IMCD N.V.

Thank you very much, Elba. Good morning to you all, and a warm welcome.

I'm Marcus Jordan, and I'm here today with our CFO, Hans Kooijmans, for the 2025 results, which we published in a press release earlier this morning. After a positive start to the year with good first quarter results, the following quarters of 2025 were challenging amid macroeconomic conditions, tariff uncertainty and geopolitical unrest.

This resulted in softer demand across a number of markets, limited order visibility and continued just-in-time deliveries. Looking at our business segments.

We saw Pharmaceuticals and Food & Nutrition have the most solid performance in 2025, and our Beauty & Personal Care and Industrial segments being generally soft in demand across all 3 regions. Moving on to the 2025 numbers.

You will find a summary of our financial results on Slide 4. Gross profit at almost EUR 1.2 billion is slightly down versus last year, but up 3% on a constant currency basis.

The gross profit margin is down from 25.4% to 25%, primarily as a result of the impact of acquired companies and product mix. EBITA was down 3% on a constant currency basis to EUR 498 million.

This is a result of a slightly lower gross profit combined with inflation-driven cost growth. As mentioned in the Q3 call, we optimized our structure during the second half of the year to further intensify our sales efforts and to drive cost effectiveness throughout the company, resulting in an overall reduction in the number of FTEs.

I'm happy to report that we increased our cash -- our free cash flow to EUR 465 million, leading to a cash conversion margin of 91.4%. We proposed a dividend of EUR 1.81 per share, the payout ratio being 35%, which is at the top of the 25% to 35% range of the adjusted net income, as mentioned in our dividend policy.

If we now look at M&A, we completed 7 acquisitions in 2025, with the 2 largest being Tillmanns and Ferrer, both in Europe, which, as you know, is our most mature region. Tillmanns in Italy operates across a broad range of markets, including coatings, construction, food and nutrition and water treatment, and in 2024, had 78 people and a revenue of EUR 143 million.

And Ferrer, a distributor of food and beverage ingredients in Spain, with 37 employees and EUR 112 million revenue in 2024. On a full year basis, the 7 acquisitions completed add about EUR 320 million revenue and 200 employees based on their last full year numbers before acquisition.

Recently, in January 2026, we also completed a further acquisition, Dang Yong FT in South Korea, a company active in Beauty & Personal Care with 14 people and EUR 34 million in revenue. With this acquisition, we strengthened our position in South Korea, which, as you know, is one of the most innovative and largest beauty and personal care markets in the world.

If we now go to the next slide. Having defined our 6 strategic growth pillars, which we presented during our Investor Day in Milan in 2024, I'm pleased to share some highlights of our progress in these areas.

I am particularly proud of the complete rollout of the sales assistant product recommendation tool, which empowers our people to easily identify the right solutions for our customers. We have seen good traction with the tool and are confident that this will improve our ability to increase our right first-time product recommendation and thus, our cross-sell ratio.

Behind every success within our company are our people. And in 2025, our people completed more than 175,000 hours of learning, leading to a 57% increase in training hours per employee with a particular focus on sales and operational excellence topics.

We also continued our focus on developing talent from within through 2 Rising Leader programs. We also further strengthened our supplier partnerships, and I'm encouraged with the number of positive discussions we are having with both existing and new suppliers to further expand our business.

In summary, we are confident in our asset-light business model, which enables us to stay adaptable to ever-changing market needs and reinforce our focus on customer centricity and supplier expansion. We also continue to invest in the tools and platforms that keep us both efficient and agile with a focus and commitment to creating long-term value for all IMCD 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.

Thank you for the introduction, Marcus, and good morning, ladies and gentlemen. And as you have seen earlier today, we issued a press release summarizing IMCD's financial results for 2025.

And on the 4th of March, we will publish IMCD's annual report, a more than 300 pages report, including more detailed financial info, nonfinancial info and various business examples. In this call, I will take you through a summary of the financial numbers before we move to Q&A.

On Page 8 of the presentation, you could see a ForEx adjusted revenue increase of 5% and a gross profit increase of 3%. And this increase in gross profit was a combination of 1% organic decline and a positive 4% as a result of the first time inclusion of acquisitions.

The year started strong, as Marcus mentioned, with 6% organic growth in the first quarter, followed by modest growth in the second and single-digit negative organic growth in the last 2 quarters. And as Marcus already indicated, we saw demand softening in the course of this year due to ongoing tariff discussions, geopolitical unrest and related uncertainty, which had a significant negative impact on customer demand.

Further, the weakening of currencies like the U.S. dollar did not help and resulted in a negative impact of the absolute amount of revenue and gross margin.

Then the 4% acquisition growth is the balance of the full year impact of acquisitions done in 2024 and more recent acquisitions signed and closed in 2025. And you could find an overview of the 2025 acquisitions on Page 5 of this presentation.

Gross profit in percentage of revenue slightly decreased to 25% in 2025. About half of the 0.4% decrease is the impact of the first-time inclusion of acquisitions and higher additions to provisions for slow-moving stocks.

The other half of the 0.4% is the result of usual changes in product mix, changes in local market circumstances, currency impacts, partly offset by continuous internal gross margin improvement initiatives. I skip the operating EBITA line, which we included for your convenience and would like to move to operating EBITA, where you can see that ForEx adjusted operating EBITA decreased 3% to EUR 498 million.

And this decrease was... [Technical Difficulty]

Good morning, ladies and gentlemen. Hans Kooijmans again.

I hope you can hear me right now because we have the impression that the line broke when I started talking on Slide 9, where I went through the segments. And I first wanted to start with the overall currency impact.

And as mentioned earlier, we had some currency headwind when translating local results into euros, most significant in APAC and the Americas. This currency translation impact is easy to quantify, and in 2025, resulting in a minus 4% on revenue and EBITA and a minus 3% on gross profit.

