Thank you very much, Arjan. Good day to you all and a warm welcome.

I'm Marcus Jordan, and I'm here today with our CFO, Hans Kooijmans, for the first 3 months 2026 results, which we published in a press release earlier this morning. I'm going to keep my opening brief to allow sufficient time for Q&A as we have our AGM immediately after this meeting and so have a hard stop at 10:00.

For our first quarter, our first quarter of 2026 delivered solid results against a strong Q1 2025 comparable, and I'm happy to report an increase in free cash flow and a robust cash conversion margin. During the previous full-year call, we referred to positive conversations with our suppliers and customers regarding the demand outlook and green shoots potentially coming our way.

Since that full-year call, a lot has happened as there have been some reversals in tariffs following the court ruling that deemed the tariffs illegal, an introduction of other tariffs, and then the conflict in the Middle East, which has created further uncertainty and quite some changes in the market dynamics. Focusing on the Middle East, since the conflict began, we have seen a significant amount of price increases, which can be broken down into two categories: firstly, the direct impact of fuel increases on transportation costs; and secondly, an increase in the cost of the product itself as the cost of the raw materials and energy costs needed in the manufacturing processes have both risen.

As we have done in the past, we are able to quickly identify and pass on any of the increases we receive. With the large number of increases we have and are receiving, the situation is quite often compared to what we saw post-COVID, but I think important to highlight that those post-COVID increases were primarily driven by pent-up demand, which is not necessarily the case now.

During the first quarter, we didn't observe significant pre-buying, but we do see some indications of this as we enter the second quarter. The increase we see is, however, relatively modest as we believe our customers learned some lessons from the post-COVID years in which they pre-bought too much inventory at a high price.

The key question going forward is how will the conflict impact end-consumer confidence and thus demand, which ultimately is the biggest driver of our business. We are therefore cautious in the outlook.

Moving on to the first 3 months of 2026 numbers, you will find a summary of our financial results on slide 4. We reported gross profit of €312 million, up 1% on a constant currency basis.

EBITA was lower than last year at €130 million, whereby our lower cost in the first 3 months of 2026 could not fully compensate for the decline in reported gross profit. I'm happy to report that we increased our free cash flow to €121 million, leading to a cash conversion margin of almost 91%.

If we now look at M&A, we completed two acquisitions in the first 3 months of this year: firstly, Donyang FT in South Korea, a company active in beauty and personal care with 14 people and €34 million in revenue. This is our second beauty and personal care acquisition in South Korea within a year, and it further strengthens our position in one of the most innovative and largest beauty and personal care markets in the world.

The second acquisition was Willow Ingredients in the UK and Ireland, a company active in food and nutrition with 26 people and €30 million in revenue. This is an exciting acquisition as it strengthens our capabilities in specialised health, sports, and animal nutrition.

To end my part of the introduction, in these unpredictable times, it's critical to remain a reliable partner for both customers and suppliers and to ensure that we quickly adapt to changing market conditions. We remain focused on the things that we can control to deliver long-term growth to our partners and stakeholders in the years ahead.

I would now like to hand over to our CFO, Hans Kooijmans, who will give you an update on the numbers.

Thanks for the introduction, Marcus. A good morning, ladies and gentlemen.

I'm happy to give you a short summary of IMCD's first quarter trading update, and I'll start on page 6 of the analyst call presentation. Marcus already referred to challenging market conditions and comps of last year.

As explained during our 2025 full-year analyst call in February, these challenging conditions coincided with significant currency headwinds. As shown on this slide, the negative translation impact of foreign exchange is reflected in a notable difference between reported and forex-adjusted figures.

You may also recall that when comparing Q1 this year with Q1 last year, the weakening particularly of the US dollar had an adverse effect on sales values across several regions. Given these conditions, we are certainly not satisfied with the reported outcome.

However, it represents a solid start to the year. As you can see, forex-adjusted revenue increased 6% and gross profit increased 1% in the first quarter of this year.

This gross profit increase was a combination of 4% organic decline and 5% as a result of the first-time inclusion of companies acquired in 2025 and 2026. The gross margin percentage in the first quarter is 24.6%, and as you can see, it's 1.2% below Q1 last year.

