Givaudan SA (GIVN) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the Givaudan 2026 Half Year Results Conference Call and Live Webcast. I am Valentina, the Chorus Call operator. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Christian Stammkoetter, CEO. Please go ahead.

Thank you, Valentina. Dear ladies and gentlemen, good morning, and welcome to our 2026 first half year results conference call, my first one as the CEO for Givaudan. Stewart Harris, our CFO, joins me today, and all documents related to the results are available on our website. I will lead you through the business highlights before Stewart will share more details on our operating performance, and we will remind the 2030 strategy and outlook before we open the Q&A session. So let's get started. Let me start a bit with my first month. Over my first 5 months as the CEO at Givaudan, I've focused on listening and emerging myself with customers, employees and investors, discovering firsthand the strength of the business model and the passion across the organization while gaining a deep understanding of the business. I've been traveling to many of our sites, visiting both divisions across Europe, [ NORAM ], LATAM, Asia and [indiscernible]. I met with many customers and also with partners to learn about the unique upstream model we have in the sourcing of unique natural ingredients. What stands out is Givaudan's unique combination of creativity, science and operational excellence supported by a strong customer-centric culture and long-term relationships. I have a great respect for what has been achieved here and for the teams who make it happen. As shared before, my agenda is built around 3 priorities: optimize, future-proof and together. Optimize means fine-tuning the strategy where needed, while driving strong execution productivity and disciplined capital allocation. Future-proof focuses on investing selectively in innovation, data, digital and AI, capabilities to support long-term growth and strengthen Givaudan's unique moats. And together reflects our collaborative culture, working closely across teams, customers and partners to create value. I look very much forward to sharing more on our strategic priorities at the summer conference that we hold in Zurich at the end of August. So in short, I've listened, I've learned and I'm obviously now in action mode, focused on aligning the organization to amplify what already works while addressing areas where we can accelerate and I look forward to delivering on our 2030 ambition together with this exceptional team and to updating you as we progress. Now let's come to the business highlights of H1. We are pleased with our sustained solid financial performance in the first half of 2026. Despite ongoing geopolitical and macroeconomic challenges, our business continued to display good growth momentum and industry-leading profitability. Group sales for half year 1 were CHF 3,799 million, up 3.6% on a like-for-like basis and minus CHF 1.7 million. Like-for-like growth was primarily volume led across both divisions, and we achieved balanced growth across customer groups and geographies, underscoring the natural hedges in our business and broad-based customer traction. In half year 1, we incurred CHF 10 million of nonrecurring costs, mainly related to litigation settlements and provisions with 2 items that are worth mentioning, a settlement agreement in Fragrance & Beauty related to the antitrust investigation and a provision related to court litigation in Taste & Wellbeing. Stewart will comment more on it in his part. On an adjusted basis, EBITDA amounted to CHF 923 million, corresponding to a margin of 24.3% compared to a very strong 25.2% in half year 1 of 2025. Half year 1 reported net income was CHF 475 million compared to CHF 592 million in prior year. Excluding one-offs, adjusted EPS in Swiss franc was CHF 60.25 compared to CHF 66.7 in the prior year period. Adjusted free cash flow was minus CHF 119 million in half year 1, reflecting increased investments and timing-related working capital movements with stronger cash generation expected in the second half, and we remain confident in our ability to reach above 12% adjusted free cash flow margin over the 5-year strategic cycle. Stewart will provide more details on the operational performance shortly. So turning to Slide 6 regarding the divisional sales performance. Half year sales were encouraging with clear strength in Fragrance & Beauty and first sequential improvement in Taste & Wellbeing. Growth was predominantly volume driven, with only limiting pricing and ForEx impact, the modest pricing we did see largely reflects logistics and tariff pass-through. The acquisition of [indiscernible] in Fragrance & Beauty contributed 1.4% growth on group level. Fragrance and Beauty sales were at CHF 2,010 million, up 2.9% in Swiss franc and plus 6.5% like-for-like, driven by strong demand across both Consumer Products and Fine Fragrance. Taste & Wellbeing recorded EUR 1,789 million, down minus 6.3% in Swiss franc and plus 0.5% on a like-for-like basis. Importantly, showing a first sequential step in the right direction in the continued challenging market environment in some of our regions. So now going into more granularity by division on the next 2 slides, starting with Fragrance & Beauty on Slide 7. The division delivered strong results in Fine Fragrance and Consumer Products, reflecting the portfolio's broad and its natural hedges across categories and geographies. Fine Fragrance delivered a strong like-for-like growth of plus 7.3% on top of a very strong prior year comparable of plus 18%, underlining the continued momentum of the business benefiting from broad geographic exposure and strong relationships with local and regional customers as well as with global customers. Consumer Products, the largest segment, representing more than 60% of the division posted an excellent performance, growing 9.2% like-for-like. This strength is rooted in creativity, innovation and a well-balanced customer mix, which together drive a healthy project pipeline and win rate. Fragrance Ingredients and Active Beauty sales decreased by minus 4.1% like-for-like, with Active Beauty facing a very high comparison base from last year, and Fragrance Ingredients continues to experience price competition