In absolute numbers, in 2025, we lost all in all, about EUR 20 million of EBITA as a result of negative translation differences when comparing with 2024. Weakening of the U.S.

dollar and the Indian rupee since the second quarter of 2025 were the most important drivers. I realize also that nobody can predict exchange rates going forward, neither the impact on the EBITA for this year.

At the same time, as most of the non-euro exchange rates further weakened in the course of 2025, it's easy to predict that we might expect negative currency translation losses again in the first half of 2026. And just to get a feel for a number, and please see this as an indication, I recalculated first half 2025 EBITA at the exchange rates prevailing end of January this year.

When doing so, I arrived at a negative currency translation impact for our first half 2025 EBITA somewhere between EUR 13 million and EUR 15 million. This is something to keep in mind when talking about the first half year result.

Where this currency translation impact is easy to quantify and also reported as a separate line, the operational impact of these currency fluctuations is more complicated to calculate. But I think it's obvious that these currency fluctuations had a negative impact in regions where it is common to quote in dollars and to invoice in local currency.

Therefore, it's fair to assume that these currency fluctuations negatively impacted our top line results in countries in LatAm, APAC and a few of the EMEA countries. Then going to the columns and the segments.

In the first column, EMEA, the only segment where we report modest but positive organic gross profit growth. Unfortunately, this 1% growth was not enough to compensate for inflation driven on cost growth.

And as a consequence, there is a negative organic EBITA growth and lower EBITA and conversion margins in the EMEA region. The decrease in gross margin percentage in EMEA that you saw in the second half of the year is mainly the result of the impact of the first-time inclusion of acquisitions with on average lower gross margin percentages.

Then in both Americas and APAC, organic gross profit growth was slightly negative. And in both regions, the positive impact of acquisitions on gross profit and EBITA was more or less wiped away by negative currency translation impact of the total region.

For the same reasons, as mentioned before, EBITA and conversion margin slightly decreased in both regions. And in the last column then, you will find the holding companies.

As you know, the nonoperating companies, including the head office in Rotterdam and regional offices in Singapore and the U.S. and holding cost as a percentage of total revenue slightly decreased from 0.8% in 2024 to 0.7% of revenue in 2025.

Then on the next page, you will find a couple of P&L lines from EBITA to the net result for the period. Some general remarks by -- I will summarize net finance cost and income tax expenses on a separate slide.

On this slide, amortization of intangible assets are noncash costs related to the amortization of supplier relations, distribution rights and other intangibles, and the increase is mainly a result of acquisitions done. Then the EUR 25 million of nonrecurring expenses, and this includes about EUR 15 million severance costs related to one-off adjustments to the organization, EUR 7 million related to successful and unsuccessful acquisitions and a few other small one-off items.

Then on Slide 11, a breakdown of the 2025 net finance cost, adding up to EUR 80 million, and this is about EUR 35 million more than previous year. And as you can see on this slide, our real cash interest cost decreased by EUR 5 million.

And the remainder, about EUR 40 million noncash cost is a combination of EUR 20 million changes in deferred considerations and EUR 16 million more negative currency exchange results. As you might remember, a part of our net debt referred to deferred purchase price considerations of acquisitions done and related potential earn-out obligations.

At the end of 2024, we reported a deferred consideration of EUR 99 million, which came down to EUR 36 million end of 2025. And this decrease was a combination of payments made in 2025, additions due to new acquisitions and changes in estimated future payments of existing deferred considerations.

And especially these changes in estimates will, as you know, flow through the P&L through the interest line as a noncash cost item. When making your financial model, I could imagine to adjust for these noncash IFRS-related adjustments.

The hyperinflation adjustment that you see is a result of hyperinflation accounting mainly related to Turkey and currency exchange results relate to realized and unrealized currency exchange differences on our monetary assets. Then on the next page, a summary of our income tax expenses.

On the regular income tax expenses, we report a decrease of EUR 20 million. The tax credits related to amortization, a noncash tax component, increased in line with amortization.

And as a guidance for our tax cost, you might remember, we always indicated to expect a blended tax rate in the range of 24% to 28% of result before tax. And this result before tax is then calculated as EBITA minus finance and nonrecurring costs.

On the bottom of this page, you could read that IMCD's blended regular tax rate in 2025 was 22.9%, which is slightly below the '24 level and also below the low end of our guidance. Then on the next page, the calculation of cash earnings per share and our dividend proposal.

As you can see on the slide, we report EUR 5.19 cash earnings per share in 2025. And at the AGM in April, we will propose a dividend of EUR 1.81 in cash per share.

The company has a dividend policy with a target annual dividend in the range of 25% to 35% of adjusted net income. And this dividend proposal leads to a payout ratio of 35%, which is at the top of the range that we set ourselves as a policy.

Then on Page 14, a summary of IMCD's balance sheet. Property, plant and equipment mainly increased due to acquisitions done and limited investments in the IT infrastructure of the buildings and labs.

As a result of the asset-light business model, the absolute amount is still relatively low compared to the size of our business. Then right-of-use assets, that's, as you know, the result of the application of IFRS 16, and this EUR 98 million reflects capitalized operational leases and the related lease liability of EUR 104 million is included in the net debt line.

The increase in intangible assets and changes in related deferred tax liabilities are mainly a result of acquisitions done. Then I will come back on working capital in a minute.

Then you see a solid equity position of about EUR 2 billion, covering 57% of capital employed, and therefore, working capital and also net debt, I would like to go to the next 2 pages. Page 15, you will find a summary of the absolute amounts of the various working capital components and these amounts translated in days of revenue.

As you can see, the absolute working capital amount increased EUR 27 million. And this increase in net working capital reflects the positive impact of further optimization in net working capital days in 2025 compared with last year, then the positive impact of the exchange rate differences on year-end balance sheet positions and as a negative, the impact of acquisitions completed in 2025.