About half of this decrease in percentage is the result of recently acquired companies with, on average, lower gross profit margins. This first quarter gross margin percentage, the 24.6%, is slightly higher than the 24.2% reported in the second half of last year.

This increase in percentage compared to the second half of last year was a combination of changes in product mix, changes in local market circumstances, but also internal gross margin improvement initiatives that helped to further increase the margin percentage. Then forex-adjusted operating EBITA, that decreased 2% to €130 million, and the operating EBITA margin decreased to 10.2%, and the conversion margin dropped to 41.6%.

Lower organic own cost in the first 3 months of 2026 could not fully compensate for the decline in reported gross profit. When talking about own cost reduction, you could see on the bottom of this slide that we increased the number of people with 112 employees, an increase of 2%, and this increase is the result of acquisitions.

As anticipated by Marcus and myself on previous calls, on a like-for-like basis, we slightly reduced the number of employees compared to last year. Forex-adjusted net result decreased 3% to €63 million.

Later, I will come back on free cash flow, which is really healthy for a first quarter. Q1 cash earnings per share is €1.46, a reported decrease of 6% compared to last year.

When normalising for forex impact, the cash earnings per share would have been similar to last year. The next slide, slide 7, you will find a few key figures from P&Ls per operating segments and, as usual, with a focus on gross margin and EBITA development.

I already mentioned the currency headwind. As you can read from this slide, the negative translation impact is most significant in the Americas and APAC.

EMEA is the only operating segment reporting modest gross profit and EBITA growth. The gross margin in EMEA decreased by 0.9% to 26.6%.

When I would normalise for the impact of the recent acquisitions in EMEA, the gross margin percentage would have been slightly higher than the first 3 months of 2025. Organic own cost in EMEA was slightly lower than last year in Q1, and the small organic decrease in EBITA in EMEA was, as a consequence, the result of differences on other P&L lines like doubtful debt provisions, other operating income, and slightly higher third-party costs.

As a consequence, EBITA-related ratios all slightly decreased compared to the same period of last year. In the Americas, there we report a substantial negative organic growth on gross profit and EBITA.

It's, amongst others, a combination of the more industrial and volatile business mix and a very strong Q1 in 2025. You might remember last year Marcus and myself had to explain how we could grow our EBITA in the Americas more than 20% organically.

I'm a bit afraid that you will ask us now to explain the 20% plus percent decrease during the Q&A. You can imagine that I prefer to explain a double-digit growth here, but unfortunately, that's not the case so far.

Then Asia-Pacific in the third column, where you can read that the positive impact of acquisitions is more than wiped away by negative currency impact. Organic EBITA and gross profit were more or less stable compared to last year.

Then in the last column, you will find under Holding companies all non-operating companies, including the head office in Rotterdam. In Q1, we spent 0.6% of revenue on holding costs compared to 0.8% last year.

On page 8, a summary of IMCD's free cash flow. As mentioned before, free cash flow in Q1 was €19 million better than last year.

When taking into account the typical working capital cycle during the year, a Q1 cash conversion ratio above 90% could be considered very healthy. The decrease of adjusted operating EBITA of €11 million was more than compensated by lower working capital investment.

CapEx of €1 million was slightly lower compared to last year. Page 9, a short update on net debt and leverage.

Reported leverage ratios and leverage ratios based on the definitions in the loan documentation were similar to 2025 year-end numbers at 2.8 and 2.7 times LTM EBITDA. Then last but not least, on page 11, you will find our outlook.

I assume you already read it yourself when reading our press release. In summary, as Marcus also mentioned, we are positive, but cautious.

Far the short summary of our financials. Marcus and myself are happy to answer your questions.

Back to Arjan.

Hi. Good morning, Marcus.

Good morning, Hans. Thank you for taking my questions.

Just the two from me, please. The first one is if you could give us some colour on the outlook for Q2.

The reason I'm asking this is one of your competitors mentioned last week that they've started seeing supply chain disruptions in the system, and they expect this to benefit their financials in Q2, and it did not benefit in Q1. They also said that they've not seen the benefit yet, but they expect it to come sometime later in Q2, and probably the full impact will be seen in Q3.

Do you kind of agree with this, or are you seeing something similar? If you could comment on that, please.

