Half Year 2026 Novozymes AS Earnings Call

August 20, 2026

Operator: Ladies and gentlemen, welcome to the Novonesis H1 2026 conference call. I am Moritz, your conference call operator. I would like to remind you that all participants will be in a listen-only mode, and the conference is being recorded. The presentation will be followed by a question and answer session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Tobias Cornelius Björklund. Please go ahead, sir.

Speaker #2: Hello, ladies and gentlemen. Welcome to the Novonesis H1 2026 conference call. I'm Moritz Yakoros, your call operator. I would like to remind you that all participants will be in listen-only mode and that the conference is being recorded.

Speaker #2: The presentation will be followed by a question-and-answer session. You can register for questions at any time by pressing star and 1 on your telephone.

Speaker #2: For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Tobias Cornelius Bjorklund.

Speaker #2: Please go ahead, sir.

Speaker #3: Thank you very much, operator, and welcome, everyone, to the Novonesis conference call for the first half of 2026. As mentioned, my name is Tobias Bjorklund.

Tobias Cornelius Björklund: Thank you very much, operator, and welcome everyone to Novonesis conference call for the H1 of 2026. As mentioned, my name is Tobias Björklund. I am heading up investor relations here at Novonesis. In this call, our CEO, Ester Baiget, and our CFO, Rainer Lehmann, will review our performance as well as the outlook for 2026. The conference call will take around 50 minutes, including Q&A. Please change to the next slide. As usually, I would like to remind you that the information presented during the call is unaudited and that management may make forward-looking statements. These statements are based on current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in any forward-looking statement. With that, I now have the pleasure to hand you over to our CEO, Ester Baiget. Ester, please.

Tobias Cornelius Bjorklund: Thank you very much, operator, and welcome everyone to Novonesis conference call for the H1 of 2026. As mentioned, my name is Tobias Björklund. I am heading up investor relations here at Novonesis. In this call, our CEO, Ester Baiget, and our CFO, Rainer Lehmann, will review our performance as well as the outlook for 2026. The conference call will take around 50 minutes, including Q&A. Please change to the next slide. As usually, I would like to remind you that the information presented during the call is unaudited and that management may make forward-looking statements. These statements are based on current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in any forward-looking statement. With that, I now have the pleasure to hand you over to our CEO, Ester Baiget. Ester, please.

Speaker #3: I'm heading up Investor Relations here at Novonesis. In this call, our CEO, Ester Baiget, and our CFO, Rainer Lehmann, will review our performance as well as the outlook for 2026.

Speaker #3: The conference call will take around 50 minutes, including Q&A. Please change to the next slide. As usual, I would like to remind you that the information presented during the call is unaudited and that management may make forward-looking statements.

Speaker #3: These statements are based on current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in any forward-looking statement.

Speaker #3: With that, I now have the pleasure to hand you over to our CEO, Ester Baiget. Ester, please.

Speaker #4: Thank you. Thank you, Tobias. And welcome, everyone. Thank you for joining us this morning. We delivered a strong 8% organic sales growth in the first half of the year.

Ester Baiget: Thank you. Thank you, Tobias, and welcome everyone. Thank you for joining us this morning. We delivered a strong 8% organic sales growth in the H1 of the year. This includes a -1.5 percentage points from exiting certain countries. Price contributed close to 2 percentage points, and sales synergies contributed a good 1 percentage point. Growth was broad-based across all sales areas, and we achieved an adjusted EBITDA margin of 37.7%. Both developed and emerging markets grew 8% in the H1 of the year, with growth across all regions. We continue to deliver growth through innovation and stronger market presence with tailored solutions. We launched 11 new biosolutions, and we are on track of our full year expectation of more than 30.

Speaker #4: This includes a negative effect of around 1.5 percentage points from exiting certain countries. Price contributed close to 2 percentage points, and sales synergies contributed a good 1 percentage point.

Speaker #4: Growth was broad-based across all sales areas, and we achieved an adjusted EBITDA margin of 37.7%. Both developed and emerging markets grew 8% in the first half of the year.