At the bottom of this slide, the development of the most important working capital components in days of revenue. And we report, as you can see, an improvement on stock and debtor days and reduction of the creditor days.

On Page 16, a summary of our net debt position. At the end of 2025, we report EUR 1.6 billion of net debt.

And the majority of this net debt position consists of EUR 1.3 billion of corporate bonds. Further, it includes, as mentioned before, the EUR 104 million of operational lease liabilities and about EUR 36 million of deferred considerations.

On the same page, an overview of the maturity profile of our debt structure as per December 2025. In Q1 2026, so at the first quarter of this year, we increased the maximum amount of our revolving bank facility with an additional EUR 100 million to EUR 700 million.

And the revolver facility bar that you see in the chart on the right reflects the old EUR 600 million maximum amount we can use as per the end of 2025. Reported leverage at the end of 2025 was 2.8x EBITDA and the leverage ratio based on definitions used in the IMCD loan documentation was slightly lower at 2.7x, which was well below the required maximum as set in the loan documentation.

I would like to finish this financial summary with the cash flow overview on Page 17. And as you can see, the absolute amount of free cash flow in 2025 was EUR 465 million which results in a cash conversion ratio of 91%.

The change in conversion ratio versus last year is a combination of lower operating EBITA combined with lower working capital investment compared to last year. And then finally, on the last slide of the presentation, you will find the outlook in which we, amongst other, indicate that we remain confident that we will continue to contribute value to our stakeholders and to sustain our growth trajectory.

So far, a little bit bumpy summary of the 2025 figures with the break in the line. But Marcus and myself are happy to answer any questions that you may have.

So back to Elba, the operator.

I have 3 questions, please. So firstly, just on customer behavior.

I think it's probably clear there was no real improvement in customer order dynamics in Q4, looking at your numbers, but perhaps you could talk about how that's developed year-to-date. Are you seeing any increased signs of optimism or more normalized order patterns?

And then secondly, just on pricing. Perhaps could you talk about how that's developed through year-end and year-to-date?

And in that context, perhaps a comment on the competitive environment. I know we spoke a lot about more competition in Asia through last year.

So wondering how that's developed. And then just lastly, a quick one on the one-off costs.

So you mentioned EUR 15 million of severance costs in that acquisition and one-off cost line. But are the majority of those restructuring costs done?

Or is there more to go in 2026? How do you expect that number to develop?

Annelies, thank you very much for the questions. Firstly, from a customer behavior perspective, what we see there is pretty much a continuation of what we were speaking about on the Q3 call with very muted demand in general.

Just-in-time deliveries have pretty much, as we said before, become the norm, a lot of orders shifting from 1 month to the next. So I would say that unpredictability, unfortunately, remains.

In terms of kind of the show of green shoots, we don't really see green shoots yet appearing. But I think positively, we hear more conversations from both our customers and suppliers about the anticipation of that coming.

So in general, I think the kind of the narrative in the market is more positive. But for us, a little bit early to see -- to say that we see those green shoots materializing yet.

On the pricing side, again, if you break it down into 2 different components, the specialty side of the business, whilst, of course, it's not immune to pricing competition, we still see quite a lot of stability there. On the semi specialty side, very similar to what we reported in Q3, basically with the demand being so low, people fighting quite aggressively for a share of a smaller piece of the pie.

So it's fair to say, yes, it's a very competitive market. But we're doing everything that we can, of course, to make sure that we remain competitive.

And again, focus on the absolute amount of gross margin that we win, not the gross margin percentage. And maybe just on that point on the gross margin percentage to complement to what Hans said, if we win new pieces of business, particularly on that semi specialty side, you can also expect that initially, that would be at a slightly lower GM percentage.

So if there is a slight fall away there, we're not concerned also looking again at what that absolute GM amount is. And then maybe, Hans, on the severance side?

Yes, perhaps to add something, Annelies, and it's perhaps more anecdotal than anything else. But a lot of people always ask us, what is pricing and what is volume, what is the impact of both on your business.

And I always answer that it's difficult to come to a conclusion because some products we do in kilos, others in grams and others in tons. And then if you add it up, it doesn't make sense.

But just as an exercise, I calculated the total volume in kilos that we sold and divided and took the total sales for both 2024 and 2025. And when dividing the 2, the funny outcome is that my on average sales price in the group, which is in itself a ridiculous number because it doesn't say anything, but the average sales price in 2024 and 2025 was exactly the same.

So I did not see any change in the average sales price across the group. I saw a huge differences per market segment.

I saw also quite some changes between regions, market segments than anything else. And doing the same on the cost price side, I saw an increase -- an average increase, which was below 1%.

So if we talk about what did we mainly see last year compared to the year before is a volume issue, not a price issue. For sure, on the different segments and individual product lines, huge differences, but in total, that was more or less the outcome.

Again, see this more as anecdotal because I don't like to do that adding up of all these kilos and tons and grams. But this is what comes out if you would do.

Then coming back on your one-off, I think we are in the process there. I don't expect short-term additional one-off costs, but we are still in the process of separating from a number of people in our organization.

And as you know, in Europe, that often takes a bit more time than in other parts of the world.

Maybe I'd just like to follow up on Hans, your anecdote, please. So if you look at the year gross margin down 40 basis points, I think you said in the introductory remarks, roughly half of that can be put down to the M&A dilution.

So you've got another 20 basis points that encompasses product mix, regional market conditions and FX. So again, is the conclusion from that, that pricing really is not playing a material role in the outcome of your profitability here?

And I don't know whether the message or the anecdote would have changed as you went through the course of the year because the Q4 gross margin was down much more significant 140 basis points. I guess you have that more pronounced European M&A in there and the more adverse currency moves.

