Dksh Holding Aktie

Thank you, Sandra, and good morning, everyone, and welcome. It's a pleasure to see so many of you here again in Zurich at the Metropol. I'd also like to extend a very warm welcome to all of the participants joining via our live webcast. It's great to have the opportunity to connect with such a broad audience across the globe. I'm Till Leisner, Head of Investor Relations, and I'm delighted to be joined today by our CFO, Ido Wallach; and our CEO, Stefan Butz.

Before we begin, the general reminder to look at the presentation and the including disclaimer, which you find on our web page in the Investor Relations section. For those who are attending virtually, again, you find that on the web page at dksh.com. With that short introduction, I'm very happy to see all of you again, and I hand over to Stefan to get us started. Thank you so much.

Thank you very much, Till. Hello, everyone. Good morning, and welcome to the presentation of our 2025 full year results. Joining me here today is our CFO, Ido, as well as our Investor and Media Relations team. As today marks the first day of the Chinese New Year, I wish especially all our Asian colleagues a Happy Lunar New Year. So today's agenda foresees a short recap of our highlights of the past year. I will then continue with a review of the business units in 2025. After that, Ido will follow up with a more detailed financial update. And to conclude, I will provide an outlook before we then open the Q&A session.

We are very pleased to report that DKSH achieved another year of improved results with an even better acceleration of growth in the second half of 2025. We continue to translate our strategy into consistent execution in 2025, delivering growth, increased margin and high cash generation in a muted market environment. As in previous year, I will primarily be commenting on our results using constant exchange rates as this better shows the operational performance and ensures better comparability with previous years or results. Despite a very challenging environment, net sales increased by 2.9% at constant exchange rates to CHF 11.1 billion in 2025.

In the second half of the year, net sales grew even faster at 3.6% with a pickup in growth in the business units Healthcare and Consumer Goods, thereby achieving GDP growth. Core EBIT amounted to CHF 349 million, 6.7% higher than in 2024. Core EBIT margin increased from 3.1% to 3.2%, in line with our midterm goal to expand core EBIT margins by at least 10 basis points year-on-year on average. In the second half of 2025, we delivered improved profitability with a core EBIT increase of 8.1% faster than the first half of the year. Our free cash flow remained high at CHF 215.5 million with a cash conversion of 95.2%. This marks the sixth year where we achieved a cash conversion above our target of 90%.

We also delivered on our midterm road map regarding capital allocation as we announced 9 accretive M&A transactions in 2025 and proposed to increase the ordinary dividend by 6.4%, which corresponds to CHF 2.50 per share. This resilient performance in challenging times once again demonstrates DKSH ability to consistently create value for our clients, customers, employees and shareholders. Based on the acceleration of growth in the second half of 2025, we will continue to deliver on our midterm road map in 2026, driven by our focused strategy execution and resilient business model.

Let me now focus on the highlights of 2025. We executed our accelerated M&A strategy and announced 9 transactions across the business units, Technology, Performance Materials and Consumer Goods in various markets. We continue to drive our business development by enlarging our client portfolio across all BUs and various markets. We signed a strategic partnership with Bayer for their pharma business in Singapore, Malaysia, Thailand and in the Philippines. In Singapore, we began collaborations with Eli Lilly, started working with Nestle in Malaysia, Thermo Fisher in Japan and Polygal in Europe and the United States. Additional highlights include the achievement with respect to our high-performance culture. Being recognized as a great place to work in even more markets and as one of the Fortune 100 best companies to work for in Southeast Asia 2025 highlights our continuous ambition to create an excellent work environment.

We remain committed to talent development and diversity as reflected in our representation of women in leadership roles. We achieved several milestones in our sustainability efforts. We have been recognized as an industry leader in the ISS ESG Corporate Rating 2025. The science-based target initiative validated our targets, and we are on track to achieve net 0 greenhouse gas emissions across the value chain by 2050, having already reduced our CO2 emissions by 65%. With these achievements across multiple areas, we demonstrate our diligent strategy execution and commitment to creating value for our clients and customers in Asia, Europe and North America.

We also create sustainable value by implementing AI initiatives across all our business units in key areas such as M&A, finance, IT and supply chain management. To support these efforts, we have established a dedicated team. AI acts as an enabling factor that seamlessly integrates with our existing processes by continuously leveraging our extensive data resource through AI we create additional opportunities for growth and enhanced operational efficiency. AI on the one hand, enhances demand forecasting or optimizes pricing, which drives top line growth. On the other hand, AI enhances our operational efficiency. For example, in our consumer goods business unit, we utilize a modular commercial excellence AI platform. This enables us to perform forecasting and segmentation, gain additional customer insights, obtain route optimization data and plan shelf layouts more efficiently -- effectively sorry.

As a result, we achieved sales force excellence through increased customer revenue, improved client acquisition and retention and optimized cost to serve. Our business benefits from high entry barriers. By leveraging our strong sales force, extensive distribution network and robust cash collection processes together with advanced AI initiatives, we further evaluate these entry barriers, giving larger distributors like us the competitive edge. As in previous years, we continue to invest our capital in business with above average margins. We follow an accelerated high-impact M&A strategy backed by leverage headroom for approximately 2x net debt to EBITDA.

Last year, we explored major transactions that ultimately did not materialize. Despite the volatile M&A environment, we announced 9 transactions surpassing the average number closed annually in previous year. Over the past 6 years, we accelerated our M&A activity as we have more than doubled the number of transactions. From 2012 to 2019, we completed 16 acquisitions whereas between 2019 and 2025, the total rose to 35%.

As a result of these acquisitions made in 2025 and our existing deal pipeline for 2026, we expect increasing EBIT contributions from M&A in 2026. Looking ahead, our strong balance sheet allows us to pursue a wide range of strategic options. We remain committed to accelerating our M&A strategy, including the potential for expansion beyond Asia Pacific in our Business Unit Performance Materials, Healthcare and Technology. Our strong cash generation not only allows us to accelerate our M&A activity but also to continue our progressive dividend policy. Therefore, our Board proposes an increase of the ordinary dividend to CHF 2.50 per share, which is equivalent to a growth of 6.4%. For U.S.-based investors, this represents an increase in dividends, by the way, of more than 25%. This proposal marks our 13th consecutive year of dividend increase confirming our dividend aristocrat status. Notably, our ordinary dividend per share has achieved an average growth of 5.1% in the last 5 years.

Let me now provide you with an update on the progress in our business units, starting with Healthcare. Our largest business unit, Healthcare, maintained its track record of profitable growth in 2025. We continued our development above GDP grades as net sales increased by 4.6% to CHF 5.8 billion. especially in the second half of the year, we accelerated organic growth. Core EBIT achieved CHF 174.2 million with a core EBIT margin of 3%, an improvement compared to the previous year. This marks the fourth consecutive year of margin increase on our full year results. These strong results were driven by broad-based growth across multiple markets and by new, as well as existing clients. We entered new partnerships with notable companies like Bayer, Eli Lilly, Reckitt, et cetera.

Patrick Grande, a well-seasoned leader with more than 20 years of experience in the global pharma industry and part of DKSH since 2022 has been appointed as the new head of the business unit following Bijay Singh's planned transition into retirement. Under this new leadership, the business unit will continue to focus on higher-value segments and services. We will increase the share of commercial outsourcing while maintaining a strong focus on our own brands business.

Moving to the Business Unit Consumer Goods. Business Unit Consumer Goods achieved net sales growth of 1.2%, with a marked acceleration of 2.8% in the second half of 2025. This growth was driven by strong performance in Malaysia, Vietnam and Singapore, alongside improved business development, especially in higher-margin business with new clients such as Nestle and Del Monte. Core EBIT increased to CHF 89.7 million, reflecting a growth rate of 5.4% and resulting in an approximately 10 basis point margin expansion. While core EBIT declined by 4.3% in the first half of 2025 growth recovered strongly in the second half. In the past 6 months, we achieved core EBIT growth of 14% and a core EBIT margin of 3%, reflecting improved earnings momentum and operational leverage. The exit of our business in Indonesia as well as the acquisition of Zircon-Swis Fine Foods in Singapore, which delivered performance ahead of the business plan further supported those results.

