Corbion Aktie

Welcome to the Corbion Q1 2026 Results Conference Call. [Operator Instructions] Please note that this call will be recorded.

I would now like to hand over to Mr. Alex Sokolowski, Head of Investor Relations. Please go ahead, sir.

Thank you, operator. Good morning, and welcome to Corbion's First Quarter 2026 Interim Management Statement Conference Call. This morning, we published our Q1 2026 results. The press release and presentation can be found on our website, www.corbion.com Investor Relations Financial Publications. Before we begin, please note that today's discussion will include forward-looking statements based on current expectations and assumptions. These statements involve risks and uncertainties that may cause actual results to differ materially from those expressed.

Factors beyond our control, including market conditions, economic changes and regulatory actions can impact outcome. Corbion does not undertake any obligation to update statements made in this call or contained in today's press release and presentation. For more details on our assumptions and estimates, please refer to our annual reports. This is Alex Sokolowski, Head of IR. And with me on the call are Olivier Rigaud, Chief Executive Officer; and Peter Kazius, Chief Financial Officer. Now I would like to hand the call over to Olivier. Olivier?

Thank you, Alex, and good morning, everyone, and thank you for joining us today for Corbion's First Quarter 2026 Earnings Call.

Let me get straight to the point. As we outlined in February, the first quarter reflects phasing effects, primarily Nutrition, and the very strong comparison base in Functional Ingredients & Solutions. Against that backdrop, we delivered group sales of nearly EUR 294 million and an adjusted EBITDA of EUR 37.8 million with a margin of 12.9%. While this is below last year's exceptional start, it's fully in line with our expectations. And importantly, it doesn't change our confidence in the year end. In fact, what we are seeing now is encouraging. April trading confirms that momentum is building, and we expect a clear acceleration in both volume and earnings as we move through the year.

Let me highlight what is driving that momentum. In Functional Ingredients & Solutions, we delivered stable sales of EUR 236 million against a very strong prior year. Underneath that, volume and mix were positive, supported by continued strong demand for natural preservation solutions and the solid growth in Biochemicals and Lactic Acid to PLA. While margins were temporarily impacted by mix, we expect a steady improvement from Q2 onwards. This will be supported by lower sugar costs and disciplined cost reduction execution. Growth will continue to be driven by structural demand for food safety solutions and increasing adoption of PLA, particularly in 3D printing and as dynamics in fossil-based plastics evolve.

In Health & Nutrition, Q1 sales of nearly EUR 58 million reflects phasing into the remaining of the year. The fundamentals here are strong. Demand remained robust. Fish oil prices are going up. Our contract positions are intact, and we expect a normalization of sales and volume growth from the second quarter onwards. Our Biomaterials business continues to build momentum and delivered a second record quarter in a row delivering growth across orthopedics, drug delivery and aesthetics.

On the TotalEnergies Corbion joint venture, we also achieved organic growth and our divestment process is progressing as planned. At the group level, margins were impacted by mix effects and temporarily lower operational leverage in Q1. These are timing-related factors, and we expect a clear improvement as volume ramp-up and cost measures take effect. This bring me to cost discipline. In a macroeconomic environment that remains volatile, particularly with well-known geopolitical tensions, we are acting decisively and have implemented a focused cost reduction program.

Turning to cash flow. Q1 free cash flow was negative at EUR 15.7 million, and as expected, given seasonal patterns. We remain fully confident in delivering EUR 85 million to EUR 90 million for the full year. Looking ahead, we fully reaffirm our 2026 outlook. We continue to target 3% to 6% organic sales growth and adjusted EBITDA margin of around 17% and strong cash generation with performance weighted towards the second half. This will be driven by sustained demand in natural preservation, normalization in nutrition, improving PLA market conditions and disciplined execution of our cost reduction initiatives.

While uncertainty in energy and input cost remains, we have robust mechanisms in place, and are actively managing volatility through pricing, hedging, sourcing and operational control. So let me close with this. Q1 reflects timing and conversion effects, not the strength of our underlying business. Our fundamentals are strong. Momentum is building, and we are executing with discipline and focus. We are confident in our ability to deliver on our commitment for 2026.

With that, let us move now to questions.

Thank you, Olivier. [Operator Instructions] Our first question this morning comes from Wim Hoste, KBC Securities.

Yes. I have 3, please. The first one is on the raw materials versus pricing dynamics. I know there's significant hedging on sugar and energy and some of the other components. But can you maybe quantify or elaborate a little bit on the kind of headwinds you're seeing maybe also on transportation costs or logistics issues, et cetera? And then also, what kind of pricing initiatives you put against that? So that's the first question.

The second one is on foods. Can you maybe elaborate on the contract wins that are mentioned in the press release? What kind of products, geographies are we talking about regarding these contract wins?

And then third and last question would be on the progress with the PLA divestments. Can you maybe elaborate a little bit on the process, the number of interested parties, the alignment with Total on that? So those are the questions.

Okay. Thank you, Wim. I will answer the food and the contract wins, and Peter, the points on the raw material pricing and the PLA.

Let me start with your second question on contract wins. Basically, what we see in foods are twofold. One is related to our natural preservatives and primarily related to some specialties in there on clean label. You might remember, we discussed during our CMD about the new EU listeria regulation, that is getting implemented in July this year '26. So we've been actively working on this, and this is bringing very nice upside, primarily related to our natural vinegar systems. And we see that really already starting in Q1, but accelerating over Q2 as customers are preparing to switch to new preservation systems. Amongst others, we see strong momentum in seafood. That is one.

The second one is more U.S.-related where back on the GLP-1 trend, we've had a couple of major wins on high-protein functional systems for our bakery business. And we have been able to build some inventory to prepare for the big launch in Q2 on that front as well. These are the -- amongst the two major drivers of these food ingredients contract wins, you know, that we discussed about in the press release.

Now to you, Peter, for the 2 other questions.

Yes. So if you look on a raw material perspective, Wim, then you are right that in sugar, we have kind of full visibility for the coming periods, and look fully hedged for this year and also hedged into 2027. I think the other key components, which I would like to call out, which relates to the Middle East is, of course, energy prices and therefore transport prices, as well as if you look to the Middle East, then sulfur is playing a role as well and we use sulfuric acid in the production of lactic acid.

Now, if you look to the three components: energy, and you can find it in the annual report is around 7% of input cost, is well hedged. So for the remaining part of the year. So I would say minimal exposure on that one. In transport, we do see some exposure, and I think the exposure is mainly on the sulfuric acid part of the equation, which how we currently view and look to it, we were talking here on a number in this year of up to EUR 10 million. And we are indeed taking pricing actions and mechanisms in the market, and that's a combination of prices, surcharges and all the rest. So that's a bit the current outlook, Middle East impact, I would say, from a cost perspective.

Then on your question on PLA, I would like to stay a bit higher level, but we are progressing nicely and on track. And I indicated in the Q4 call that we anticipate to bring more news by mid-2026 because I don't want to hamper or jeopardize the process itself.

Our next call this morning comes from Robert Jan Vos from ABN AMRO.

I have a few questions as well. Based on what you said about pricing in FI&S in Q1, still slightly negative, but the mix plus phasing of input cost materials, should we anticipate positive pricing in the forthcoming quarters? That's first on FI&S. Second one is maybe elaborate a little bit on the softness in the North American market?

Then moving to H&N. You say that you expect volume mix growth to return to positive in the next quarters compensating for Q1. So my question here is, do you expect -- because Q1 was pretty negative, do you expect positive volume mix growth for H&N in the full year? And related to this what about pricing in H&N in the coming quarters?

And my final question, the cost savings. Can you elaborate a little bit on this? What is the amount that you expect for this year that you can take out of your model? How is it split per division? And are there upfront costs related to this?

Thank you, Robert Jan. So I will discuss the answer on North American softness and the H&N. Whilst Peter, you can take pricing and cost savings, yes.

So let me start over, Jan, with the softness on North American market. Indeed, we are exposed to some large categories as bakery and meat there. And we've seen, of course, the inflation impact and tariffs impact in the U.S. to some large customers, that impacted already Q4 last year. And we've seen some continuation of that in some of these categories. Although I have to say lately, when we look at retail numbers, you would say bakery is leveling off. So it's not declining anymore, whilst the meat sector is still declining in the U.S.

Now as I said, it's unequal. We see, indeed some of these developments, as I just mentioned, in a very specific area being the natural preservation in the clean label. There is still underlying quite a lot going on related to MAHA on clean label development, primarily on preservation specialties. And nothing new, but the continuation of the fortified proteins compounds that we see. So yes, as you know, it's a big market for us. It's a mixed bag.

On the meat side, it's more negative than in bakery where things are stabilizing. There is a new spot which is a bright spot for Corbion emerging in the U.S. being around culinary, where it was part of also our strategy to develop business in culinary. And I mentioned just before on the previous question that, indeed, we also spread around this Listeria antimicrobial systems now primarily based on vinegar. So we see really strong sales of vinegar-based preservatives across the board, not just in Europe, but also in North America.

On the H&N expected return, there, as we said, indeed, we see already a much better momentum starting in Q2, and we have a very good visibility as we speak now on Q2. As you know, and we explained primarily going into aquaculture, this is a concentrated market with 5 large players, and it's really phasing to one of these customers that we knew upfront, that is now kicking in as from Q2 on one side. But the reason why -- I mean -- and to your question, we expect a positive volume mix growth for the year. And we see a few strong underlying drivers.

First of all, as we said, we've been able to renew the expired longer-term contract. So we have a good contracted position for the year. That's one thing. We are developing nicely into adjacent market, being human nutrition, and also we have very nice development into the shrimp market as well as we speak in the Asian markets. So that's the second driver we see supporting our growth this year.

And obviously, on pricing, we see also nice upcoming impact on -- later on this year, non-contracted part of our business, supported by a fish oil price increase. You might have seen now the final quota for Peru has been officialized and is 36% lower than last year. So that is obviously driving fish oil price up, which is a nice support going forward for a non-contracted part of the business.

What also these lower quota do say, just to close that point, is basically that the famous fish oil gap we've discussed many times and also at CMD was anticipated to be around 50,000 tons shortfall for fish oil, is more likely going to be much higher than the 50,000 tons for this year. Again, we are tracking that every day, but so that -- what makes us feeling really comfortable on our H&N for this year.

Peter?

Yes. So your point on the pricing, Robert Jan, it was indeed negative in Q1, driven, by the way, by lactic acid pass-through mechanism to the joint venture, with a bit of positive even in some other areas. The price uptake, which I just discussed related to the Middle East, is not included in Q1 and will be only as of Q2, but mainly in the second part of the year. So I anticipate a mild negative in Q2 and then basically returning into positive.

If you look in terms of the acceleration of our cost savings program and if I look a bit on the timing and the impact of that, then the saving program, together with the sugar basically, if I look to an impact Q2 already versus Q1, I anticipate an increase of around EUR 5 million. It will be mainly in Functional Ingredients & Solutions and a bit and Health & Nutrition.

I want to make one additional comment because you did ask, sorry, I forgot. In terms of kind of additional costs, we did incur some additional costs in Q1 in anticipation basically of this program.

Okay. That's very helpful. One follow-up maybe. Now that you mentioned that there were some costs taken in Q1. I also saw that depreciation and amortization was EUR 23 million in the quarter, which appeared a bit high. Is that a proxy for the remaining quarters? Or did it include some impairments in Q1?

No, it includes some small adjusted items related to two different elements. One is the divestment process of PLA, as you can imagine. And the other one, which is good news, which you will not see basically in our numbers, but only in -- sorry, H1 is that we had a positive tax outcome in a discussion with the Spanish authorities, which would have a positive impact of around EUR 5 million in terms of tax this year, and we incurred some costs, which are also included in that part. So if you look from a depreciation element specifically, it's around just above EUR 22 million, which is in line basically with kind of the trend in Q2, Q3, Q1 and Q4.

Our next question this morning comes from Fernand de Boer from the Degroof Petercam.

Fernand de Boer, Degroof Petercam. Actually I had one question. If I look to the drop in EBITDA in FI&S, you can say, okay, part is because of ForEx, maybe the mix was negative, but still, there is an absolute decline of EUR 10 million. So could you help me out a little bit on the bridge because I can understand maybe that food sales were quite negative in that respect.

So if you look to the absolute EBITDA, indeed, it is a drop. There indeed currency in it, as you know, because it was $1.05 basically in last year, and it is $1.17 in the U.S. dollar in the average of this year. Then if you look to the delta, there is indeed a kind of negative impact in the equation of mix, price and volume. There is, if you compare to last year, of course, a bit of inflation in that one. We did have some additional costs as I indicated. And the other one is, and it's maybe a bit technical accounting wise, but we do share the kind of bill of SG&A, across the different segments. So that means if you have a reduction of your overall sales, it's also impacting basically the absolute number in...

Our next question this morning comes from Setu Sharda of Barclays.

Yes. So one question on the volumes, given the soft Q1 start and the ongoing inflationary pressure on end market, on customers, has your base case assumption for the volume growth changed in either division and how sensitive is your FY '26 guidance to a slower-than-expected volume ramp-up in Health & Nutrition?

And my second question is on the fish oil contracts. Could you clarify how much of your Nutrition business is currently sold on a spot basis versus under contracts? And when do the existing contracts typically come up for renegotiation? And could you provide like more color on how you are approaching contracting in context of volatile fish oil prices?

And my third question is on if you can give more info on the trading, how has been the Q2 trading till date in both in FI&S and Health & Nutrition? And are you already seeing some sort of recovery that you are expecting?

Yes. Thank you, Setu. So on taking your question on H&N and fish oil, basically, if you look to the way we are ramping up the H&N volume and primarily the omega-3, which is the large chunk there, what we see is that, again, across the year -- last year, if you remember, on customer phasing, we had a kind of U-curve and this year it's more a V-curve in terms of the contract. And this is, of course, the pattern -- the ordering pattern of this business, which is volatile quarter from a quarter to another, although we have this now firm contract position for the year, but we have a great visibility on this contracted part. And then, as you know, we are adding more stable sales and predictable sales in both pet nutrition and human nutrition that is now nicely ramping up. So we have -- and there, we have also very good visibility.

So if I look to the fully contracted position, this year is very similar in H&N than last year, where we have around about 2/3 of our business and their longer-term contract and 1/3 that is open. To your pricing question, obviously, what is open going forward, we have already proof of evidence that we can pass on already some price increases over the next 3 quarters. And these are roughly double-digit price increase on the open contract related to fish oil. Now, where fish oil is going, as you know, we've seen fish oil prices going from the low $3,000 per ton, now around $4,500, $4,600 sometime. And this is what we are translating.

On the long-term agreement, to your second question, we are really not looking to align our pricing on fish oil only. The aim of the game during this 2 to 3 years deal is to have visibility on margin because then we are hedging our sugar. And we do not want to play the commodity game that fish oil is about. So it's about giving really visibility and security of supply to fuel the supply gap to our key customers. And some of them, of course, do share that view, others less, but this is the way we approach it.

Now, on the renewal, to your question, we had a contract that was ending by end '25 that we have renewed, and the others we are ending in '26. So it means that we would probably start next multiyear negotiation for the next years in the course of the summer to renew these type of contracts because they're all ending now by end of '26. So that's, I mean, again, what I could say on that.

On the inflationary pressure, this is, I mean, a difficult one because, of course, I mean, we see our customers trying to push also price to retail and to their consumers. Now, with what Peter explained and what we are facing with the Middle East crisis and how we're going to push also our sulfuric cost and extra freight costs, these are really pricing we are implemented wherever now we have open contracts, but the vast majority will be implemented as from early H2. So this is what we have and what we are planning.

But quite a lot of conversations are going on. I have to say that, on freight, it's different from FI&S than H&N. In H&N, on this large aquaculture contract, we have freight clause in all these contracts where we pass immediately any freight surcharge. It's a lot more limited in FI&S where you have this lag. There's going to be a 3-month lag to push these prices as from the end of July, early August.

That was helpful. Just one question, like because -- do you see any -- like how is the trading update until now, like have you seen the recovery in Health & Nutrition?

No, it's a pretty good. We have very good visibility on Q2, very good, and it's really a very strong start of Q2 there. So I'm feeling really good, feeling really confident what we see in both divisions actually already in April.

Okay. Our next question this morning comes from Karel Zoete from Kepler Cheuvreux.

I've had two questions actually in relation to the FI&S business unit because the margin has been, of course, a bit lower than expected in the quarter. But if we zoom out, it's been a couple of quarters in which profit margins are declining instead of going up towards the 14% to 15% ambition level. So in relation to that, what are the incremental savings efficiencies, et cetera, you try to capture now? And the more longer-term question then is the positioning of the business. Where are you losing market share? Or is it simply the exposure to more mature categories in the U.S. that have been under pressure?

Okay. Let me do the first one in terms of the longer-term trajectory and then Olivier can take the market one from that perspective.

And you are right, that you see basically a kind of negative momentum if you look quarter after quarter. And I don't want to be -- but there is always a bit of volatility around it, frankly speaking, a bit of phasing. And I don't want to basically go to all these details. But if you look to Q2, and let's start with that. Then I did mention we anticipate a kind of EUR 5 million impact of sugar and cost reduction savings, of which the majority will be in FI&S, and that will lead to a kind of sizable margin improvement as of Q2, following actually an improvement into Q3, Q4. So with that one, I think that in terms of Q1, we reached the bottom, Karel, from a longer term perspective. If you then say the ambition level is still there, I anticipate for the full year to be higher in terms of FI&S margin than last year, but not to the 15%.

Karel, so on the cost positioning of the business, this is a very valid question. So if you look to the entire FI&S, basically, I'm taking it outside the lactic to PLA that is a longer-term formula contract to the other pieces, basically there is this natural preservation specialty that is where we invest in growth, which is high margin, high growth. And we see even a lot more options around the lactic derivatives, but also the vinegar, the antioxidant and a lot of food ferments that are growing the mold inhibitors. So this is the part we really want to grow and focus on. And this is where we are investing in resources, as well.

There is the functional systems that basically is transitioning right now from a pure bakery-only play, where we want to specialize in something that has close synergies with preservation, meaning enzyme cocktail shelf-life extension, and this is a business we are now really simplifying as part of the cost program as well to really simplify SKUs and focus on the high end. So this is really one of the big angle of our cost optimization program that Peter mentioned.

And then you have what I call the basic derivatives, lactic -- plain lactic acid that is commoditizing where we basically changed the governance, where we run this business now since January with a new team in a very lean base. And that's the business we also are looking to now restructure, leveraging basically where we have the lowest cost plant in Thailand and primarily the new lactic gypsum-free plant. And this is not where we're going to invest going forward. So the aim is really to have this gradual shift in portfolio to the preservation specialties and restructure the functional systems into the shelf life extension and less exposure to bakery-only business going forward. So that's, I mean, our mission there.

Now, as you know, there is still a large chunk of these commoditized lactic acid or less differentiated, if I would say, which is where I think pricing discipline is important, but also cost management.

And back a minute to the FI&S margin, as Peter alluded before, we started this program. We presented our new Chief Operating Officer ambition in the CMD as well, where as part of also the new ExCo governance, he kicked off a major program that we embarked on. And of course, in Q1, you see the cost of that program is not a benefit yet. But that's fine, we are planning to develop more around that during our H1 results. So that is to come.

Our next call this morning comes from Sebastian Bray at Berenberg.

I have two, please. You have talked about, Olivier, the pieces of movement in terms of last expiry of long-term contracts in '26 for algal oils. If everything were to remain the same as it is today and spot prices for fish oil were to remain the same, assuming that the contracts expire and are then re-struck, is the pricing effect from algal oils for 2027, roughly flat? Or is it different to that?

My second question is on the ongoing negotiations regarding PLA divestment. Are there any dissynergies to think of here? Because the current setup of contracting is that there is almost an over-the-fence style cost-plus agreement. Is a buyer interested in, let's say, renegotiating that? Or do the economics in all likelihood remain intact as they are for supply of lactic acid to the PLA JV post divestment?

Thanks, Sebastian. So your H&N question is very relevant. Now, you know, what we said publicly in the past is that these long-term contracts were at that time negotiated between $4,000 and $5,000 equivalent, yes. So obviously, we need to understand the fish oil price dynamic in the coming months when we're going to be at the table of negotiation in the summertime.

Now, having said that, if you compare the fish oil price volatility, we know it has been picking up to $8,000 or $9,000 and going down as low as $2,000 in the past. We believe this type of price level are the longer-term sustainable price at the margin we have and we need going forward, and you know this level.

So I mean, again, it's a difficult answer because, indeed, obviously, as we are growing volume, we have better and better operational leverage and we should get better margin as we go at this price level between $4,000 and $5,000. And we believe these are the longer-term right level of prices. Now let's see where the fish oil price development going to be over the next month, but again, for these contracts, we want to disconnect from fish oil volatility.