But I was just wondering if you could just elaborate a little bit more on the relative order of importance between those 4 drivers that you've put in the press release about the margin evolution. And then maybe just a second question, just to follow up on that one on restructuring and the cost base.

As you look into 2026, is your expectation that your organic cost base is flat, higher or lower, based on that restructuring effort that you were doing in Q4? Do you feel like we're going to see less inflationary pressure on the cost base going into 2026?

Shall I start, Marcus, with the last -- the second one?

Yes, and then I'll -- yes.

We go back to the margin percentage and -- Matthew, what -- I think if you look at the development of the cost base, there are a couple of factors there, that is number of people, that is the wage and salary component, there is the bonus item and what I would call all the other operating costs that we have. If I look at the wage and salary component, the combination of the number of people and salary inflation, I think that it's fair to assume that we try to take out of the cost structure, the impact of the wage inflation by doing the reduction in people.

But at the same time, I hope that we come back to a situation where we can pay our people full bonuses that we have now 2 or more or less 3 years in a row that people missed their targets massively in certain areas. On the one hand, that leads to a cost saving, and that part of the cost will come back if people reach the targets, and the targets are based on growing compared to last year.

And that is -- that, I think, on the cost base. Then on the margin, Marcus?

Yes. So Matthew, as I mentioned before, if you look at that kind of product mix, and not to go into too much of the detail, but as I mentioned on the Q3 call with the pharmaceutical market being soft, predominantly related to the India tariffs, we did see that continue quite heavily, I would say, in the fourth quarter.

So there was an impact there, which is why we do refer to the product mix, but also market. I think just on that pharma piece, positively, we do see more normal ordering pattern coming back into play at the beginning of this year.

But the price pressure is, again, it's really on that semi-specialty component part where there is an aggressive, I would say, competition. And again, it's not to say that specialties are immune from that, but definitely much more protected.

And again, to reiterate, the much bigger impact is from a demand perspective. Does that give you the color that you would like, Matthew?

Yes, that's fine.

I've got 3 questions, please. First of all, maybe following up on the gross margins in Asia Pacific.

There, we did see a recovery quarter-on-quarter. And Marcus, you highlighted that you do still see that impact from Indian tariffs on Signet.

But now with the trade deal in place between the U.S. and China, do you expect that will continue to show further improvements into 2026?

And how do you see the competition from Chinese suppliers moving up the value chain in semi specialties? Second question for Hans.

You're cutting the dividend by 16% based on the top end of your payout ratio. I think you earlier were indicating that you are contemplating share buybacks as the M&A process takes relatively longer to complete.

What made you change your mind? Is that the relatively higher leverage ratio at 2.8x EBITDA?

Or do you still have a full M&A pipeline and confidence that these acquisitions will complete? And then maybe finally, Marcus, you highlighted you do see constructive conversations with your suppliers about outsourcing?

How do you see these trends in the current environment and particularly in Europe where your suppliers are under substantial pressure?

Great. David, firstly, from a pharmaceutical India perspective, as I mentioned, we do see, I would say, more normal ordering pattern at the beginning of this year.

Of course, we're only 1.5 month through the quarter. So a bit difficult to say that this is now the new norm.

But our general feeling at least today is that there's much more confidence coming back on that front. With regards to competition from China.

Firstly, we very much recognize and take seriously both the threat, but very importantly, the opportunity from Chinese suppliers. And as we've spoken about before, we have had our own China sourcing office in place for more than 20 years.

In general, we see that, yes, China, in particular, we're not involved with the commodity side, but they're very present there more and more in the semi specialties and, of course, have the ambition to play within the specialty field. We have worked and do work heavily in some cases, with quite some Chinese suppliers through that China sourcing office that we have.

And it really, I would say, is a slow process as with actually with Western suppliers when we founded the company, but really building the relationships with those Chinese suppliers over time, where we get to know them, they get to know us, we get more comfort on the quality of the products that they have to supply. And maybe even more importantly, the stability of supply, how committed are they, for example, genuinely in having long-term supply to Europe, to LatAm, or is this just because they have products available today that they're looking for a greater amount of export.

But these are relationships, as I said, they're not new to us. Our business with Chinese suppliers continues to grow.

As those relationships do develop, there are examples of them offering initially customer exclusivity, and then in some of the smaller countries, again, with many years of relationship building where there are some exclusive relationships coming into play. But their business model, as I've mentioned before, in general, is quite different.

But yes, it is an important, I would say, consideration for us. And again, we see this as not only a threat but an opportunity for the future.

Maybe, Hans, do you want to cover the leverage and then I talk about...

So David, basically, your question about capital allocation. We have a dividend policy whereby we indicated from the start of our listing that we would use a payout ratio between 25% and 35%.

The last 5, 6 years, we have been on the top end of that range, and we did not see any reason to change the dividend policy, neither the place where we are in that range, on the top end of that range. And that's why we pay out what we mentioned in the call and in the press release.

At least we proposed it to the AGM. And it is, of course, up to the AGM to approve.

Then on the M&A pipeline, we have a healthy pipeline there. We have quite some processes, processes that what we mentioned earlier, sometimes take longer, take longer due to discussions around valuations, about what the sustainable EBIT going forward.

And at a certain moment, we need to decide if these processes take longer than expected, what do we find an acceptable leverage and how do we use the cash that we have available for M&A. And I would like to keep all options open there.

So I did -- we did not really change our mind, but we always look at the combination of case that we generate, M&A pipeline and opportunities to put the cash at work most efficient for all our stakeholders.

And then your last question, David, from a supplier outsourcing trend perspective. I would say here, it's really a bit of a mixed bag.