In our Business Unit Performance Materials, net sales grew by 1.4% to CHF 1.4 billion. The Asia Pacific region, which accounts for around 60% of the business unit net sales delivered the strongest performance with growth of 5.5%, demonstrating a clear outperformance in an overall declining market. The resilient performance of the business unit was reinforced by strong business development with key clients such as Synthomer, Kronos, Polygal alongside 3 M&A acquisitions and a very strong pricing discipline supported by gross margin expansion. Core EBIT increased by 1.9%, with the core EBIT margin improving to 8.2%. The core EBITA reached CHF 120.4 million driving the core EBITA margin to 8.9%. Looking ahead to 2026, streamlined leadership with Natale Capri as the sole head of the business unit, cost optimization initiatives and already signed M&A transaction will provide additional growth momentum in 2026.

Last but not least, let us focus on our business unit technology. Against the macroeconomic backdrop characterized by short-term uncertainty and delayed investment decisions, the business unit delivered resilient results around 2024 levels. The business unit further focused its portfolio. We completed 5 strategic acquisitions within the Scientific Solutions segment. The share of our business line, semiconductor and electronics increased highlighted by the integration of CLMO in Malaysia and Taiwan, while the business line precision machinery also grew, driven by the strong performance with key clients. We also divested our cable business in Australia and Taiwan, focused more on consumables and services, and it's achieved very strong digital sales growth.

In 2026, the business unit will continue to capitalize on consolidation opportunities in Asia Pacific and other regions. With a promising business development pipeline, the business unit is well positioned for a stronger year ahead. Now I hand over to Ido who will guide you through our financial results in more detail. Thank you very much.

Thank you, Stefan. Thank you, Till. I would like to extend my warm welcome to all of you also from my side, especially for those of you who are able to join us today. I know that your time is valuable, and thank you for spending it with us. I am very pleased, as Stefan was to share more details about our 2025 results. As always, to best reflect the comparability of our operating performance, I will also focus on our results at constant exchange rates. The global economic environment in 2025 was marked by heightened uncertainty, particularly in the first half of the year. Against this backdrop, we are particularly pleased to have once again demonstrated the resilience of our business model and our ability to navigate challenging conditions.

We have proven this during the pandemic shutdowns in the postpandemic inflationary environment, and we confirm it once more throughout 2025, as reflected in our key financial metrics. Net sales growth amounted to 2.9% at constant exchange rates. Core EBIT increased by more than twice the rate of net sales at 6.7%. Core EBIT margin increase of 0.1 percentage points to 3.2%. This represents the fifth consecutive year of core EBIT margin expansion. Core profit after tax stood at CHF 226.4 million, an increase of 3.3% at constant exchange rates. Building on our asset-light business model, we generated CHF 215.5 million in free cash flow. This represents a cash conversion of 95.2%, the sixth consecutive year above our target of at least 90%. To sum up this section, we have once again delivered as predicted, top and bottom line growth, margin expansion and substantial cash generation.

Let us now examine the composition of our net sales and core EBIT development in more detail. Organic net sales growth reached 2.5% marking growth acceleration in the second half. The step up from 2.1% in the first half to 3.6% in the second half was particularly evident in business units health care and consumer goods. M&A contributed 0.4% to our growth. Combining organic and M&A, our net sales growth at constant exchange rates totaled 2.9%. The appreciation of the Swiss franc negatively affected net sales by 3.1%. This figure however is slightly smaller than 3.8% negative impact recorded in 2024.

Let us continue with the development of our core EBIT. We are pleased with our continued core EBIT growth. We grew our core EBIT organically by 5%, twice the rate of our organic net sales growth and driven by our intentional focus on high-margin businesses, cost efficiencies and the scalability of our business model. M&A added 1.7% to core EBIT growth, also ahead of its contribution to top line growth, and validation of our strategy to acquire higher-margin businesses. All business units contributed to core EBIT expansion throughout M&A, and we are confident that profit contribution for M&A in 2026 will exceed that of 2025.

Net sales growth, combined with continued strong focus on value-added services, operational excellence and resource optimization delivered an overall core EBIT margin improvement of 0.1 percentage points. Similarly to net sales, the translational FX had a meaningful and negative impact on our core EBIT amounting to minus 5%. The investment materials that we published on our website today include details of the items that we consider nonoperational of a one-off nature or in short, noncore. The main items that fall into this category in 2025, our restructuring cost of $7 million, onetime project cost of CHF 3.9 million and disposal of trademark licenses to the tune of CHF 1.8 million.

To wrap up the core EBIT section, it stood at CHF 349 million, representing another landmark achievement in the 160 years history of DKSH. The sustained long-term effects of our diligent strategy execution, the attractiveness of the business we're in and the resilience of our business model become very evident when we review performance metrics over a 5-year period. We successfully and consistently convert our operational achievements into financial value creation for business growth, cost controls and return on invested capital. Since 2021 in constant exchange rates, our net sales increased by a compound annual growth rate of 4.2%. This is higher than the average annual weighted GDP of our markets. Our core EBIT rose at an even faster upward trajectory of 11.6% CAGR.

Consequently, our core conversion margin defined as core EBIT as a percent of gross profit increased sequentially. Having exceeded the 20% mark in 2024, we lifted by further 70 basis points to 21.4% in 2025. Furthermore, our core EBIT margin followed a similar upward trend. The 3.2% core EBIT margin in 2025 correspond to a total of 60 basis points margin that we delivered sequentially over the last 5 years.

I would also like to highlight to you today the significant improvements that we have achieved over the past 5 years in the area of logistics and distribution. By diligently focusing on operational excellence and leveraging digital tools, including AI technologies, we decreased our logistics and distribution costs by around CHF 35 million, thereby supporting our core EBIT margin by 30 basis points over the past 5 years. A key source of our resilience and agility to respond to ever-changing market conditions lies in our low-risk asset-light business model. We operate primarily with leased offices, lease distribution centers and leased transport fleets. This becomes apparent when looking at our capital expenditure. It's still between 0.3% and 0.5% of net sales across the last 5 comparative periods, with a very lean level of 0.3% maintained over the last 3 years.

Building on our ongoing efforts to drive efficiencies across the organization, we are proud to report that we optimize our working capital even further in this reported period, matching the 8.6% of annual sales recorded 2 years ago. Subsequently, over the same period, we delivered constant and high free cash flow, exceeding our objective of 90% conversion in each one of the last 5 years. To sum up, our year-by-year results demonstrate once again the high quality and predictability of our earnings, sustainable in nature, repeatable in execution, and mirrored by strong cash generation.

Let us now move on to our balance sheet. Building on the financial performance achieved in 2024, we further enhanced the quality of our balance sheet and returns in 2025. Core return on equity increased by 30 basis points year-over-year to 12.4%, reflecting stronger profitability and very disciplined capital allocation. We continue to operate with a positive net cash position supported by an efficient and disciplined deployment of liquidity. At the same time, we maintained a high core RONOC close to 20% evidencing our sustained focus on value creation and capital efficiency.

We operate a low-risk asset-light business model that drives a high and consistent free cash flow for our capital allocation. In 2025, we funded 9 acquisitions while distributing a higher ordinary dividend to our shareholders, all with existing cash. 2025 was a 12th consecutive year of progressively higher ordinary dividend. We also reduced our gross debt position by almost CHF 50 million, which resulted in more than CHF 4 million savings on interest expenses in 2025. With an improved equity ratio of a 1 full percentage point to 33.1%, we maintained a significant leverage headroom to grow our platform through industry consolidation. As we already shared in the past, we continue to carefully assess deals and only acquire if we find them value accretive, scalable and available for a reasonable price.

