DSM Firmenich (DSFIR) Investor update summary

Strategic transformation and portfolio optimization

• Completed transformation and integration phases, merging two companies and divesting volatile and commoditized businesses, notably Animal Nutrition & Health, to focus on specialty, differentiated ingredients and high-growth, high-margin segments.

• Achieved €175 million/CHF 175 million in cost synergies and are halfway to €500 million/CHF 500 million in revenue synergies, with merger synergies fully delivered and TTH outgrowing the market by 2%.

• Multi-lever plan introduced to drive growth, expand EBITDA margins, and improve cash conversion, with operational excellence and cost optimization programs in place.

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

Financial performance and guidance

• Achieved €9bn sales, 4.5% organic sales growth, and improved EBITDA margin from 14% to nearly 20%, with a €300 million EBITDA step-up from 2023 to 2025 and 9.5% like-for-like average adjusted EBITDA growth.

• 2026 outlook: 2%-4% organic sales growth, ~20% adjusted EBITDA margin, and 11%-12% cash conversion, assuming no major prolonged geopolitical disruptions.

• Pathway to 2028: targeting 4%-6% organic growth (plus 1% from Bovaer), 22%-23% EBITDA margin, and ≥14% cash conversion, with further improvements expected post-2026.

• 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 ~1.9x net debt/EBITDA, maintaining a strong investment grade profile and refinanced debt maturities.

Innovation, AI, and growth drivers

• AI and digitalization accelerate growth, lower costs, and improve win rates in product development and customer adoption, with use cases in ingredient discovery, production optimization, and brief-to-adoption acceleration.

• Growth supported by innovation in high-margin segments, reformulation opportunities, and expansion in emerging markets and product categories.

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

• Capex and working capital programs in place to structurally improve cash conversion and operational efficiency.

• Sustainability and customer-centric innovation are key differentiators, with scalable end-to-end solutions and strong customer co-creation.