Speaker #4: With growth across all regions, we continue to deliver growth through innovation and stronger market presence with tailored solutions. We launched 11 new buyer solutions, and we are on track to meet our full-year expectation of more than 30.

Speaker #4: These launches are responding to increasing needs for healthier products, higher yields, resilient and efficient production, as well as replacing chemicals across industries. We've now passed one year since closing the Fit Enzyme Alliance acquisition, and we are delivering well in line with the regional commitments.

Ester Baiget: These launches are responding to increasing needs for healthier products, higher yields, resilient and efficient production, as well as replacing chemicals across industries. We have now passed 1 year after closing the Feed Enzyme Alliance acquisition, and we are delivering well in line with original commitments. We continue to see increasing traction with customers around the globe through a direct, broader, and more integrated offering of enzymes and probiotics, positioning it as well to harbor the growth opportunities from the acquisition. Based on the strong results of the H1 and a good trajectory for the rest of the year, we are increasing our full year guidance to 7% to 8%. Growth is expected to be mainly volume driven, supported by a good 1 percentage point from each, from pricing and synergies. The outlook includes a close to 1 percentage point negative effect from exiting certain countries.

Speaker #4: We continue to see increasing traction with customers around the globe through a direct, broader, and more integrated offering of enzymes and probiotics. We are also positioning ourselves to capture the growth opportunities from the acquisition.

Speaker #4: Based on the strong results in the first half of the year and a good trajectory for the rest of the year, we are increasing our full-year guidance to 7% to 8%.

Speaker #4: Growth is expected to be mainly volume-driven, supported by a good 1 percentage point each from pricing and synergies. The outlook includes a close to 1 percentage point negative effect from exiting certain countries.

Speaker #4: With a stronger sales outlook, we now also expect the adjusted EBITDA margin to be at the higher end of the 37% to 38% range.

Ester Baiget: With a stronger sales outlook, we now also expect the adjusted EBITDA margin to be at the higher end of the 37% to 38% range. We announced earlier this month that we signed an agreement to acquire the remaining shares of MicroBioGen, where we have been a minority shareholder since 2013, strengthening our yeast capabilities. We continuously look at our capital allocation, and with the developments we are currently seeing, we initiate a multi-year share buyback program of a total of EUR 1 billion that we expect to finalize in 2029. With that, let us look at the divisional performance, starting with Food & Health Biosolutions. Could you please turn to slide number 4? Thank you. Food & Health Biosolutions delivered a strong organic sales growth of 9% in the H1 of 2026, including a negative impact from exiting certain countries of around 3 percentage points.

Speaker #4: We announced earlier this month that we signed an agreement to acquire the remaining shares of Microbiogen, where we have been a minority shareholder since 2013, strengthening our yeast capabilities.

Speaker #4: We continuously look at our capital allocation, and with the developments we are currently seeing, we are initiating a multi-year share buyback program of a total of $1 billion that we expect to finalize in 2029.

Speaker #4: And with that, let us look at the divisional performance, starting with Food & Health Buyer Solutions. Could you please turn to slide number 4?

Speaker #4: Thank you. Food and Health Biosolutions delivered strong organic sales growth of 9% in the first half of 2026, including a negative impact from exiting certain countries of around 3 percentage points.

Speaker #4: Pricing contributed close to 2 percentage points and synergies contributed a good 1 percentage point to growth. The adjusted EBITDA margin was 36.2%, slightly higher than last year.

Ester Baiget: Pricing contributed close to 2 percentage points, and synergies contributed a good 1 percentage point to growth. The adjusted EBITDA margin was 36.2%, slightly higher than last year. This was mainly driven by economies of scale and synergies, and partially offset by the ramp-up in commercial resources that we did over the course of 2025, product mix effects from HMO growth, and currency headwinds. in the Q2, organic sales growth was strong at 9%, including the negative impact of around 3 percentage points from exiting certain countries. The adjusted EBITDA margin improved by 160 basis points compared to the same quarter of last year, mainly driven by the sales leverage. During the quarter, we launched three new products in Food & Health, including an analytical data platform that enables producers to deliver yogurts with consistent fresh taste over the shelf life, accelerating the use of our bioprotective cultures.