Let me also provide you with some additional financial indications before we return to Stefan to elaborate on future prospects. In terms of M&A, we estimate that our recent acquisitions will contribute around 0.8% to net sales in 2026. This is based on acquisitions which we have closed until now. We expect more deals to materialize in 2026 and naturally, those will provide further growth upside. While the currency development remains volatile, we expect a slight negative FX translation impact, assuming December rates prevail for the remainder of the year. Tax rate, our 28.7% tax rate on core earnings in 2025 was at the upper end of our midrange of 27% to 29%. We continue to guide this range for 2026. Capital expenditure is expected to remain between 0.3% to 0.4% of net sales for the full year.

With that, I would like to thank you again for your attention today and then over back to Stefan.

Thank you, Ido, for the comments on our financials. Our results reaffirm the robustness of our business model and reinforce our role as a reliable anchor for clients and customers even in times of change and challenges. Before we come to the outlook, I would like to comment on the changes in our Board of Directors. Andreas Keller, Member of the Board of Directors since DKSH founding in 2002 will not stand for reelection at the next AGM. Andreas Keller joined Diethelm & Co in 1976. He initiated and led the merger of the 2 Swiss trading companies Diethelm and Edward Keller in 2000 and supervised the creation of DKSH in 2002 together with Adrian, Keller and others.

The Board members and all my colleagues from the Executive Committee wish him continued success in his future endeavors and delighted that he as the Chairman of the Board of Directors of the Diethelm Keller Holding, will continue to be connected to DKSH. We are all very pleased to propose Julie von Wedel-Keller as a new member of the Board of Directors. As a direct descendant of the Keller family, her election as the fifth generation would ensure continuity and stability, underlying the family's long-term commitment to DKSH.

Looking ahead, we remain confident to deliver sustainable core EBIT growth and reaffirm our midterm road map. We expect core EBIT in 2026 to be higher compared to 2025. As always, this outlook assumes economic growth in Asia Pacific exchange rates to prevail at current levels and excludes any unforeseen event. Asia Pacific remains the most attractive region for global trade, highlighted by Asia's resilient growth of expected 4.6% in 2026. Recent GDP forecasts indicate strong economic growth in Asia Pacific, driven by less significant tariff impacts and Asia's pivotal role in transforming global trade. With 2/3 of the world's middle class expected to reside in Asia by 2030 and its leadership in future industries like AI, the region is well positioned to reshape global trade alliances.

Strong export dynamics and intraregional trade will continue to support the economic momentum across the rapidly growing Asian economies. DKSH remains very confident in Asia Pacific's long-term potential. Supported by its resilient business model, we are well positioned to benefit from favorable long-term market industry and consolidation trends in Asia Pacific and beyond.

With that, I thank you for all your attention and invite you now to address your questions in our Q&A session. Thank you very much.

Thank you very much, Stefan and Ido. We will start the Q&A session, and we'll begin here in Zurich, give Gian-Marco on the first floor, the opportunity to kick it off. Thank you.

Thank you. Three questions from my side, if I may. The first one is on the consumer segments. There, we can really see a trend in the change -- a change in the trend about the top line development, also the margin development. I remember from recent discussions that there was quite a bit of an issue that Western consumer companies had a problem really to diversify themselves, especially in the food business. Is this also related now to trend change that you observed maybe in APAC that those brands become more powerful again?

And then the second question is on the cost optimization, interesting that you mentioned efficiency improvements with AI on the growth as well. So I would really wonder if you could quantify maybe at this point in time already from a growth perspective, what opportunities you see there to increase your revenues? And then also, of course, your improvements in the logistics costs have been impressive, I think, with the CHF 35 million that you mentioned. But on the other side, you also had some FX tailwind in this perspective, reducing your FX overall weight. So I would wonder this question by how much have your logistic costs have really reduced organically? And how much tailwind did you have from FX?

Okay. Thank you, Gian-Marco. Good to see you, and I'll start with -- because many of the questions were more on the financial side, and Stefan will chip in. On the consumer goods we -- well we serve more than Western suppliers. We have a fair bit of Japanese Asia Pacific suppliers. So it's no longer the case of just Western DKSH bringing Western goods into Asia. We have -- I think the change that you see is coming out of the strategy pivot that we announced in Capital Markets Day where we said that gradually, we'll move from better before, bigger to better and bigger business for consumer goods.

We have done -- we have said that we are going to look at increasing our distribution, increasing our sales force efficiency, focus on higher premium categories. And what you see in the last 6 months is realization of the strategy. We still expect the consumers to be muted to foreseeable future. We know what's going on in the world. It's also what the big consumer goods companies are publishing so far, those that are published for this year. So perhaps not yet declaring victory, but very, very encouraged by the results that we see in the last 6 months.

On the profit side, I think it's not new news because if you go back to 5 years ago or 2019, so that's 6 years ago, the consumer goods was at 1.7% margin. We are now at 2.7%. We have then launched a strategy to get to 2.5%. We've already delivered that last year at 2.6%. So I think on the EBIT side growth, that's not new news, and that we have achieved through the various savings focusing on more profitable clients and what brings me to your second question, which was logistics and distribution, which, of course, being one of our bigger business units with the one that is delivering the bigger boxes because the health care tends to be -- medicine tends to come in smaller boxes. This is where the bulk of the saving was made.

It is true that the number reflects FX, but if you look at our annual reports over the last few years, you'll see that the -- unfortunately, because of the strong Swiss franc the -- in Swiss franc level, the sales are at CHF 11 billion over the last few years. And the improvement is of 30 basis points over this CHF 11 billion, which means that these are pure 35 at current exchange rate savings to our bottom line from logistics and distribution. We have done that from significantly automating and digitalizing our warehouses.

We have done it for rerouting into more efficient and packing more into each truck which reduce our costs overall. And this is the main story behind those savings. I think your other question on AI was how it can translate also into revenue growth. And that's a very rich opportunity out there, which we are yet to fully capitalize.

Maybe a few remarks on that one, Gian-Marco. As you know, we are sitting on a ton of data with the hundreds and hundreds of clients. We have thousands and thousands of customers and almost millions of different SKUs. This creates a huge amount of complexity on a daily basis. If you want to optimize which products go in what stores, what are the perfect sales routes and customer visits for our thousands and thousands of sales agents. And here, clearly, AI is an opportunity to look into the data and within minutes, give recommendations how you -- how a salesperson can optimize the visits of customers, what products he or she best recommends to our clients, give recommendations in terms of pricing on shelf location, et cetera.

And that is where we believe there's a significant opportunity to further accelerate our top line growth. And then on top of that, obviously, we have many internal processes which can, in an accelerated way, digitized and supported by AI at the end of the day to save manual labor. But it's too early to tell. We have now 14 pilots, which are already running within the organization and another 15 will be rolled out in Q2 and maybe in the second half of the year, we can give you further feedback in terms of potential, especially the saving potential, which could be achieved by those projects.

I am Michael Foeth, Vontobel. My first question is on the health care business and the shift towards more or higher margin businesses? If you can comment on that and where you stand in that road map. And if at one point, you should see a further acceleration here actually in the -- in that progression? And the second one, actually very much similar to what was just asked on AI. On the real results in terms of efficiency or productivity gains, if that is something that you expect to be reflected on the margin progress in future years because you're still basically obviously at the same midterm ambition there? Or if those gains are effectively then basically passed through to your customers over time, how do you expect that to play out?