That's my first question. Second question on a related note, even without supply chain disruptions, many of the European producers have increased prices for their chemicals, BASF being the latest one, and they just mentioned in the call about an hour ago that they've increased prices and they expect this again to hit their financials in Q2.

Even without the disruptions and just these price increases, I would expect IMCD and Azelis to benefit because of the opacity in the pricing model. Would that be right?

If not, you could give some colour around that. Thank you.

Good morning, Anil, and thank you very much indeed for the questions. As you can imagine, we're not going to give too much detail on, let's say, the Q2 outlook as a whole, but what I can say is that we've seen a solid start to the quarter.

I think if you look at supply chain disruptions, whether it be IMCD or one of our competitors, supply chain disruptions are really one of the skill sets that we have. As a distribution company, we're agile, we're fast-acting, we've of course got the inventory in stock on a local basis, and you know that we're very used to now this just-in-time delivery and being the partner of choice, whether it be to both the customer or the supplier.

Whilst the Middle East crisis is of course terrible, the market disruption, I would say, is something that if anything as a business fits into the wheelhouse that we have. Really then, as I said before, really focus on the things that we can control.

I think that the teams are very busy. That kind of leads then on to the second point in terms of absolutely we can confirm the very high level of number and, in some cases, the absolute amount of the price increases that we've received.

This kind of started, to be honest with you, relatively slow because quite particularly the European manufacturers, they'd spent a lot of time and effort either maintaining or growing their market share over the last 1 to 2 years. When the Middle East crisis started and it was thought to be short-term, quite some suppliers were holding back on the increases, even though they themselves might have been incurring additional cost.

As the crisis has then continued in time, we have seen the number and level of those increases increase quite significantly. I think it's fair to say that it's more, I would say, the exception than the rule to have not received a price increase.

If I was to break it down into the regions, I would say it's at a lower level from a North America perspective than the other two regions.

Yes, thank you for that. Just a quick follow-up.

Can you confirm that these price increases are beneficial for IMCD?

I think that you've seen in the past that when there's pricing volatility as a distributor for a variety of reasons, we typically perform well. It's of course always a balance with making sure that we continue to be, as I said, that long-term partner with both the customers and suppliers.

It's really a case-by-case basis, but yeah, wherever possible, we try to take the advantage.

Thanks a lot, Marcus. That's very helpful.

Thank you.

Hi, good morning, Marcus. Morning, Hans.

Two questions, please. Just firstly, a quick follow-up on those price increases.

Can you quantify how substantial they are? Are we talking 5%, 10%, 15%, or is this 30%, 40%, 50%?

I appreciate it will vary enormously by product type and probably end market, but any kind of range would be useful. Then secondly, also on the supply chains, are you seeing any supply issues or shortages as yet, any products that you're already seeing some pressure?

Is it fair to say that you'll expect to see more shortages through Q2? Thank you.

Annelies, the first question is very difficult to answer because as you say, it's really very much product-specific. I think that you can read in the press from many of our suppliers the levels of the increases that are being made, and it does range extremely broadly, mentioning pretty much all of the numbers that you just said.

On the supply chain issues and shortages, we haven't yet experienced shortages, but it's fair to say that the volume of the narrative around potential shortages is beginning to increase. I think important to reiterate that even some of the very base chemicals, and we all hear about methanol as an example, which is a pure commodity, which of course we're not involved with, but methanol being a solvent is very short, particularly within the Asia-Pacific region.

A base solvent such as that goes into the manufacture of a lot of specialty products. Whilst we're at in-cosmetics the week before last, some of our Asia-Pacific suppliers beginning to talk about methanol shortages and maybe there being an impact in the future on their ability to manufacture the specialties.

I think at the moment, it's a case of we don't see it, but people are becoming more concerned as the conflict continues.

Thank you.

Hi, good morning. Thank you for taking my questions.

My first one is on the organic GP declines of minus 4% that you reported in the quarter. Can you help us understand maybe how the declines evolved over the course of the quarter?

Was March maybe better than Jan, Feb? If it was, then which geographies or verticals did you see the most material change?

I appreciate that you don't give any guidance on 2Q per se, but is there any colour that you can give on whether organic GP inflected to positive territory yet in 2Q? My last one is on working capital investments.