On the PLA dissynergies, obviously, you know, and this is not -- I'm not pitching that, of course, the sale of that business, but the combination of this PLA factory next to the largest lactic acid plant in the world and the lowest cost one is very powerful for any new owner of that business.

Now, obviously, there is a long-term agreement to supply lactic acid that is in place until 2035 and that would survive any change of control of the PLA JV. And for Corbion, whether we own part of the JV or not, it's a very nice plant filler because this business is, as you know, in these huge lactic acid factories, operational leverage is very important and you really make -- and start to make a lot of money when you run above 80% to 85% capacity.

And for us, this plant is a guarantee that we run at really very high capacity rate. So it's quite critical. We remain the supplier, and it's the way also to buffer our two lactic plant on sites, yes. So we see it as, I think, a very nice addition. And actually, it's a deal and a contract with very little, if any, cost. It's a pipeline. So yes, on the front face, the margin might look low, but it has such a huge operational leverage impact on the rest of the lactic that we sell to the preservation and other categories that it's very important. So there are no specific dissynergies that we see from that deal.

Our next question this morning comes from Reg Watson at ING.

I'd like to come back to the cost cutting, if I may, Peter. Thank you for giving us the EUR 5 million delta between sort of Q1 and Q2. Could you break that down a bit, please? How much of that is the absence of the costs you had to take in Q1? And how much of that is the cost saving? And how much of that is the sugar? And a follow-on question from that is, how do you expect this to build through the quarters in the year? Is this a one-off cost-saving exercise? Or do you see further benefits to come in the coming quarters?

Yes. No, thanks. So the EUR 5 million, by the way, relates to sugar and cost reduction activities. So it's not even reversing the other basically element. This is a kind of recurring benefit, and I actually think it will increase over the second half of the year as well.

Okay. And then to that, in terms of the language and Olivier, Peter, feel free either of you to answer this. You mentioned that the sales strength in Q2 is expected to "more than compensate for Q1." As analysts, we're too hung up on quarterly volatility, if we look at first half in the round, do you expect them to deliver positive volume for -- sorry, positive sales with particular volume mix for the business as a whole?

So if I look for, let's say, the business as a whole in terms of volume mix, then for the first half, I do anticipate indeed a kind of positive elements. If I look in the combination a bit, then Health & Nutrition, I see a recovery, but that is around kind of the same. If you look in terms of price, I think I alluded in terms of FI&S, I anticipate in Q2, still a mild year-on-year price reduction, driven by lactic acid to PLA and then basically reversing of that trend in the second half of the year, driven by the growth which we made on Middle East and partly pricing that's true. In terms of Health & Nutrition, if I pick pricing, then we had a kind of 4% pricing delta. I anticipate a mild kind of price erosion during the remainder part of the year.

And then final question from me. How is the ramp-up of the gypsum-free lactic acid plant going? Where are you at on continuous capacity utilization?

So Reg, so where we are, as you know, the plant is designed on 125,000 tons of lactic acid. We are now approaching really the 100,000 tons type of level on that plant, yes.

And it's also important that -- because we've discussed that in the past as well. It's also because these are significant additional volume we put in the market that we -- it's important we also put that in the market wisely, also making sure that, yes, we do not come with large volume that would necessarily impact our margin anywhere. So there is a conscious ramp-up that we have as well on this.

Obviously, the sooner we can fill it, the better, but we see a very nice upside on the remaining part of the year on basically PLA that is requiring a lot more globally. And that's, I would say, to me, quite an important statement because, as you know, the conversion ratio usually between lactic and PLA is 1.4. So you need 1.4x lactic to PLA. So when PLA grows, it's really accelerating massively the need of lactic acid. And we see that for our JV, but we see that also for Chinese players right now.

And that's something that when we look to the whole balance of lactic market, it would be really helpful to see how Corbion can leverage on one side, the fact that we have a competitive position because we are gypsum-free. And we know our main competition is Chinese.

The second is, if you look over the last 6 months, there is quite a positive trend in the favor of Corbion when we look to the carb cost, the sugar -- the Thai sugar cost versus Chinese cost and all our competitors in China are on corn. So the ratio is again back in favor of Thai sugar since September last year. So it's already 2 quarters. And that, I think, going to support also Corbion margin going forward.

Okay. So I'm really pleased to view that you're running that plant at 80% capacity utilization because that must be driving efficiencies in terms of variable cost of production, et cetera. So that must make it probably the most cost-efficient plant in the world for lactic acid, Am I wrong with that?

No. You're right. But primarily right now with the Middle East, this is the only plant in the world with no sulfuric acid because this -- the whole story about, of course, as you know, conventional lactic process is that you are using lime and then you need sulfuric to precipitate into gypsum.

Yes.

And the reason why we developed that process over the years is to have no gypsum, hence, you don't need sulfuric. So that's a big competitive advantage, primarily these days with what's happening in the Middle East.

And then does that mean then that the cost benefit of the ramp-up is now already included in the numbers? Or should we continue to see more benefit to come from any further utilization, any further ramping of this, through the year?

We have already factored in, in our outlook what we think we're going to achieve in terms of capacity this year. So the rest, we keep for '27.

Very good. And our last question this morning comes from Eric Wilmer at Van Lanschot Kempen.

Yes, two remaining questions, brief questions, actually. Given that sugar prices or sugar costs actually have come down year-on-year, might this actually result in market dynamics and forcing lower product pricing for functional ingredients during the remainder of this year?

And maybe on customer behavior, are there any signs of -- given the current disruptions, customers stocking up your product, you mentioned sulfuric acid supply chain issues.

And maybe actually also a third one then on transportation costs. You talked about obviously increasing them. I was wondering to what extent are customers receptive, different from what they may read. Energy costs have actually started to come down a bit again. And I've been hearing that this is not always a very straightforward discussion.

No, I think, Eric, so good point. So basically, I think, we have -- except -- I mean, again, in a few large U.S. contracts, and of course, the joint venture of PLA and sugar-related costs is not something we have really widely spread. So obviously, key customers do track, of course, input cost. But in terms of competitive dynamic, today, it's getting really about, as you know, our critical competitors in lactic are in China, and they are based on corn. So the important is to look to the Chinese corn versus New York 11, Thai sugar or Brazilian sugar. So that's one. And this is what plays in the competitive dynamic.

On stocking, we -- I mean, we don't see that because -- of course, the situation has been heavily complexified with tariffs and still is. And what we see is that the advantage of Corbion being the only lucky producer having a plant in each geography is really helpful for us. So there are different dynamics if you look to the U.S., where we have our plant in Blair, Nebraska, in Brazil, in Campos dos Goytacazes, in Thailand. So we do not anticipate any extra customer stocking. On the opposite, we see people being so tight on working capital that we have a lot of rush orders, a lot of last minute which are creating other issues. So that's what we see.

And on freight cost, yes, of course, as I said, Health & Nutrition is very different than FI&S. In Health & Nutrition, all the large contracts do have a freight clause that we review on a quarterly basis. So if freight costs are, let's say, improving or declining in the next quarter, we would apply it and vice versa.

In FI&S, it's very different. And as you know, we have a big route that is impacting Corbion, where most of the European lactic acid is freight from Thailand to Europe. And this is a very large volume because this is the feedstock for all the derivatives we are making into our Spanish and Dutch operations. So that's an important one for us, where basically, we have more choices than to push these extra freight cost to the market. And this is what Peter explained what we are busy doing and what we have to do.

Okay. This concludes our conference call this morning. Thank you all for your attendance and questions, and we look forward to discussions at upcoming conferences in the next weeks.

Please note that we will hold our Annual General Shareholders Meeting on May 13, 2026, in Amsterdam, and our Q2 half year '26 results on July 31. Information on both meetings is available on the Investor Relations page of our website, and we look forward to engaging with you again.

Operator, you may close the call.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

Good morning, everyone, and welcome to Corbion's Full Year and Fourth Quarter 2025 Results Conference Call. This morning, we published our full year 2025 results press release and presentation. These can be found on our website at www.corbion.com Investor Relations Financial Publications. Before we begin this morning, please note that today's discussion will include forward-looking statements based on current expectations and assumptions.

These statements involve risks and uncertainties that could cause actual results to differ materially. Corbion does not undertake any obligation to update statements made during this call or in today's publications. For further details, please refer to our annual report 2024. With me this morning on the call are Olivier Rigaud, Chief Executive Officer; and Peter Kazius, our Chief Financial Officer. Now I would like to hand the call over to Olivier to present on the business performance. Olivier?

Thank you, Alex, and very good morning, everyone. Thank you for joining us today to discuss Corbion's fourth quarter and full year 2025 results. I will start with our business performance, after which Peter will cover the financials in more detail. 2025 was a strong year for Corbion. We delivered solid organic growth, a significant improvement in profitability, and strong free cash flow generation.

Volume/mix growth reached 3.4% for the full year, accelerating to 8.8% in the fourth quarter, reflecting healthy demand across our portfolio, particularly in Health & Nutrition and in Natural Preservation Solutions. Profitability improved substantially. Adjusted EBITDA reached EUR 204 million for the full year and EUR 48 million in the fourth quarter, representing organic EBITDA growth of nearly 27% for the year and nearly 40% in Q4.

Free cash flow generation was strong. We delivered EUR 91 million of free cash flow in 2025, including EUR 58 million in the fourth quarter, supported by higher earnings, disciplined CapEx and tight working capital management. As a result, earnings per share increased to EUR 1.29, up more than 60% year-on-year. We are proposing a special dividend of EUR 0.34 per share in addition to regular dividend of EUR 0.64, underscoring our commitment to consistent shareholder returns.

Overall, we delivered strongly in the fourth quarter, met our full year's commitments and entered '26 with a clear strategic direction and into execution of our BRIGHT 2030 ambition. BRIGHT 2030 defines Corbion's next phase of growth as a focused specialty ingredients' leader in natural preservation and nutrition, powered by fermentation. This is where we win and invest. We build on the strong progress of Advance 2025, a streamlined company, stronger margins and balance sheet, improved food ingredients performance, a profitable omega-3 DHA business and a sharper portfolio after the emulsifiers divestment.

Corbion is now more focused and ready to grow. Our priorities are clear: invest in natural preservation, nutrition and biomedical polymers, strengthen innovation, reduce noncore lactic acid exposures and review strategic options for PLA. Our ambitions that we presented last November, 3% to 6% organic growth, 18% EBITDA margin by 2028, EUR 270 million free cash flow over 3 years, 13% ROCE and double-digit EPS growth.

BRIGHT 2030 is focused, disciplined and built on our strength. Let me now turn to Functional Ingredients & Solutions. This segment delivered a solid performance in a mixed market environment. Our Food business showed good momentum, driven by continued demand of natural and label-friendly preservation solutions. At the same time, some end markets remain soft, partly in North America, where inflation continued to impact demand.

We also continue to expand in attractive adjacencies, including natural mold inhibitors and listeria control, where we see strong long-term growth opportunities. Operational execution remains strong. Our circular lactic acid plant in Thailand is ramping up according to plan, and our sourcing initiatives are delivering benefits.

Combined with input cost relief, primarily sugar and structural cost improvement, this resulted in 200 basis points improvement in adjusted EBITDA margin, keeping us on track towards mid-teen margins by 2028. On the second segment, Health & Nutrition, we also delivered another outstanding year, and this remains a key driver of growth and profitability. We saw continued expansion of algae omega-3 DHA with growth expanding beyond aquaculture into petfood and into human nutrition.

Biomaterials performed strongly, supported by demand in drug delivery, orthopedics and aesthetics. Our pharma activities continue to grow, driven by medical-grade lactic acid derivatives. Despite some quarterly pricing volatility, the segment delivered an adjusted EBITDA margin of 32.5% for the full year, reflecting the strength of our portfolio and the stability of long-term customer relationships.

We also continue to strengthen our operational platform, including debottlenecking omega-3 DHA capacity and ongoing train optimization. Looking forward, we will benefit from further relief in sugar input costs and increases of fish oil prices driven by the supply and demand gap.

With that, I will hand over to Peter to walk you through the financial performance. Peter?

Thank you, Olivier, and good morning, everyone. I will now cover our financial performance for Q4 and the full year 2025. If we look to the full year sales and adjusted EBITDA, we see that group sales for 2025 amounted to EUR 1.267 billion for full year. The organic sales growth was 2.2%, driven by positive volume/mix in both segments. As anticipated, we had a stellar sales growth in the fourth quarter in H&N. The organic growth was more than offset by negative currency effects, mainly from the U.S. dollar.

As a consequence, full year results growth was minus 1.6%. The U.S. dollar last year was on average 1.13 and prior year, it was 1.08. The adjusted EBITDA increased to EUR 204.3 million, representing a 26.7% organic growth. This improvement was driven by strong performance in both Health & Nutrition as well as Functional Ingredients & Solutions. The adjusted EBITDA growth, including negative currency effects was plus 16.7%.

If we now look to the full year P&L below sales and EBITDA, we can see that the adjusted EBITDA margin went up with 250 basis points to 16.1%, depreciation went up with 1.8%, which is the combination of the start of the depreciation of our new Thai lactic acid facilities, partly offset by currency impact. Adjustments in the year were very limited and mainly related to an impairment of a small asset.

If we go to financial charges, overall, there were EUR 17.5 million. These increased year-over-year, mainly due to currency effects, partly offset by lower interest costs. These currency effects are mainly related to intercompany positions. The financial charges in cash flow statements were EUR 10.6 million. If we go to the results from joint ventures, it's negative minus EUR 4.1 million, which consists of a positive EBITDA of EUR 10.1 million in the joint venture, which, of course, 50% is attributed to our results, offset by depreciation of EUR 8 million and interest paid to both shareholders of EUR 10 million, of which EUR 5 million is included in our financial income and expense.

The effective tax rate for the year was 21.2%, which was benefiting from currency-related tax effects. The anticipated effective tax rate for the coming years, as we disclosed in our Capital Markets Day is around 27% following the tax jurisdictions where we are present. As you can see, our earnings per share reached EUR 1.29, which is an increase of 63.3% versus prior year.

If we look into Functional Ingredients & Solutions, we see an organic sales growth of 1.1% for the full year. This is driven by a positive volume/mix of 1.9%, driven by food and lactic acid to the joint venture. The volume growth in Food is supported by momentum in natural preservation and shelf-life extension. The growth to the joint venture is following the volume growth in the PLA market.

The Biochemicals segment was slightly down following softness in some end markets. Pricing was minus 0.8%, which is following the input cost and a pass-through mechanism to the joint venture. If we go to adjusted EBITDA, we've seen an improvement versus last year of 230 basis points. The full year EBITDA is 11.1%, which is driven by cost savings and input cost relaxations.

Q4 margins decreased sequentially, driven by inventory movements following reduced inventory levels during the quarter. You might have seen in our free cash flow statement that our inventory basically reduced by roughly EUR [ 15 ] million in H2. The positive free cash flow in the quarter was therefore driven by a significant reduction in inventories.

If we look to Health & Nutrition, organic sales growth was 6% for the full year and nearly 25% in Q4. Growth was driven by a strong volume/mix across all the 3 segments: Nutrition, Biomaterials and Pharma. Biomaterials sales grew due to increased traction in drug delivery, Orthopedics and aesthetics. We see continued growth in Pharma, driven by higher volumes with positive pricing and organic sales growth in Nutrition has been driven by volume growth, partly offset by reduced pricing.

The adjusted EBITDA increased to EUR 96.6 million with a full year margin of 32.5%, which was up 260 basis points versus last year. Despite lower omega-3 pricing in Q4, we've maintained our margin in the quarter. This pricing was due to a high share of noncontracted business. If we look to the results in the joint ventures, then the joint venture sales increased 4.8% in 2025, which is driven by increased volumes, partly offset by lower pricing.

The lower pricing did have an impact on the full year margin, and you've seen a margin of 7.5% for the full year. The Q4 margin is also impacted by inventory movements related to a planned maintenance shutdown in the quarter. If we look into next year, then we anticipate to come back to a double-digit EBITDA margin for the full year. And this is driven by cost reduction measures in the joint venture as well as lower anticipated input costs.

Capital expenditure in 2025 amounted to EUR 68.5 million, with maintenance being around EUR 44 million and expansion around EUR 24 million. The expansion CapEx was mainly supporting the Nutrition capacity projects and the in-sourcing of Vinegar supporting the Food business. Operating working capital improved to 24.2% of sales, which is the lowest level since 2021, with inventories being reduced with 100 basis points year-over-year, mainly impacting the second half of the year.

Free cash flow, therefore, reached EUR 90.8 million, which was reflecting the strong EBITDA delivery and our disciplined CapEx and working capital focus. Based on our results and the cash flow generation, we propose to distribute a dividend of EUR 1 per share, consisting of a regular dividend of EUR 0.64 per share and a special dividend of EUR 0.36 per share, which underscores our commitment to consistent shareholder returns.

With that, I would like now to hand over back to Olivier for the outlook.

So looking ahead to 2026, we expect organic sales growth of 3% to 6% and adjusted EBITDA margin of around 17% and free cash flow between EUR 85 million and EUR 90 million. Capital expenditure is expected to be around EUR 80 million, and we target double-digit growth in adjusted earnings per share.

Adjusted EBITDA growth will be second half weighted, reflecting phasing effects in the first quarter. Overall, we remain confident in our strategy, our portfolio and our ability to deliver sustainable value creation. Now Peter and I are happy to take your questions. Operator?

[Operator Instructions] Our first question this morning comes from Robert Jan Vos from ABN AMRO ODDO BHF. Robert Jan, please go ahead.

I have a few questions on the H&N division. Pricing, far more negative than expected. You mentioned temporarily lower fish oil price and also more exposure to short-term contracts. So first question is, since you mentioned the temporarily impact, how is the pricing situation currently? And what should we expect for pricing in the division in 2026? That's my first question.

Second, Peter, you rightfully said that EBITDA profitability in the division remained quite stable in Q4 despite this pricing effect. Is that purely the volume leverage impact because the volume growth was very strong? And related to this, do you expect to be able to maintain EBITDA profitability of the levels that you've shown in the full year 2025?

And last question, at the CMD, the 3% to 6% organic sales growth guidance through 2028 was including 8% to 10% for H&N. Is that also a range that we can anticipate in 2026, knowing what you said about Q1? And my final question is on PLA. Can you provide a bit more color on the progress that you made since the CMD when you announced that you were looking to sell your stake?

Thanks, Robert Jan, for the question. And let me do them one by one. And let's start with the outlook. So the outlook, we reiterate indeed the CMD, which is an organic sales growth of 3% to 6% as well as the growth we anticipated both in Functional Ingredients & Solutions as well as Health & Nutrition. If you look in terms of H&N in the fourth quarter, we've seen indeed a negative pricing impact, which is driven by a high share of noncontracted business following fish oil prices, which, as you know, went down during the course of this year.

And the good news, by the way, if you look to the last year, is nicely going up. If you look to the expectation for next year in the aggregate, I anticipate a mild decline in terms of pricing of H&N. But in terms of the total margin, I anticipate still an EBITDA margin of around 30% for the full year. And this is driven by the combination on the one hand of mildly lower prices.

But on the other hand, the main input cost also in H&N is sugar related, which is on a positive kind of journey. And positive means lower prices, so positive impact in terms of EBITDA. In terms of your question on PLA, we started to execute a plan to sell our interest in the joint venture. I would say we are fully on track with this plan in executing it. And I anticipate to share more news by mid-2026. I think I answered the questions.

Our next call this morning comes from Setu Sharda of Barclays.

So again, a question on the 3% to 6% guidance. So basically, what are the key variables you think for achieving whether it's going to be 3% or 6% or is this -- so what would be the key sensitivity over here? And my second question would be about the FIS division. Like how much of the slowdown in FIS division is your end market weakness or there is -- which is cyclical or there might be some structural reasons because of the GLP-1 penetration?

Yes. Okay, Setu, thanks. I will answer the first one and let Peter -- I am letting the second. So yes, when you look at the 3% to 6% key variables, obviously, 2 different things. Peter just mentioned our confidence into the H&N for the year. So -- and we see a continued momentum despite the high comping we mentioned in Q1. On FIS, as you know, it's really, I think, related to, of course, our high exposure to the North American market, where we've seen some softness into some of the key markets as Bakery and Meat last year.

And we see 2 different dynamics in the market are also relating to your point on GLP-1. One is on one side, following the cancellation of the -- of course, the financial support by the administration for lower income people. We've seen really our customers asking for more affordable recipes and reformulation, asking to us to help them reduce cost in use. But you see that basically, there is a reduction in demand also on the more, let's say, bulky categories as Bakery and Meat on one side.

And that is something obviously that, again, we are tracking very closely, but we see really some decline in terms of overall consumption in the U.S. market on the low end. And there is, I mean, the other angle on the more indeed sophisticated product and the nutritious product backed on the GLP-1 trend, but also on the MAHA trend in the U.S. where we have a lot of requests to reformulate more nutritious products, higher protein, higher fibers.