in parts of the portfolio, which explains the softer performance. Moving to the next slide to Taste & Wellbeing. As mentioned earlier, Taste & Wellbeing showed a clear sequential pickup in Q2, moving to plus 1.5% in quarter 2 from a minus 0.4% like-for-like growth in quarter 1, reflecting the first positive effects of our optimization and commercial action, although the market environment remains challenging. You see Europe was broadly stable at plus 0.3% like-for-like. SAMEA showed a strong recovery in the second quarter was plus 8.1%, leading to plus 0.5% like-for-like for the half year on top of a double-digit comparable. And also, Asia Pacific showed clear momentum driven by ongoing strength in China and a continued acceleration across Southeast Asia. The opening of a new production site in Indonesia demonstrates our confidence in the region's growth prospects. North America remains more volatile at minus 1.5% like-for-like. As consumers remain selective, particularly at lower income levels, but we see encouraging areas of growth in reformulation, natural colors and GLP-1-related brief. And last, in Latin America, temporary headwinds in specific markets, notably Mexico, continued leading to overall minus 1.5% like-for-like sales growth. However, we are beginning to see early traction from targeted action and remain confident in our market positions and ability to progressively strengthen performance over time. So overall, Q2 marked a clear step in the right direction and supports our confidence in continued sequential improvement into half year 2, supported by healthy leading indicators and easing comparables. Turning to the regional view on group level on Slide 9. We delivered balanced broad-based growth across geographies with high gross markets up 5.2% like-for-like and mature markets up 2.0%. EAME maintained good momentum and contributed 3% like-for-like for the half year on top of a high comparable. North America increased plus 2.3% like-for-like although Taste & Wellbeing, as seen before, remain more challenged in the region. This was offset by a continuously strong momentum in Fragrance and Beauty across both consumer products and Fine Fragrance. Asia Pacific increased by 9.2% like-for-like, reflecting continued strong growth across key markets, particularly China and India, and also strong growth, especially in Indonesia. And Latin America recorded minus 3.9% like-for-like growth in half year 1, 2026, influenced by temporary market conditions in Mexico in Taste & Wellbeing alongside a strong prior year comparison in Fragrance & Beauty. So in conclusion, our balanced exposure across mature and high-growth markets continues to provide solid, consistent growth and resilience in a complex environment. Yet we are conscious that there are areas where we are actively working to further optimize our performance step by step. And now moving to Slide #10. This slide illustrates our 2030 strategy in action. Concrete examples of how we extend customer reach, deepen geographic presence and innovate for differentiation and care for our people, nature and communities. We secured the seventh consecutive CDPA for climate action and achieved a CDP for supply engagement, reflecting continued progress towards our net 0 ambition and 2030 purpose goals. We continue to invest in our footprint to deepen our geographical presence. We broke ground on an expanded fragrance manufacturing complex in Pedro Escobedo, Mexico, and we opened a new state-of-the-art production site in [ Cikarang ] Indonesia to support Taste & Wellbeing growth in Southeast Asia. And we continue with our M&A strategy that is supporting our 2030 strategy to extend our customer reach, especially in local and regional customers. For example, through the acquisition of a strategic majority stake in Eurofragrance, a highly creative, regionally rooted fine fragrance out. Together, these milestones show our 2030 strategy being put into practice, advancing sustainability, unlocking differentiated innovation and expanding our local presence to capture growth. On the next slide, Slide 11, shows how we turn insight and science into customer value, practical innovations that address clear consumer trends. The examples span taste, fragrance and beauty and illustrate our focus on application-ready solutions and enabling technologies. Let me highlight a few for Fragrance & Beauty. In Active Beauty, we launched PRIMALHYAL NeuroYouth use, an advanced [ eluronic ] asset technology, supporting skin longevity, firmness and sensory perception opening new opportunities in skin health and beauty. We strengthened our fragrance performance toolbox through strategic equity investment and collaboration with Microcaps AG to expand our high-precision microencapsulation capabilities, enhancing fragrance longevity and performance across fine fragrance and beauty application, including alcohol-free formats. Now let me highlight Haus of Suds, which reimagines laundry as a multi-sensorial experience, helping customers create emotionally engaging sent concept in differentiated product formats across generations. In Taste & Wellbeing, we focused on GLP-1 and broad awareness trends that are increasing demand for lower calorie and functional products. We combine consumer insights with taste, delivery and masking technology to help customers reduce sugar, fat and salt while maintaining indulgent taste, helping customers on GLP-1 and especially briefs and functional beverage, one of the fast-growing subsegments into winning products. For [ hot and spicy ] where our [ chefs council ] in Mexico combined culinary expertise with sensory science to develop cutting-edge hotness technologies and practical flavor solutions that help customers win in spicy and flavor forward segments. And in February, we opened the House of Lime in Mexico, an immersive co-creation space, combining flavor expertise, sensory tools and digital capabilities to help customers accelerate innovation and speed up reef to market. So across both divisions, our focus is clear: translating science, insight and creativity into differentiated solutions that help customers innovate faster and grow. And with this, let me pass the word to Stewart Harris, who will go into more detail regarding our performance in half year 1. Stewart, over to you.