Given all of these concerns around product shortages, do you anticipate higher requirements on working capital, inventory perhaps, just to make sure you can navigate the next few quarters effectively? Thank you.

Thank you for your questions. The breakdown over the first quarter, as we don't give a lot of breakdown month by month, but I think it's fair to say that we had a softer than expected start to the year, particularly that we had quite a soft end to 2025 and then a nice increase as we went through the quarter.

The Q2 outlook, I think that I've said as much as I really want to say there. On the working capital levels, it's really a case of making sure that we've got the right inventory in place to be able to fulfil the customers' demands.

As you can imagine, the forecasting from the customers is very short-term or in some cases invisible, but it's working very closely together with those customers to try and make sure that we've got the right inventory in place, but also working with the suppliers to make sure that we don't also over-order product from them that then creates the shortage for the future. It's very much about communication and, again, being agile and fast-acting on everything that we do from a supply chain perspective.

I think, Hans, we're pretty comfortable with the working capital.

Suhasini, I really hope to report much higher working capital at the end of Q2 driven by much higher debtor positions because of higher sales. That is, of course, the ideal scenario, and then I'm happy to report a higher working capital position.

If I look at the end of Q1, we never disclosed specific numbers on working capital positions, but it's fair to say that our stock days were similar to what we reported at year-end. The little bit increase that we saw was related to increased debtor positions because of stronger sales in March.

I hope that that continues going forward. Then I'm happy to report a bit more working capital due to higher debtors, not because of higher debtor days, but because of more sales.

Understood. Thank you.

Hey, good morning, everyone. Hans, I actually wanted to follow up on that working capital comment because we don't have the balance sheet, I was going to ask you about the breakdown.

Firstly, a little bit counter-intuitive that your free cash flow is very good despite working capital days being up by 3 year-on-year. Any other moving parts that would explain that?

Secondly, in terms of that working capital, if you've seen better momentum through the quarter and order intake as you suggested on the receivables, why has that not come through in the inventory position yet? Were you, I don't know, trying to clean up older stock and that's maybe offset some of the extra buffer that you may have been securing supply or to fill orders?

Thank you.

Matthew. As we typically report a full balance sheet twice a year, and we see the Q1 and Q3 really as a trading update to give you a feel where we are.

If I look at working capital days, what I already mentioned, stock days more or less flat. We are very cautious in handling our stock, as Marcus already mentioned.

What we see at the moment that there is supply chain issues that we also can more quickly turn stocks, quickly get it out of the warehouses again. If I look at the days that we would have reported and will report on the basis of our half-year figures, I don't expect material changes there.

Then that I come back on the point that I made previously. I hope to report a higher debtor position because of higher sales with similar debtor days.

We don't see collection issues or these type of things. It's just in the ordinary course of business.

The other thing you need to realise is that a working capital position at a month-end or a quarter-end is just a snapshot of a certain moment in time. Paying a creditor just before or just after a quarter-end could have an impact on these type of days.

Okay. If I can ask a follow-up, Hans.

If we think about the sort of prior supply chain cycle coming out of COVID when we had a lot of price inflation in the industry, to what extent does something like inventory revaluation have a meaningful impact on numbers very short-term?

Yeah. We are not in the business to take speculative stock positions whereby we bet on future price increases.

We base our order pattern on often confirmed demand by our customers. As a consequence, at the moment that we then fix prices with customers, we also try to fix that with suppliers.

Where we could benefit a bit is where we have old stock in the warehouse that we can sell off. Old stock bought at a lower price and now sell it off at a slightly higher price, but that's in most cases immaterial compared to the total margin that we generate.

I think you could see this more in the more commodity businesses where people really take a position and start now betting on shortages in methanol, as an example, take a position, and then hope to sell it at a higher price. That's not the business that we are in.

Thank you both.

Yes, good morning, gentlemen. Thank you for taking my questions.

I want to focus on the return to growth in the Asia-Pacific region with 3.5% organic revenue growth. The first question is are you already seeing any relief from fading competition from Chinese suppliers in semi-specialties in Southeast Asia and maybe also in Brazil?

Secondly, I think you talked about the reversal of some of the tariffs. Have you already seen any signs of an improving performance in India?

I remember Signet was quite hard-hit by tariffs in the third quarter of last year, also impacting gross margins. Do you see any improvement in that situation already?