Okay. Let me start with the first question regarding healthcare. I think you have seen that over the last 5 years, continuously, we were able to increase the margin in the healthcare business by 10 bps. And that is rightfully as you say, driven by a higher focus on high-margin business in the portfolio. The trend for outsourcing, full commercial outsourcing, that means that we also run the full sales and marketing function on behalf of the client is continuously increasing, and we are gaining some very strong market share and new business with our client base.

A few years back, the contribution from commercial outsourcing to EBIT was 40%. Last year, it was slightly over 50%. In 2025, we moved that to 55%. And on top of that, the contribution of our own brands business is also continuously growing. So right now, we don't foresee an end. We rather believe that we can further accelerate the share of commercial outsourcing over the years to come and can confirm the midterm outlook that every year, we are accelerating the margin also in healthcare by 10 bps year-over-year.

Yes. On the AI potential for cost, revenue and ability to pass on some of the savings to our suppliers. A key component of our business is to manage complexity that our suppliers don't want to or cannot at the same economic efficiency that we can. In many of our jurisdictions in Southeast Asia, bureaucracy is still part of daily life. A lot of paperwork when we sell, buy, when you file for taxes, when you do everything, which is regularly required. So our business has a fair bit of administration of those things.

And over the years, even before the AI revolution, which has just started, we have moved a lot of those repeatable tasks into our shared services center in KL. Our global IT team is based there and also the financial services are based there, where we process a big part of what is happening in the countries over there. The AI revolution offers us to make that a lot more efficient than before because we now apply all those tools and machine learning on paperwork. And we honestly -- the full potential is yet to be understood and realized but it is going to be big because by definition, this solves what human repetitive tasks are currently doing.

It is probably too early for us to increase the guidance of 10 basis points per year, which has been our guidance for several years now. We have delivered this year. We have delivered the year before. We actually delivered for 5, 6 years now. And we also delivered in 3 of the business units in -- out of the 4 in 2025. So we'd like to continue with this guidance. Some of those savings, we will invest back in our business also in IT and in other elements that we would like to invest. And in the future, if we see more, we will, of course, communicate a change of that guidance.

Chiara Di Giammaria from Berenberg. I have 2 questions, if I may. The first one is on Performance Materials. So I guess, in the industry in general, one of the main concern is the Chinese competition. Can you explain how you are protected from this? And the second question is on the USD denominated sales. If you can share a split -- so how much more or less of your sales come from the USD sales?

Yes. Thank you very much. Look, if you -- very clearly, the chemical markets are being challenged now since 3 years. The difference between our setup and the setup of many of our dear competitors is that 2/3 of our business is in Asia. We have very good and very strong connections to Chinese suppliers, and we also distribute business within China. So close to 8% of our overall PM business is within China. And we are very successful in Asia across the board because we have a very broad customer base and very deep and long relationship with those customers. So we currently don't see significant challenges of Chinese player in Asia. And that was the reason why also in Asia, we were able not only in this challenging end market environment to deliver over 5% of growth.

As you might have recognized, we were also able across the full globe of our operations to increase the gross margin and to increase the EBIT margin. In terms of the sales in North America, this is under 8% of the total business. But obviously, if you do the math, you will see that also in Europe and in North America, our chemical business is also being challenged. But Asia is very strong, and we expect a very solid performance also in 2026 in Asia in Performance Materials.

With regard to the share of U.S. dollar sales, it's actually very small. It's about 1% to 2%. But I would also like to add that we -- our currency risk is a translational risk. In terms of transactional, we hedge all our -- everything that we buy in non-U.S. dollars and sell in U.S. dollar, we hedge on the rate that ensures the margin that we make on the deal. So we only suffer translational, which has an impact.

The next question in the room, please. For the time being, no question in the room, operator, can we please have the questions from the call.

The first question comes from Nicole Manion from UBS.

A couple for me, please. Firstly, just a follow-up on Performance Materials. Could you comment maybe on how trends developed through Q3 and Q4 and how you've seen things evolve so far in early 2026. And then the next question, could you talk a bit about the tariff environment in, I guess, in India and China within APAC, particularly on the pharma side? Anything you're sort of seeing there in terms of impacts? And then perhaps just more generally on inventory levels. It looks as though group stock turns are still 7x to 8x. But within that, can you comment on any regions or products that you think are still elevated? That would be very helpful.

Nicole, can you please repeat your second question on was that the impact of tariffs? Did I understand that correctly?

Exactly. Yes, if you could just comment on anything that you've seen particularly, I guess, in the region in India and China, maybe on the pharma side, if there's any impacts that you can call out there? And then, yes, the related question was just about inventory levels in general.

Okay. Maybe then I start with the first 2, and then Ido is commenting on the inventory. So yes, I mean, Performance Materials, it was a very rocky year 2025. I'll start with Q1 where we have seen some good developments. In Q2, we discussed it during the half year results was a complete disaster after the uncertainty being created with all the tariff discussion. Then in Q3, actually, there was a bounce back happening. So we had a very strong Q3, whereas then in Q4, there was a more normalization and the results were slightly negative across the full portfolio. Looking into 2026 and maybe a few of you have seen that there is some very light optimism coming back to the market also triggered by a report from Goldman Sachs last week. We are optimistic, especially for our Asian business in 2026.

Regarding the tariffs, I would like to summarize it in a way that at the end of the day, I think everyone recognized that the impact, especially for Asia will be more limited than what was originally feared towards the end of Q2. What we do see is that the supply chains are moving slightly and there is a decoupling from China into Southeast Asia. You just have to look into the GDP growth rates in Southeast Asia for the second half of 2025 as well as the outlook for 2026 where you see there's a very strong development in Vietnam, which is out of the material economy, the fastest-growing one, where I think we can expect up to 8% GDP growth this year but also Malaysia is doing very well.

Singapore is doing very well. Taiwan is forecasted to do very well in 2026. And what I would really like to highlight is also Japan. We have high expectation in terms of Japan. I think there is a giant which is being re-waked and we have seen already some good development in 2025. And I say with the political environment there, we can expect a further acceleration coming out of Japan. And yes, then I would hand over to Ido regarding the inventory level.

Nicole, just specifically on your question on the pharma business in India and China, we actually had a very solid year in those jurisdictions in this category. So we don't see the effect, as Stefan just mentioned. I did not quite get the question about the inventory. Can you please repeat it? I'm sorry that the line is not great today.

Yes. Sorry, no, I was just asking it looks as though stock turns for the group are around, I think, 7.5x. But I was just asking if there are any regions or products that you think are kind of elevated within that or anything interesting to call out on a regional or product basis, essentially, just any detail?

No, I think that overall, our inventory level is a very healthy level. And so is our working capital, as I mentioned before in our -- in my speech. There's -- if there's anything in particular to report is that it's very lean. And I think we're going to start the year with the right level of inventory and good quality inventory, meaning low level of excess or bad inventory. So we're quite pleased with the achievements there across all the business units.

The next question comes from Jon Cox from Kepler Cheuvreux.

Just on consumer, just to come back to that, you're talking about encouraging results coming through in consumer in the second half. Can you just talk us through that a little bit just in terms of maybe the countries you're seeing improvement or which parts of consumer is seeing the improvement? Because obviously, the overall economy and a lot of your big markets, notably Thailand hasn't been great. And I'm just wondering if you could talk a little bit about what those improvements are a bit more specifically.

And then just to come back to Performance Materials, you're talking about Asia should be pretty decent this year. I can see you're a bit loath to talk about the U.S. and Europe. Are you seeing any signs of improvement there at all. And I'm just wondering, is the weakness really in the industrial segment, and it's really about the Chinese competition. Or is it across the board and it's not just the Chinese competition, it's just businesses in general, being pretty nervous.