Speaker #4: This was mainly driven by economies of scale and synergies, and partially offset by the ramp-up in commercial resources that we did over the course of 2025, product mix effects from HMO growth, and currency headwinds.

Speaker #4: Growth was strong at 9%, including the negative impact of around 3 percentage points from exiting certain countries. The adjusted EBITDA margin improved by 160 basis points compared to the same quarter last year, mainly driven by sales leverage.

Speaker #4: During the quarter, we launched three new products in food and health, including an analytical data platform that enables producers to deliver yogurts with consistent, fresh taste over the shelf life.

Speaker #4: Accelerating the use of our bioprotective cultures. For 2026, we expect the division to deliver organic sales growth around the higher end of the group range, driven by Food & Beverages.

Ester Baiget: For 2026, we expect the division to deliver organic sales growth around the higher end of the group range, driven by food and beverages. Could you please turn to slide number 5? Thank you. Food and beverages delivered strong sales growth of 11% in both the H1 and in the Q2. Pricing and sales synergies contributed positively, supported by cross-selling and increased commercial scale. Performance was supported by all industries, driven by market penetration and increasing adoption of innovation. Demand continues to be supported by the increasing pull for resilient and cost-efficient food production, clean label, and healthier products, all while delivering the right taste, the right texture profiles adapted to the local preferences around the world.

Speaker #4: Could you please turn to slide number 5? Thank you. Food and Beverages delivered strong sales growth of 11% in both the first half of the year and in the second quarter.

Speaker #4: Pricing and sales synergies contributed positively, supported by cross-selling and increased commercial scale. Performance was supported by all industries, driven by market penetration and increasing adoption of innovation.

Speaker #4: Demand continues to be supported by the increasing pull for resilient and cost-efficient food production, clean label, and healthier products—all while delivering the right taste and the right texture profiles, adapted to local preferences around the world.

Speaker #4: Momentum in dairy continued to be strong, driven by productivity gains, upselling, and customer adoption of innovation—including increasing demand for probiotics and high-protein products—all driven by health and GLP-1 trends.

Ester Baiget: Momentum in dairy continued to be strong, driven by productivity gains, upselling, and customer adoption of innovation, including increasing demand for probiotics and high-protein products, all driven by health and GLP-1 trends. This was further supported by solid growth in cheese, with good contribution from conversion to our DVS format. Growth was led by North America and emerging markets. The strong growth across baking, beverages, meat, and plant-based solutions was mainly driven by penetration and innovation. Our increased commercial presence and technology toolbox, combining cultures and enzymes, is positioning us well for an increasing reformulation activity and underpinning the strong growth we see in these segments. For 2026, a strong growth in food and beverages is expected to continue to be broad-based, supported by both synergies and pricing. Human health delivered sales of around growth of 4% both in the H1 of the year and in Q2.

Speaker #4: This was further supported by solid growth in cheese, with good contribution from conversion to our DBS format. Growth was led by North America and emerging markets.

Speaker #4: The strong growth across baking, beverages, meat, and plant-based solutions was mainly driven by penetration and innovation. Our increased commercial presence and technology toolbox, combining cultures and enzymes, is positioning us well for increasing reformulation activity and underpinning the strong growth we see in these segments.

Speaker #4: For 2026, strong growth in food and beverages is expected to continue to be broad-based, supported by both synergies and pricing. Human health delivers sales growth of around 4%, both in the first half of the year and in the second quarter.

Speaker #4: Both pricing and synergies contributed positively. Performance was driven by Advanced Health and Nutrition, supported by both Early-Life Nutrition and Advanced Protein Solutions. Growth in Early-Life Nutrition was led by HMO, with strong growth across the regions, including cross-border trade into China.