Thank you very much.

Good morning, David. Firstly, related to India and the Signet business, yeah, as we mentioned it in the full-year call, we anticipated kind of the more normal ordering pattern to return during the first quarter, and I can confirm that that was the case.

Tariffs in general, I think that it's become a bit more of a muted point because of the Middle East conflict, but of course that is still, I would say, to a certain extent a concern in the background because there is uncertainty not only in terms of the original tariffs that were imposed and are there rebates now given, but also the new tariffs that were then superimposed and when those end. I think those tariff discussions, we shouldn't underestimate that there is still some impact there.

In terms of the APAC question and potentially I think your wording was failing China, it is fair to say that we have seen restrictions and hear more of restrictions of export out of China for particular product groups. We have seen in countries like Brazil and Southeast Asia certainly more requests coming through at the beginning of the second quarter, more requests from customers for, let's say, more of a local-to-local supply.

I wouldn't say that there was an impact in the first quarter, but again, the narrative is beginning to build in terms of availability issues out of China, and that could also benefit us potentially.

Great, sounds good. Thank you very much.

Thank you. Appreciate your comments on April and what you can say there and the comparison to the post-COVID period.

I guess the post-COVID period was split into 2021 where you had very strong demand and 2022 when we had Russia-Ukraine, an energy price shock, and a kind of gradual decline of demand through the year. Just trying to kind of get an idea of the scale of the benefit you could see from the disruption we're seeing, how comparable is this to 2022, which is I guess a bit more similar from a macro perspective?

Then on the opex side, how are you running with the organic headcount reduction that you provisioned in Q4? Have we worked through those provisions yet, or is there more to come through the rest of the year?

Thanks.

Great. If you look at the similarities or dissimilarities related to COVID, there was certainly a huge similarity from a supply chain disruption and the level of pricing increases, both in terms of the number and level.

As I mentioned prior, I think that really fits into the skill set that we have as an organisation and super important that we get closer to the customers. There are then opportunities also that come out of it when we prove what we can deliver also from a supplier expansion perspective.

I think that there's a lot of positives there. I think underlying that is the question mark in terms of consumer demand going forward, and I don't think that any of us really know the answer to that.

I was at in-cosmetics two weeks ago, and there was still a lot of positivity at that show. I think in general, there's still positive talks, but the longer the conflict goes and the market dynamics can change.

I think in general, David, again, we focus on the things that we can control. I would say the teams are fairly upbeat at present.

Then in terms of the organic headcount reduction, I think Hans spoke about that a bit in the full-year call where there was still some impact coming into this year. I think in general, we're very happy that we've got the right people in the right places.

As I also mentioned on the previous call, we've further invested in the commercial team that we have in place, both from an internal and an external perspective. We're happy with the organisation that we have.

Maybe if I could just ask a quick follow-up actually, which occurs to me. The digital sales tool that you've been rolling out through 2025, what's the uptake of that been like in the sort of early part of 2026?

Since the disruptive effect of the Iran war, have you seen people increasingly sort of adopting that tool, or are they jumping on the phones as a kind of first point of call?

The sales assistant tool, as we rolled out fully internally to begin with during the course of last year. We're very happy with the uptake, let's say, from an internal perspective from the commercial teams looking to how do we increase the cross-sell rate and be able to offer the right product first time.

We've only relatively recently during the course of the end of last year and completed during the end of Q1 rolled out this tool externally. We're very happy with, I would say, the uptake from customers on the MyIMCD platform, but ultimately, we still want to be speaking to the customer.

It's still very very much a combination, but we're pleased with the uptake of the tool and the ability to be able to, I think, certainly offer a wider range of products first time.

Brilliant. Thanks.

Hi, thanks for taking my questions. The first one is I wanted to ask your view on kind of overall demand.

You said Q2 started relatively well. Has there been any pre-buying, do you think?

One chemical producer implied March was very strong, but then April much softer. Is that the same kind of trend that you've seen, or do you think as a distributor the trend is a bit different?

As I mentioned before, we didn't see really pre-buying during the first quarter, and I said we'd had a solid start to the second quarter, so. I do think that there is some pre-buying at the beginning of the second quarter, but as I also mentioned before, I think it's very muted relative to what we may have expected from the past because I think customers have really learned the lesson as they came out of COVID about bringing in too much inventory at a high price.