Thank you, Jon. I will start with the CG question. Stefan will follow on PM. I think in the same countries as Stefan mentioned before, that have been quite successful for us in both PM and Healthcare also successful in CG. These are core markets. Vietnam, Malaysia and Singapore had a particularly strong year for CG. You're right to point out that things are a little bit more lukewarm in Thailand. But I would also like to say that over the last 3 years, we have outperformed the overall GDP in Thailand. So some slowdown is something that we were going to expect in 2025.

Certain categories, I think Beauty Care is coming back. Also, food and beverage are coming back. What we see is consumers are going back to brands that they can trust and value, okay? So we're not talking necessarily about higher value, lower value. But after a certain shock 2 years ago from the inflationary pressure, they're coming back to brands because they -- this is what they trust. So overall, slightly stronger consumer confidence, but it's very volatile times. I mean we cannot be overly optimistic at this stage. We are optimistic though.

Yes, Jon. I'm talking about Performance Materials. First of all, in the U.S., we see really very, very light indications of -- you might recall that our business there is primarily an industrial specialty chemical business related to the so-called K segment, which heavily goes into the housing market. There are some very soft early indications that there is actually a shortage on housing in the market and some investments are rolling into the market also in terms of renovation. So I would say maybe we see the light at the end of the tunnel, but there is still some -- there's still some tunnel right?

In terms of our European business in Europe, we have a very healthy life science business across the board, which is in Europe, more resilient than the industrial business, which is further hit by the overall economic environment and the production is just diverting out of Europe, which is also an effect. I think just focusing on some Chinese materials or ingredients is a little bit shortcoming. And in that summary here, I would also like to point out that we have a very healthy client base across our portfolio from American or North American clients, European clients as well as Asian clients, which is also giving us some healthy stability. And by the way, one last comment is that within Asia, our industrial specialty chemical business was in Asia, even growing slightly faster than our Life Science business, which is underlying my statement before that there is some production is moving into Asia.

Just want to just keep going. Just on the technology business, that seemed to have a pretty soft second half. And I know maybe your exposure is somewhat limited. Taiwan is doing really well. There's a lot of stuff going into AI and CapEx and that sort of stuff. Are you not really exposed to that, and that's why you're not seeing much of a pickup in that technology business?

We do have some exposure in our -- with our semiconductor business into those markets. not only in Taiwan, but also in Singapore and Malaysia, and that is where we still have seen some business growth but there was just a huge amount of uncertainty in the technology sector in 2025 and many investments and orders were delayed and canceled. Having said that, if we look in our pipeline of 2026, what we have signed up for 2026 and the business, which is moving from '25 into '26 because of the delays or the pushover plus some additional business coming out of the investments in data centers, even in data centers in Thailand is giving us the optimism that in our presentation here, we talk about a strong rebound of our technology business in '26. But '25 was, yes, was not a great year for them.

Thank you for the questions, Jon. Operator, is there any further question in the call?

So far, there are no further questions from the phone.

And an opportunity here in Zurich. Gian-Marco has a few more questions.

Gian-Marco, Zürcher. I'll just take the opportunity to ask 2 more questions, if I may. First one is you mentioned for the Technology business, some promising business development pipeline for a better 2026. So can you elaborate a little bit on that, that would be interesting. And then your own Healthcare business, I assume according to your slides that you kept the EBIT margin there quite on a high level, over 20%. And if I assume also that this grew by around 5% or so, then, however, this would mean over CHF 2.5 million additional EBIT for Healthcare. Is that a fair assumption? And why then despite the strong performance that you had in Healthcare was the EBIT growth in Healthcare not stronger?

Okay. Let me start with technology and then Ido can drill down into the EBIT margin analysis. In technology, as I was just saying before, there are 2 things or a few things happening. One is we have seen some projects, some investments, which were being delayed into 2026. So that is obviously giving us some good backlog for this year. Secondly, especially in scientific instrumentation, where many of our customers were a little bit cautious we have some good order intake for 2026.

And then last but not least, as mentioned already in the question from Jon, there is significant investments also going into data centers where we supply, obviously, not the core business, but some equipment down to even generators and whatnot, where significant investments are going to happen in '26. And if you put those 3 together that is building the strong backlog and pipeline we have for '26, giving us the confidence that we say this business is bouncing back material from the, yes, disappointing results in 2025.

On the own brands in Healthcare, first of all, we always welcome your questions, so you can do even more than 2. We are being a little bit victim of our success also in the other categories because we had a very good year in commercial services and full agency in healthcare that are growing proportionately as much as own brand. Hence, the overall mix did not change. In specific own brands, we had some difficulties. Myanmar had been traditionally a very strong market for us for own brands, and that is a very soft market at the moment for geopolitical reasons that I'm sure you're aware. So we have lost some business there.

The rest of the own brand portfolio has performed quite well, but that's why it explains it didn't grow overall from the mix. The math that you made is correct. If we can grow that at the proportion that you mentioned, we will grow disproportionately our EBIT. And yes, those are fine jewels that we are constantly searching to buy and expand. And when we have the opportunity, we do that. We did it a couple of years ago with one of our acquisitions. And hopefully, we'll find something in 2026.

Thank you, Gian-Marco. Any more questions in the room? Seems not the case. Then from our side, big thank you for all of the participants today here in Zurich, but also in the conference call. Wishing you all a good rest of the day, and we are all available also here in Zurich for questions afterwards. There's a little bit of catering. So please stay with us, and we are happy to engage. Thank you so much.

[Audio Gap]

This is the Chorus Call operator. [Operator Instructions] the conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Mr. Till Leisner, Head of Investor and Media Relations. Please go ahead.

Thank you, Valentina, and good morning, everybody, or good afternoon for everybody who's dialing in from a different time zone. It's a pleasure to really welcome you all on behalf of DKSH. Thank you for joining the virtual half year results conference. We really appreciate your participation. As Valentina said, my name is Till, I'm the Head of Investor Media Relations, and I'm very happy to have Ido, our CFO; and Stefan, our CEO, with us today.

Before we start the usual comment, please have a look at the disclaimer of the presentation regarding forward-looking statements. For those of you who do not have the presentation in front of them, you can download them on the web page under dksh.com.

With that, I'd like to hand over to Stefan. Thank you so much.

Good morning, good afternoon, and a warm welcome, everyone, to the presentation of our half year results 2025. Thank you for joining us today as we review the highlights and progress our company has achieved during the first half of this year.

Today's agenda foresees a recap of the highlights of the first half of 2025. Following that, I will go into details about the progress we have seen in our 4 business units. After that, Ido will follow with the financial update. To conclude, I will provide an outlook before we open the Q&A session.

Our performance in the first half of 2025 once again demonstrates DKSH's ability to consistently create value for our clients, customers, employees and shareholders through solid EBIT growth, improved margins and strong cash generation. We delivered again a resilient performance in very challenging times. This achievement was driven by our focused strategy execution and resilient business model. Net sales grew by 2.1% at constant exchange rate to [ CHF 5.5 billion ]. In this context, we observed stronger business momentum towards the end of the first half of the year.

In an environment marked by global economic strengths and market uncertainty, DKSH achieved EBIT core growth. Core EBIT amounted to CHF 169.3 million with an increase of 5.1% compared to the first half of 2024 at constant exchange rate. Accordingly, our Core EBIT margin expanded by 10 basis points to 3.1%. These results align with our midterm road map KPI of expanding margins by an average of at least 10 basis points annually.

Free cash flow remained robust at CHF 120.6 million with a cash conversion of 117.5%. Alongside these resilient results, we already announced 5 acquisitions and have a strong pipeline for the second half of the year.

Let me now focus on the highlights of the first half of 2025, which underline how we create value for our business partners. As already mentioned, we executed our accelerated M&A strategy and have already published 5 acquisitions this year. We are happy to welcome to the DKSH Community, CLMO, MDxK, Taqkey Science and Quantum Biotech in our business unit Technology; APN Plastics in our business unit Performance Materials; as well as Zircon-Swis Fine Foods in our business unit Consumer Goods.

