business, we are not in cosmetic actives. And that's why when we look at the combination with DSM, we see this addresses this gap. Most of my competitors, if you look at the Germans, the Americans and the Swiss, they are already in cosmetic actives, we are not. Now with this combination, it addresses this gap. The second area is about scale in Taste and beyond. So we've picked our fights, and this is where we're growing with the trends of the future, but scale helps. The third area that is critical that needs to be factored is biotech. You heard Sarah mentioning biotech. Biotech is revolutionary and transformational for our industry for the future. We have pioneered this in F&F, but at the same time, we don't have end-to-end. And now with this partnership with DSM, what do we have, we have also manufacturing. So we will have end-to-end biotech that will give us a competitive advantage. So these will be the 3 areas that if I was my competitors, I will pinpoint at, and we have done our internal self-assessment and we know what works, what couldn't work. And all of these 3 are addressed part of the merger of equal and this dream, and this is one of the reasons why our shareholders are committed to the long term. So our shareholders are not looking at the value creation today. They are committed for the long term because they believe in the dream and they want to make sure they are part of this long-term journey.

Thank you. Actually, that was a great question to bring us to the end of this Q&A session. For those of you with us here, of course, please stay with us. The booths are still here, let's have a drink. Online, I would like to thank you all. And now I have the pleasure to open the day. And therefore, I would like to hand over to you, Dimitri, to have the pleasure to close the day. Or Gilbert you would like to say a few words.

I want to thank you also for showing up today. We definitely have a small gift from Firmenich for you to take back home. At the same time, as you saw, there are so many great brands on these displays, and all of these brands are brands that you usually have at home. We will give you also each one of you the opportunity to select one item to take with you. So you will take your Firmenich bag, but at the same time we don't want to waste this stuff. These are great brands and these are consumer brands that you use at home. Every one of you on top of your bag, please make sure you pick one of these items you can take with you back home.

Thank you, Gilbert. And I've seen some first-mover advantage at some of the tables that some of you had spotted that this may be the case. So well done for being the first movers.

There is enough, there is enough, so don't worry. I would like to close just with one sentence, maybe 2. I think we've been part of the wild experience. Employees, customers, and I hope you share that same wild experience with us. The wild is also linked to a dream. And a dream is fantastic for the moment, but the real dream is worth something if you make it reality. I hope that you've seen the executive team here, that you've seen 90% of it, only [indiscernible] not here, who is committed but also feels [indiscernible] responsible to make that dream a reality. So [indiscernible] and myself, we'll feel fully responsible for it as Co-COs. But it's not us, it's the whole combination that you've seen a lot of our future colleagues out there in the corridor. We feel that responsibility. We don't take it light hardly. We feel the commitment and I hope you share that commitment with us because we're going to make that dream reality. It's a promise. Thank you.

Thanks, everyone. Thank you.