Ester Baiget: Both pricing and synergies contributed positively. Performance was driven by advanced health and nutrition, supported by both early life nutrition and advanced protein solutions. Growth in early life nutrition was led by HMO, with a strong growth across the regions, including cross-border trades into China. Advanced protein solutions grew alongside our anchor customer. Dietary supplements was impacted by a softening North American market, while the other markets contributed positively. We continue to see the resilience of the healthcare practitioner channel, a continued global pull for preventive health, and demand for innovation, both in traditional areas such as gut health and women's health, as well as new categories such as weight management and GLP-1 support. For 2026, excuse me, human health is expected to grow only slightly, supported by advanced health and nutrition led by HMO, while dietary supplements is impacted by a temporarily cautious North American market.

Speaker #4: Advanced Protein Solutions grew alongside our anchor customer. Dietary Supplements was impacted by a softening North American market, while the other markets contributed positively. We continue to see the resilience of the healthcare practitioner channel, a continued global pull for preventive health, and demand for innovation, both in traditional areas such as gut health and women's health, as well as in new categories such as weight management and GLP-1 support.

Speaker #4: For 2026—excuse me—human health is expected to grow only slightly, supported by advanced health and nutrition, led by HMO. Meanwhile, dietary supplements are impacted by a temporarily cautious North American market.

Speaker #4: Please turn to slide number 6. Planetary Health buyer solutions delivered organic sales growth of 7% in the first half of the year, and 9% in the second quarter.

Ester Baiget: Please turn to slide number 6. Planetary Health Biosolutions delivered organic sales growth of 7% in the H1 of the year and 9% in Q2. Pricing contributed close to 2 percentage points, and sales synergies contributed a good 1 percentage point. The adjusted EBITDA margin in the H1 of 2026 was 38.8%, up 40 basis points, driven by the Feed Enzyme Alliance acquisition and cost synergies. Margin improvements were partially offset by the ramp-up in commercial resources we did over the course of 2025 and currency headwinds. In Q2, the adjusted EBITDA margin was 38.2%, an increase of 80 basis points compared to Q2 of 2025. In Q2, we launched four new solutions in Planetary Health. Household care, we launched a multi-enzyme blend for laundry detergents to provide higher performance and stability in various formulations.

Speaker #4: Pricing contributed close to 2 percentage points, and sales synergies contributed a good 1 percentage point. The adjusted EBITDA margin in the first half of 2026 was 38.8%, up 40 basis points, driven by the Feed Enzyme Alliance acquisition and cost synergies.

Speaker #4: Margin improvements were partially offset by the ramp-up in commercial resources we did over the course of 2025 and currency headwinds. In the second quarter, the adjusted EBITDA margin was 38.2%, an increase of 80 basis points compared to the start of 2025.

Speaker #4: In the second quarter, we launched four new solutions in Planetary. For Coastal Care, we launched a multi-enzyme blend for laundry detergents to provide higher performance and stability in various formulations.

Speaker #4: In Animal, we introduced a triple-strain probiotic solution, improving the health of piglets and feed efficiency. For 2026, we expect the division to deliver organic sales growth around the lower end of the group range, supported by both Household Care and Agricultural, Energy & Tech.

Ester Baiget: In animal, we introduced a triple-strain probiotic solution, improving the health of piglets and feed efficiency. For 2026, we expect the division to deliver organic sales growth around the lower end of the group range, supported by both household care and agricultural, energy, and tech. Please turn to slide number 7. Thank you. Household care delivered organic sales growth of 8% in the H1 of the year and 12% in Q2. Growth was broad-based and mainly volume driven, supported by pricing. Performance was driven by increased market penetration with a strong traction among local and regional customers by the adoption of innovation across laundry and dish, as well as other categories such as professional cleaning. In Q2, growth was driven by the same factors as those in the H1, with particularly strong performance in emerging markets. Also, keeping in mind a relatively lower comparable.

Speaker #4: Please turn to slide number 7. Thank you. Household Care delivered organic sales growth of 8% in the first half of the year and 12% in the second quarter.