The customers when we speak to them, I think that if the Middle East and when the Middle East crisis finishes, you could then see some material price decreases. Again, the longer that the conflict goes on, I think the longer that the longer-term supply chain disruptions will last even when the conflict finishes.

Even if the conflict was to finish the end of this week, I think it's still quite some months it would take to then recover.

Thanks. Then second question is I was wondering if you could comment a bit on your performance in the Americas, which is quite soft versus the other regions and softer than your peers.

Maybe could you split out performance of some of the sub-businesses there?

Sure. In LatAm, it was generally a challenging market in the first quarter.

I've mentioned on previous calls with Brazil in particular having a higher percentage than the group average on the semi-specialty side, and it's fair to say that particularly at the beginning of the quarter, we were seeing quite some pricing pressure there from China, for example. As I mentioned earlier in the call, that is a country where we have seen a bit of a shift coming through the beginning of Q2.

Also some currency headwind. The translational side, but also still some operational currency headwinds there.

Then from a North America perspective, you know that we're a bit more industrially focused there and still a softer demand in the coatings and construction housing market for a example. Also some moving parts there from a supplier perspective.

As within the US, we're quite unique that we really try to work with suppliers on a coast-to-coast basis. Sometimes we need to make supplier changes where some suppliers only want to work with us maybe in one or two of the regions within the US, sometimes we make some difficult decisions there to then work with new partners coast-to-coast, and there's a bit of a timing impact.

That was a bit of the case there in the Q1 numbers. Then of course, the biggest impact was related to the, as it was explained by Hans, the very strong comp for Q1 last year.

You also might have seen that, Tristan, if you compare with our peer, we never mention the name, but we all know who we are talking about. We reported last year in the Americas plus more than 20% organic growth, and this year more than 20% minus.

They did better this year, also with a minus, but last year they also reported a minus on the organic growth, their comps is also slightly different than our comp. Nevertheless, it's not good, what we reported, and we will work hard to get that back to more normal.

That region is at the moment for us a bit more volatile than the other parts of the group. That has sometimes the positive impact and sometimes the negative impact, and unfortunately, we are now on the negative side.

Got it. Thank you.

Hi. Thanks.

Morning, all. I was just wondering if you can give us some colour by end markets.

I remember last year you were seeing a more difficult environment in your beauty and personal care market. As we sit today based on all of the volatility, have you seen any notable changes across any of your key end markets?

Just broadly speaking, it's quite interesting I find these days when I speak to, Marcus, you guys or some other distributors, they say, okay, we've not seen any supply shortages. Then at the same time, we see these huge price increases that are happening in the industry.

There is clearly something off. Either there is supply shortages that maybe you are not seeing, some of your competitors are not seeing, but somebody else is, or people are just anticipating those shortages and trying to or willing to pay higher prices, which perhaps then creates a risk that if the supply is actually not short, things can unwind quite rapidly.

How do you square that from your perspective? Thank you.

Good morning, Chetan. Let's begin with the second question first from the price increase side.

This is very much driven by raw material cost pricing. The energy costs associated with manufacturing, of course, has gone up dramatically.

You also see the cost of some of the base hydrocarbons, which is driven by basically crude. I don't think that it's certainly not driven, I don't believe, by opportunistic price increases at present.

It's very much driven by raw material costs. In terms of the end markets, as we mentioned before, I think if you look at the life science side to begin with, pharma pretty much normal, resilient.

The Indian Signet business, we already spoke about, returning back to a normal type of ordering pattern in the first quarter. Food and nutrition had a very strong year last year, a bit of a difficult comp, but we're happy with the performance on food.

Beauty has been a bit of a softer demand market in general, but the commentary at beauty at the in-cosmetics show was pretty positive, let's wait and see there. I wouldn't say anything material changed from what we spoke about on the full-year call on the industrial side, which is generally a bit softer, particularly within the coatings and construction space.

Got it. Thank you.

Good morning. Just one follow-up question, please, on some of the previous ones around volumes.