What you see is quite some suppliers making some mass redundancies and therefore, looking to outsource a much greater percentage of their business because, of course, they're reducing quite significantly their own in-house commercial and tech support teams. On the other hand, you also see some suppliers, which are looking at IMCD and the customer base that we've successfully been able to develop and looking at which are some of the larger accounts which we've successfully developed and could they take those accounts back in-house for short-term win for themselves.

Of course, those are then healthy conversations that we have with them, a little bit, I would say, of horse trading. And in some cases, you can imagine that there are those bigger accounts taken back in-house, but in return, either for some smaller accounts transferred to us or even, in some cases, product line or geographical expansions.

So I would say, in general, there's even more healthy conversations happening with suppliers about further developments and expansion than I've seen for a long, long time.

Yes. Just 2 questions, please.

First is on costs. Am I right -- I mean, did I understand it right when you said that going forward in 2026 that any kind of a wage hike will be offset by a decrease in FTE?

So we can -- on an organic basis, we can expect costs to be flat. And if that is so, given -- I mean I'm trying to understand what kind of a gross profit growth would be required so that you can offset any kind of a cost inflation, if there is any?

So sort of like if I'm building a bridge between 2025 and 2026 EBITA, then if EBITA has remained constant between 2025 to 2026, then what kind of a gross profit growth would be required? That's my first question.

And the second question is specifically on the organic EBITA decline of 18% in Q4, which has been considerably worse than the Q3 EBITA decline. I know you don't like to talk about the business on a quarter-on-quarter basis.

But I'm just trying to understand what has gone worse in Q4 versus Q3. Is there any particular end market or any one-off costs?

Just any kind of color on that would be very helpful.

Yes. Perhaps I should come back on the cost side to make clear what I just mentioned that what we see, if I look at -- we are in an environment where people expect a salary increase every year.

And what we see is that the reductions that we made in the organization should compensate for the average salary increase. That is the basic work assumption that we have.

On top of the salary increase, a lot of people missed their bonus this year. So that is a saving this year, like it was a saving in 2024 and unfortunately, also in 2023.

So we have 3 years in a row that people massively missed their bonus targets. We hope that, that will come back.

If that comes back, that leads to additional costs. And I'm happy to pay these costs as that is just a sign of a successful outcome of a year, and the successful outcome of a year means that we will grow gross margin substantially compared to last year.

And that is the working assumption that we have. And then you were talking about an 18% miss and things that went wrong in the last quarter.

I think it's first important to take into account that the base number of result is much lower than the quarter before. So mathematically, already the percentage goes up.

At the same time, we are not happy with the development of gross profit. The organic decrease in the third quarter was minus 3% and minus 7% in the last quarter.

Basically, yes, that's not good. And we had a bit of a weak finish of the year.

October, pretty okay, November, soft, December, well, very soft, I would go like that.

And again, in general, we would say that the pharma market was surprisingly soft for us again in the fourth quarter, as we mentioned on the Q3 call. But yes, I think -- and to support it, it was really a surprising lack of demand again from customers.

And yes, it wasn't a particular market segment or region, it was pretty much across the board.

Yes. Got it.

If I could ask a very quick follow-up. How has the trading in January been?

I mean you mentioned that November and December have been soft and very soft. So have you seen -- have we started seeing any kind of improvement in January?

Or is it similar?

Well, as you know, the first quarter of last year was our strongest quarter, and January was actually the strongest month within that quarter. Hans also has already spoken about the significant currency headwinds that we're facing on a like-for-like basis.

So that comp is very tough. But I would say, look, beginning of the year, January looked pretty okay.

We're only halfway through Feb. So we have limited variability.

So it's a bit too early to comment. But we're very much focused on the things that we can control, the commercial team activity, developing and converting the new opportunities, both with the customers and the suppliers that I've mentioned, and of course, being cost-conscious.

Maybe I could just dive into that January comment. Could you talk about different -- I know it's early in the year, but could you talk about the different end markets and what you're seeing changing?

I think you said Pharma was looking a bit more positive. But maybe you could give some views on the industrial side of the business.

We've seen obviously U.S. ISM was much more positive.

There are some European sentiment surveys, which are looking a bit better in January. So is the industrial side also coming back?

Secondly, if I look at the implied margins of acquired businesses in EMEA, then actually -- obviously, it's still quite dilutive, but Q4 was less dilutive than Q3. I think implied margin was like 6.5% EBITA versus 5% in Q3.

Is that the early impacts of cost being taken out of that business? And sort of how quickly would you expect the sort of acquired businesses to come back to group levels of margin?

And then if there's anything you could say about price decreases with supplies in January? Should we expect a sort of step down in your COGS as you sort of negotiate new terms of suppliers at the start of this year?

Thanks, David. I think firstly, if we look across the various markets, as you say, it's a bit early to really look at what the market trends are, but I think we're seeing, with the exception of Pharma, pretty much a continuation of the trends that we saw coming out of last year, where we see Food & Nutrition, I think being very stable to actually some pretty nice growth on a global basis across all 3 regions.

Pharma, I spoke about globally, I think we're seeing more normal order patterns beginning to come back into play. Beauty Personal Care, it was a soft market for us last year.

I would say when I spoke about the green shoots and people talking about green shoots, the beauty market is definitely one of those markets where people are beginning to talk about an upturn coming. And as I mentioned on the previous call, again, we see a lot of reformulatory activity coming through our labs.

So I'm pretty excited about the beauty opportunity. So we're confident about that market for the longer term.

The industrial side, unfortunately, is the one that's more difficult to predict. We likewise hear, again in the U.S., things like the coatings and construction market, which has been very depressed, and we all know about the stagnation from a housing market perspective.

We hear people talking about, again, these green shoots coming, but we don't yet see them. So I think, unfortunately, on the industrial side, it's a case of wait and see.

But of course, I mean, we're confident that it will come.