We have continued to drive our business development to achieve profitable growth. We enlarged our client portfolio across all business units and various markets with brands such as Bayer, KRONOS, Vida World and [ IBARMIA ]. These new partnerships demonstrate that we are the preferred partner for our clients, providing a full range of tailored services to expand their market share, especially in times of uncertainty.

We continue to invest in our high-performance culture and are proud to have received further recognition for these efforts. Notably, we achieved the Great Place to Work Certification in 15 markets and we are honored with the Best Workplaces for Women Award in Greater China.

We also continue to focus on sustainability. Our continued dedication and proactive approach in advancing responsible business practices have been recognized by EcoVadis with a gold medal, placing us among the top 5% of rated companies globally. We have also received a global ISO certificate for environmental practices as well as occupational health and safety across multiple markets. This reinforces our commitment to sustainability and safety in our supply chains, which are continuously improved.

Over the past few years, we have seen a general outsourcing trend across all industries, with manufacturers increasingly entrusting their products to distributors like DKSH to focus more on their core competencies, such as innovation, production and product marketing. This outsourcing trend remains strong in the first half of 2025, which allowed us to secure partnerships with new and existing clients across multiple markets.

Let me share 2 recent examples. In our Business Unit, Healthcare, we entered a strategic partnership with Bayer to provide comprehensive services for their cardiovascular products in Singapore, Malaysia, Thailand and the Philippines as well as women's health retail portfolio in Thailand. With our deep expertise in cardiovascular therapies, proven engagement with health care professionals, capillary distribution infrastructure and integrated commercial and medical affairs capabilities, Bayer chose DKSH as their partner.

In our business unit, Performance Materials, we managed to extend our existing partnership with KRONOS for whitening ingredients to new markets, namely China, Philippines, Australia, New Zealand and Taiwan. Following the successful collaboration in Spain and Portugal, KRONOS sought to expand into Asia Pacific region and continued to trust their products to DKSH.

In addition to expanding our portfolio with new clients and deepening partnership with existing ones, we remain focused on driving higher profitable business through active portfolio management. In 2025, we continued to invest our capital into businesses with above average margins. We are on track of delivering on our M&A strategy, having published 5 acquisitions in the first half of this year. We entered the second half of 2025 with a solid track record as well as a strong balance sheet and trust that we can further accelerate the most recent acquisition speed.

Let me now continue with an update on our business unit, starting with Healthcare, please. Our biggest business unit, Healthcare, continued its track record of profitable growth in the first half of 2025. The net sales development was strong and above GDP growth. Net sales reached CHF 2.9 billion and Core EBIT amounted to CHF 90.2 million. This corresponds to a Core EBIT margin of 3.1%, which marks the fourth consecutive year achieving margin increase. This result was driven by favorable underlying market trends, successful business development with both new and existing clients and a continued focus on the higher-margin business such as commercial outsourcing, where we see solid demand. After all, our business unit Healthcare will continue to expand its strong market position and drive higher growth value segments and services.

Let's please move on to our business unit, Consumer Goods. Amid very challenging market conditions, we achieved resilient net sales performance. The result was mainly influenced by reduced consumer spending and more focus on low- and mid-tier products across Asia Pacific as well as lower trading spend in general. For example, the already persistently low consumer confidence in Thailand dropped to a 27 months low in May 2025. In Hong Kong, we experienced decreased retail sales by 4% in 2025.

Core EBIT was down slightly by minus 4.3% at current exchange rate to CHF 39.8 million with a Core EBIT margin of 2.4%. However, we are proud of having executed on the strategy presented at our Capital Market Day. Despite the challenging environment, we expanded our food service segment by acquiring Zircon-Swis Fine Food and achieved strong development in our e-commerce business. We look forward to seeing the benefits of this business development pipeline materialize in the second half of the year.

For our business unit Performance Materials, we can continue to report a slight positive trend despite the volatile market environment with a high degree of uncertainty. Net sales grew by 1.3% at current exchange rate to CHF 698 million. Our digital platform, DKSH Discover, contributed to this result by boosting lead generation as well as business development. Currently, we see that pricing remains more or less stable with volumes resilient.

Core EBITA reached CHF 33.4 million, driving the Core EBITA margin notably higher to 9.1% compared to 8.9% in the first half of 2024. This was primarily driven by our home market, Asia Pacific, where we saw a double-digit organic earnings growth.

Ending our business unit review with Technology. In line with our strategy of building resilience and delivering profitable growth, we showed a resilient performance in the first half of 2025. In a market environment characterized by short-term uncertainty and delayed investment decisions, we achieved net sales at CHF 246.9 million and a Core EBIT at CHF 7.7 million. The business unit already announced 3 acquisitions in the first half of 25, and we'll continue to capitalize on market consolidation opportunities in Asia and beyond. More investment decisions are likely to materialize in the months to come. And with that, the business unit is well positioned for a stronger second half of the year.

Now I hand over to our CFO, Ido, who will guide you through our financial results of the first half of 2025 in more detail.

Thank you, Stefan. I would like to extend a warm welcome also from my side, and I'm very pleased to share more details about our 2025 first half results.

As always, to best reflect the comparability of our operating performance, I will focus on our results at constant exchange rates. Global economic environment in half 1, especially in Q2, was characterized by increased uncertainty. Geopolitical tensions remained and the inclusion of Asian markets for the first time into the debate on tariffs sent a few shock waves around the region. In this context, we are particularly pleased to have demonstrated yet again the resilience of our business model and our ability to withstand challenges. We have shown this during the pandemic shutdowns. We have shown this in the post-pandemic inflation run, and we are showing it now once more in our key financial metrics.

Net sales expanded to CHF 5.5 billion, an increase of 2.1%. Core EBIT grew by 5.1%, more than twice the rate of net sales to CHF 169.3 million. Consequently, Core EBIT margin increased to 3.1%. This marks the sixth consecutive year in which we achieved Core EBIT and Core EBIT margin growth in the first half.

Core profit after tax amounted to CHF 103.5 million, a decrease of 10.3% driven by finance expenses related to recent appreciation of the Swiss franc in the past 2 months, especially against the U.S. dollar. Conversely, at the same time in the first half of 2024, we benefited from the depreciation of the Swiss franc. This has amplified the year-on-year impact of the financial expense.

Free cash flow stood at CHF 121.6 million, representing a cash conversion of 117.5%. This conversion rate exceeds our long-term target of 90%, an achievement that we have now repeated for the third year in a row. To summarize, the key metrics of the first half demonstrate the resilience of our business and our organization, delivering top line and even faster bottom line growth, coupled with strong cash generation.

Let us now examine the composition of our net sales and Core EBIT development a bit closer. With organic sales contributing 1.8% and M&A 0.3%, our net sales grew by 2.1% at constant exchange rates. The Asian Development Bank and the IMF are due to release their GDP data later on this summer. Once they do, we expect our half 1 top line growth to benchmark comparably well to their data.

After several years of decline, many hedging currencies had stabilized against the Swiss franc in late 2024 and stretching into the beginning of 2025. This trend has now reversed in the past few months, resulting in a slight negative FX impact of 0.6% for half 1. If current rates prevail, we expect an adverse FX impact also for the remainder of the year. However, as we noted in previous rounds of communication, the impact of foreign exchange on our results is predominantly translational, arising from the conversion of local market currencies into Swiss francs for reporting and consolidation purposes. On a transactional side, our revenues and costs are largely aligned in similar currencies. Where this is not the case, we mitigate exposure through hedging.

