DSM Firmenich (DSFIR) Investor update summary

Strategic transformation and portfolio update

• Completed transformation and integration, merging two companies and divesting commoditized businesses, with a focus on high-growth, high-margin, specialty segments and innovation-led growth backed by science and sustainability.

• Achieved CHF 175 million in cost synergies and are halfway to CHF 500 million in revenue synergies, with merger synergies fully delivered and operational foundation strengthened.

• Multi-lever plan introduced to drive growth, expand EBITDA margins, and improve cash conversion, with business unit leaders outlining progress and action plans.

• Sustainability remains a core focus, with double A CDP ratings, EcoVadis platinum, 100% renewable electricity, significant emissions reductions, and employee engagement stable at 80%.

Business model, innovation, and growth drivers

• Business model centers on specialty ingredients and creation capabilities, leveraging biotechnology, sensor/receptor technology, microbiome science, and AI for ingredient discovery, process optimization, and product development.

• Growth driven by defending market share, developing new markets (e.g., sugar reduction, HMOs, preventative healthcare), and innovation in high-margin segments.

• AI and digitalization accelerate growth, lower costs, and improve win rates in product development and customer adoption.

• Bovaer® platform to significantly contribute from 2028, supporting sustainability and growth in dairy markets.

Financial performance and outlook

• Achieved €9bn sales, 4.5% organic sales growth, and improved EBITDA margin from 14% to nearly 20% (FX-adjusted), with a €300 million EBITDA step-up from 2023 to 2025.

• 2026 guidance: 2%-4% organic sales growth, ~20% EBITDA margin, and 11%-12% cash conversion, with targets rising to 4%-6% growth and 22%-23% margin by 2028 and cash conversion ≥14%.

• Margin improvement driven by operational excellence, cost reduction, and normalization of capex to a maximum of 5% of sales after major investments.

• Leverage expected to remain stable at 1.5x–2.5x, with a strong investment grade profile and refinanced debt maturities.