We see also more supplement in terms of mineral salts related to our calcium lactate, magnesium lactate type of products. So where -- we see a strong demand. And so this is a part where we are feeling pretty confident and have a good pipeline. Now I have to say the U.S. is still lacking visibility with basically a lot of volatility coming from the discussions around tariff.

We've said a few times that basically we do not have a large impact coming from tariffs, but this is where we have the lowest visibility. On the rest, I think we have good momentum primarily in regions like Asia Pacific and LatAm as well. So this is a bit what we see happening as market dynamics there. On the FIS, peter, maybe you take this one.

Yes. If you look in terms of FIS, Q4, Setu, and if you look a bit on the dynamics and the buildup, then there is underlying positive volume/mix in the Food business. If you look to lactic acid in the joint venture, there are actually -- although full year, we've seen a positive volume momentum, there, Q4 is negative. So if you look into the kind of underlying businesses specifically for Food, I think there where we do plan to grow and also plan to grow into next year, those businesses are actually nicely growing.

Okay. Our next question this morning comes from Wim Hoste from KBC Securities. Wim, please go ahead.

Yes, I have 3, please. Can you maybe comment on the overall raw material cost outlook for you in '26? That's the first question. Second one is on the Omega-3 business. There was, yes, more or a certain degree of spot or shorter-term contracts in '25 that played a role in the pricing. Can you comment on the duration or the average duration of your contracts for '26 and the overall pricing levels in a bit more detail?

And then third question is on PLA. I think you mentioned to expect an improvement in EBITDA margin in '26, but -- and you -- if I explained the levers there on cost efficiencies, et cetera. But can you maybe comment a little bit more on also the volume outlook for the PLA business? How do you see that evolving?

Okay. Thanks. So I will answer, I mean, the omega-3 and Peter, the raw material cost outlook and the PLA margin. So -- let me start with omega-3 short-term contract. As we discussed in the past, we have roughly 2/3 of our business that is on a longer-term contract, where there, we have good visibility on pricing, and these are prices that we are not tying up to any, let's say, monthly or weekly fish oil price variations. Yes, so we have more stability and visibility on that part.

On the non-contracted, usually, the market rules there runs from either monthly to quarterly contracting on that part. And what we've seen last year is that we initially booked some deals for Q4 prior to the increase in fish oil price that the market saw starting in October, November. So levels, again, if I give you high-level numbers of fish oil pricing used to be around the $3,000 in the course of Q3, went up close to $4,000 in the course of Q4. And the latest one, if you look to the trend over the last 2, 3 weeks is more around $4,000, $4,200 yes.

But at the time, we had some Contracted business on the short-term type of customers in Q4 that we agreed at the previous fish oil price. So going forward, we are feeling really good because we see the current trend on fish oil dynamic. And we are waiting for further news on this famous fishing quotas from Peru, but all indications have been confirmed that this quota are going to be much lower than a year ago.

And obviously, when you look at the supply gap, these are also very difficult metrics to get in aggregate. But speaking with the major industry actors, people do believe that the supply gap by the end of '26 is going to be around 50,000 tons of fish oil deficit. Now these are assumptions. So we have to be cautious with that. But it just, I think, to me, confirms that what we basically also communicated a few times that structurally, this market is getting into structural shortage. Now let's see how price is going to develop on these short-term contracts for '26. But on the contracted, we have good visibility. On raw material, Peter?

Yes. So if you, Wim, overall look raw material, then as you can follow the New York 11 prices, which are coming down or did come down quite substantially over the last, let's say, 2 years, that's flowing into our P&L, also continues to flow into our P&L next year. So sugar is a clear benefit. If you look to all the other raw materials, on average, they're around stable.

And where we have seen some minor increases, we actually passed that through. So I anticipated if you look from a pricing perspective, a bit of positive impact. But of course, there is one assumed negative one, which is the pass-through of the joint venture because the sugar prices, we basically hedge together with the joint venture. So if I look overall, raw materials on a downward curve.

That also brings me to your margin question on PLA. If you look to the margin this year around 8%, then there are indeed 2 key levers bringing that up, which are the reduced input prices and input prices read as our price to the joint venture as well as cost reduction measures, which were taken in the joint venture during Q4.

If you go back to kind of the volume price dynamics, we've seen price erosion in the joint venture. And I assume that we are roughly at the kind of curve that we don't see further price erosion. And I do expect a volume increase in the joint venture also following the volume increase in this -- or this year, basically in 2025. I hope that answers the questions, Wim.

Our next question this morning comes from Reg Watson of ING.

I have 3 questions, if I may. The first one is the inventory adjustments, Peter. I think in the press release, you -- the margin in FI&S was impacted by inventory adjustments. So I'm wondering if you could elaborate on that a little more, please, and quantify the hit there? That's the first question.

Second question is on the EPS guidance range for 2026. I think you mentioned double-digit EPS growth now. I think it doesn't take a mathematician to work out the double digit is 10% to 99%. And I'm wondering if you could narrow that range for us a little, please?

And then the final question I have is this phasing of customer buying in Q4 in H&N versus Q1 this year. So again, you highlighted that there is a shift from one quarter to the other. I'm wondering if you could also quantify that for us as well, please, because clearly, 40% volume/mix growth in Q4 is exceptional. It would be useful to know how much of that was phasing.

Let me pick the inventory adjustment and the EPS, and then Olivier will comment on the phasing part. If you look to inventory adjustments, I am happy to quantify it, if you look in terms of the elements in terms of inventory, I mean, as I said, a reduction of EUR [ 15 ] million, of which the vast majority is in Q4. And if you look to the impact of inventory movement, how we call it, it's a couple of millions.

So from that perspective, it's quite substantial. If you look in terms of EPS growth and if you look to double digit, I don't anticipate to be at 99, Reg, frankly speaking. If you look to the kind of shape in terms of earnings per share, I would be more on your lower part of the range of 10% to 99%.

On the phasing, Reg, so basically, 2 things. The first one is the phasing we spoke about before was re-phasing between Q3, which remember was low into Q4 and not getting anticipated sales within Q4, although indeed, it was really good, but we benefit from a lot of these noncontracted deals that we had at that time in Q4. What's important is what do we see in Q1? Because we are still basically have some customer concentration, as you know, in aquaculture.

This is a market that is quite concentrated. And this is why also we are pushing really hard to grow beyond aquaculture as well into pet nutrition and human. But still, you are dependent on a few large contracts. So what we see happening in Q1 is that some customers probably anticipating further fish oil price increase, have increased their inventory in Q1. And although we are contracted and we feel very well for our contracting position for '26, what they have told us is that it's going to be really more of a load as from Q2 going forward.

So -- and this is what we see, knowing that you play with in aquaculture primarily, which is where the big volume lies still today on a few large customers. And it's exactly the same phenomenon towards -- we have seen to some extent in Q3, between Q3 and Q4 that we anticipate now for Q1, and we see happening in Q1.

Okay. So just to be clear then, so the Q1 phasing is more a delay into -- later into the year rather than a shift of demand from Q1 to Q4. Is that correct?

Exactly correct, yes.

Okay. And if I may be really cheek and ask one final question, is a technical one for Peter. Just on the gypsum-free lactic acid plant ramp-up, you mentioned that you started -- depreciation increased for '25. How is that expected to unfold in '26? Do you expect the depreciation charge overall to increase year-on-year and if so by how much?

So I anticipate depreciation to indeed increase a bit in 2026 because we started that and we are slowly ramping it up. And also here, I would say, look, a couple of millions, but not an overall significant impact on that.

Our next question this morning comes from Fernand de Boer from Degroof Petercam. Fernand?

Most of my questions have been answered, but one is on the PLA joint venture. I saw you moved it now to assets for sale with being EUR 69 million, does that mean EUR 65 million for the loan provided to the PLA joint venture and then only a book value for the equity of EUR 4 million? That's the first one.

And just to be clear, because I had this discussion this morning, and I thought that the phasing of Q1 was indeed to Q4, but that's not the case of '25, but that's not the case. So it's later in the year that I heard that correctly from the previous question.

Yes, correct, Fernand. On Q1, just to confirm my comments just made to Reg.

Okay. And then maybe one question. You opt for a special dividend. What's the reason behind that and not to go for a share buyback?

Let me answer the 2 questions. One is asset held for sale, which is the EUR 69.2 million and asset held for sale is really because we are in the process to selling it. And that is the combination of the equity and the loan part of the portfolio. So if you look into last year, part of our kind of financing in the joint venture was in loan and part in equity. The EUR 69.2 million is the book value, which is the combination of the loan as well as the kind of stake in the -- the equity stake in the joint venture. And it's the book value from that perspective.

Last year, the book value of the loan was EUR 65 million? Or do I have that wrong?

I need to double check. And of course, this is a dollar loan. So the dollar will have an impact on that one. So I think year-over-year, it should be the same, but it can be reduced driven by the U.S. dollar. In terms of special dividends, I think, look, this is really underscoring our commitment to shareholder returns and why special dividend has to do with execution and associated tax impact?

So also going forward, that means that share buybacks is going to be difficult anyway. So if you would sell the PLA JV, then it's going to be difficult to allocate that money to those proceed to a share buyback?

The answer is based on what we announced today that will be not that difficult.

It will be not that difficult.

Okay. Thank you, Fernand. We have 2 more analysts in the queue. The next question will come from Eric Wilmer of Kempen. Eric, please go ahead.

I had a question on the margin expectation for this year. You're anticipating 100 basis points year-on-year EBITDA margin improvement supported by Preservation and Nutrition, which both seem subject to a certain degree of price erosion. If I'm not mistaken, you're also highlighting a 30% EBITDA margin for H&N this year. So this would imply quite a serious step-up in FI&S profitability. Is the main component here sugar pricing?

But I was also wondering with regards to, yes, the tough comps or tougher comps in Q1, it -- to me, it seems it would also apply to preservation, just looking at the margin you managed to print in Q1 last year. Is that correct? And last question, some of your competitors are emphasizing Rosemary extracts as a natural preservative, and it seems like end markets are broadly similar for this type of solutions. In which categories would you argue that lactic acid-based solutions strongly outperform these Rosemary extracts or is this really not apples-to-apples?

Okay. Let me pick a couple of questions. So the first one, you are fully right. So if you look to the margin step-up of 16.1%, which is the EBITDA margin this year to be around 17%. That is mainly driven by Functional Ingredients & Solutions because in Health & Nutrition, I anticipate to be around the same margin level.

If you look into the Functional Ingredients & Solutions, it's indeed a combination of maintaining/increasing prices in parts of the business, whilst, as I explained, the lactic acid to the PLA will be at lower prices, combined with lower sugar prices and some cost efficiency measures, which we have taken and there is a bit of flow. So all in aggregate, that's explaining that one. You're also right, if you look in terms of FIS, Q1. But if you look to the comparable last year in FIS because you might recall that the volume/mix growth Q1 2025 over Q1 2024 was 7.3%. So in FIS, indeed, the comparable is playing a role as well.

On your second question, Eric, so basically, we are also active in the Rosemary but we are sourcing with basically strategic partners. And what we are doing is building solutions between Rosemary and for instance, our vinegars. Now just maybe to explain how we see it to your question related to lactic acid. If you look at natural preservation, one approach for certain spoilage is to acidify foods with natural organic acids. So this can be indeed lactic acid or other organic acids like propionic that you get through fermentation.

Another is to prevent oxidation in the different categories. And this is where Rosemary is being used. And it could also be that it is used in combination with other natural antioxidant. And we see that as a nice opportunity because this is a bit what we explained in the CMD. We would really also like to add this technology of botanical extraction to our portfolio because we speak about Rosemary as a big one.

But you see also you have a lot of polyphenols coming from gray or green tea that are strong antioxidant or ascorbic acid that is also natural vitamin C coming from acerola berry. So there is a family that represents a very nice adjacencies which is highly complementary to lactic acid that provides a different functionality in terms of antioxidation versus acidification. I don't want to make it too technical there. But to your point, this is not competing, it's complementary.

Okay. And our last question this morning comes from Karel Zoete from Kepler Cheuvreux. Karel, please go ahead.

A couple of follow-ups. But firstly, maybe the gap between the organic EBITDA growth in the reported was very big in the fourth quarter. Is this all currency related? And how should we think about that going into 2026, where currencies stand today? And then the other question is around the net working capital.

You already highlighted here the progress. But what's really based on lower sugar prices and COGS if you look to the working capital and why are you seeing the improvement from a tighter more strict working capital management? And then the third question is in relation to the Pharma business. That's seen good growth this year. But what's driving the growth in pharma?

Let's have Peter answer the first 2, and I will take the pharma.

Yes. So if you look to the currency impact in Q4, then it's related to the U.S. dollars. It's around 6, 6.5 million. And if you look to the currency then -- and if you look Q4 2025, the average is 1.17. And if you might recall, it's a long time ago, we talked almost about U.S. dollar parity, I think, at that moment in time. But in Q4, the average one was 1.07. So there is a 0.10 difference. And if you do that 0.10, then that explains it.

If you now -- I did mention that the average U.S. dollar rate is 1.30 in this year. And if you currently look to the U.S. dollar, it's trading on the 1.18 kind of level. So that means that there is a further impact anticipated into 2026 as well with where it currently stands. If you look in terms of the reduction in net working capital, there, the majority is volume driven from that perspective. We ended at 24.2% in aggregate, which is indeed a reduction. In the Capital Market Day, I did indicate that I anticipate an operating working capital of around 24% for the coming year.

Okay. So on the Pharma business, basically, you have 2 key drivers there. So one is looking to the more traditional outlets of pharma in terms of dialysis and primarily kidney dialysis. But what you see, unfortunately, globally is still increase in obesity rate and type 2 diabetes triggering at one point by end of life more kidney dialysis. So that's something we see as well a lot happening in some of the emerging markets and developing markets.

And the second that is also interesting that we've seen developing across '25 is also the similar type of products being used for electrolyte solution, where there is indeed a very good mineral balance you need also into some health condition. And we see that as a kind of adjacency growing now very nicely on top of the traditional Dialysis business that is really also stimulating growth there. So that's the 2 drivers behind Karel.

And actually, our queue is populated with a returning question from Robert Jan Vos.

Apologies for coming back. But I have a question on the special dividend. The words suggest that it is a onetime event, but your -- when financial leverage is low. It's actually at the lower end of the optimal range that you guided at the CMD. On top of that, you guide for another year of strong free cash flow of EUR 85 million to EUR 90 million. So my question is -- and that is not even taken into consideration some proceeds for the PLA business. So my question is, will you look at this on a yearly basis? Should we anticipate a special dividend more frequently than only for fiscal year 2025? Or as an answer to your -- to one of the previous questions, will you look more at share buybacks?

It's a great question, Robert Jan. So if you look in terms of the dividend, I would see that as a yearly kind of dividend proposal. It's also subject to approval in the AGM. And in terms of your other question, I refer to that we have a balanced capital allocation policy and continuously review our cash position overall.

I want to make one comment on your leverage one. You're absolutely right. We are on the low end. If you look to covenants, net debt EBITDA, which is the kind of leverage in our banking covenants. We still will repay the kind of subordinated debt, and we start doing that basically in the course of next year as well.

Yes, that's a fair addition. Okay. Can you remind me what was the difference if the reported leverage is 1.5?

It's EUR 100 million, which you talk on. And of this EUR 100 million, by the way, EUR 16 million to be repaid into next year.

What is the difference on the leverage points? It's not 1.5, but it is then actually if you add the subordinated loans, it's a bit higher than...

0.5, you need to divide it by the EBITDA of this EUR 204 million.

Thank you, Robert Jan. We have one more returning question. This is from Fernand de Boer of Degroof Petercam. Fernand, please go ahead.

In your outlook, I heard now several times that actually you will have the benefits coming in from the lower sugar prices. So that I understand. But from the other hand, sugar prices are also relatively volatile. So if you then look at your medium-term target of 18%, how much does that depend on lower sugar prices?

No, it's a relevant question, Fernand, because you're right, it's volatile. However, we have this hedging policy that is a very strong governance where Peter and I have a risk committee on a monthly base, and we decide our hedging on some of the commodities and sugar is a big one. And of course, we are fully covered for '26, and now we are almost really covered for 3 quarters of '27. So we have a great visibility going forward on that part of our cost.

So that is also important to assess that you will not see quarterly volatility in the input cost related to sugar going forward. We do that for sugar. We do that for corn and for energy. So -- although it's a part of our 18%, it is not the only part. We have these 3 levers on getting above 18% margin. One is the input cost, but the second one is really portfolio enhancement to continue to, of course, grow much faster in the 3 specialty segments of H&N. That's, I think, quite important.

And the rest is really benefiting from all the investments we've done over the last years where you need to see the return now, I'm primarily thinking about the Thai lactic acid plant. If you remember, we committed to create quite a nice additional value from both insourcing, but also getting the Thai lactic plants are running flat out, and this is also going to contribute to our cost base.

Okay. It looks like there are no more questions this morning. I look forward to engaging with all the analysts and investors at our upcoming roadshows and conferences. A replay of today's call will be available later today on our website. So thank you all analysts for attending and webcast attendees for listening in.

Okay. So good morning, everyone, and welcome. So I'm really pleased to host you today here in the heart of Corbion in our Horton facility. So this is one of our most important manufacturing facility, but also one of the most important innovation center we have across the company.

So let me begin now with a brief recap of Advance 2025 and the major achievement we've delivered. Then I turn into the future and why we have every reason to be confident as we embark on our Bright 2030 strategic plan.

The Advance 2025 plan has been largely achieved. Over the past strategic cycle, we executed a significant transformation. We streamlined operations. We delivered margin expansion from 13% to 16%, and we strengthened our balance sheet by now 10 consecutive quarters of positive free cash flow delivery. In our Specialty Food in Green business, volume/mix grew by 4%. We also turned a heavily loss-making algae omega-3 business into a highly profitable nutrition platform. In addition, we divested our low-growth emulsifier business and investing in capacity that will drive future value, most notably through our new lactic acid plant in Thailand. Overall, Advance 2025 delivered a top line CAGR of 9% and an EBITDA growth of 8%.

Looking ahead, Bright 2030 sharpens our focus and accelerate our growth ambition. We aim to become a high-growth specialty food ingredient company centered around natural preservation and nutrition. This strategy also reinforces our commitment to capital discipline. As announced today, we've also initiated a strategic ownership review of the PLA portfolio. For the '26-'28 period, we are targeting top line sales growth of 3% to 6% per annum, an adjusted EBITDA margin of 18% and a cumulative free cash flow of EUR 270 million.

Now let me discuss our purpose and the Bright 2030 path forward. Guided by a purpose of preserving what matters, we will accelerate building a sustainable specialty funding green business company focus on natural preservation and on nutrition. And we will achieve this by leveraging our fermentation backbone technologies, our deep expertise in food solutions and our portfolio of differentiated natural and clean label ingredients.

And why do we believe we are so well positioned to benefit from the megatrends shaping today's market? The shift in consumer needs, the market dynamics are really redefining the entire food industry nowadays. First, the clean label and the natural preservation, consumers increasing demand natural recognizable ingredients and the growing concern of over ultra processed foods is really accelerating to push for more and more transparent labeling. Second, the rise in GLP-1 adoption is really reshaping diets and consumer habits. People are seeking for less process, minimally processed foods and more and more nutrient-dense foods product enriched with proteins, vitamins, dietary fibers and minerals.

Third, the regulatory pressure and the demand for transparency continues to intensify. And these policy trends do favor sustainable, safe and innovative food solutions, think of the ongoing push to reduce sugar, eliminate nitrates, lower sodium content or removing hydrogenated fats and more broadly to clean up the ingredient list. Fourth, with an aging population and a greater consumer health awareness, the focus on functional food is just accelerating. And the line between food and nutraceutical is becoming increasingly blurred as consumers are looking to nutrition for proactive health benefit.

And finally, food safety remains absolutely critical because ensuring safe food is essential not only for consumer trust, but to prevent real and serious health consequences.

We also see concrete examples that illustrate how quickly the shift towards natural ingredient is accelerating across everything from colors to preservatives. A few months ago, Walmart, the largest retailer in the U.S. announced that it will remove more than 30 synthetic and artificial ingredients from its private label brands by January '27. Many of these ingredients are commonly linked to ultra processed foods. This move is really remarkable. It's likely one of the biggest private brand reformulation in the history of retail.

Another strong example comes from Tyson Foods, which recently committed to eliminating [indiscernible] as well as synthetic preservatives like BHD and BHA from all its products. So taken together, this action shows the shift towards natural preservation is clearly accelerating. And yet the opportunity had remained significant. Conversion rates in natural preservatives are still far below, for example, what we've seen in natural colors. And when you look at new product launches today, those formulated with natural preservatives are growing much, much faster than overall food launches. So the markets where we do operate are large, attractive and growing, and this is exactly where the momentum is today.