Thank you very much, Christian. I would like to add my warm welcome to all of the participants on the call. On the following slides, I'll give you an overview of the 2026 copper operating performance of the group and that of the 2 divisions, as well as the financial performance of the group. Let me start with the performance highlights on Slide 13. As Christian already noted, group sales in the first 6 months of 2026 were CHF 3.8 billion, an increase of 3.6% on a like-for-like basis over the same period in 2025 and a decrease of 1.7% in Swiss francs due to the continued strength of the Swiss franc. The adjusted EBITDA was CHF 923 million compared to CHF 973 million in the first half of 2025, a decrease of 5.2% in Swiss francs, where when measured in local currency, the adjusted EBITDA increased by 0.8%. The adjusted EBITDA margin was 24.3% in the first half of 2026 compared to 25.2% in the same period in 2025, due to the nonrecurring costs that Christian already touched upon, and that I will expand upon in the coming slides, the net income decreased to CHF 475 million and the net income margin was 12.5% of sales. The adjusted free cash flow of the group was minus CHF 119 million in the first half of 2026 or minus 3.1% of sales, mostly due to the higher investments and temporary working capital effects. The net debt-to-EBITDA ratio was at 2.8x at the end of June 2026 compared to 2.5x in June 2025 and 2.1x in December 25, with the increase in leverage driven by the impact of the aforementioned nonrecurring costs in EBITDA. In order to ensure consistency and comparability over the strategic planning cycle 2026 to 2030 and ahead of the introduction of IFRS 18 in 2027. The group has updated the definitions of some of its key performance metrics, notably by replacing comparable EBITDA with adjusted EBITDA and introducing adjusted free cash flow and adjusted earnings per share. Please turn to Slide 14, which shows the overview of the exchange rate development in the first half of 2026. This slide shows the comparison of the exchange rates in the first half of 2026 versus the same period in 2025. The Swiss franc continues to strengthen against most major currencies in which the group operates with an impact on the group's reported results in Swiss francs. This is particularly evident in the year-over-year comparison of absolute Swiss franc results in the first half of 2026 versus the comparable prior year period. However, as we have consistently noted, our operational and geographical spread provide good natural hedges to mitigate the currency impact and our EBITDA margin remains well protected against currency fluctuations. Please turn to Slide 15 for an overview of the half year operating performance of the group. The gross margin slightly improved to 44.5% in the first half of 2026 compared to 44% in 2025. With the continued impact of the Fragrance Ingredients competitive environment, evident in H1, more than offset by good operational leverage in both divisions. On the EBITDA level, the EBITDA was CHF 820 million in the first half compared to CHF 945 million in the same period in 2025, mainly impacted by higher distribution costs negative currency impacts and by the nonrecurring cost of CHF 103 million. The group recorded CHF 83 million of litigation settlements and provisions in the first 6 months of 2026 as well as CHF 20 million of acquisition, restructuring and project-related costs compared to CHF 19 million in the prior period. After adjustment for these nonrecurring costs, the adjusted EBITDA margin continued to be strong at 24.3% compared to 25.2% in 2025. On the following 2 slides, I will take you through the operating performance of the 2 divisions. And if you turn to Slide 16, we will start with Fragrance & beauty. Fragrance & Beauty recorded an EBITDA in the first half of 2026 of CHF 492 million compared to CHF 525 million in 2025, with the decrease mainly driven by slightly lower gross margin, investments in growth as well as currency impacts and nonrecurring costs. In the first half of 2026, the Fragrance & Beauty division reached a settlement agreement in relation to certain several proceedings of CHF 30 million in connection with the broader competition authorities investigations into the fragrance industry. And furthermore, incurred acquisition, restructuring and project-related costs of CHF 4 