DSM Firmenich (DSFIR) Investor update summary

Strategic transformation and portfolio optimization

• Completed transformation phase, merging two companies and divesting Animal Nutrition & Health to focus on high-growth, high-margin, specialty, and differentiated ingredients.

• Achieved €175 million/CHF 175 million in cost synergies and completed merger integration, with TTH outgrowing the market by 2%.

• Multi-lever plan introduced to drive growth, expand EBITDA margins, and improve cash conversion for 2026–2028.

• Sustainability remains a core focus, with top ESG ratings, 100% renewable electricity, and stable employee engagement at 80%.

Business model, innovation, and operational excellence

• Business model centers on specialty ingredients and creation capabilities, leveraging perfumers, flavorists, and application specialists.

• Strategic focus on biotechnology, sensor/receptor technology, microbiome science, and AI/digitalization to accelerate growth and efficiency.

• Growth driven by innovation in high-margin segments, reformulation, and expansion in emerging markets and new categories like sugar reduction and HMOs.

• Operational excellence and cost optimization programs target a 1% EBITDA margin uplift, with normalized CapEx and reduced working capital.

Financial performance and outlook

• Achieved €9bn sales, 4.5% organic sales CAGR, and improved EBITDA margin from 14% to nearly 20% (corrected for FX).

• 2026 guidance: 2%-4% organic sales growth, ~20% EBITDA margin, and 11%-12% cash conversion; 2027–2028 targets: 4%-6% organic growth (plus 1% from Bovaer in 2028), 22%-23% EBITDA margin, and ≥14% cash conversion.

• Portfolio changes and operational improvements lifted EBITDA margin from 14.4% to 18.2%, with further improvement to 19.6%.

• Cash conversion outperformed previous targets, averaging 11%, with a new midterm target of 14%+ by 2028.