Then you had a question about the integration of M&A and if that -- how quickly you can bring them back to more average IMCD levels. Most of the acquisitions that you referred to, either we did in December or in the third quarter of last year.

So there is -- it will take a bit of time. We are, especially on the Ferrer side, in the process of integration.

We are also cautious. It's always important in the first year that you don't lose your customers and your suppliers by massive price increases to get margins up to a more IMCD average level.

So it's more important that to stabilize the business there where we can get our cost benefits we will do, but we don't want to lose critical people, critical suppliers and customers in these processes. But for sure, over time, you could expect a bit more normalization of profit levels in these activities.

Yes. And then, David, on the pricing side, you speak about price decreases at the beginning of the year, but what we've actually seen is quite some price increases.

Of course, it's not across all product lines and all markets. But I think it's fair to say that, particularly outside of the semi specialty side, we've seen more price increases than decreases.

And interestingly, that also includes from Chinese suppliers. So let's wait and see how much of those price increases really stick, but there's certainly ambition from our suppliers to try to push pricing up.

Just a couple for me, please. It's just a follow-up to some of the previous questions.

If we think about your 2025 results and the tariff-related uncertainty that you saw impacting numbers, would you see that tariff-related uncertainty being -- representing more of a one-off kind of a weakness and that hit your numbers and potentially hit your numbers in 1H '26? If that eases, would you expect volumes to improve?

Just trying to understand what went -- what changed in '25? What is the catalyst to help it the change in '26, I suppose?

And then the next question is on gross margins. What do you think is more important for the gross margin percentage?

Is it pricing of chemicals? Or is it volumes?

If, let's say, we see further chemical price deflation, especially on the semi commodity side of things, but volumes recover, do you think gross margins can see some improvement underlying organic FX adjusted?

Thank you for your questions. I think with regards to the tariff uncertainty and the impact that, that had, I mean, of course, it was a big shock wave that came into the market.

And I think the biggest impact of that was it really damaged consumer confidence. My own personal feeling is that as we get and are beginning to get already some more certainty around what the tariff numbers are, I think that we will gradually get better consumer confidence back, and therefore, the volume demand will follow.

And it's that volume demand, which we need in order, I would say, to re-kickstart the business. So again, I think the talk of the green shoots are definitely there.

Let's see when those green shoots do actually develop. But yes.

And on the gross margin, I think, again, really important that we don't focus just on the GM percentage because you could imagine that as demand does pick up, particularly on the industrial side, and the industrial side, as we mentioned before, does tend to have a slightly lower GM percentage, as those markets do pick up, there could be a slight drop in the overall GM percent. So important that we really focus on what the absolute gross margin amount is.

Also, again, to make sure that we're taking advantage of gaining new business because typically, when you gain a new piece of business, particularly on that semi specialty side, again, the GM percent can be a bit lower. And then over time, as we build the relationship with the customer, we then look to increase that over time.

First of all, I've a question about your working capital. I noticed that the payables increased significantly year-on-year.

So can you give a bit more color on the working capital developments that you saw in Q4 and what you expect in '26? And my second question is on the bonuses.

You mentioned those as a potential dampening impact on the stabilization of operating costs. So can you give a rough indication how much lower they were in the last 2 years versus the previous period, for example?

So how big can that swing factor be?

Yes. Luuk, thanks for the questions.

First, working capital. I think, and you specifically referred to creditor days.

And as a company, IMCD is always -- we pay our creditors in time on the due date, and we don't want to play around with that. And if the due date is just before Christmas, then we pay just before Christmas, and we don't want to push the payment in the first day of the new year to show a better number there.

So this is more timing difference than anything else. I don't see a change in the behavior of suppliers there.

On the bonus component, in previous calls, we have mentioned a couple of times that if you look at the average bonus amount, I think if you look across the company, we talk about somewhere between 1.5, 2.5 months of salary that people can make. At least half of the target is linked to financial performance, reaching your financial targets, and there are always individual targets in there.

And that is a bit of flexibility that we have there. I don't want to mention a specific number there, but that should give you a bit of a feel of the magnitude we are talking about.

Just 1 question, please, on the Americas business as regionally, that's where you've seen perhaps the biggest slowdown through the latter part of the year. I wonder if you could give any detail on what you're seeing in LatAm perhaps compared to North America through Q4.

Obviously, aware that markets like Brazil, you've called out some pressure from increased competition, but you've also maybe got pressures on the U.S. consumer side too.

If you could help us isolate some of that maybe.

Yes, I would say from a U.S. perspective, the biggest impact there is on the industrial side, particularly, I would say, Coatings & Construction.

Beauty Personal Care also being fairly muted throughout last year. And then moving on to LatAm, yes, Brazil most definitely, one of the more impacted countries that we have.

As we've mentioned before, through the acquisitions that we made quite some time ago, a little bit more of a higher industrial semi specialty component there and quite some price pressure. So yes, Brazil definitely, as a result of that price pressure, I would say, one of the poorer performers.

And for me also, Nicole, Brazil is one of the areas where we saw quite some operational currency impact. That is typically a market where we quote in dollars and then invoice in the local currency.

And if I look at -- if I compare the exchange rate, U.S. dollar, euro, versus what happens in Brazil, we saw a 13% drop in the dollar and only a 3% drop in the reais.

And you can imagine then you already lose 10% of your sales value locally with the same cost structure. And so these type of things people often forget how important local currencies versus the dollar, how that plays a role in the day-to-day business environment.

And that is one of the things that also really hit hard the P&L in that country.

I was wondering, are you seeing a difference between larger and smaller Chinese suppliers in their willingness to go exclusive? Are the bigger ones also as willing to go exclusive?

I can see the smaller ones wanting this, but what about the larger ones? Would this be for them, perhaps something that is seen as a potential sales limitation when you bet in one distributor?