In food preservation, we participate in an addressable market of nearly EUR 3.5 billion. And shelf-life extension is a closely related space. These 2 are going together. So combined, this represents roughly a EUR 7 billion opportunity.

In Nutrition, when we look at omega-3s, together with sustainable lipids, we see another market here of nearly EUR 7 billion, growing in the range of 2% to 6% per annum. So these are really substantial market with strong underlying demand trends. So just as important, our portfolio is very well positioned to capture in all of these segments allowing us to play directly in the areas where customer needs and market expansions are the strongest.

What also truly makes us unique is our ability to start with something as simple as sugar, and transforming to differentiated high-value food ingredients through our advanced fermentation technology. So we work with a broad range of microorganisms from lactic bacteria to micro algae, yeast and various food cultures. And this diversity allows us to produce a wide portfolio of functional ingredient tailored to really specific market needs. But what is especially distinctive is not just the functionality of these ingredients is also our ability to scale up. We can move from a vast library of strains containing thousands of microorganisms from a 5-liter bench [indiscernible] our innovation center, then up to pilot scale and ultimately, to large-scale production with fermenters of more than 250 cubic meters. And this seamless scale capability bench to pilot to industrial scale, while maintaining the right yield and competitive cost structure is extraordinarily rare, and Corbion is one of the very few companies globally that can execute this reliably, and it is a core part of our competitive advantage.

As a concrete example of scale up, let me introduce a short video showcasing our breakthrough innovation in lactic acid processing with is -- our new site of lactic acid plant in Thailand. This represents a truly revolutionary state-of-the-art plant that allows us to operate with far greater sustainability, but also for greater cost efficiency. And this process came from here from this [indiscernible] innovation center lab that you're going to visit later this afternoon and was scaled a pilot level, both here in the plant and in our Spanish facility. And with this new process, we can significantly reduce CO2 emissions, while at the same time, securing high cost competitive position.

And this matters enormously given that Corbion owns a 50% market share globally in lactic acid. So strengthening both our sustainability profile and our cost leadership is therefore critical to maintaining and expanding our leadership in this market. So let's have a look at the video now.

[Presentation]

Our ecosystem is built on our -- not only build on our strong fermentation expertise and our unique scale capabilities, but also on deep formulation know-how and replacing synthetic and artificial ingredients with natural alternatives require more than just great fermentation technology. It demands the ability to design complete functional solutions. And this is where Corbion brings additional strength beyond fermentation industrial scalability, we offer expertise in enzyme formulation, microbiology, predictive modeling and a fully integrated sustainability approach. All of these capabilities work together to help our customers achieve better performance, cleaner label and more sustainable products.

All of this is supported by strong global innovation capabilities. Today, we operate 8 innovation centers worldwide. We are working across 28 core technologies and are managing more than 700 customers projects every year. In total, this is over 250 specialists, primarily scientists and PhDs that are dedicated to innovation within Corbion. The scale and depth of expertise enable us to continually bring forward new solutions and stay ahead of evolving customer and market needs.

Now let's have a look at how sustainability is embedded in our portfolio. Sustainability is not an add-on for Corbion. It is built directly into our technologies and the value they create for customers. From CO2 reducing RG production to natural preservatives that do extend shelf life and reduce food waste, our portfolio helps customers meet their own ESG ambition while improving product performance. A few illustrative examples of this impact. Food waste prevention, our natural preservation solutions helped safeguard more than 10 million tons of food globally each year by preventing spoilage and extending shelf life. Our algae-derived omega-3 will enable up to a 30% reduction in wild cord fish used in aquaculture feed. This couple of examples really demonstrate our ability to really sustainably drive innovation and translate it into real measurable benefits supporting both our customers' sustainability, but also the broader global transition towards more efficient and responsible food systems.

And how does it translate into our climate commitment. We remain firmly committed to lowering greenhouse gas emissions. This is a central pillar of our sustainability strategy. Climate change is already driving severe consequences from extreme weather and biodiversity loss to growing risk to human health. Every action does matter there. And by reducing our emissions across operations and the entire value chain, we contribute to global efforts to limit warming and protect future generations.

So our ambition is clear: achieved net zero emissions across our entire value chain by 2050, with these targets being validated by the science-based target initiatives. Our responsible sourcing program is designed to ensure resilient and sustainable supply chain for our raw material. Over the past decade, we've made really significant progress. Now 99% of our raw material are verified deforestation free. In the next 5 years, we will remain really focused on maintaining the strong performance while responsibly onboarding new suppliers to support business growth. And of course, safety. Safety there is also part of this and is a nonnegotiable. Our ambition is zero incident because nothing is more important than protecting our people and our partners.

While we've made strong progress over the last years, there is still a lot more to do. So our 2030 goal keeps us focused on continuous improvement and on building a culture where safety is inspective and embedded in daily operation.

So now let's have a look to Corbion today. We operate 13 manufacturing facilities and 8 innovation centers supported by our global network of sales offices. We are, by far, the largest producer of lactic acid in the world and the only 1 with a true global manufacturing footprint with around 50% market share, we clearly lead this category. We've also recently built a leading position in omega-3 and in Sustainable Food Solutions. So overall, Corbion is a EUR 1.3 billion business, delivering EUR 196 million in adjusted EBITDA, reflecting our strong operational performance and leadership in our core domains.

Now let's take a look -- a closer look at the current portfolio, and it's already quite compelling. 98% of our raw material are renewable. 82% from our sales are coming from our backbone fermentation technology. And Food & Nutrition account for 72%, already today of total sales, while natural preservation represents nearly 50%. So these numbers clearly demonstrate a strong focus on Food & Nutrition, which is a critical foundation as we look forward and prioritize future growth opportunities.

Looking ahead, our investment priorities will focus where they matter most. This is the essence of our Bright 2030 strategy. First, we will build on our core specialty food ingredient business, strengthening the foundation while accelerating growth in our profitable, high potential segments.

So our strategic focus will be on 3 key areas: natural preservation, nutrition and biomedical polymers. And at the same time, we are committed to developing a robust pipeline across our nutrition portfolio and our food ferments for natural preservation. Conversely, we will defocus non-food lactic acid applications and have already initiated a strategic ownership review of the PLA portfolio.

Let me now come back once again on the essence of Bright 2030. By 2030 positions Corbion as a sustainable specialty footing grading company centered on natural preservation and nutrition, leveraging our fermentation backbone and food solution expertise, and delivering differentiated natural and clean label ingredients. So we are confident that this strategy is a winning combination. It aligns with consumer needs, taps into powerful mega trends and positions Corbion to create significant values in the year end.

Now let's dive into the 3 selected focus area for Bright 2030, and we'll start with natural preservation. Our business has grown strongly over the past few years, with an average volume mix growth of 4%. We have successfully expanded our key label solutions into new market segments including mid snacks, culinary and baked goods. Geographically, we have extended our footprint into Latin America and Asia Pacific through strategic bolt-on acquisitions in Brazil, in Mexico and in India. We've also made significant improvement in cost efficiencies and implement a new ferment technology such as the new circular type lactic acid plant as well as our new vinegar manufacturing facility in Montgomery, Alabama.

And finally, our preservation platform allows us to enhance the nutritional profile of products by replacing artificial products by natural alternatives demonstrating that sustainability, enabling and functionality can go and enhance.

Looking specifically at food preservation, the total addressable market is EUR 3.5 billion, with natural preservation representing EUR 1.6 billion. Importantly, natural preservation is growing faster, 4% to 5% per year compared to 2% to 3% for the broader food preservation market. This demonstrates a clear trend of natural alternatives gradually cannibalizing the water food preservation segment. And this growth is driven by very strong market forces, including first, the shift towards minimally processed foods versus UPS. And this requires much stronger preservation system.

The impact of the GL1 trend, which is really reshaping dietary habits. Again, people looking for more grow food, minimally processed, but also clean label and healthier products. So there is a really strong growing consumer demand there for cleaner label and natural.

And last but not least, the increasing regulatory pressure worldwide promoting safety, transparency and the better nutrition. So [ Maha ] is one of the examples, but we can see much stricter regulation around the globe about sodium reduction, nitrate reduction as well. So Corbion is very well positioned to capture this opportunity.

We combine preservation and shelf life extension while also using our preservation platform to enhance the nutritional profile of products or without compromising on food safety. So today, we hold a solid 25% market share in the natural food preservation market, and we will be reinforcing our leadership in this high-growth space.

So how are we winning in this market? First, by leveraging the breadth of our portfolio and second by building on our strong market positions. Our natural preservation portfolio today is centered on 3 major product actives. The first one is around natural antimicrobials. These are clean label fermentation solutions such as vinegars, cultured dextrose cultured sugar or wheat and various food ferments. Together, they provide efficient microbe control with minimal impact on favor.

The second family is around natural antioxidants. These solutions, including botanical, natural antioxidants, help prevent oxidation of food and [indiscernible] stability. And last, natural acidification. Here, we provide high-quality lactic acid and lactide derivatives for pH control and flavor management. So by combining these natural preservative solutions, we can serve a wide range of categories, including meat and meat snacks, but also culinary products, baked goods, confectionery and dairy. In short, we offer a focused, fully natural ingredient portfolio that addresses both consumer, but also regulatory demands while delivering functional performance across multiple applications.

Let me now share a practical example that allows our formulation capabilities across both preservation and nutrition. In this specific project, we replaced a synthetic mold inhibitor, calcium propionate with a cultured wheat ferment. At the same time, we use dough conditioners and our freshness solution derived from our enzyme systems technologies, and we fortify the bread with high protein content. And by combining these approaches, we were able to deliver to that customer a product that is natural and clean label, that is nutritionally enhanced with reduced sugar and, enriching protein and free from emulsifiers.

These examples demonstrate the strength of the Corbion ecosystem, integrating preservation capabilities, shaft extension and fermentation in enzyme technologies to create clean label, functional and attritionally improved products.

Looking ahead, there are really several reasons to be excited about the short- and medium-term opportunities in natural preservation. On the very short-term action, obviously, we are busy closing Q4 now, and we are also busy in finalizing the contracting round for 2026, and this is progressing very well.

We are also accelerating penetration in the natural mold inhibitor space to replace synthetic alternative. And this is a large opportunity today. We are also preparing to leverage the upcoming EU listeria legislation that's going to be enforced in July '26. So this is coming very soon, and this is offering us a very large opportunity in this market.

Number two, it's about restoring our margins there. This is a key priority. First, through an improved and disciplined pricing strategy, but also we are benefiting from much favorable sugar price input there, procurement savings and a major program to optimize our end-to-end supply chain.

Lastly, we will maximize further the throughput of our new lactic acid plant that will further enhance our cost efficiency. On midterm, we will be launching new food ferments and high potency vinegars with initial launches planned for early '26. Then we are expanding into different categories, including primarily culinary and seafood preservation. Third, we will also grow in pet food preservation, there, leveraging the strong market position we've built from our nutrition omega-3 business already. So they are very nice synergies we see there.

And last, by introducing clean label system that supports reduced sodium, minimally processed foods and the diet trends related to the higher adoption of the GLP-1 diet in the U.S. And finally, growing beyond, we embarked recently in an open innovation collaboration with a company called BRAIN. This is targeting sorbate replacement. Most of the sorbate today being scientific, this is a very nice large opportunity. We are also exploring small selective bolt-on M&A to just complement and expand further our portfolio there.

All these initiatives under Bright 2030 makes us committed to take our business up to the EUR 1 billion mark there by unlocking also significant growth at improved margin.

So now let's move to the second area, our Nutrition business. But before we dive into strategy, let me review where we stand today. Over the past several years, we've built a leading market position in algae-derived omega-3 oils, transforming the business from a modest EUR 13 million operations into a nearly EUR 160 million business by '24. What began as a heavily loss-making venture is now a highly profitable start growing contributor to Corbion's overall performance.

Our first focus area was aquaculture. We have resecured multiple longer-term multiyear supply agreements. These contracts provide stability for the base business and enable growing an ongoing investment in growth primarily into administration and human nutrition. In parallel, we've successfully built a strong presence as I said, in Pet Nutrition, where demand for sustainable and high-quality ingredients continue really to accelerate and in human nutrition, where our nutrition portfolio is supported by a strong opportunity pipeline.

Operational excellence has been very critical through that journey. The manufacturing plant in Brazil has been steadily ramping up supported by a great breakthrough from our San Francisco innovation center, improving massively the yield of our fermentation there. Our Corbion omega-3 business is another strong proof of the company's end-to-end scalability and fermentation expertise. The journey here begins at large scale, where optimal micro algae strains are selected and tested in 5-liter fermenters at San Francisco pilot lab. Then when successful concepts are being developed, this is transferred to 1,000 liters, 1 ton fermenters in Belmont, California. This is in the pilot plant, which is validating performance, consistency and process robustness. From there, the process is carried seamlessly to large industrial fermenters in Orindiúva, Brazil, where the full-scale production takes place.

And across the scale of trajectory, bench to pilot to plants, Corbion has successfully replicated manufacturing conditions, optimize yields, increase downstream processing efficiency. And these integrated scaling capabilities has really enabled us in the rapid growth on the Omega-3 platform from a small loss-making ventures to highly profitable business.

With this, we've not only built the world's largest omega-3 plant, but also the most competitive and sustainable one. What you can see there is quite unique. It's a sustainable, low-cost and fully backward integrated production model we do have in Brazil. At our Corbion site in [indiscernible], we benefit from access to abundant ultracompetitive sugar, the lowest cost feedstock globally, and from a direct integration with [indiscernible] sugar mill that supply very affordable utilities and renewable energy. This integration significantly enhanced both our cost position and our sustainability footprint. And this site is now really fully invested to support our growth trajectory until at least 2028.

It is important to highlight that within a few years, on an omega-3 production basis, this plant is already the largest plant in the world. Compared to peers, it gives Corbion a truly distinctive advantage. A single large-scale, fully integrated operation that delivers significant operational efficiencies, cost advantage and consistent quality. And this concentration of capabilities in 1 major site is a unique competitive strength that firmly position Corbion ahead in the omega-3s market.

Now let's take a closer look at the market dynamics, particularly those shaping the omega-3 demand and the [indiscernible] sector. Globally, omega-3 represent roughly a 1 million tonne market, translating into a total addressable value of about EUR 5 billion. Aquaculture dominates the consumption there accounting for nearly 70% of demand, and this is followed by nutrition and pharma at around 20% with smaller segments such as pet food and terrestrial applications making up the remainder. When we look at the supply picture over the last decade, one thing is really clear, fish availability is highly volatile and structurally constrained. And despite steady growth in end market between 1.5% and 2.5% annually in aquaculture and 3% to 6% in human nutrition, especially in [indiscernible] and pharma, there is simply not enough facial to meet rising demand.

The supply sealing is defined by catch limits by ecosystem protection requirements. And of course, biological variability and climate events is also a limiting factor. As a result, the market faces an ongoing structural supply gap that will only get bigger in time. In fact, in recent days, the market has reacted sharply to speculation around significantly reduced fishing quota from Peru, one of the world's most important source of marine ingredients. And this is already triggering upward pressure on fish oil price, reaffirming the fragility of supply and the urgency of scalable alternatives.

To illustrate the supply gap in fish oil, let's have a look at key dynamics currently reshaping the aquaculture market. These insights are based on a very recent Rabobank report. Aquaculture continues to rise. By '23, the sector will require an additional 14 million to 15 million tons of aqua feed simply to keep pace with the expected growth. Translating into fish oil, aquaculture alone will need 20,000 to 30,000 additional tons official every year, a requirement that the current supply base cannot make.

This growing imbalance is amplified by several factors. First, in elastic demand in end markets. Even small variations in fish oil demand trigger disproportionate price variations because application such as aquaculture and human nutrition cannot substitute omega-3. There is also an impact from more intensive farming and farming of new species, more than aquaculture techniques and this expansion into new species with higher nutritional requirements are both increasing the demand for fish meal and fish oil.

And last but not least, the climate variability. There is today and over the last decade, much greater volatility from El Nino and El Nina. We see these cycles really coming sooner and sooner and closer, and this is making fish oil supply more unpredictable, very often reducing fishing quotas. And the data clearly shows the impact there.

So I only put for illustrative purposes, if you look to the bottom left slide, just looking at the trend of fish meal, I mean this is steadily also growing over the years. On the right side, simply look at the trend, the light blue part of this slide is just official structural deficit. This deficit is already present this year in 2025 and is projected to widen sharply next year in '26 and really accelerate in subsequent years this widening gap underscores why we are so confident in the medium-term and long-term outlook for algae-based omega-3 business. As fish oil price rises and supply volatility increases, large-scale, sustainable and reliable alternatives like our algae omega-3 oil become not just attractive, but they are essential. And this is exactly why we are so excited about the opportunity ahead of us there.

So we are planning to leverage our technology platform to unlock value there and address, I mean, evolving market needs through a dual growth approach. First, we are expanding from our strong base in omega-3 DHA for animal nutrition and primary aquaculture, into pet nutrition and human nutrition. At the same time, we are diversifying beyond the omega-3 DHA into other sustainable lipids. Our recent launch of omega-9 is being positioned in food application to support better nutrition.

Looking further ahead, we are exploring additional product platforms, including algae-derived ingredients as antioxidant and proteins. This strategy not only broadens our market reach, but also enhances margins and reduce our reliance on aquaculture.

So what's next for our Nutrition business and why is it again so exciting? In the short term, we are well underway on closing a strong Q4, as we discussed during our latest Q3 results, while we are continuing to secure long-term contracts in aquaculture, and further also expanding our customer base in aquaculture. From 2026 onwards, our Nutrition business will benefit also from favorable sugar input costs, further securing margin and also potentially higher fish oil prices. We're also optimizing and diversifying our omega business by expanding beyond salmon into other species, but also different life stage as [ archery ], while accelerating growth in high-margin segment as better human nutrition. There, we aim to convert the healthy opportunity pipeline we've developed this year into [indiscernible] growth in 2026.

And last but not least, we are also advancing an EPA omega-3 strain development to complement our existing DHA portfolio. Beyond the omega-3, the growth is driven in the short term by the commercialization of our omega-9 and by a strong focus [indiscernible] innovation. Key initiatives you might have supported in recent press releases including developing astaxantin through fermentation in partnership with Kuehlne AgroSystems and investing in algae-based protein development with Phycom here in the Netherlands, building a robust pipeline for the future.

Now looking ahead to our Bright 2030 ambition for our Nutrition business, we are committed to driving revenue from EUR 157 million up to EUR 275 million, an ambitious almost EUR 120 million increase in just 5 years. This is not just growth. It's a strategic evolution for Corbion, built on innovation, build on efficiency and the relentless focus on value creation. And the beauty of it is that we will not need massive capital investment to make this happen. As I said, we are pretty well invested to sustain sales until at least 2028.

In this journey, building a human nutrition business is a cornerstone of our future. We are doubling down on human nutrition, aiming for it to represent up to 10% of our total revenue there by 2030. And this is not just of our numbers, it's about leading the charge rapidly in an evolving market as we believe human nutrition will also convert from official to algae oil. And we see also a strong consumer demand there for algae oil, reshaping the industry going forward. So we are positioning ourselves at the forefront of the shift delivering really product that matters there.

On this now, let's move to the last and third really exciting platform, our Biomedical Polymers business. This business is not just growing. It's really striving. Over the past years, we have nearly doubled our revenue, achieving a remarkable 14% CAGR there. Now as part of our Bright 2030 vision, we are setting our sites even higher. We have the ambition to reach EUR 125 million in sales over the next 5 years. So we will continue the powerful momentum we've built so far.

This is a business like no other. We boast a truly global footprint with 2 GMP-certified manufacturing plants, 1 in the EU here next door and 1 in the U.S. serving customers globally. Our reach extends across wound management, orthopedics, slow release drug deliveries, regenerative medicines and aesthetics, making us a pivotal player in the biomedical polymer space. At our core there, we are material scientists and innovators starting from monomers like lactide and glycolive in that case, we engineer highly specialized polymers with tailored properties as material strength, degradation rate, different viscosity, water absorption and more. And our advanced technology allowing others to really fine-tune every aspect from polymer length, polymer architecture to meet the exact needs of the end application of our customers.

The total addressable market is large, speak about EUR 1 billion there. With our current market share, the potential for growth is immense.

To capture this opportunity, we are pursuing a dual growth strategy there. First, by building on a solid foundation we do have for our resorbable searches and wound management. Second, by further expanding in the high-growth area, as orthopedics and drug delivery, where our pipeline is really robust and really promising. And last, by exploring new areas as we are building expertise and capabilities in aesthetics and in regenerative medicines, positioning ourselves for future leadership in these emerging fields.