Let's now turn to the evolution of our Core EBIT. We are pleased to see our core EBIT grow by 5.1% underlying our resilient business model. Driven by business unit Healthcare, Performance Materials, our Core EBIT grew organically by 3.6%, while M&A, largely in business unit Technology, added 1.5%. As emphasized in the past, we focus on growing our businesses, but also on resource optimization and operational excellence. This is illustrated by the development of our supply chain cost. They currently represent 3.5% of net sales in half 1 2025, down 10 basis points versus half 1 2024 and down 30 basis points versus half 1 2023. We anticipate further savings and efficiency in this area to continue to support our P&L in the future as well.

Similarly to net sales, Core EBIT was negatively impacted by the recent adverse FX development to a total negative 1.6% in the half year. The investment materials that we published on our website this morning include details regarding the items that we consider nonoperational of a one-off nature or in short, noncore. The main component of the items recognized in half 1 this year are CHF 2.9 million related to the cost of seizing our business unit Consumer Goods operations in Indonesia.

It is important to highlight that we are very pleased with the development and results of our Performance Materials, Technology and Healthcare businesses in Indonesia, and we remain very committed to further develop them in the short, mid and long terms. The remaining 2 noncore items are an income and an expense that are minor in comparison and related to the movement in companies where we own only a partial stake. To wrap up the section of our Core EBIT, it stood at CHF 169.3 million, representing another landmark result in the history of DKSH.

Sustained long-term effects of our diligent strategy execution and the resilience of our business model become very evident when we review performance metrics over a 5-year period. Since 2021, in constant exchange rates, our net sales in the first half have increased by a compounded annual growth rate of 4.1%. This is higher than the average [ annual ] weighted GDP of our markets. Our Core EBIT increased in a similar and even amplified upward trajectory of 12.1% CAGR.

Consequently, our core conversion margin, defined as Core EBIT as a percentage of gross profit, increased sequentially. Having exceeded the 20% mark in 2024, we augmented it by additional 50 basis points to 20.6% in half 1 2025. Furthermore, our Core EBIT margin has followed a similar pattern. The 3.1% Core EBIT margin in half 1 corresponds to a total of 70 basis points margin sequential increase over the last 5 years.

A key source of resilience and flexibility lies in our low-risk asset-light business model, which relies primarily on leased offices, leased distribution centers and leased transport fleets. This becomes apparent when looking at our capital expenditure. It's still between 0.3% and 0.5% of net sales across the last 5 comparative periods. With 0.5%, this clean level was maintained in half 1 2025.

As a consequence of our ongoing efforts to drive efficiency across our organization, we are proud to report that we optimize our working capital even further in this reported period, reaching 7.7% of annualized net sales, effectively an all-time low. Subsequently, over the same period, we delivered constant and solid free cash flow, exceeding our objective of 90% conversion in this half year and in total in 4 out of the past 5 half year periods.

Let us now move on to our balance sheet. It remains very solid, as reflected in constantly high return metrics as well as robust power sheet ratios. As shown on the previous slide, optimize working capital, driven by timely connection and just-in-time inventory management, is at the core of our successful distribution and market expansion business.

In half 1 2025, we lowered our trade receivables to a level of only 16% of annual net sales or 59 days outstanding. [indiscernible] also remained lean at 12% of annualized net sales or just about 50 days. At the same time, our trade payables stand at a mere 20% of [ annualized ] net sales or 87 days. This represents another low compared to past years as we were able to reward our clients with faster payments in line with our faster collection. With that, we achieved robust core [indiscernible] of 19.6%, up by as much as 50 basis points versus half 1 last year and a strong core ROE of 12%.

We adhere to a low-risk asset-light approach that drives stable and high free cash flow. In the reporting period, we used our cash flow primarily to fund bolt-on acquisitions, to distribute an ever higher ordinary dividend to our valued shareholders as well as to further optimize our liquidity borrowing ratio. Subsequently, our net debt position by the end of the first half of 2025 was almost neutral and amounted to only CHF 3.5 million. With an equity ratio of 31.7%, we continue to have significant leverage headroom to further grow our platform for industry consolidation. As we have explained in the past, we continue to carefully assess deals and only acquire if we find value-accretive, scalable and available for a reasonable price.

Before we return to Stefan to provide us with an outlook, let me walk you through additional financial indications for the full year of 2025. In terms of M&A, we estimate that our recent acquisitions, those already signed and closed, will contribute around 0.5% point to net sales in 2025. This estimate is based only on the acquisition we have closed until now. New acquisitions are likely to happen and to close in the second half year and will provide further growth upside.

Assuming that current exchanges prevail over the remainder of the year, we expect the FX impact ranging from negative 2% to negative 3%. We estimate tax rate to remain between 27% and 29% of profit before tax. Capital expenditure is expected to remain between 0.3% and 0.4% of net sales for the full year, unchanged to previous estimates.

Thank you for your attention this morning. With that, I'll be happy to hand back to Stefan.

Thank you, Ido, for your commentary on our financials. To conclude, let's move on to the outlook, please. The first half of '25 was characterized by macroeconomic and geopolitical uncertainty. Most recent GDP forecasts show that this trend continues as lower economic growth is expected worldwide, including Asia Pacific.

However, growth in Asia Pacific is still expected to exceed the global GDP growth. An increase in Asian trade will balance out some of the reduced global trade. This is why we remain very confident about Asia Pacific's long-term potential. We are also continuously observing the ongoing tariff discussion. The tariffs themselves have only a very limited direct impact on our business, which underlines the resilience of our business model.

Regarding the prospects for the rest of this year and the ones to come, DKSH remains committed to its long-term road map, highlighting that its 2025 outlook is aligned with those goals. We expect that our accelerated M&A strategy continues in the second half of the year. And we can reconfirm our guidance, including that Core EBIT will be higher in '25 than in '24 at constant exchange rate, assuming an economic growth in Asia Pacific and barring any unforeseen events.

To sum it up, DKSH showed the resilience of its business model in the first half of '25, despite the challenging environment. Therefore, we remain confident that this business model allows us to benefit from long-term market industry and consolidation trends in Asia Pacific in the future.

With that, I thank you all for your attention and invite you now to address your questions in our Q&A session. Thank you very much.

[Operator Instructions] The first question comes from Gian-Marco Werro from Zürcher Kantonalbank.

Two questions from my side. First of all, very [indiscernible] results. However, there's small low [ line ], maybe a bit is the development from the organic growth perspective in Performance Materials. And therefore, my 2 questions are addressing this topic.

First of all, if I look at the peers and then how they performed in the first quarter, I come to the conclusion, to the assumption that you might have a [indiscernible] growth in the second quarter. So can you give us a bit more detail about the growth trends first quarter versus second quarter? Also in relation to your comment on the slides that you see positive trends to continue that somehow really doesn't match up with my assumption.

And the second question also remains with Performance Materials for the profitability there. Can you elaborate a bit about how you could improve then the operating profit margin despite the quite volatile market environment?

Yes. Thank you very much, Gian-Marco, for your question. And let me please answer it. So I think if you go back what we reported in February for the full year '24, we have actually really seen since Q3 2023, quarterly improvements in Performance Materials. We have also seen in Q1, an increase in Performance Materials. And you are rightly pointing out that Q2 was very challenging. Actually, right after the liberation date, we could see that the market was responding to the significant uncertainty, which was created there. And indeed, we have seen a softer April and May. The positive news is that at the end of the second quarter in June, we have seen again organic growth.

Let me also give you a little bit more granularity. So in Asia Pacific, we have seen in H1, organic growth of over 4%. So our core market in Performance Materials was growing nicely despite all those uncertainty, whereas in U.S. and in Europe, we were facing also with an organic decline.

Where is the profitability increase coming from? That's actually at the end of the day, a mix issue. So first of all, we see in Asia, we have a slightly higher profitability where we see the organic growth. And the other thing is we have seen some better developments on the food and pharma side versus personal care and industrial and in food and pharma, also the margin is slightly higher. I hope this did answer your question.