And then yesterday, I think a key food ingredient supplier highlighted a deterioration in Q4 with regards to food ingredient volumes in EMEA and then particularly in food service. And I think you actually stuck a bit more optimistic tone.

I was wondering, is this because you're perhaps differently exposed? And then lastly, maybe a bit of a silly question, but I believe you generally talk about 20% of your business being geared to semi specialties.

I was wondering, is this 20% still 20% or more like 15%, perhaps given the underperformance? Or is it actually still 20% due to recent M&A?

On the food ingredient volume side, I would say that we haven't seen a big impact there. I mean when we talk about food ingredients for us, it's also the nutritional side.

So we see, for example, quite some nice formulatory opportunities as people are looking to increase the amount of protein and fiber within their diet. Similarly, by the way, for the U.S.

where GLP-1 drugs have quite an impact, I would say, on consumer behavior. But again, similar to Beauty Personal Care, a lot of formulatory work going through our labs as people are really looking to, I would say, enhance the quality of the products that they eat.

Larger versus smaller...

Chinese suppliers.

Chinese suppliers, sorry. Eric, definitely, in our experience, the smaller Chinese suppliers are much more, I would say, willing to build a closer relationship.

Again, this is not something that happens overnight, but over a time frame of a few years as we get to know them and vice versa. In our experience, the smaller ones are more willing to give the customer protection and in some cases, the country exclusivity.

The larger ones, I would say, it's pretty rare. In our experience, almost never happens.

But yes. And then the final question on the semi specialty to specialty.

It really differs by market, where I think we've said before that things like the pharmaceutical market, you could imagine, is a much smaller semi-specialty percentage. But I think fair to say that across the board, that roughly 20% still stands.

I had a few questions. First on the trend of outsourcing, Marcus, I think I'm hearing this for the first time you referring to some sort of a horse trading with a few suppliers trying to gain the access back to some of the bigger accounts.

And I'm just curious, what is the net impact of that on IMCD? Are you seeing more, let's say, cannibalization or accretion in your customer relationship because of those changes or it's not meaningful in terms of impact?

I'm just curious if this is a new trend of maybe customers wanting to in-source? Or it is something that you would say is part and parcel of the negotiations that you generally do?

The second question was, and Hans, you highlighted this a couple of times during your notes, which is the operational impact from currency. And I'm just curious, and this is just my impression speaking to my colleagues in India, correct me if I'm wrong, but even Signet in India prices in euros or dollars and then invoiced in rupee.

Is this -- beyond just the P&L impact, is this creating some sort of a competitive pressure as well? Why would customers not look to source from local distributor or supplier who can quote them in rupee rather than having to pay in euros or dollars given the rupee in India has depreciated by 15% to 20% in the last 18 months?

I'm just curious is this coming with some competitive pressure on top? And the last question on Signet.

Is Signet back to growth now in Q1, do you think?

You're very specific on Signet.

Maybe if I begin with the outsourcing, I think firstly, Chetan, when I talk about this horse trading and kind of the discussions that we have with suppliers, when we grow accounts to a certain size, that's nothing new. I mean that's been with us since the foundation of the company.

I think what I was referring to there is that there's more and more discussions with suppliers about expansions and opportunities as I think they themselves also struggle significantly with their own performance, I think that they are more open to making change. And as I mentioned in my initial starting speech, I'm encouraged by the number of positive supplier conversations that we've got ongoing.

So I would say generally very positive about that outsourcing trend. And Hans, on the India and Signet?

Yes. Now perhaps more in general around currencies, Chetan.

That is -- in a lot of countries, we import material, and then in a lot of countries, it's common to quote in either euros or dollars and then invoice in the local currency. We see that in India with Signet, we see that in Mexico, I see that in Brazil, I see that in Poland, I see that in Turkey.

In a lot of B2B environment, this is quite a common practice. If you then compete with a local producer that produces locally and always quotes in the local currency, that could be a positive or a negative.

I think if I specifically look at the segment, there the risk is remote because basically, we import their material from American and European suppliers that are part of the formulation, part of an FDA-approved recipe. So the customers are, they are more or less obliged to use that material because the final product is then sold back to the American market or to the U.S.

-- to the European market. But if I look, for instance, at the coating business in Mexico, there, we quote -- everybody quotes in dollars, and then you invoice in Mexican pesos.

And if I look at the exchange rate, again, as an example, U.S. dollar versus the euro versus the Mexican pesos versus the euro.

If I see a drop of 13% in dollars and I see more or less a flattish Mexican pesos, I basically lose about 13% of my top line, and my cost base is still in Mexican pesos. So what you then see is lower organic growth because of this currency impact, and you see the same cost base because in the end of the day, all these companies report in euros, and that is for me always difficult to explain the impact of these changes, but it definitely had a negative impact in the second half of last year on top line growth and margin growth, but by the cost line still remains in the local currency.

But there is always that competitive element if there is a local producer that still quotes in local currency.

Yes. Two questions remaining for me.

So I mean, the first one. Taking a step back, I'm curious to see if you can highlight where do you think we are in the cycle?

Because obviously, end of Q1 last year, Q2, lots of volatility due to tariff discussion, et cetera. And I think many thought Q2, Q3 would perhaps be the bottom.

And I think today's surprise is mainly to see that it's getting worse. But looking at your free cash flow conversion up in the 90-plus percent, et cetera, it's very high, maybe signaling really, really low demand.

So just we can't see the future, obviously, but I'm just curious where do you think we are in the cycle today? And then the second question is on the, let's say, headroom for M&A.

How much headroom do you really have? The question here is because 2.8x, obviously, compared to your bank covenants, you still have some room.

But in my experience, particularly European investors, when the leverage gets to 3x, they get nervous. Maybe in the U.S., they say it's still too low.

But in Europe, that's my experience at least. Also thinking again about the high free cash flow conversion.