Let's have a closer look how we're delivering value today. And our joint venture with MedinCell in slow release drug delivery is a prime example there. The first product launch using MedinCell technology with our pointer, really at scale is usually a groundbreaking product from Teva Pharmaceuticals for schizophrenia, which is really experiencing rapid growth. But moreover, there is a second major product now in clinical Phase III that is really planning to launch in the second half of next year. And that's also exciting. And this is just the beginning. The pipeline, as you can see, is reach and deep when innovation sets to roll over the next 5 years. And this is not just about optimism, it's really confidence backed by science. Our partnership with MedinCell and we have a very clear road map for success.

So with this foundation, we feel really confident to scale this business and shape the future of the biomedical polymer space. Our unique capabilities, strategic investments and relentless focus on innovation is just position us to lead and grow within this dynamic industry.

On this, now I will hand over to Peter, who will walk you through the financial details of our Bright 2030 plans and we'll return later for wrap up in the Q&A session. Thank you. Peter?

Thank you, Olivier, and welcome to all investors and analysts. Our strategy, Advance 2025, has delivered strong results on both sales as well as EBITDA. We've amended our portfolio towards natural food preservation and nutrition and the significant capital investments fueling future value creation. Our strategy, Bright 2030 is focusing on delivering profitable growth, delivering productivity and reinvesting in value-creating opportunities. Our balanced capital allocation policy is focused on supporting the profitable growth as well as returning profits to shareholders to both dividends as well as share repurchases.

Our medium-term financial targets are on the period 2026, 2028, on organic sales growth, adjusted EBITDA margin as well as free cash flow. Over the period, we targeted a organic sales growth between 3% to 6% per annum, an improvement in adjusted EBITDA to around 18% by 2028, and a cumulative free cash flow over the next 2 years of around EUR 270 million. As a result, we see return on capital employed and earnings per share grew significantly as well.

Over the last 5 years, we can show a strong track record of sales and EBITDA growth. Sales growth in our core activities have grown 9% per annum, translating into an adjusted EBITDA growth of 5% -- 8% per annum. Our noncore activities included the frozen dough business, which we divested in 2021 as well as the emulsifier business divested in 2024. Both divestments were a result of portfolio choices we made earlier in our strategy to focus and preserve what matters. These results were generated in a volatile business environment, which really show the resilience of our business model.

Sales growth over the last 5 years has been driven by both volume mix as well as price with currencies being constant. Price on average has been 5% per annum, which was by passing on input cost inflation, especially in the early part of our advanced period. Volume/mix growth has been 4% per annum, which has been driven by the significant increase of omega-3 sales, our biomedical polymer business as well as volume mix in food of around 4% per annum. As you know, volume mix in 2023 was driven by industry-wide destocking.

Following the margin erosion in the early parts of advance, driven by price inflation and some investments, we've seen significant increase of margins over the last 3 years. This margin increase of 430 basis points has been driven by a combination of pricing, yield optimization, efficiency measures, fixed cost reduction as well as input cost deflation. On top of that, we fully compensated the stranded costs of our emulsifier divestment.

The reported EBITDA year-to-date Q3 was 16.3%, and we see further upside in the coming years on which I will come back later.

Over the last 5 years, we deployed significant capital behind organic growth plans, fueling future value creation. Some of the key projects were the new [indiscernible] acid facility, but also installing [indiscernible] capacity in-sourcing vinegar as a building block for our natural preservation solution strategy. Expanding omega 3 fermentation capacity in Orindiúva, Brazil as well as expanding lactic acid powder capacity to support our food business. Going forward, we see a more normalized CapEx level of around 6% of sales.

Our capital investments are delivering sound returns with paybacks generally lower than 5 years and internal rate of returns above 20%. The exception are the longer term investment prior lactic acid plants, where we see internal rates of return in excess of 15%. The 3 expansions, which I just mentioned, lactic acid powders, omega-3 as well as vinegar are all showing adequate returns. All these projects have become operational over the last years.

Most of the milestones announced in our latest Capital Markets update in January 2024 have been delivered. In the Capital Markets Day of January, we presented the financial targets for the year 2024 and 2025. These targets were a volume mix growth of 2% to 6%, organic adjusted EBITDA growth of 15% to 20% and a cumulative free cash flow over 2 years in excess of EUR 125 million. With 1 quarter being left, we can announce that all these metrics were achieved.

We are also proud that we continue to deliver behind some of our key business growth areas like food preservation, nutrition and the biomedical business. In food preservation, we've seen further growth in product and market adjacencies. In omega 3, we reached our sales and EBITDA objective from 2025 already in 2024. And in Biomedical, we are on track to deliver double-digit growth.

We also delivered on most of our restructuring program delivering free cash flow. The emulsifier business has been divested and the stranded cost has been fully compensated during the course of 2024-2025. The fixed cost savings program has delivered with some key components being an FTE reduction of around 200 FTE as well as mothballing our [indiscernible] site in the U.S.

We also reduced variable costs by in-sourcing some production following the successful growth earlier in advance. Although we made nice progress in the ramp-up of our [indiscernible] acid plants, we've not yet generated the full potential in 2025. In 2025, we've had some start-up inefficiencies which are being addressed. The supply chain savings, which we anticipate are, therefore, to come to fruition in 2026.

Related to working capital, we've seen some reduction, although not to the original ambition level. This is partly driven by the volatile geopolitical environment where the Red Sea is still blocked and tariffs need to be managed carefully. Although under control, I don't see a significant improvement going forward.

Let me come back on our strategy Bright 2030. Our strategy is growth led with a focus of delivering sustainable value creation. Our strategy is, on one hand, focused on delivering profitable growth, delivering productivity and reinvesting in value-creating opportunities. This should lead to organic sales growth as well as an enhanced EBITDA margin. Our strategy is also focusing on capital returns, [indiscernible] by a balanced capital allocation policy. We continue to focus on free cash flow and as a result and vision to grow both in return on capital employed as well as on earnings per share.

As indicated, our strategy is focusing on 3 targets. Our medium-term targets are on organic sales growth of 3% to 6% per annum, and increased EBITDA margin to around 18% by 2028 as well as a cumulative free cash flow of around EUR 270 million over the next 3 years. As a result, we do see ROCE improving to around 13% by 2020 as well as a double-digit increase per annum of earnings per share over the next 3 years.

Now let's dive a bit deeper in some of the businesses. Overall, our organic sales growth is 3% to 6% per annum. This is driven by functional ingredients and solutions between 2% to 4% and Health & Nutrition of 8% to 10%. We will not amend our reporting structure going forward and continue to report on the different market segments. This also amplifies the consistency. Functional Ingredients and Solutions continue to consist of foods, biochemicals and lactic acids to [indiscernible], and health and nutrition continue to consist on nutrition biomedical [indiscernible] pharma. The different businesses have different growth ambition levels.

As mentioned by Olivier earlier in the presentation, we target double-digit growth in our Nutrition and Biomedical Polymer businesses, and we target mid-single digit growth in our Food business driven by natural preservation.

We plan to increase our EBITDA margin with 170 basis points to around 18% in 2028. And this is driven by a combination of different levers. The first lever is product mix, which is driven by higher growth in more profitable business. As indicated, the growth rates of our H&N segment is at a higher pace than a Functional Ingredients & Solutions segments. Our thiolactic acid plant is ramping up, but full savings are anticipated to be delivered in 2026 and therefore, in step up in margin versus the current margin flow.

Our value creation program consists of pricing strategy, further cost optimization as well as lower anticipated sugar cost. And over time, we plan to invest in H&N and also in our innovation capability.

Our balanced capital allocation policy is focusing on driving profitable growth and shareholder returns. We will continue to invest behind organic sales growth and selectively invest in bolt-on M&A, strengthening the core portfolio, all in a disciplined manner. We anticipate CapEx program will be around 6% of sales in the coming years. We also remain committed to returning capital to shareholders via dividends and share repurchases. Our dividend policy remains unchanged, which is paying a stable to gradually increasing absolute dividend. Our anticipated midterm leverage ratio is between 1.5x and 2.5x.

Driving organic sales growth is supported by a disciplined CapEx program. Our expansion investments are behind food preservation, nutrition and biomedical polymers. The cumulative CapEx is estimated around EUR 255 million, which translates to around 6% of [indiscernible]. The CapEx program is split into maintenance, which is there to maintain our current asset base as well as expansions. The plant expansion programs all have attractive returns. The key expansion programs will be in foods behind powder capacity as well as vinegar. And in H&M, it's driven by further capacity optimization in our Orindiúva, Brazil plant as well as capacity increase behind biomedical polymers in both the U.S. and the Netherlands.

We plan to generate a free cash flow of around EUR 270 million over the next 3 years, which is, on average, EUR 90 million per annum. This is a result of organic sales growth, improved EBITDA margins while having disciplined programs on CapEx and working capital in place. It's a continuation of our free cash flow delivery over the last 2 years. And as a result of our profit improvements, we see ROCE increasing from currently 10.7% to around 30% by 2028.

We've actively managed down our leverage ratio following the investment cycle. The reduction is driven by free cash flow delivery as well as the disposal of our emulsifier business. At the same time, we increased dividends and did a share buyback. Going forward, our net term EBITDA is planned to be between 1.5% and 2.5%, including the subordinated loan, which we have around EUR 100 million. This subordinated loan is having an impact of 0.5x. We have a very balanced maturity profile, which is well spread over the coming years. In total, we have around EUR 370 million of U.S. price placement after the planned reduction of EUR 25 million by December. The average interest rate on our portfolio is around 3%.

On working capital, working capital as a percentage of sales has increased in 2021, driven by input cost inflation as well as global supply chain disruptions. After 2021, working capital looks relatively stable around 25%. The underlying improvements, which have been made were being offset by the disposal of our emulsifier business, which did operate at relatively low inventory levels.

Going forward, we only plan a mild reduction of inventories in the continuous volatile geopolitical environment where the Red Sea is still blocked and tariffs need to be managed carefully.

Earnings per share has been stable during the period 2020, 2023 and has been impacted by the disposal of our emulsifier business. As from 2023, earnings per share has grown driven by organic sales growth, EBITDA margin improvement and reduction of our debt levels. Going forward, we anticipate double-digit growth of EPS every year.

Concluding, our strategy, Bright 2030 is focusing on driving profitable growth, delivering productivity and reinvesting in value-creating opportunities. We continue to deploy capital towards organic growth opportunities as well as selectively in bolt-on M&A. We also remain committed to returning capital to shareholders. Our medium-term targets are focused on organic sales growth, margin improvement and free cash flow. And as indicated, organic sales growth between 3% to 6% per annum, adjusted EBITDA margins of around 18% and a cumulative free cash flow of EUR 270 million. As a consequence, we see return on capital employed increasing to around 30% and an EPS growth per annum in the double-digit trends.

With that, I would like to hand it over back to Olivier.

Thank you, Peter. And so let's conclude with a key Bright 2030 takeaways now. So as you have understood, we are not just evolving. We're also transforming Bright 2030 will be -- really make Corbion stand as a global leader in sustainable specialty food ingredients, primarily natural preservation, nutrition and biomedical polymer.

How we will get there? We will accelerate clean label preservation and formulation, enabling the massive shift from artificial incentive ingredients to natural and cleaner label alternatives. We will expand algae fermentation, unlocking new opportunities beyond our current DHA omega-3 business. And we will fuel growth in biomedical polymer, capitalizing our unique capabilities and unlocking the vast potential in this dynamic market.

As we discussed, we announced that we have initiated a strategic ownership review of our PLA portfolio, and we will defocus our lactic acid nonfood biochemical business. So the ambition is clear and is backed by clear financial targets, 3% to 6% growth annually, reaching 18% adjusted EBITDA margin by '28 and delivering a cumulative EUR 270 million free cash flow, also by '28. So this will drive a ROCE of around 13%, and we are committed to grow EPS double digits every year.

So on this, I really thank you for your attention and your engagement today, and we will open the floor to Q&A.

If you'd like to ask a question this morning, please raise your hand, and we have some mic runners that will come your way.

Wim Hoste, KBC Securities. I would like to ask 2 questions, let me ask one by one. The first one is the short onthe various update. There's been some volatility on measures from the government trying to reduce food inflation. Is there any impact on the recent measures on [indiscernible]?

Let me answer that question. The answer is no, not a significant impact. You are right that every day you get some new announcements, whether it's on exemption list or every country is changing. And therefore, I would say it puts a lot of time and efforts of people within the company in order to manage it. But so far, the kind of direct impact is relatively minimal [indiscernible].

Okay. And then my second question would be on omega-3. With the recent price increase in fish oil, can you maybe elaborate on revenue stand on the 2026 contracts? How much have been contracted at much as well pricing levels? Can you offer some clarity on that.

So let me answer this one. As you remember, we've had this multiyear supply agreement. So one was, I mean, ending this year, others are rolling over. So on the -- so we've renewed the 1 that was ending now already a few months ago. So -- but we have also negotiated new long-term supply agreements with additional customers. So on, let's say, a large part of the Aquaculture business, this is already contracted for '26. On the 30% that are open contracts, this is not being contracted. Basically, these are markets moving with the volatility official and we are not yet done, and we are looking closely to what official price are doing before we close any contracts there.

So -- but we try really to secure the base, and we've been able to secure the base at much higher price than the depressed low level you've seen last year, but that's the aim is that we maintain a level of pricing between the floor, you see in fish oil price and the high peaks we've seen also in the past. The aim for us is really to have a predictability of the margin by on one side, hedging our sugar cost in time and then by securing a large base of our business for the years to come.

So now on contracted business, we are already well contracted for '26. We have the vast majority of the open-end market, so which is around 30% still to be negotiated.

[indiscernible]. I have 2 questions. The first one is on the natural for men and the ambition to grow there. If you look to some of your major end markets meet [indiscernible] and often in the U.S. These are not like super growing markets. To what degree can you expand into adjacencies or new parts that are offering faster growth? And how quickly can you make that shift? And the other one is one with regards to [indiscernible] the scope of the operations in global retail, very interesting innovations, leadership positions. But at the same time, we have a company with EUR 1.3 billion, EUR 1.4 billion revenues. To what degree is that sufficient to scale and reach opportunities everywhere?

Two very relevant questions. So on the first one, you're right. If you look, for instance, to the major categories as meat or baked goods, these are not really the growing ones. However, within this category, if I take, for instance, meat today in the U.S., you see a reduction in base what we call harvest in duration, meat preservation on fresh meat. At the same time, you see very nice hike on meat snacks that do offer high proteins. And that's quite interesting because obviously, we play into that segment as well of meat snacks because these are the kind of type of protein shop people do take today, primarily people on GLP-1.

So just to say you have segments that are really impacted by higher inflation in GLP-1 or UPF trends and others that are supported. Overall, we see really also that there is -- and this is why we are expanding into culinary. We see in terms of ready-to-eat food and ready meals, very nice trend ongoing trends. Where, so far, we are not that present. So this is largely new for us. But this is also where people are also cleaning label. I was mentioning sodium reduction a few times. We see very nice moves now into high sodium-containing products. Think about soy sauce as an example, but you have, I mean, a lot of the sauces and dressings that are [indiscernible] through basically a foodservice that are really converting to healthy alternatives.

So within this segment, we see very nice growth opportunity. So the aim is really going there. But obviously, the key categories on bulk commodities, primarily in the U.S. is suffering.

The second part of your question there is also to grow beyond the U.S. This is the largest market for us, but we are making very good strides in Asia Pacific now and also in Latin America. So there is a both approach there on this. So can you repeat your second question?

Yes, the scale of the business. There's lots of opportunities, but then we see a revenue number that?

No, this is indeed also a good point now, we are indeed smaller, but we are truly global. So this is why this model, if you look to how do you go to market with our sales force. We said, yes, we need to be the better expert in town, for instance, in natural preservation or in the sustainable lipid. This is what we do. So -- and it's about presenting and offering ourselves really a deep expertise in very selected area and not pretend we are the supermarket to the world for ingredients because we're not. And we want to make sure that when people do have a preservation issue, the first name on the list is Corbion, that they call Corbion. And we are one of the few having this very specific capability.

So yes, we do not have a portfolio that is the kind of supermarket to the world in terms of natural ingredients, but we aim to be very specialized and be first on the lease when we get [indiscernible]. Now it is essential, we have all these application labs and innovation center globally because this is customer proximity that, as you know, food is local and taste is local. And by having these 8 innovation centers locally, it's how do you basically also turn [indiscernible] more quickly than the largest company. The aim for us also is important as a midsized company is to be extremely fast to the ball because that's the way we win briefs is by being able to turn it around.

And this is why we have discussed many times our blending business. We are now trying to convert this business that was historically, the bakery business into a system solution fast business where we plug not only bakery products, but our antimicrobial systems going forward and probably tomorrow, some nutritional solution as well. And that's the trend we are trying to accelerate.

Robert Jan Vos, ABN AMRO. I have a few questions. What would be the operational or even strategic implications of your defocusing on nonfood lactic acids? That's my first question. And related maybe also on the portfolio. Can you be a bit more precise what you mean with what you said on PLA. Should we anticipate that you are looking for a seller for your stake in the joint venture. A bit of clarification would help there.

Another question is on the free cash flow target. Peter, you said it's EUR 90 million on average per year. For this year, you're aiming for at least EUR 85 million. If I take everything into consideration your sales targets, your EBITDA growth target, it doesn't seem to be very ambitious. What am I missing there? Is that the working capital, although you said it's limited improvement. There's still some investments. Obviously, if your revenue growth. So can you elaborate on this?

And final question, why not a more committed comments on share buybacks. You keep it open as an option. You have a firm free cash flow target. Dividend is clear. So why not a bit more firm commitment to share buybacks?

Yes. So Ben, let me take the first 2. So on this biochemical business, what we intend to do, there are 2 pieces around it. One is that we see there is part of this business that is commoditizing, and we're going to run it really for cash as a commodity business, meaning very lean organization that we are actually busy restructuring, really working on our cost base to make sure that we remain and we maintain our traffic margins, but we will not further invest going forward, and that's important. When you think about in the past, we have been discussing and exposed to volatility into the semiconductor business, for instance, so the agrochemicals, obviously, if you look to the market outlook, the regulatory outlook also for these segments. We do not expect massive growth going forward for this.

When you look to capital allocation, we see much higher potential for growth into the food and nutrition space. So we're going to put really the money the investment where the [indiscernible] is there. And this way, we want to move to really, you've seen today, we are almost already of 80% full in nutrition. We're going to increase that by growing much faster. We're going to really continue to run the Biochem for cash. That's what we're going to do to fuel the growth in Food & Nutrition. So that's the approach we have. And so we are streamlining the way we operate there already as from now to make sure we maintain high margin.

On PLA, I think you had a strategic review saves a lot. I think if you understand, of course, we are looking to exit there, and that's a process we've already kicked off. So that's in the play now. Peter, maybe you want to...

Let me answer your 2 questions on the free cash flow delivery. So if you look at free cash flow, then actually translates quite well into the numbers which we presented. If you then look to indeed this year and also last year, last year, we had a benefit in terms of reduction of inventory as well as we monetize some VAT receivables in Brazil. And there is a bit of phasing in terms of the longer-term contracts, which we do have. So as indicated, we have long-term contracts around the delivery of our Nutrition business. And of course, the way how these contracts are designed is that you have a payout at the end of the contract.

So I would say the volatility in operating working capital is a bit year-on-year. If you [indiscernible] kind of organic EBITDA growth and you then take into account an operating working capital of around 24%, the kind of tax, which, by the way, effective tax rate is roughly 24%, and the interest rates of 3% on our interest, then you roughly come to EUR 90 million per year. So there's always a bit of fluctuation from that.

Your other question, Robert Jan, is also a fair question in terms of share buyback. If you look at the moment, our kind of medium-term net debt to EBITDA is between 1.5 to 2.5 per annum. We always communicated this leverage ratio, including the subordinated debt of roughly EUR 100 million because that [ branch moves to ] EUR 2.3 billion. And that's the reason we carefully basically assess moving forward. But as indicated, are committed to both have the existing dividend policy in place, which is stable to gradually improving as well as doing share buyback.

Sebastian Bray of Berenberg Bank. My first one is on polylactic acid. I'm thinking about mechanically and financially how I'm capping this business from Corbion works. So imagine Corbion gets [indiscernible], let's say, for today, does it actually see any of that cash? Or is there something that prevents Corbion getting that because the JV is quite heavily indebted. It's something like 8 to 10x gross debt in EBITDA. Is Corbion actually expecting any cash out from that transaction? And does to target refuse to any potential bidder for the 50%? That's my first question. I'll ask the second one after.

Should I take that one? So I mean we communicated that we initiated the process and we are in clear alignment with total energies on the way and how to proceed with that. So that means from a contractual perspective, I think that is covered.

In terms of do you anticipate [indiscernible], the answer is yes. Now it would be a bit premature to kind of disclose anything on that.