The next question comes from Andy Grobler from BNP Paribas.

Two for me as well, if I may ask you. You mentioned in Consumer that you had a strong business development pipeline that you expected to materialize in H2. Could you just give a bit more color to that, please?

And then secondly, on M&A, you had 5 deals that were completed in the period and you talked about that pipeline going into the second half of the year. To what extent can we assume that the kind of quantum of those deals begins to grow because you still have essentially no net debt and the impact on group top line is relatively modest. Should we expect that to kind of materially change over the next few months and quarters?

Thank you very much, Andy. And let me start, please to answer the M&A question. And then as usual, Ido takes over the Consumer Goods question. So as mentioned, yes, I think we have a very good M&A performance in H1. We have a very solid pipeline for H2. And in the second half of the year, there is also some more material contributions to be expected versus H1.

In the H1 contribution [indiscernible], this is really only the deals. And on the top line of the deals, we closed at this point of time. And normally, as you know, for the bolt-on acquisitions, the top line contribution is a little bit lower, whereas the EBIT contribution is a little bit stronger. So we can do expect that in the second half of the year, we will see more contribution from M&A. We are very optimistic. But again, I mean, you still need to sign and close those deals. There's always some degree of uncertainty, but we are very confident for H2.

And then I hand over to Ido.

Yes. With pleasure on -- I think the question was about the role of PD in the second half year and our expectations. We're in a very final stage of signing several deals. Of course, we're not in a position to -- before we've been signing to be clear about the names, but some promising ones.

Overall, we have to be also cognizant of the overall situation of consumer in Asia. So we do not expect a disproportional growth in the second half year, but we definitely expect a rebound from the negative 0.5 organic growth of CG in half 1, something to more balance, and we're optimistic that we can also show growth organic growth in the second half year.

The next question comes from the line of Chiara Di Giammaria from Berenberg.

I have 2 questions, if I may. The first one is on the commercial outsourcing. So for the Healthcare business, you mentioned that the share of commercial sourcing has increased. But can you maybe share more color on this on the development and on the EBIT contribution?

And the second question is on margin improvement. So what are the key savings and efficiency measures that you are doing to improve EBIT margin? And what is the room for improvement here?

Yes. Thank you very much for your question. Yes, as indicated in my speech, I think we are making some very good progress in Healthcare, especially in the segment of full agency business or full commercial and outsourcing. And indeed, for the first time, in the history of our Healthcare business, the EBIT contribution of commercial is over 50%.

You might have seen that last year, we announced a very significant deal with [ Kyowa Kirin ]. We just announced a very sizable deal with Bayer. So it's a clear evidence that the trend towards accelerated outsourcing and the trust those large organizations have in our capabilities, it's continuously increasing. And that is also the biggest driver behind the increased margin as well as our own brand business, which is also of higher margin, as you know, and it's also developing nicely with the exception of the setback we are facing in, in Myanmar.

In terms of the operational efficiency, look, we continuously look for opportunities today to use AI and increase the effectiveness and efficiency also of our sales force across the organization through digitalization of further parts of the processes we have. So we are quite optimistic that also in that regard, we can deliver on top margin and expansion on top of the economies of scale with the growth of the business.

The next question comes from Nicole Manion from UBS.

Just one follow-up, please, on Consumer Goods, where you saw some slight margin compression in H1, obviously on a slight and in a tough backdrop for the first time that you've seen that after some sort of years of progress in quite a while. Could you maybe hone in on where you're seeing that pressure by sort of segment? Is it just in the core FMCG business or more in food service or the lifestyle pool of the portfolio?

Yes, I can -- Nicole, I'll take this question. Indeed, we are not pleased with the slight decline on margin of 10 basis points, especially after making the record and overdelivering the internal target we set for ourselves at the end of last year. This is predominantly driven by the softer net sales to impact the scale of the business as the overall structure is -- remains solid. As I mentioned in the speech, the savings that we see also supply chain that are actually helping us to mitigate this decrease to be only 10 basis points.

It is not food service, to answer your question. It's really the core FMCG business and the core industry that is undergoing changes that may not be as vocal as they should. You see that many of the blue chips company have reported very soft Q1 results. They are likely to report Q2 results on a global level and Asia level.

There's a lot of divestiture and consolidation in the industry. We learned last week that Kraft Heinz is about to split itself. We learned at Kellogg's, definitely, a household name in the consumer goods, is selling its core business to Ferrero. Names like P&G are shedding 7,000 jobs. So there's something happening with the basic proposition of consumer goods to consumers that are in themselves, in a bit of a disarray with their buying ability.

In this context, I think our results are -- we're not too happy about them, but I think they are decent. And we expect that the industry will reinvent itself, will continue. We'll come back to investing in advertising and promotion to help us also generate higher returns there.

We are not letting go the 2.5 target of last year. As I said before, we expect half 2 to be stronger. We're taking a lot of right steps in the strategic action plan that we have set ourselves in optimizing sales force, in providing a sales force with new tools to be more effective, the sales -- the supply chain savings that I mentioned, the AI that Stefan mentioned. So as soon as the industry comes back, we will come back with it.

[Operator Instructions] The next question comes from Michael Foeth from Vontobel.

Just one short follow-up on Consumer Goods, basically tying together the stronger business pipeline into H2 with your comments on margin. How is that strong pipeline sort of positioned to support margin improvement in the second half of the year?

Thank you for the question. As I said, we are going to shoot for a better half 2 versus half 1. So we expect to restore the margin of last year. But we have to keep in mind this is uncertain times, not only for Asia and the global, but specifically for the consumer segment. So this is what we're shooting for. We're optimistic, but please take it with a grain of salt.

The next question comes from Hela Zarrouk from ODDO BHF.

So 2 questions from my side. The first one, in the Technology business unit. So on the organic growth, should we expect an acceleration in H2? If yes, what would be the main drivers? And regarding profitability, what should we expect -- how should we expect margin to develop in H2, knowing that the Core EBIT margin in the Technology business unit decreased by 30 basis points in H1?

And my second question is on tariffs. So if you can make an update on the tariff impact. You said that the impact is rather indirect. So could you share your view with us on this subject?

Yes. Thank you very much for the question. Let me take it. So first of all, the Technology business is a very seasonal business and remains a very seasonal business, where the majority of the deals are happening and are being closed in the second half. And this is also what we can expect in 2025. I mean 2021 clearly was hit by this uncertainty in technology. Many of the customers, they were stalling projects, they were delaying projects. But we do expect that this is slightly going to disappear and definitely expect a better half in H2 than in H1. And also the margin in H2 will be better than the margin in H1.

Regarding the tariffs, as I mentioned in my speech, we have a very limited direct impact on DKSH. In the U.S., we are only active with our business unit Performance Materials. And in total, the U.S. accounts not even for 1% of our revenue, and only 0.3% of the products are being sold into the U.S. So the impact on that side is very, very limited. If you look at our total inventory purchases across the group, 60% or 2/3 is actually from APAC and 30% is from Europe and only 6% is from the U.S. So that's the reason why the impact is very, very limited to us.

And as I also mentioned already, we see already some activity by a few countries and by a few clients within Asia, that they are aggressively looking for new opportunities to sell their markets rather within Asia than exporting into the U.S. or into North America. And obviously, we are going to benefit from that as well. So I think the biggest impact currently is really the uncertainty and the potential reduction of global GDP.

[Operator Instructions] Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to DKSH for any closing remarks.

Thank you, Valentina. And also thank you, everybody, for joining us virtually today. We really appreciate your time and engagement and already look forward to continuing the conversation with you in the second half of the year. So we wish you a great rest of the day and say goodbye. Thank you so much for joining.

Thank you very much and see most of you on the roadshow during the next couple of days. Bye-bye.

Thank you.