Given you saw limited pre-buying, it looks as though there was some underlying volume improvement in Q1, but then in the outlook for Q2, maybe you're seeing kind of more risks to underlying demand, understandably given the geopolitical situation. I wonder, can you help us unpack that demand weakness a bit as it seems as though stock levels are quite low at customers, if anything, and have been actually for some time?

Maybe we're about to get some shortages on top of that. How should we think about that volume softness?

Is it literally just less product going out of the door? Is there sort of less innovation going on?

Any extra detail there would be great to hear. Thanks.

I think if you look at let's call it demand rather than the volume, we spoke about the potentially green shoots coming and more narrative around that at the beginning of the year. I think that as we were coming through the first quarter before the Middle East conflict, that messaging was really being reinforced.

I think that consumer confidence and demand was generally expected to steadily increase during the course of the year. It's very difficult at the moment because of the Middle East conflict to really then say where are we in terms of that consumer demand confidence.

Unfortunately, it's a little bit wait-and-see. As I said, it's clouded a bit by what I believe is a bit of pre-buying at the beginning of this quarter that we have seen, but again, nothing like we saw in the past.

I also agree with you that the stock levels downstream with the customer are light and lean, which is where, again, I think us as a distributor plays a very important part because we are seen as that reliable partner being able to deliver just in time. This inventory management that we've touched on a few times is extremely important.

Thank you.

Good morning, everyone. I have two questions.

The first question is about the M&A in EMEA. It had a negative impact on your gross profit margin as we understand.

You said excluding these acquisitions, we had a positive development of the gross profit margin. If I look at these numbers, then it looks like that Thielmann's in Italy is the deciding factor here with gross profit margins below, I would say, 18%.

Is there any explanation for that low gross margins? Is that normal for this company?

Are you going to recover that in the coming period? My second question is about the US still.

What is then the reason that your gross profit margin is so much under pressure compared to the revenues? Because that's a serious difference here.

What we see is 200 basis points loss in your gross profit margin. If you can a little bit explain that.

Quirijn, perhaps I should for sure take the first one. If you look at the acquisitions that we did in EMEA, we had Thielmann, we had Ferraris, we had Tecom, food businesses in Spain.

When we publish acquisitions, then we often indicate something about revenue and number of people that we buy, and there's also a bit of a standard way that if the EBITDA margin deviates a lot from what we typically do on average, then we also mention something. Now there was no information about EBIT margin, but what you see now in the numbers is that the combination of these three acquisitions all had a decent EBIT margin, but a much lower gross margin percentage.

That has to do with partly the product mix that they sell to the market, the type of products they do, and it also offers us an opportunity that if we do well, that we should be in a position to bring gross margin percentages in areas of their portfolio where that is possible in the current market conditions where we could improve the margin percentage. That is also why I mentioned in the introduction that we have also internal projects to improve margin percentages.

One of the things that you might have seen is that the gross margin percentage in the first quarter of this year is already slightly higher than what we saw in the second half of last year. For us, it's if you buy something with a lower gross margin, partly product-related, difficult to change, but there where we can change, we do, and you see that happening.

The drop in gross margin percentage in the Americas, looking at Marcus, Shall I?

Yeah.

I think the main thing there is that a couple of changes in the product mix that we had there having an impact on the overall margin percentage, what Marcus referred to, a change in suppliers, setup, timing difference there that played a bit of a role. Another important thing is the way we need to deal with currency volatility in that region having a negative impact.

A lot of moving bits and pieces having an impact on the margin that we make there.

Of course gross margin percentage is a good indicator, but as I've mentioned before, we incentivise and really focus internally on the absolute amount of gross margin. The reason for that is also making sure that as a company we don't miss out on incremental new wins.

You can imagine that trying to incentivise our sales team to go out and to win new business, quite often that new business can start at a lower gross margin percentage than the group average that we have. A drop in the gross margin percentage doesn't necessarily mean poor business performance, and it's important that we remember that.

I think to reiterate Hans's overall point is, we're focused very hard on improving the performance of the Americas as a region. More to come.

Thank you. Your conversion margin is also now below 40% for that area, can imagine that it's a little bit concerning.

Room for improvement, Quirijn. No, that is a bit concerning, but also room for improvement.

Thank you.

A big thank you from Hans and myself to you all for joining the call this morning and for the questions, and we wish you all a very good day. Thank you, all.