That's helpful. If I move to the EBITDA bridge that you showed, there's about 1.2%, but it's the largest single component when moving from 16% towards 18% that is focused on self-help initiatives that seem to be centered around pricing. Corbion has, in some cases, historically struggled to grow volumes when it's pushed price, particularly in food. What does that 1.2% referred to? And does it include the EUR 10 million delayed benefit from the new lactic acid plant in Thailand?

Let me pick on that. So it doesn't include the delayed savings of the [indiscernible] plant because that's the 50% improvement in the box before. It's a combination indeed of 3 different levers, and one is the combination of pricing on the one hand, input costs on the other hand. And in that, by the way, as everybody is well aware, is that sugar price is quite on a downward or has been on acquired downwards dually from that perspective. And also, people know that we have a hedging policy in place, so there is a bit of a delayed impact in that.

The other element, which is that we did review our end-to-end supply chain and see further opportunities to get cost out of the system. So that's the totality of the 1.2%. If you look to that, then pricing is always a bit of, how would I say, system, there's a bit of delay. I mean, we've seen a significant increase in terms of pricing in the earlier part of Advance. We've seen then price deflation with a bit of price reduction on that way. I don't see further significant price reduction, especially in our Functional Ingredients & Solutions business going forward.

And last one for me. The Thailand lactic acid plant has this gone according to plan, how far away from full ramp-up? Are we? And is it affected by the ambition to exit the PLA business?

Quickly addressing the [ tilactic ] acid. As you know, this is really a [indiscernible]. So we've had stoping in the early part. But now what I can say is that we are ahead of 70% capacity occupation and are really ramping up more and more every day, but what came in the way was more that to adjust, we have to stop and go. And again, I will not get into the technical detail, but obviously, when you stop and go, it's not 1 day. It's -- you have to just get the process cleaned, restart. So this has got a delay.

The big thing where I'm really optimistic is that the chemistry there is working because that, of course, when you launch these always the big question mark. So chemistry is working is how do we get quickly to the 125,000 tonnes design capacity. This is the number we made public. And today, we are running on above 70% rhythm roughly of this. So we are not the full. We expect to get there in the course of next year.

On the PLA question, Sebastian, we have this stream, which is roughly 60 million sales to the PLA TV. We see the PA market continue to grow. You see this year volume-wise, clearly is growing 10%, 11% backed on, of course, the Chinese market momentum. So we still see that continuing ahead. And there is a very long-term contract we do have to supply whoever new owner are going to be of that business. So there is a contract in place and the margin is correct in the sense that for us, when you run such facilities as the new [indiscernible] or the former one, running at high level of capacity occupation creates really big operational leverage and makes really cost efficiency savings into the entire business.

So we see this very simple business to manage because it's a pipeline between the 2 factories, and it helps us really ramp consistently at the MAX cap. So it's a small impact. You speak about EUR 60 million sales over EUR 1.3 billion today, but it really helps operational leverage on the entire Corbion business. So that's how we see it.

Reg Watson from ING. I have 2 questions, one for each of you. Peter, the 10% growth in Human Nutrition top line looks pretty impressive. Can you break that down for us, please, between volume and price mix expectation? And for Olivier, sorry to talk on about the PLA, but a little over 2 years ago, you placed PLA under strategic review. And we know the outcome of that in January a few months later was that you were going to retain it. What is different about the review this time? And can you take us through your thought processes?

Shall I take the first one. So if you look on Health & Nutrition, let me give 1 step max. So we did indeed guide on sales growth in terms that of full mix, because I think we are a bit out of this kind of significant price bumps up and for, which makes it a bit more easy. If you overall think the majority of our growth is really coming out of volume mix and less so in terms of [indiscernible] that as a bit of an overall context. If you then dive a bit deeper into the specific of Health & Nutrition, in Nutrition, biomedical polymer [indiscernible] pharma even there as well. The majority is coming from volume mix. I mean, in the biomedical polymer business, I would say almost everything and also in the pharma.

If you look in terms of Health & Nutrition longer term, I would say it's coming from volume mix, because if you look into a 3-year strategic cycle, I mean, it's a bit more difficult in terms of where prices would go through. If you look into the immediate future, then we did indicate we anticipate some price reduction into Q4 and a bit of spillover into next year as well. We're moving forward, and then it's a bit of a crystal ball from that perspective.

I think, look, in a 3-year cycle, it's really volume mix driving the equation, less so in terms of parking, but we need to manage a bit of short-term vulnerability, especially with the noncontracted part of the portfolio as we go.

Yes, Reginald, on PLA, I think there is one big change compared to a couple of years ago. It's that on this decision, we are really aligned with our partner on this. And that makes a difference if you consider only a 50% stake or a full stake in terms of valuation, as you may understand. So that's really a major difference compared to the situation where a couple of years ago, it was only about disposing a 50% stake.

I'm Setu from Barclays. So I have a question like you mentioned about the margin growth for the whole group. So if you can give some color about the divisions and some of the phasing that we can expect in the margin delivery, because as I expect that you have taken some pricing cuts and held the nutrition. So will there be some margin headwinds for next year?

Okay. I did not understand the regional one, but in terms of margin improvement to the 18% into 2028, I expect a quite granular improvement from that perspective. If you look to the kind of different levers. So it's not that next year we do a mild improvement and then there is a hole stake in the year 2028. I would think, overall, it's a gradual improvement in our P&L.

And Setu, the other 1 was on regional?

On the division, if you can, do you still reiterate your 15% EBITDA margin guidance for [indiscernible]?

If you roughly do the current offer guidance on health and nutrition as well as functional ingredients and solutions, a bit longer term, I would stay with this around 30% in Health & Nutrition, and around 15% in terms of Functional Ingredients & Solutions. So the key, I would say, step up in terms of margin is more in the functional ingredients and solutions part of the business.

Okay. And my second question is about the biomedical polymers. You mentioned about expected growth of about 15% CAGR. So how much of that will be coming from the existing drugs? And how much would be the new drugs that you would be launching? And what would be the phasing in that, particularly as -- and how much time does it take for 1 drug for you to monetize?

Let me answer this question. I think if you look to the -- we're going to feel the big part of the growth is both orthopedics and [indiscernible] delivery. If you remember, we have these 4 different business. We see promising developments in aesthetics. And this is on the back of, of course, complementing or replacing [indiscernible] acid or collagen, but we see really. Our polymers do work with a very different mechanism of action that is quite natural. So we see promising, but we are building proof of concept. So we have already a couple of very large global customers, but we need to bring a much wider customer portfolio and wide base there.

So really, the bulk of the growth will be around orthopedics and sores drug delivery, primarily. So 80% of the growth will be there.

This business to your second question is very sticky because the depth of the pipeline as these are really pharma FDA approved, you have to go through this famous clinical stage 1 to 3. And then our customers would submit FDA approval, they would come to audit our sites. And then you can start the business. So these are cycles that are 5 to 10 years. So this is why I was showing the breadth of the pipeline is that with the launches that has been done this year in schizophrenia, and the big one, which is much larger are coming next year. These are things we initiated 6, 7 years ago, and that will materialize. And then it's about -- you might have seen [indiscernible] announced their cooperation with AbbVie on top of Teva Pharmaceutical.

So AbbVie, you know that this pipeline also using some of our polymers will probably materialize in '29, '30, '31. And so this is the time it takes. So of course, the disadvantage takes really long. On the other is so sticky that once you're in there, you're in there forever because it's FDA approved and cost to change is huge. So this is why we feel good because we have a visibility on this pipeline. We have a good visibility. And of course, we are really early days in regenerative medicines. There are a few major trials going on where we see also a very nice potential. So -- but you have to look at this business into a 5 to 10 years horizon.

First of all, complements for the theme of improving the financial attractiveness. Of course, [indiscernible] the last couple of years, very impressive. I have a more like a strategic question. You mentioned the Asia Pacific region, only project accounting for 17% of the market share. I think a very attractive market, a lot of access to better foods is coming up. It's a growing population. Also not new to Corbion with the production facility up and running. What is the current target for growing the market share in the upcoming 5 to 10 years for Corbion in the Asia Pacific region?

No, it's a great question because indeed, we didn't develop here the geographical strategy, but we are really committed to really grow much more these Asia Pacific markets. So just to illustrate what we've done recently is that, again, we really strengthened our management there. So we operate from a regional hub in Singapore to cover entire region. But we also built the last few years application centers, innovation centers in both Shanghai, in Singapore to cover the space. And we moved our senior leaders that did build our business in LatAm into Asia Pac to reproduce the same success we've had in Latin America, into Asia Pacific. So Maria Cecilia. She's now our Head of Asia Pacific, really busy to reassess the strategy, rebuild the entire go-to-market in Asia Pacific to really improve our business there because this is also I think a big opportunity where Corbion is under basically represented.

And we see in the market, I was speaking about soy sauce as an example, but you see that this is markets that are really facing huge sodium salt consumption. And we're also -- you find a lot of synthetic preservatives. If you just look at the landscape where these countries are becoming a lot more health conscious. You see already in China, for instance, people banning TBHQ all this very bad synthetic products antioxidant. There is a lot of freight food in Asia as well that are using a lot of synthetic antioxidant. So we see really big opportunity in sodium reduction and in natural. So simply for health reasons. So yes, very good question.

Okay. Thank you very much for your attention and your questions. This will conclude the webcast portion of the call. So we'll just wait for a disconnect.

Good morning, and welcome to Corbion's Third Quarter 2025 Results Conference Call. This morning, we published our Q3 2025 interim management statement press release and presentation. These can be found on our website at corbion.com/investor-relations/financial-publications.

With me on the call today are Olivier Rigaud, Chief Executive Officer; and Peter Kazius, Chief Financial Officer. Before we begin, please note that today's discussion will include forward-looking statements based on current expectations and assumptions. These statements involve risks and uncertainties that may cause actual results to differ materially from those expressed. Factors beyond our control, including market conditions, economic changes and regulatory actions can impact outcomes. Corbion does not undertake any obligation to update statements made in this call or contained in today's press release and presentation. For more details on our assumptions and estimates, please refer to our annual report.

Now I would like to hand the call over to Olivier Rigaud. Olivier?

Thanks, Alex, and good morning, everyone, and thank you for joining our Q3 2025 earnings call. We are pleased to report solid results for the first 9 months of the year, which underscore the fundamental strength and resilience of our businesses. Our third quarter performance was in line with expectations, especially considering the strong comparable basis for Q3 2024 across both Functional Ingredients & Solutions and Health & Nutrition. We delivered meaningful margin expansion with adjusted EBITDA margins improving by 240 basis points year-to-date and 110 basis points in the quarter. These gains reflect the successful execution of our cost reduction initiatives, lower input prices for key materials and our continued focus on operational efficiency.

In our Functional Ingredients & Solutions segment, we maintained strong sales momentum in both year-to-date and quarterly results. As anticipated, pricing was slightly lower, primarily due to the pass-through pricing mechanism in Lactic Acid to the PLA joint venture. Although pricing declined due to reduced input costs, the decline was limited as our teams continue to capture the value of our differentiated products in the market.

Turning now into the Health & Nutrition division. We achieved excellent adjusted EBITDA growth despite a temporary decline in volume mix in the third quarter. This decline is mainly due to the exceptionally strong Q3 2024, particularly in the Nutrition sales to aquaculture. Overall, sales in the segment in the third quarter continued to the momentum from the first half of the year.

So our Pharma business also delivered positive sales growth driven by increased volume/mix, both year-to-date and in Q3. Looking ahead, we expect strong volume/mix growth in Health & Nutrition in Q4 to more than offset the Q3 dip.

Based on the robust year-to-date performance published today, we are reaffirming our full year 2025 guidance and narrowing the range for the full year volume/mix growth target.

This concludes our prepared remarks. Peter and I are happy to take your questions. So Alex, let's start the Q&A now.

[Operator Instructions] So our first question this morning comes from Wim Hoste at KBC.

I would like to ask 2 questions, please, on Functional Ingredients & Solutions. The first one is on the Food business. Can you elaborate a little bit more on the dynamics you see in the various markets? And I'm specifically interested in Bakery, which is -- which was down. I think I recall from the H1 conference call that you mentioned at that point in time that there was some reformulation in Latin America occurring. But I'm wondering if you can elaborate on the various market segments within Food and especially on Bakery in the various geographies and how that will pan out in Q4?

And then a relatively similar question on the Biochemicals business. Both agrochemicals and semiconductors were improving in the third quarter after weaker performances top line-wise in the previous quarters. So I'm wondering if you can elaborate a little bit. Is that a structural improvement? Is that just temporary restocking you see? If you can also elaborate on that, that would be interesting. Those were my questions.

Okay. Thank you, Wim. I will take both questions. So on FIS, so indeed, I mean, on the dynamic, we have to differentiate, of course, regional impact, knowing that we have our largest exposure into the North American market, amongst others in Bakery, but also in meat and culinary, but Bakery is a big chunk. What you see happening in the U.S. is really 2 things. One is really customers focusing on cost optimization and recipe optimization. So really reaching out to look with us how to reduce cost by replacing some ingredients or reformulating or reducing waste.

At the same time, you see on the other side, still a continued trend on one side, cleaner label. So this is really underlying already for a few years, but also some impact of the GLP-1 reformulation consequences with the nutrient dense, high protein stuff. So if I dive into Bakery, we see these 2 things. We see, on one side, some of the bulky markets on basic bread type of products where the market is suffering. And discussing with the major industry players, they both see volume decline in the quarter and until the end of the year. And on the other, on some more specialties, if you think about high-protein breads or keto breads, they are still, I mean, experiencing a very strong underlying growth there. So overall, this is compensating some of the shortfall we see in the bulky part of the market, but not fully.

The second trend we see in bakery that is also not new, but progressing nicely as we speak is the conversion from primarily synthetic artificial natural -- sorry, mold inhibitors to natural alternatives. So this is where we are nicely positioned where you see that the conversion to natural mold inhibitors is continuing. Having said that, you see these different dynamics, but the overall bakery market in North America remains really, really soft and in decline actually on the second part of the year.

Referring to also the point you made in Latin America. Indeed, what we discussed a couple of quarters ago was that at that time, we had some reformulation in LatAm, but we've been able to successfully replace the business impact we had following this reformulation. So -- and that's, I mean, not something that is coming in as a negative anymore. So that one, I mean, is behind us and has been fully compensated.

What also we see in Food, I mean, beyond Bakery, where we are making good strides is on the culinary. As you might remember, we've been working on adjacencies. One was going to dairy with functional systems and shelf life extension value proposition. Another is really to expand from the basic meat market into more meat snacks and more culinary preparation. And although you see the major meat market, the more commoditized also being impacted negatively like you might see -- you see in Bakery, you see some pocket of markets that are more niche but higher margin growing very nicely like meat snacks, also based on some of the GLP-1 reformulation because these meat snacks are a great way to get a protein shot within brackets and protein intake, but also culinary. So -- and these are the 2 subsegments where we see very nice growth right now, but also going forward.

On your second question around Biochem and this agrochemical, yes, it has been improving, but coming from quite low over the last month. So there is some recovery, but it's not massive. And we are not sure this is really structural today. And we've mentioned that in the past, this is not where we are putting any focus right now. Obviously, these are good business, making good margin and cash, but we do not see a big turnaround in semiconductor area or in the agrochemical. We even know that agrochemical longer term is on structural decline as this is really being market being challenged by regulatory pressure. So again, not where we put any focus. So we don't believe there is structural fundamental turnaround there. I hope it answers your question.

Our next question this morning comes from Setu Sharda of Barclays.

I've got 2 questions. So the first one is about -- you mentioned about the strong order book in your commentary. So can you help us understand like how the Q4 order book today compares to the same period last year? And how much of the implied like 7% volume growth at the low end of your 3- to 5-year full year volume guide do you have visibility on today?

And my second question is about -- again, about the volume. Given your Q4 implies quite strong volume growth, what does this imply for Corbion's exit rate into 2026? Like should we interpret this as a signal of sustained momentum or more of a timing-related uplift? Any early view on 2026 in terms of volume growth outlook as compares to the 3% to 5% in 2025 would be great.

Okay. Thanks, Setu. And let me ask -- or answer the question, and I do them all in one. So if you look the order book, the great visibility we have is in the order book of the Health & Nutrition part of the portfolio. And by the way, we already had that in the call we did last quarter. And if you look to the dynamics, then last year, Q3 was really high and Q4 was a bit lower, as you can recall. This year, it's the other way around, which means Q3 a bit lower and Q4 a bit higher. This is really temporarily phasing of our key customers in the nutrition part of the portfolio. So I think there is -- you can't take on that, say nothing on the exit rate from into 2026. It's a bit premature to give an outlook, but I think nothing has significantly changed versus all the earlier announcement, which we did on the kind of multiyear guidance, Setu.

Our next question this morning comes from Robert Jan Vos from ABN AMRO ODDO BHF.

I have a couple of questions. You provided guidance for the currency translational impact at the current spot rates for the remainder of the year of EUR 12 million. Can you do the same for the deconsolidations? I saw EUR 4 million negative impact year-to-date. What will this amount be for the full year? That's my first question.

Second, if I look at pricing in H&N, it was only marginally negative in the quarter. I thought it would be more negative because of the noncontracted part of the business and expiration of some contracts in Algae. So it appears now that pricing will be materially more negative in Q4. So is it postponed to Q4 this effect that we talked about in the past? Or can you elaborate why the metrics moved in these ways? So hardly any impact in Q3 and apparently, a more material impact in Q4 for pricing?

And then my final question, my last question, in your outlook comments, you talked about the profitability in H&N, the year-to-date, almost 33%. So that is quite a bit above the 30% that you mentioned. Yet in the guidance comments, you specifically mentioned that negative pricing in Q4 will not reduce EBITDA profitability to below levels of 30% for the full year. That sounds a bit worrying as if we should anticipate a materially lower EBITDA margin for HN in Q4 compared to Q3 and maybe also year-on-year. So can you elaborate on this, please?

Okay. Thanks, Robert Jan. Let me ask the -- or answer the questions. So the first one is indeed on ForEx, it's $12 million based on a continuous rate of the U.S. dollar. And currently, it's at 1.16. And last year, by the way, in Q4, it was 1.07. The other one related to the transitional services of the emulsifier business in last year that's behind it. I think Q4, it was only EUR 0.6 million, EUR 0.7 million or something like that. So year-on-year in Q4, no impact from that perspective.

If you then look indeed on the Health & Nutrition part of the portfolio, and let me answer the combined questions because it indeed has to do with phasing of noncontracted business on the one hand, which is phased more into Q4 than in Q3. And this is really a timing difference from that perspective. And therefore, you did see indeed quite a stable margin or even increased margin in quarter 3, which we anticipate to slightly reduce in Q4. By the way, this margin pattern has been amplified by the buildup of stock. So we've built up stocks in the course of Q3 in anticipation of delivering the orders in Q4. And then you also have a bit of absorption effect in that, which is then positive in Q3 and will be reversed in Q4 from that perspective. And that's why we kind of gave the outlook. So you are right that in terms of Q4, we anticipate a price erosion and also a margin reduction, which also, in this case, doesn't say anything for the full year 2023.

One, maybe a small addition on next year, as you might recall, and we will expand that more in the upcoming Capital Market Day. We continue to work on the portfolio with basically also our human nutrition effort accelerating in the course of next year. So that's also some of the initiatives that we start to see yielding a nice, let's say, results in H2, but we intend to accelerate across '26, Robert Jan.

Our next question this morning comes from Fernand de Boer from the Degroof Petercam.

Fernand de Boer from Degroof Petercam. Two questions from my side. I'd like to come back on '26 and the Algae because I think for most of us, that's the big question mark. And certainly, if it looks now that the pricing impact of the lower algae prices is coming through more in Q4 and also then more next year. So could you give us a level of comfort that you could say, okay, next year, we will see and also the remarks of Olivier, we will at least see the same kind of results in H&N as we have in '25? That's the first one.

And then the second one on FIS, the margin is still a little bit up, but of course, given the comparison is less. But on the other hand, it also looks to stabilize if you look quarter-on-quarter. So do you still believe that FIS could go to a kind of margin of around 15%, let's say, in 1 or 2 years' time?

Yes. So thanks, Fernando. I will answer the first on Algae and Peter will take up the FIS margin. So maybe -- so just to recap, of course, on the fish oil price momentum, we all know what did happen with this sharp reduction on fish oil. As you know, we were protected in this period by longer-term contracts for 2/3 of our business and 1/3 being open where we did follow a fish oil price. But looking forward for '26, there are a couple of things to say.

First of all, the contract that was ending -- that is ending by the end of '25 has been renewed during the course of the summer already at prices that are lower than the one we used to have before, but really not at fish oil price as well. So that's also a very important element because actually, it's a strong signal that we see and we get from the market that the structural shortage is there whatever happened to the recent hike up and down where this fish oil price went up through the roof back in late '23, '24 and then down back to the $3,000, $3,500. So -- but the large users in that field do all agree that the shortage is really structural. And that gives us really a lot of optimism going forward. So that's one thing.