million compared with CHF 5 million in the first 6 months of 2025. The adjusted EBITDA margin of the division was 26.2% in 2026 compared to 27.6% in 2025, continuing the excellent financial performance profile of the division. If you would like to turn to Page 17, we will look at the operating performance of the Taste & Wellbeing division. Taste & Wellbeing recorded an EBITDA of CHF 328 million in the first 6 months of 2026 compared to CHF 420 million in the same period in '25. The decrease is mainly due to negative currency impacts as well as the nonrecurring cost of CHF 69 million. In the first half of 2026, the Taste & Wellbeing division recorded a provision of CHF 53 million in relation to an adverse judgment against Givaudan in the state of Missouri and the United States in connection with long-standing butter flavor litigations involving alleged pulmonary injury. The outcome in this case is exceptional and inconsistent with the broader litigation history over the past 20 years and we are considering all available legal options in terms of possible next steps. In addition, the division recorded restructuring and project-related costs of CHF 16 million mostly related to operational restructuring expenses compared to CHF 4 million in the prior period. After adjustments of these nonrecurring items, the adjusted EBITDA margin of the division was 22.2% compared to 22.7% in the first half of 2025. Please turn now to Slide 18, where we look at the net income. The net income before tax was CHF 580 million in the first half of 2026 compared to CHF 713 million in the same period in 2025, largely driven by the nonrecurring costs of CHF 103 million, which we have already covered. The effective tax rate was 18% compared to 17% in the half year of 2025, mostly driven by the progressively increasing safe harbor rate under the [ OECD ] minimum tax initiative. Net income after tax was CHF 475 million in the first 6 months of 2026 compared to CHF 592 million -- excuse me, in the same period with a net income margin at 12.5% in the first half year 2026. When adjusted for the nonrecurring costs, including tax effects, adjusted basic earnings per share were CHF 60.25 in the first half of 2026, compared to CHF 66.71 for the same period in 2025. Please now turn to Slide 19, where we see the adjusted free cash flow performance. In the first half of '26, the group had adjusted free cash flow of minus CHF 119 million or minus 3.1% of sales compared to minus 0.4% in the same period in 2025. This difference is largely driven by temporary working capital effects as well as higher investments at a group level. At this stage, the only adjustment to the prior definition of free cash flow is the CHF 50 million settlement agreement reached in the Fragrance & Beauty division, as previously noted. Net investments were up CHF 207 million in the first 6 months of the year, representing 5.4% of sales compared to 4.4% of sales in the prior year period due to the timing of key investment projects. As a reminder, we have guided to a net investment range of 4% to 5% of sales in the strategic planning period 2026 to 2030. Net working capital was 30.8% of sales in the first half of 2026 compared to 27.1% in the first half of 2025, due to sales phasing and temporarily higher inventory effects. We continue to balance our working capital ambitions with the business needs, and we expect to see a meaningful improvement in working capital by the end of the year. Please turn to Slide 20 on the debt and leverage profile. This slide shows that the group continues to have a well-balanced and stable debt portfolio with interest rates, which have been locked in at attractive rates. At the end of June 2026, the net debt was CHF 4.6 billion with a weighted average interest rate of 2.12% compared to 1.94% in December 2025 and 1.9% in June 2025. There is a relatively large short-term debt within 1 year due to the traditionally higher short-term debt at the half year, and some maturing bonds in the first half of 2027 being reclassified as short term. At the end of June 2026, the net debt-to-EBITDA ratio was 2.8x compared to 2.1x in December 25 and 2.5x in June 2025, with the leverage being impacted by the nonrecurring costs, as explained previously. This concludes my section of the presentation. I would like to thank you for your attention and hand back to Christian.