If should demand come back, you need to invest something in your working capital. So overall, on the base of 2.8x, it might be that your headroom for acquisitions might be lower than it looks.

If you can please comment on that.

The first question relates to where do we think we are in the cycle. I think we would also love to know that ourselves.

But I think when we look at all of the different market reports and as I mentioned before, speaking to customers and suppliers, I generally feel that there's more optimism than there was certainly during Q3 and Q4. And I think that the market reports, as was previously mentioned on this call, was an indicator of that.

So we don't have a crystal ball. But as we said, I think people talking about the green shoots coming, we've definitely heard more of that since the beginning of this year.

And Hans, on the...

And also a nicely building order book, a bit more positive there. Stefano, the headroom on M&A.

I understand your question. At the same time, I think you also saw that we generate quite a bit of cash every quarter, creating additional headroom.

With looking at the pipeline and the speed of executing the M&A opportunities, there is room for us to maneuver, sufficient room to maneuver. And if for whatever reason we see something that drives our leverage temporary just over 3x, we are not shy to do a transaction if that really -- if we really feel this is needed to further grow the business.

But then we will also explain to the market how we will bring leverage back to below the 3x that you just mentioned, mainly because of European investors. Because the American investors always tell me that we are -- the leverage is much low and the business can have much more.

But yes, we need to take into account all stakeholders in this respect. But I feel confident with the room that we have to maneuver there.

Two questions, please. The first is on 2025, you talked about relative price stability.

But at the same time, you're saying explicitly that there's continued pricing pressure in semi specialties. Are your European producers losing market share because they are pricing above Asian competitors?

And therefore, effectively, although your pricing might look stable in some areas, effectively, the net impact is the same as prices basically traded for volumes lost? So really still the leading indicator here is pricing even if that is kind of indirect.

Is that fair? And then second question.

We're back at pre-COVID conversion margins in Q4, so kind of around your long-term average. Is this kind of a normalized level for the business?

Or was Q4 a bit of a one-off due to some destocking? And what kind of range could you see on that margin in 2026?

Yes. Perhaps first, let me answer your last question.

Q4 is for us always a quarter whereby the December month is more or less half a month. And for the cost base, we need to pay the full salaries in third quarter -- the fourth quarter.

And so the conversion margin in the last quarter is always the lowest in the year. So this is not the new normal going forward as far as we see it.

Pricing, pricing stability?

Yes. Tristan, I think, I mean it's a very complicated question to answer, as you can imagine, because with over 50,000 products within the portfolio.

But in general, as I've mentioned before, what we see is on the specialty side, pricing stability during 2025 with, I would say, quite some price increases coming through the beginning of this year. But you're right, on the semi specialty side, there is pricing pressure, has been pricing pressure.

But again, it's early stage, but we have seen some price increases at the beginning of this year coming out of China. So let's see again if that sticks.

But yes, with such a diverse portfolio, it's difficult to be specific.

Did we now create more confusion, Tristan? Or did we try to answer your question?

That's very helpful.

Of course, a lot of discussions. First of all, Marcus, maybe can you tell me something you presented, let me say, at the Capital Markets Day in September 2024, the new tools and the high expectations you had from that.

Is there anything visible yet on the rollout of that and the successes of that? That's my first question.

So thank you for the question. Yes.

So I presented the Sales Assistant. Delighted, as I mentioned in my pre-commentary, with the full rollout of that internally from a global perspective during the course of last year.

And yes, we are seeing very good traction from our commercial teams there, the usage of the system and also the ability to increase the cross-sell rate. That tool has already been rolled out for 4 of our business groups externally on the MyIMCD platform and will be rolled out to the other bigger business groups during the course of the next 1 to 2 months.

Okay. Perfect.

And then, Hans, with regard to the restructuring, can you indicate any size of that and how it is spread over the areas? And to what extent is this acquisition-related?

Because it's for me not clear what exactly the amounts...

Maybe if I could just say a quick word on that to begin with, Quirijn. And it wasn't a significant restructuring.

What it was, was us really looking across the whole organization, making sure that we are as sales-orientated and customer-centric as possible to be able to drive the sales activity in the most effective way. So we had a look at this.

And in some areas of the business, it meant actually investing in additional highly qualified commercial staff, but also looking at where can we make efficiencies. You mentioned the Sales Assistant, but you can also imagine that we've got quite some work ongoing around AI use on things like the -- on the order to cash or quote-to-cash process.

So it's a combination of really looking across the company and making sure that, again, we're as active and proactive as we can be commercially, but also as efficient as we can be from a back-office perspective. Net-net, as we said, that resulted in a reduction in the number of FTEs.

But it wasn't so much a massive restructure focused purely on reducing cost. It was really also about making sure that we are that hungry sales organization.

Yes. And if you then ask me, if you look at the regional split, I think it's fair to say it was a bit more EMEA oriented than any other parts of the world.

But all in all, the fact that we have a global integrated IT CRM system allowed us to make these efficiency changes across the globe. So it impacted more or less each and every country in the IMCD structure.

Okay. Maybe a final question.

So on the M&A, so the pressure on the gross profit margin in EMEA, you mentioned, let me say, was related to the M&A, as I see it. Yes, mainly because -- but it is a little bit strange to me because it was only 2% increase of the revenue because of M&A.

And the pressure 80 basis points, something like EUR 4 million. So it's, in my view, a little bit strange that the effect can be so large.

Yes. It was, I think, larger than you would expect.

I think I mentioned 2 things. I mentioned a combination of M&A and additional stock provisions.

So it's fair to say that you need to take into account both. And in EMEA, we had both.

And basically, the stock provision impact is something that happens...

Great. I just want to thank you all very much for joining the call this morning and for your questions.

And yes, Hans and I wish you all a very good day. Thank you all.