The other thing is that we've been able also to basically convert additional new customers in aquaculture for '26 that we didn't have this year. And that also, I think, is giving us a nice visibility and outlook both on volume and on price for '26. And the last point is what I just said, on one side is how do we grow also our customer portfolio beyond DHA in aqua, meaning further continuous momentum in pet nutrition and obviously, human now. So on human, yes, it's still small on this year because we start to have commercial business on H2, but we have now the first repeat sales, so it's going up very nicely. And there is really further acceleration we are planning next year.

Having said that, aquaculture is going to remain the largest chunk of our omega-3 DHA sales next year. But when you start to combine pet nutrition and human in '26, we are really going and basically also adding another nice leg to the portfolio there. So that's, I mean, what we have in play as we speak. So now the big difficulty is what will happen to fish oil price next year. We stay very close. You see that right now lately, it has been slightly increasing, not massively, but slightly increasing. Obviously, the next catch season, spring next year, we will give more insight on what's going to happen. But again, all the signals we get from industry association and discussing with major players are all telling that the structural supply and demand is in deficit midterm.

So the big question is when are we going to see the market turning around? So is that in H1 '26 in H2? I mean, we just don't know. Nobody knows. But this is why I think derisking with longer-term contracts, upgrading the portfolio into pet and human are the 2 big measures we've embarked on to also mitigate any volatility we might see in the aquaculture business.

On FIS margin, Peter?

Yes. No. So thanks, Fernand. So the ambition level is still to reach the mid-teen levels and a couple of without all granularity for the coming period because I think that's better to do in the CMD. I mean we see some further optimization in terms of efficiencies. And also keep in mind, if you look at the sugar development and the way that we are hedged, you will see that also into next year, there is quite a favorable benefit in that. So the answer is clearly, yes, Fernand.

Come back on Algae. Could you say because you did mention human. Could you say now how much pet food? I thought it was around 10% of revenues in Algae. How is that progressing?

No. So pet food is indeed from this 10% slightly up. But we know pet foods at one point is quite a concentrated market. So this will never be 25% of total sales. So just to put things in perspective, but we are grasping a few percent up on the total. And human, yes, the ambition is to get quickly to the similar level. We are not yet there. We are not yet at 10%, but it's ramping up very fast. And for us, it's also important -- if you remember on the capital investment program at the time we discussed on Algae, one was to have ability to produce a human nutrition grade, which was important to basically, first of all, prove technology, but also reference into the market, which is the steps we've been through in the course of '25. And once the approval were made in H1, we've started commercial business in H2. So -- and this is where we stand in the whole process.

But what was important was to, first of all, have the first contracts in hand, but then to have repeat because it's, of course, Algae in human nutrition nutraceutical is still relatively small as a market. The biggest chunk of the market is still based on fish oil for food supplement. So it's about making sure that we capture our fair share whilst the market is converting from fish oil-based to algae oil based. But yes, we expect to really continue the strong momentum in '26 by converting more customers and capitalizing on the one we have today.

Okay. We currently have 2 more questioners in the queue. So our next question comes from Sebastian Bray at Berenberg.

Could I start with the cash flow and investments required for Corbion for the next 2 or 3 years? How has cash flow been behaving through Q3 and on a longer-term basis? Can you remind me of what investments are currently planned for Algae, if any? Is it just fully invested? And there are a few bits and pieces of debottlenecking, but any color on that is helpful.

And secondly, can you distinguish a little bit about the definitions of Pharma and Biomedical at Corbion? Because I sometimes get these 2 confused. What is the fast-growing exciting part of this business that is mentioned? And what is the order of magnitude of size at the moment as far as drug delayed drug release is concerned? Are we talking EUR 20 million, EUR 30 million, but any color on that is helpful.

So let's have Peter answer the first one, and I will take the second, Sebastian.

Yes. So in terms of free cash flow, I think, Sebastian, let's do the longer-term outlook in the CMD. But if you look to the free cash flow delivery in this year, there is always a seasonal impact between Q3 and Q4 or actually Q4 is normally the highest one. We've seen that last year in Q4 and also in Q4 2023. If you look in terms of our kind of key metrics and also articulated in the previous CMD, it's really on kind of organic sales growth margin as well as free cash flow delivery. So don't expect a significant kind of uptick in terms of CapEx over the coming years. And the details, I think we will do on November 20.

On your questions around Pharma and Biomedical, so we have 2 different type of businesses there. What we call Pharma primarily is our lactic acid derivatives we sell into the dialysis market. So this is a long-lasting historical business of Corbion that is really progressing on the back of indeed the increased number of diabetics globally. And knowing that, unfortunately, these diabetics when they are in terminal phases, very often do need dialysis. And where we play there is that indeed the functionality of our product is based on the high purity level on one side and the fact that the design of our product is really fit for purpose for a big new trend related to home dialysis that we see developing. So there is an underlying momentum. This business is a high-margin business with a very nice underlying growth year-over-year on these drivers.

On the Biomedical, which is also a health value proposition, but a different angle. There, as you know, we have 3 underlying pillars around orthopedics, slow-release drug delivery and aesthetics. We will also deep dive a lot more in the next CMD around this business because, again, it has been a business with a very strong growth momentum. It was a small business 5 years ago. It has more than doubled now. And as you know, we intend to double it again with high profit, high growth. And we have very encouraging news. You might have seen in the press the last days from basically our partner, MedinCell, in association with Teva launching a lot of this slow-release drug delivery on schizophrenia.

With now next to the U.S., they got approval in Korea and in Canada for the first product they launched, UZEDY, but they're going to launch in '26 olanzapine, which is a second drug on schizophrenia that is very promising. And every time this is carbon polymer behind the formula. So -- and recently, there is also a big news is that they got also a new medical treatment approval from FDA, which is this drug can be used for bipolar treatment, which is even a wider opportunity. So that's one thing where we have a great visibility of what is in the pipe on this slow-release drug delivery.

An emerging segment also we will detail in the CMD is aesthetics. So it's a sector in between regenerative medicine and cosmetics, where basically the mechanism of action is pretty nice and attractive where we see a big player to go and replace everything related to hyaluronic acid in this type of applications. And we didn't mention a lot so far because it was emerging with a few customers, but we see customer base now enlarging. And again, more to come in the CMD on these segments, but very exciting segment, very attractive, high margin and with a very strong R&D pipeline actually. So we'll come back on that, Sebastian.

Our last call today comes from Eric Wilmer at Van Lanschot Kempen.

Yes, I also had a question on the wording you provided regarding a strong Q4 you're anticipating for Nutrition. It sounds like you've landed quite a material deal on the Algae side. So I guess some sort of a similar question to the previous questions. I believe your Algae business is running at a margin of roughly 25% EBITDA. So given what is going on, on the fish oil pricing side despite some stabilization now, would you expect this margin to trend more towards, let's say, I don't know, 20% a bit above during '26? And then lastly, I had a question on what you just mentioned on the fact that MedinCell recently announced to have received approval from the FDA for UZEDY treatment related to bipolar disorder. Would you be able to quantify or perhaps maybe qualify this a bit further?

I will let Peter answer the Algae. I will take the Biomedical. Just on the Biomedical quickly because it's, of course, difficult to quantify. But when obviously, just to put things in perspective, when Teva, I mean, the end user is speaking about billions of, of course, sales for UZEDY or olanzapine -- if I recall well, I think UZEDY was EUR 340-ish million sales on the first year of launch. Relatively to the polymer amount in such a product, you really have to divide a lot. So these are things between for us, EUR 3 million and EUR 5 million but a very decent EBITDA. So just to put things in perspective, now there is, I mean, quite a lot in the pipe because we know Teva has 6 in the pipe in terms of launches. You know also in the next 10 year, you might remember, MedinCell also announced a very nice partnership with AbbVie going forward. So basically, this is the way this business works. But you don't speak about hundreds of millions. These are more blocks between EUR 3 million and EUR 5 million EBITDA for each of these launches for us incremental, yes.

Let me give a bit of the answer, Eric, and it's in line with the previous answer. So Q4 because there is quite some impact in terms of customer mix from that perspective on non-contracted and contracted business. So always be careful around taking certain percentages. But if I do a bit of the longer-term outlook, then Olivier already alluded to that we have visibility of contracts into 2026 as well, not fully covered. And also keep in mind that what I mentioned on sugar prices moving forward is impacting both the FIS business as well as the H&N or the Algae business because also there, we do fermentation of sugar. So sugar is an input cost in that one as well. I hope that helps on the question, Eric.

Actually, we have one last minute addition to the question queue. So this is from Reg Watson at ING.

Apologies for the late addition. I was experiencing technical problems. Peter, if I can just cast your mind back to the first half call, I asked about the seasonality of EBITDA into Q4 and your expectations at that time. And reviewing the transcript, I think you suggested that FIS EBITDA seasonality would be normal this year, but that H&N would see a strong rebound in Q4 relative to Q3. Given what you've told us today, is that still likely to be the case? Or would you revise that expectation?

If you look a bit high level, the only thing where I've seen a difference is in terms of FIS margin in terms of seasonality, which is in Q3, it went, I mean, mildly down around the same level. And normally, seasonality-wise, you see a bit of dip in Q4 but given where sugar currently is trading and how it impacts in the P&L, I don't see basically that reduction in Q4 because sugar actually started to help in our EBITDA delivery as of Q4. The other one, but that's in Health & Nutrition, and that's also following the previous answers. We've seen a bit of shift of orders between kind of Q3, Q4. But overall, perfectly in line if you look to the kind of H1, H2 dynamic, Reg.

Okay. And then can I take that a bit further forward and sort of look into next year. If I look at your guidance for the H&N margin this year of more than 30% based on 9 months to date, that means that Q4 margin is going to be more than 23% and therefore, second half more than 27.8%. Given that we don't have the full effect in the -- and based on your loading and your explanation earlier this morning on the call, it feels fair to take the second half margin of 27.8%. Is that realistic going forward into next year then as a sort of suitable run rate even though we haven't fully annualized all the decline in the spot contracts?

The only additional -- or there are 2 additional comments to make, Reg, on that one. One is sugar, as I indicated, we clearly see that trending down also into next year. And the other one is the underlying mix improvement into next year into human nutrition.

Okay. And then on that sugar question, apologies if I missed it on the last bit because as I said, I had to dial in for technical reasons. How confident are you that you can retain the benefit of that? Because obviously, I think we've seen some pricing pressure already this year due to lower sugar prices.

Maybe just to answer quickly on the -- because it's a different dynamic in algae fermentation, Reg than in lactic acid, yes. But as you know, I mean, we compete against fish oil that has nothing to do with sugar as a feedstock. So there, we have a disconnect, which makes us feeling pretty good because, as you know, we are fully hedged for '26 and even seen the very low price now partly early '27 as well. So we have great visibility at very low prices for the next 15, 16 months. That's going to really be also a very nice asset for the Algae business.

Okay. And then final question. Gypsum-free lactic acid, how is the ramp-up of that progressing?

So we are -- I mean, according to our plans. So as you know, this is really the new to the world type of processes. So we have had some stop and go in the course of the year, but we've been running now really steadily. Actually, in August, we beat our best 14 days throughput there. So we are aiming still to continue in the course of '26 to go to a much higher level. But at the same time, we've not been constrained by capacity because we have enough lactic acid invested in network.

So yes, so far, look, I mean, the major thing for us was to qualify this product into the joint venture because this is, of course, an easy outlet next door. And as you might have seen, okay, we didn't discuss the joint venture, but yes, the joint venture is nicely up on volume, not on price, but on volume this year because if you see the volume of the joint venture, they are up 11% this year. So this is a nice outlet over the fence for the product -- for the plant.

Okay. That's great. And Peter, on that, are you able to give us some guidance on the depreciation charge associated with that yet because again, at the first half, it was dependent on sort of the run rate of throughput.

Yes. No. So it's still dependent on the run rate of throughput. So if you look to the kinds of lactic acid alone, that might go slightly up more into next year, I think, than into this year.

All right. Thank you to all the call participants this morning. I look forward to engaging with you all again at our aforementioned upcoming Capital Markets Day 2025 on November 20. A link to the live webcast is available on our website at corbion.com/investor-relations/capital-markets-day.

So thank you all for participating and your attention. Operator, you may close the call.

Good morning, everyone, and welcome to Corbion's First Half 2025 Results Conference Call. This morning, we published our half year 2025 results, press release and presentation. These can be found on our website, www.corbion.com/investor-relations/financial-publications.

Before we begin, please note that today's discussion will include forward-looking statements based on current expectations and assumptions. These statements involve risks and uncertainties that may cause actual results to differ materially from those expressed. Factors beyond our control, including market conditions, economic changes and regulatory actions can impact outcomes. Corbion does not undertake any obligation to update statements made in this call or contained in today's press release and presentation. For more details on our assumptions and estimates, please refer to our annual report.

With me on the call today are Olivier Rigaud, Chief Executive Officer; and Peter Kazius, Chief Financial Officers. Now I would like to hand the call over to Olivier.

Thank you, Alex, and good morning, and thank you all for joining us today for Corbion Half Year 2025 earnings calls. Let's start with some key highlights from our latest results. I'm pleased to report for the half year, we achieved an increase in sales driven by robust demand and delivering on our strategic initiatives. We achieved an organic sales of EUR 645 million for the half year results, corresponding to a 2.9% organic sales growth rate. As anticipated, Q1 2025 reporting back in April, phasing of sales into Q1 resulted in a lower sales level in Q2. Our volume mix growth came in at 3.3% for the half year with a Q2 growth of minus 1.3%, again reflecting the phasing effects.

In terms of EBITDA development, we've seen significant improvements. Our adjusted EBITDA reached EUR 106.6 million for the half year with our Q2 number of EUR 52.2 million. This represents an adjusted EBITDA growth of almost 24%. Our adjusted EBITDA margin improved by 300 basis points to 16.5%, demonstrating our operational efficiencies and cost management as well as growth in higher-margin product categories. Free cash flow was positive for a net consecutive quarter. We feel very confident and reaffirm our fiscal year 2025 outlook, which I will discuss in more details when we cover the outlook section.

So now diving a bit deeper into our segments and starting with Functional Ingredients & Solutions. In this business unit, we showed positive volume mix in 2 of the 3 businesses, our specialty food ingredients and the lactic acid to the PLA joint venture. The half year volume mix growth in Food Ingredients was in meat, dairy and culinary markets as demand for Corbion's natural preservation solutions remain healthy. Our focus on strong customer collaboration and leveraging our broad natural portfolio is paying off there, whereas in the biochemical businesses, some demand softness persists. Looking at our growth initiatives, continued success in focused areas like food ferments, natural mold inhibitors and dairy stabilizers continues. We also experienced strong growth in adjacent culinary applications with our natural mold inhibitor portfolio. Another interesting growth driver has been in high-protein bread fortification in the U.S. driven by strong consumer demand for high-protein diets and also for fortified foods.

As recently announced, Corbion is participating in the Ferment for Health project, a research initiative focused on understanding the health benefit of fermented foods and postbiotics, particularly their impact on gut health and inflammation. So Corbion's involvement there will leverage our expertise in fermentation-based ingredients to contribute to the development of functional food solution. From the operational and manufacturing front, our circular tylactic acid plant is wrapping up gradually. And looking forward, we are confident about delivering the full value creation from this investment. Next, our new vinegar plant in Montgomery, Alabama is also ramping up, bringing substantial in-sourcing benefits as we are backward integrating this critical building block in our portfolio of natural preservatives. Nonetheless, we continue to positively impact our EBITDA with cost savings benefit from other initiatives such as operational excellence and complexity reduction and volume mix growth in higher-margin categories.

Now turning to our Health & Nutrition segments and our 3 businesses there, starting with Nutrition and omega-3. Despite quarterly fluctuations, there has been continued strong demand for algae-derived omega-3 DHA in aquaculture, pet nutrition, and we have some promising new contracts in Human Nutrition as well. Additionally, there is also positive momentum in our biomedical polymer business in the 2 important key submarkets being drug delivery and orthopedics. Also, our Pharma business containing our high-purity lactic acid derivatives has shown strong double-digit volume mix growth, mainly in the kidney dialysis market in China. As for our exciting growth initiatives, starting first with our biomedical polymers, our products are increasingly being used as a biostimulatory treatment agent to support tissue growth and natural collagen production in the aesthetics markets. This is next to the 2 historical subsegments of orthopedics and drug delivery.

Secondly, about omega-3DHA, referencing and first contracted volume in human nutrition end market will materialize in the course of the second half of the year. And finally, on omega-3, we continue to pursue opportunities to broaden our customer base in aquaculture, in pet nutrition, but also recently in some attractive new terrestrial categories. A highlight for the Nutrition business in the quarter was recent Carbon's announcement that the company successfully secured multiple regulatory approvals for China General Administration of Customs. This is paving the way for offering Carbon's high-quality sustainable algae-derived omega-3-DHE solutions in the Chinese fast-growing human and animal nutrition end market. This is opening great opportunity for us going forward into 2026.

Last but not least, on efficiencies initiatives, our investment program is delivering the expected capacity increase to secure growth into omega-3s for 2026 and beyond, but also in the biomedical polymer business. Through the microalgae train optimization, we can further increase yields from the existing assets in Brazil. And with that, I'd like to give the stage to Peter to present our half year results in more detail. Peter, back to you.

Thank you, Olivier. In the first half of 2025, our sales increased by 1.3% compared to H1 2024. This growth includes an organic growth of plus 2.9%. Currency impacts, particularly due to the depreciation of the U.S. dollar in the second quarter resulted in a negative minus 1.2% impact on sales. The organic sales growth was driven by volume/mix growth in Functional Ingredients & Solutions of plus 2.9% and in Health & Nutrition of plus 5%. In the second quarter, mainly due to phasing effects, organic sales growth was minus 1.8% for Functional Ingredients & Solutions and minus 0.6% for Health & Nutrition. I will come back on the dynamics when presenting the individual business units. Turning to our adjusted EBITDA. We achieved a remarkable growth of plus 2 -- plus 23.8% increase versus H1 with an organic growth of plus 29.3%.

This increase was driven by sales growth as well as cost-saving measures within Functional Ingredients & Solutions. The adjusted EBITDA margins improved overall by 300 basis points to 16.5%. This resulted in a EUR 25 million benefit on an organic basis. The currency effect, largely driven by depreciation of the U.S. dollar in the second quarter impacted the EBITDA negatively by EUR 2.2 million. The nonrecurring transitionary service agreement benefit last year is minus EUR 2.5 million. On an adjusted EBITDA, we've seen growth both in Q1 as well as in Q2. Looking further down the line in our profit and loss statement, depreciation and amortization decreased year-over-year following the depreciation of the U.S. dollar as well as the Brazilian real. Some assets were fully depreciated, and this was partly offset by an increase of depreciation from our new Thai lactic acid plant.

Adjustments were mainly driven by restructuring costs as well as some costs related to the planned settlement of a defined benefit scheme. Financial income and expense came in higher than last year, mainly driven by translation effects of intercompany positions. The interest expense on our debt is EUR 6.5 million, which is an interest rate of around 3%. The 50% of the net results of the TotalEnergies Corbion joint venture were EUR 1.1 million negatively. The positive EBITDA of EUR 6.7 million is offset by interest paid to the shareholders as well as tax. Our effective tax rate stands at 18%, which is relatively low. This is due to tax effects related to currency results. For the full year 2025, we anticipate an effective tax rate between 23% and 25%. Finally, our results after tax have seen a positive impact of 86.8% versus H1 2024. Looking at the Functional Ingredients & Solutions business unit, we experienced a positive volume mix growth of 2.9% for the first half and minus 1.2% for Q2.

This growth was primarily driven by our food business units, particularly in meat and dairy markets as well as growth in our key product and market adjacencies. Additionally, we observed growth in lactic acid volumes to our joint venture. In H1, our Biochemical business unit was down compared to last year, primarily driven by weaker demand in some categories like agrochemicals, which especially impacted Q2. This was amplified by phasing of some key customer orders into the second half of the year. Regarding pricing, we saw a negative impact of minus 1% for the first half and minus 0.6% for Q2, following the decline of input costs, mainly passed through the joint venture. Our EBITDA margin for H1 stood at around 12% with Q2 at 11.7%. This represents an increase of nearly 300 basis points versus the first half of 2024.

Variable margin improved following the implementation of cost reduction measures and input cost declines, offsetting negative mix from growth in lactic acid to the PLA joint venture. Moving on to Health & Nutrition and starting with our organic sales growth. We achieved plus 6.8% for the first half of the year with Q2 contributing minus 0.6%. Our volume/mix growth for H1 was 5%, with Q2 slowing -- showing a decline of minus 1.1% due to customer phasing within the Nutrition part of the portfolio. The H1 growth was driven by all 3 business units: Nutrition, Pharma and Biomedical Polymers. In the Pharma business, we delivered double-digit volume mix growth, mainly due to addressing the kidney dialysis market in China. In the Biomedical Polymer business, sales grew high single digits, supported by increased sales in our 3 key markets: Orthopedic, drug delivery and aesthetics. Moving on to EBITDA.