Thank you, Stewart. So now let's look forward to our 2030 strategy and outlook. Our 2030 strategy is about purposeful evolution, building on the strong foundation of our proven model, combining innovation, customer partnership and disciplined execution to deliver sustainable growth while preparing for what's next. As I mentioned earlier, my focus is centered around 3 priorities: optimize, future-proof and together, priorities that bid naturally on the strength of Givaudan and the opportunities we see ahead. Our success is rooted in close calibration with our customers, suppliers, partners and teams around the world, delivering differentiated solutions with excellence, agility and care for people nature and communities. I look very much forward to sharing more detail on our strategic priorities and ambition at the summer investor conference in Zurich at the end of August. Now on the next slide, a reminder on our targets for the 2030 strategic cycle. So what I can confirm is that we are committed to our 2030 performance ambitions, delivering 4% to 6% like-for-like sales growth and adjusted free cash flow margin above 12% on average over the 5-year period from 2026 to 2030, together with our purpose-linked targets. As you know, we've consistently managed the business against midterm ambitions rather than annual targets, which remains the right approach for our project-led business model giving our teams the flexibility to focus on sustainable growth and long-term value creation. It also supports disciplined execution and agility while ensuring the right balance between delivering short-term performance and investing for the future. So on the next slide, I can share a few words on the outlook. As highlighted earlier, we delivered another solid underlying set of results in the first half of 2026 against high comparables of 2025 with continued good growth momentum and industry-leading adjusted profitability despite an environment that remains marked by geopolitical and macroeconomic uncertainty. We continue to see strong momentum in Fragrance & Beauty, and we see the start of what we call the sequential recovery in Taste & Wellbeing in line with our expectations. Based on this, and is in comparables, we are looking ahead with confidence towards H2 and overall on delivering our targets for the strategic cycle 2030. And while we have some areas to optimize, we are convinced of the resilience of our business model, supported by our diversified portfolio across customers, geographies and product segments as well as a healthy project pipeline and encouraging lead indicators. At the same time, the external environment remains uncertain, and we continue to closely monitor the geopolitical development and broader macroeconomic conditions. Our input costs, we now expect to be low single-digit inflation in the second half of the year. As always, we're working closely with customers to appropriately manage these developments and to offset those input costs while continuing to prioritize supply reliability and service quality. On the U.S. tariffs, the situation remains fluid. Following the Supreme Court decision, we have started to receive partial refunds of previously paid tariffs, and we expect this to be passed back accordingly to customers, broadly offsetting the inflation-related pricing impact within like-for-like growth. With that, we are at the end of our 2026 half year result presentation. So let me hand back to the operator for the instructions to open the Q&A. Stewart and I are looking forward to taking your questions.

[Operator Instructions]. The first question comes from Alex Sloane from Barclays.

Two from me, please. The first one on cash flow and working capital, obviously, free cash flow weaker than expected and you highlighted quite a significant working capital build in the half. Presumably, part of that build is maybe Givaudan carrying higher inventories amid supply chain disruption concerns or raw material availability concerns. And if that's the case, do you think of your customers may have also behaved similarly in any regions or segments. I'm thinking could any of the very strong consumer products performance in fragrance, particularly in Asia, have benefited from the same dynamics? And if so, is there any kind of unwind risk to think about there in the second half or into next year, if relevant? That's the first one. The second one would be on Taste & Wellbeing. I mean, good to see the sequential improvement and that you're confident in that continuing in the second half. If I could maybe just ask specifically on North America, which remains, I guess, one of the weak spots in the quarter. Is this just weak end markets? Or is there any market share loss challenges for Givaudan do you think perhaps associated with the litigation provision that you've disclosed today? And I think last year at the Investor Day, you had talked about efforts to accelerate growth in North America taste and well-being through expansion into food service and going after private label. So maybe you could give a bit of an update in terms of where we are on those initiatives.

Okay. Thank you, Alex. I'll maybe ask Stewart to take the first question, and then I will take the second one on Taste & Wellbeing.

Yes, Alex, thanks for the question. So yes, I think on the cash flow, you've seen as you called out. And if you look at the constituent parts of cash flow, you will see in receivables, we are up and in inventory were up. So I think those are temporary effects. We would expect, as I said in my speaker notes, to have a meaningful improvement in working capital in the second half of the year. To specifically address your questions and where it may translate into customer order activity. We said in Q1 that we didn't see any evidence of prebuying or stocking on the customer side. we saw the evidence of that coming through in the second quarter. And we have the same position today actually. We don't see any across the business. We don't see anything other than strong recurring demand and no evidence of any stocking that we would expect to unwind in the second half.

Okay. And then on Taste & Wellbeing, particularly in North America, Yes, I think we see, obviously, a continued difficult market environment in North America on the end consumer side when it comes to demand, but that is probably not all behind the performance. We also know that there is some shifts that we see, for example, when it comes to subsegments. So when you look in -- for example, within beverage, you still see fast growth in functional beverage, even fueled by GLP-1. You would see that still the high protein market is growing very fast. And I think for us, what will be important and what we're really working on is to ensure that we're capturing the right growth in the right subsegments. So deleveraging even more on our strategy in North America and that's what gives me confidence is that I see the pipeline inflow. We see a good pipeline inflow, of course, also in natural colors. That is obviously, kind of the shift with the [ MAA ] movement towards natural colors. So the pipeline is strengthening. The area also where we are weaker, and that's something which we are looking at and working on is we're also having natural ingredients that we sell where, for sure, we are not so happy with the performance. So it will take a bit more time on our side as well to really capture the shifts in the segments because you know that we are a project-based business that transforming pipeline into kind of actual revenue is always with a bit of a time lag. But really, you're looking at the pipeline, I'm very confident that [ Norm ] on our side will turn around also sequentially also the shift, we talked last time about private label, for example, you mentioned again, foodservice. So all this, unfortunately, as we're not selling final products, but we are basically selling way into projects, we're into briefs we need a bit of time to convert pipeline into revenue.

Next question comes from Nicola Tang from BNP Paribas.