H1 adjusted EBITDA grew from EUR 41.5 million to EUR 47.5 million, driven by volume mix growth in all 3 businesses. The adjusted EBITDA margin grew 240 basis points to 32.1%, driven by leverage of fixed costs and positive pricing. In summary, our Health & Nutrition segment was impacted by some phasing in Q2, whilst having a positive momentum across the 3 key business areas. And finally, if we look to the results of TotalEnergies Corbion joint venture, the joint venture achieved an organic sales growth of 5.6% for the first half year, with Q2 showing a year-over-year decline of minus 9.3% -- the growth in the first half of 2025 was driven by volume growth, albeit at low PLA prices. The JV achieved a margin of 9.7% for H1 with Q2 at 11.7%, in line with expectations. We continue to expect high single-digit EBITDA margins for the full year 2025. And with this, I would like to hand over back to Olivier.

Okay. Thanks, Peter. So moving on to the outlook for the rest of the year. We are confident to achieve our previously given ambitious targets for full year 2025. We're targeting a volume/mix growth of between 2% and 6%. Moving on to organic adjusted EBITDA growth. We maintain our target growth rate of over 25%. This reflects our confidence in the strength of our business and our capacity to deliver on our cost efficiency program. We target free cash flow of over $85 million and continue to anticipate a covenant net debt to covenant EBITDA ratio of approximately 1.6x by the end of the year. This reflects our commitment to maintaining a strong balance sheet. And now on this, Peter and I are happy to take your questions. Operator, back to you.

Okay. Before going into today's Q&A, I would also like to announce that we are planning to host the Corbion Capital Markets Day 2025 on November 20 at our Horkum site in the Netherlands.

E-mail invitations to register to attend the event in person or to log into the live webcast from your computer will be sent out shortly. So please keep your eyes on your inbox. [operator instructions] This morning, our first call comes from Setu Sharda of Barclays Bank.

Q3 is expected to be negative. So how confident you are able to deliver the volume growth for FY '25 of 2% to 6% range? Any risk we should consider? And also if you can give any color on how has been the trading so far in Q3? My second question is on the nutrition volumes. They have been quite volatile since the fish oil prices have come down. So what is your outlook on nutrition volumes in H2? And have you seen any impact of lower fish oil on contracting? And my third question is on the cost savings. Like if you can update us on the progress on cost savings and how much of target is achieved? And if anything is pending, which should be incremental in H2?

Okay. Thank you, Setu. So I will take the first 2, and I will let Peter handle the cost savings one. So when looking at indeed the Q2, but on your question about confidence in delivering in the fiscal year, indeed, we reiterate our target to 2% to 6%. So we feel confident there. Now as we explained, we already discussed about the phase in Q1, is different from a business to another. If I start first with Functional Ingredients & Solutions. If I look at the current momentum starting Q3, the Food Ingredient continues in a nice momentum, and we do not expect that really to change in the rest of the year. We have also some visibility, obviously, on the lactic acid intake to the PLA joint venture that where also we confirm the growth ambition of the joint venture for the full year.

I think the nutrition question, your second question around indeed fish oil price dynamic and outlook on H2 is, I think, worth really diving into. We explained that indeed, we had a very strong Q1 and with some phasing into Q2. When we look forward, basically on volume outlook, first of all, we do not expect an outstanding Q3 just because we have a very high comparable if you compare to '24. If you remember, we grew this business with 30% last year. So Q3 will be good, but obviously, we face a very strong comparable. At the same time, we have a very good visibility on our Q4, and we expect a very strong Q4 in Animal Nutrition. I think it's also worth explaining a bit the dynamic in that business because when you speak about omega-3, obviously, in the 3 segments being aquaculture, pet nutrition and human nutrition, they have very different dynamics.

In aquaculture, basically, you serve some major global accounts that are less than handful where you are phasing orders from a quarter to another. But basically, what's important in that dynamic is that we supply on one side, the contracted volume and that we have very good visibility. And we said last time, we have basically 30% of our business that is not contracted where we have lower visibility and that is more exposed to fish oil price dynamic. So when we look again at H2 for our Nutrition omega-3 business, we anticipate a low Q3 based on very high comparables last year and a very strong Q4, and we maintain our double digit for the full year. And we also maintain our very strong EBITDA margin for that division. obviously also sustained by a good performance in the biomedical polymer and Pharma business on top of the omega-3. So Peter, maybe you take on the cost savings now.

Yes. So, thanks for the question. So overall, on cost savings in our program, we are online and in line and therefore, also happy to see the margin delivery mainly in our fifth business unit, which increased 290 basis points versus last year. And if you translate the 290 basis points, then that's roughly EUR 50 million. And therefore, we are also confident in reiterating our outlook in terms of EBITDA delivery for the full year.

Our next question this morning comes from Robert Jan Vos from ABN AMRO ODDO BHF.

I have a couple of questions as well. First one is on free cash flow. You delivered EUR 12 million in the first half. The target, if I'm not mistaken, is still more than EUR 85 million reiterated today. So yes, there's a lot of phasing first half, second half. Is that purely working capital? Or are there any other factors that we should take into consideration? That's my first question. Then the second one, you talked in the prepared remarks, but also in the Q&A, you already talked a bit about the pricing of the noncontracted portion in aquaculture in H2 following the fish oil prices that are quite low. Yes, in 2025, you just said that this noncontracted part is 30%, so relatively small in the total portfolio. But for 2026, I assume that all the contracts, which is 70% apparently currently needs to be renegotiated.

So my question is not so much on 2025 second half, but what is your first view on new contracts for the upcoming year in this business? In other words, do you still expect to be able to achieve this 30% plus EBIT margin in the division? And my third question is on PLA. What exactly was the reason that the organic sales growth dropped so much in Q2? And at the same time, the EBITDA margin was much higher than in Q1. Maybe you can elaborate a little bit on that.

Thank you, Robert. And I will let Peter handle the free cash flow, and I will handle the other questions. So maybe we start with the free cash flow, Peter.

Yes. So Robert, you're right. If you look to the free cash flow delivery, then there is a phasing between H1 and H2. By the way, also pretty much in line with last year because last year, if you recall, we did also EUR 12 million in H1. And then in H2, we ended up in the full year of around EUR 100 million. So it's really the seasonality in our working capital, which is the prime reason behind that.

Okay. So let me start with the PLA and then I think elaborate more on the fish oil question. So on PLA, again, when we look at again to the phasing -- in the full year, we see indeed, I mean, a reduction on some of the key markets, primarily China in the Q2. But this has been also phasing because we see until the end of the year, a consistent forecast on the PLA joint venture outcome. So I would say the joint venture is sticking to its target for the full year. Now as we've discussed many times, the portfolio is still quite widely exposed to what's happening in Asia and primarily in China. So this has not changed. But there is no structural changes suddenly from a quarter to another on the PLA that are leading us to say, yes, we're going to change the outlook for the joint venture for the year.

Now as we said earlier, the pricing remained depressed, also back on the fossil-based polymer competition that is also really low right now. So what we see is that the margin are being impacted by pricing. At the same time, as you know, the major input cost being lactic acid, and we have a pass-through in terms of price formula to the joint venture. The joint venture is benefiting largely from the relaxation in input costs coming from sugar, which is also, of course, benefiting the wider Corbion as this is one of our major input costs. And you might have seen the dynamic around sugar over the last month that is trending very positively for us because in some extent, we are back to some pre-COVID level in sugar and even lower.

So that's a different point, but we are taking indeed advantage of the current situation to basically hedge longer-term sugar for Corbion. And of course, we're going to start to benefit from that in the second half of the year, but really moreover, a lot more in 2026 as we are now, I can say, fully covered for '26 and our sugar needs a much lower price. On fish oil and noncontracted questions, we've all seen the fish oil price dynamic and the strategy having indeed longer-term contract did pay off. Now on this 30% uncontracted, we had to, of course, I mean, adapt our pricing there in line with the fish oil trend. To your question on '26, and this is a very critical one, -- and let me a bit elaborate on the current dynamic, although it's very early, but you might know that Peru just concluded the first launch of it's fishing season, and they put a quota target of 3 million tonnes, and they decided to stop at 82% of this 3 million tonne last week actually on July 23.

It's also important to understand that if you look at the numbers, of course, Peru, to a large extent, is setting the price of fish oil. But you have to look at the 13 countries that matters and you have the big countries being Peru, Chile, Denmark, U.K. and U.S., they do represent roughly 50% of the global fish oil output globally. And this is what's making the price trend. When you look to what's happening, obviously, they didn't match the quota. What's going to happen on price, still to be seen, but we are still very much in the balance of supply and demand where things might turn with a slight surplus or a slight deficit on the pricing dynamic because this is a commodity. And there is another important element is that in the same time, China being also an important player there in terms of fishing and what they call marine ingredients.

The domestic production of marine ingredients in China continues to be limited due to really ongoing fishing bands along the coast line. And we can see that, of course, in the first half of '25, the Chinese domestic marine ingredient output has been really decreased substantially. So we see some very slight signals of potential rebound in price, but it's minor. You speak about 2.5% right now on fish oil, but we cannot make any conclusion yet. What we have seen is that basically the increased stocking activity, the declining cost of feedstock -- feed costs, sorry, and the more positively profitability outlook for the fish farmers suggest that the aquafeed demand by the end of the year may surpass the 2024 level. So -- and that could point out to potentially a stronger demand for marine ingredients as the year progresses. So now we are not in a position to make any speculation for 2026 on fish oil.

Back to the contract discussion, we still have contracts running until the end of '26. For the contracts that are to be renegotiated by the end of the year because we have some ending 2025, we have already initiated discussion to renew these contracts already in the course of Q2 because we are not waiting last minute, but we are in the middle of negotiation rounds on these contracts that are going to end by the end of the year. Structurally, we believe that at one point with everything that we are seeing in terms of fishing quotas and fish oil dynamic that the market is really structurally short anyhow. And whether the quota going to lead to at 1.2 million or 1.3 million tons of fish oil, that's going to make either a shortage or a slight surplus. But structurally, we are still in the year where there is no more fish you can catch.

And structurally, the fundamentals of the business remains really strong. So let's see how it moves over the last month. You still have a small fishing season in October, and that will tell a lot more whether the '26 is going to be really a shortage or a slight surplus. But if a surplus is going to be really tight. So that's our current analysis of the market dynamics.

Okay. That is quite clear. But maybe if I may ask an add-on, what is the general -- yes, let's say, outcome of the discussions you currently have with customers for whom the contracts end at the end of this year on the pricing?

It's difficult to disclose, of course, the detail, as you understand. But basically, our aim is not to align, of course, right now to the current fish oil price because when you negotiate multiyear, and that's what we are looking for, the aim is really to see what is, of course, the right price to basically what we offer that fish oil can offer is security of supply and 0 volatility. And some customers do approach it not as fish oil being a commodity, but as a security of supply and a risk mitigation supply because they know structurally you know fish oil is going to be short.

And if you want to stay in the omega-3 market and you guarantee the omega-3 level in salmon, you have to secure a minimum amount of omega-3. So we are more keen to discuss and favor these customers that do not speculate on fish oil, but see that as a risk management and supply guarantees over the long term than the short-term players. And just to end on that topic, this is why also the diversification strategy going more to pet, moving to terrestrial, but also primarily human nutrition is crucial in our ongoing strategy for Omega.

Very clear. I have one small question for Peter, I think. You elaborated briefly on depreciation. Is it fair to assume that depreciation will increase with the lactic acid plant in Thailand now coming into stream?

So that's the right assumption, Robert Jan. So -- and especially, if you look moving forward, if currencies do not fluctuate because we have quite some assets in U.S. dollar and Brazilian real, then you are right.

And what is the step-up approximately?

So if you look to the step-up, and I look a bit back. So in total, if you look to the CapEx amount, then you talk about roughly EUR 240 million. You have a depreciation between 15 to 20 years. So if you calculate that back, then it is quite a significant amount, which will come. The depreciation, by the way, we will do in a unit of measures and not a straight-line depreciation. So it's ramping up in line with the ramp-up of the entire lactic acid plant.

Okay. Very good. We have 3 participants in the Q&A queue. Our next question this morning comes from Fernand De Boer from Daf Petrocam.

Fernand de from Daf Peter. Two questions from my side. One, Olivier, did I hear you saying that you had again a yield improvement coming in for the Omega-3? That's the first question. And the second one is, I remain a little bit puzzled on the pricing in the Human and Health because 30% of the omega-3 is noncontract. There, you should expect a big decline in the prices. Well, the price has stayed positive in the quarter. So I think that if you look at fish oil prices, Omega-3 prices on the spot price, that already should take this pricing down for the whole segment, but it is still positive in the second quarter. So could you explain a little bit?

No. So first on improvement, yes, the fact is that you know this process is still relatively new. As we explained, we had 2 years ago, this massive yield improvement in terms of getting more oil out of the biomass and then, of course, more omega-3s. And now we are benefiting from a kind of a second row of yield improvement on omega-3 content. That's a kind of 2020. We don't disclose it in terms of percentage. But obviously, with the same asset and the same ton of sugar, we produce a lot more omega-3. And we are pricing the omega-3 percentage to customers, not the full ton of oil. This is where, in the end, profit lies. And the plant, obviously, as we are getting more experienced, is making really great efficiency progress in terms of yield improvement.

Sometimes these are small debottlenecks or improvements, sometimes they are massive. So we are really still learning as we go. The other thing is that we have a much better operational leverage because, of course, the volume is going up. And it's like in many situations where we see that we can get a lot more throughput from existing assets as well just by having small improvements on various parts of the process being refining, but also fermentation and moreover by reducing fermentation time. So this is where the major project comes because it's really where the secret lies is also the efficiency and reducing the fermentation cycles in the plant. So the team has done great progress, and this has really enabled us to, first of all, get more throughput, but also get a much more operational leverage on our fixed cost there in Brazil. On pricing, Peter, do you want to comment on it?

No, happy to take the pricing. And you're right. I mean, if you look on a yearly basis, the percentage is roughly 70%, 30%. In the quarters, it changes a bit Fair enough from that perspective. And if you currently see where we are in terms of contracts, then there is stability of the contracted part of the business. If you look to the noncontracted part of the business, I anticipate pricing to be reduced in the second half of the year and not so much in the first half of the year. And then if you look to overall in the margin profile because that I articulated, I think, in the previous call, we still think we will reach margin levels of around 30% of EBITDA.

Okay. But coming back on the question on the yield improvement because you said that you do not need capacity increases in Brazil for '26 and beyond. That's correct.

Yes. So if you recall, when we presented the capital plan, we had a EUR 50 million investment over 3 years for omega-3. And now we are really in the middle of that program. So -- and we said with this EUR 50 million, we can really materialize the numbers we gave at that time to go until the end of '27 and secure growth until the end of '27. So we are well on track there. So even we are ahead, I would say, on this capacity because we are spot on, on this EUR 50 million investment, but more throughput than anticipated for the EUR 50 million actually. So this is the good news on Algae. And obviously, we would have to make decisions on next step probably in the first half of '26 of what do we need to do to grow beyond as from '28. But as I also said previously, we've eliminated the option of building a brand-new greenfield operations because with what we've learned from the process, we think that further incremental lower CapEx options are really better than moving into a new factory, whether it is a greenfield or a brownfield.

Our next question this morning comes from Eric Wilmer of Kempen & Co.

I believe you saw volumes come down in Functional Ingredients by a little over 1% in Q2, which seemed primarily driven by softness on the biochemical side, which I believe is around 15% of your Functional Ingredients sales. You also highlighted that meat and dairy was up, where bakery was slightly down. I was wondering about the sequential performance of your Bakery business. Did this go down sequentially in Q2? And where does the softness come from in bakery during both Q1 and Q2? Are you seeing customers or consumers perhaps switching into synthetic potentially as a result of down trading? Or is this primarily related to a stronger focus on protecting pricing, resulting perhaps in some margin market share losses. Am I right to assume that the phasing that you alluded to was primarily geared to the biochemicals business within Functional Ingredients?

Yes, Eric, I think this is indeed the case. Basically, the Biochem is where really we have this softness. And we've seen, I mean, even further deterioration. If you look at that business, indeed, roughly 15% of fish, certainly, you have subsegments like semiconductors, agrochemicals and animal feed, which usually are volatile by nature. But also there are some underlying market trends, for instance, in agro, where this type of products are being formulated out and the more stringent regulation. So -- and we have also decided to be much more disciplined on pricing there, even if we have to let some business go because these are not really within our strategic priorities [indiscernible]. So -- and that is indeed explained the largest part of the softness in Q2 is coming from this biochemical part of the portfolio.

In terms of food, indeed, I mean, as you just said, we see meat and the adjacent categories, culinary savory growing nicely with natural preservatives, dairy as well. Bakery, the category is flattish. Now in this category, you have different dynamics. We have, of course, a strong presence in the U.S., but we have also a strong presence in LatAm. And actually, we had some downsize in LatAm just with a couple of customers and primarily one reformulating one product, which is a one-off event. At the same time, we have a good pipeline. But to your questions on people moving back to synthetic, we've not seen that. Now I think it's a great question in the sense that we have still to see what the new tariffs impact going to be in that category because obviously, there is still quite a lot of ingredients being imported from outside the U.S. that might be formulated out to the benefit of products produced in the U.S. And this is where we intend to leverage our manufacturing presence, primarily on natural mold inhibitors.

Today, basically, the major competition we do have in the U.S. bakery market is coming from outside imports, amongst others from China. And I think we have a competitive advantage if this is going to be confirmed in the next negotiation to benefit from that with our U.S. footprint because we manufacture there. But -- so yes, there is no move right now to synthetic in the short term.

Okay. That's very helpful. And maybe if I may squeeze in one more question. Pretty excited to hear about the Capital Markets Day on the 20th of November. Yes, the question here is regarding perhaps natural flavors. Also given your background, your previous background at Naturex. I believe it's also -- I mean, there's pretty clear focus within the industry, within the flavors industry on natural flavors also through fermentation. It's also something you can make through lactic acid. Is this something -- spoiler alert, but is this something that -- is this an area of growth potentially for Corbion going forward?

I would say, yes, in terms of the principle, not becoming a flavor house. This is not where we are going. But again, to make it simple, if you have primarily when you look to the world of additives or ingredients and whether additives are natural, they need to be labeled as additive ingredients or if you have natural flavors that has a more friendly, cleaner label attributes. When we look at preservatives today, we already have some lactic acid derivatives that are labeled as natural flavors. And this is really what I'm a strong believer is that Corbion should invest and will invest more into this avenue of cleaner label. Partly, if you look at what you can do with natural antioxidant for preservation, quite a lot of these natural accidents could be botanical extracts or fermented products that could be labeled as natural flavors, although they bring a functionality of natural preservation.

So this is clearly an avenue we are really working deeply on that we will disclose more about in the upcoming CMD, Eric, for sure.

Okay. We have one more question -- one more participant in the queue. Our last question comes from Reg Watson at ING.

So I had a follow-up, please, Peter, on the sort of depreciation question. Thank you for highlighting that it's based on unit of measure on the gypsum-free plant. To help us calibrate this for the depreciation charge for this year, can you tell us where you are on the utilization of that plant, please?

I will not fully tell you where we are. But if you look to the depreciation, which we have done in the early part of the year, it's a couple of million.

Okay. But would that increase through the year? Is that an expectation? Because presumably, the utilization is changing all the time.

That's correct. So it will change during the year and then running up to the amount which I indicated earlier.

Okay. And then my second question relates to the Q3, Q4 seasonality. So thank you for highlighting that Q3 is going to be down year-on-year, but I'm acutely aware that Q4 is normally seasonally the weakest quarter, both from a revenue and EBITDA perspective. Do you still expect that to be the case this year with the weakness in Q3? Or is Q3 still going to be stronger than Q4?

So if you look overall to the seasonality impact and if you look to -- let us disseminate Functional Ingredients & Solutions and Health & Nutrition. And then in Health & Nutrition, I would say the seasonality impact was really proliferated last year because we had this plus, what was it, 30% in Q3. And then it was around flattish in Q4. And I assume that will turn around in this year. Having said that, with the order pattern, which we see in the contractor part of the businesses, I see some shift from Q3 to Q4 as well. So I don't anticipate Q4 being weaker. In Functional Ingredients & Solutions, you will roughly see indeed the same pattern as we have seen previously.

Okay. As there are no more questions, this concludes our conference call this morning. Thank you all for your attendance and questions, and we look forward to discussions at upcoming roadshows and conferences in the coming weeks. A transcript of today's call will be available on the Investor Relations page of chorbion.com in the next days.