First, I wanted to ask about input inflation. So thank you for quantifying the low single digits in the second half of the year but percentage in the second half of the year. Can you share more detail on what you're seeing in terms of natural [indiscernible]? And also how it impacts the 2 divisions? Is there a different view on inputs for the 2 divisions? And linked to this, when you gave this helpful sensitivity, this 100 -- sorry, $10 move in oil price, roughly having a 1% impact on synthetic raw materials. I was wondering if you could help us understand the -- what oil price assumption is baked into this input guidance that you've given. I appreciate it's pretty complicated and you're not buying oil, but there's clearly a lot of volatility in oil price. So I was just wondering if the oil price stays where it is now, which is higher than it was earlier in the quarter. Should we assume that, that means higher synthetics, say, in another 6 months' time. And then maybe just on the natural side. I think previously, you've talked a bit about potentially higher costs with fertilizers or with weather impacts like El Nino. So again, if you could share what sort of -- what you're seeing and what's baked into the guidance?

Well, Nicola, thanks. A lot of different elements there in. So let me try to unpack them and keep it as simple as possible. So I think if one looks at naturals versus synthetic, I think historically, as you know, we've seen naturals more or less progressively increasing consistently over time. a little bit more volatility in synthetics. But I think if we look to the second half, we see a fairly balanced picture at those levels across synthetic and natural input costs. So no major a weighting towards one division or the other. In terms of the -- in terms of the oil price assumption, it's relatively easy for that one in so far as we basically are looking now at contracted raw material prices for the second half. So we don't anymore have an underlying oil assumption based then. Those are now based on firm contractual commitments that we have. So that gives us a good level of confidence about the indication we've provided. More broadly, you touched on El Nino effects and others. I think it's fair to say that we don't expect those effects to be evident in 2026. We expect those more to be evident in 2027, and we would update that more, of course, in the normal [indiscernible] in January of 2027. So I think for second half in '26, in summary, evenly split between the divisions and confidence in the contractual basis that we have, that we have a good visibility on that for the rest of the year.

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

I think I'd just like to follow up on a couple of things. I think as Alex mentioned. Stewart, just going back on receivables. If my math is right, I think that was up 13% on what is effectively a slight sales decline for the group. So is that telling us something about the strength of your June activity? Or is there any issue here around sort of overdues? If you just elaborate a little bit more on the receivable element. And then maybe for Christian, following up on the U.S. discussion. You mentioned there's a variety of opportunities around GLP-1s, but presumably, there's also some risks in terms of calorie destruction. So when you take those 2 things together, net-net, do you come to the conclusion that this is an overall a negative, neutral or positive dynamic for Givaudan looking forward?

Okay, Matthew, I'll kick off. So you've been busy doing your calculations in the first part of the morning. So I can confirm there's no challenge related to overdues or that. It's more in relation to phasing of sales.

Okay. And then on the GLP-1. Net-net for Givaudan, I see GLP-1 as a significant opportunity. And let me explain a bit why I see that. I think if you look at the strengths that we have, for example, in suite modulation, the strengths that we have in protein masking, all those are basically segments that are winning. And of course, whenever you go beyond flavor into Taste solution, where protein masking is part of it, where [indiscernible] modulation is part of it. That is something that is positive for us because we are increasing the share in the final customer product. So all these reformulations that come are something that I see as positive because they come with a higher share on kind of what we can provide to the customers. And there, we have some unique capabilities, bioscience solutions that we can apply. So for me, GLP-1 is positive. The same, by the way, on the discussions that you have on kind of sugar reduction, on salt reduction, on kind of fat reduction because also here, we are very well set with our technologies. Let me give you an example of something that gains popularity not just in the U.S., everywhere, which is air fry, because air fry is seen as a healthier form of preparing your food. Still the consumer wants the same kind of tastiness that you are used from normally fried products. And I think that is the solutions that we provide, so that in the end, when you use air fry, kind of the taste that you want this richness that also comes from frying in [indiscernible] is maintained. So those trends that we see are positive for the solutions so that in the end, when we look at the net-net, we believe that those movement is positive for us. We lead to more briefs, we'll lead to more innovation and that we can leverage this going forward.

The next question comes from Celine Pannuti from JPMorgan.