Speaker #4: Growth was broad-based and mainly volume-driven, supported by pricing. Performance was driven by increased market penetration with strong traction among local and regional customers, by the adoption of innovation across laundry and dish, as well as other categories such as professional cleaning.

Speaker #4: In the second quarter, growth was driven by the same factors as those in the first half, with particularly strong performance in emerging markets, also keeping in mind a relatively lower comparable.

Speaker #4: For 2026, we expect solid performance in household care, driven by continued innovation, increased penetration in both developed and emerging markets, and continued support from pricing.

Ester Baiget: For 2026, we expect solid performance in Household Care, driven by continued innovation, increased penetration in both developed and emerging markets, and continued support from pricing. Agriculture, Energy, and Tech delivered organic sales growth of 6% in H1 of the year and 7% in the quarter. Growth in H1 was driven by double-digit growth in Energy and supported by Agricultural. Both synergies and pricing also contributed to growth. Strong growth in Energy was driven by Latin America and Asia Pacific, particularly India, reflecting continued growth in corn ethanol production. North America also delivered strong growth through increased adoption of innovation and supported by higher ethanol production volumes driven by accelerating exports. This reflects a higher global demand for biofuels driven by increasing need for energy security and supply stability.

Speaker #4: Agriculture, Energy, and Tech delivered organic sales growth of 6% in the first half of the year and 7% in the quarter. Growth in the first half was driven by double-digit growth in Energy and supported by Agriculture. Both synergies and pricing also contributed to growth.

Speaker #4: Strong growth in Energy was driven by Latin America and Asia-Pacific, particularly India, reflecting continued growth in corn ethanol production. North America also delivered strong growth through increased adoption of innovation and was supported by higher ethanol production volumes driven by accelerating exports.

Speaker #4: This reflects a higher global demand for biofuels, driven by the increasing need for energy security and supply stability. Additionally, increased penetration of biodiesel solutions and the ramp-up of second-generation ethanol production contributed to the strong growth.

Ester Baiget: Additionally, increased penetration of biodiesel solutions and the ramp-up of second-generation ethanol production contributed to the strong growth. Growth in Agricultural was driven by Animal, partially to an inventory build-up at a key customer in Q1, as well as solid underlying performance in Animal. Plant declined, impacted by weak US farm economics. Tech declined in H1 of the year, driven by order timing in biopharma and a softer grain processing end market. In Q2, the performance was driven by double-digit growth in Energy due to the same factors as the one in H1 of the year, but boosted also by increasing global demand in biofuels. In Agricultural, performance in Animal was in line with expectations and did not include any inventory build-up, while Plant was negatively impacted by weak US farm economics.

Speaker #4: Growth in Agricultural was driven by Animal, partially due to an inventory build-up at the key customer in the first quarter, as well as solid underlying performance in Animal.

Speaker #4: Plant decline impacted by weak U.S. farm economics. Tech decline in the first half of the year was driven by order timing in biopharma and a softer grain processing market.

Speaker #4: In the second quarter, the performance was driven by double-digit growth in Energy due to the same factors as in the first half of the year, but also boosted by increasing global demand in biofuels.

Speaker #4: In Agriculture, performance in Animal was in line with expectations and did not include any inventory build-up, while Plant was negatively impacted by weak US farm economics.

Speaker #4: Tech was driven by growth in biopharma processing aids, while the soft gain in grain processing and market impacted negatively. For 2026, growth in agricultural, energy, and tech is expected across all industries, led by energy and agricultural, and supported by synergies and pricing.

Ester Baiget: Tech was driven by growth in biopharma processing aids, while the soft grain processing end market impacted negatively. For 2026, growth in Agricultural, Energy, and Tech is expected across all industries, led by Energy and Agricultural, and supported by synergies and pricing. Now let me hand over to Rainer for a review on the financials and the outlook of 2026. Rainer, please.

Speaker #4: And now, let me hand over to Rainer for a review of the financials and the outlook for 2026. Rainer, please.

Speaker #1: Thank you, Esther. And good morning, everyone, and welcome to today's call from my side as well. Let's turn to slide 8. In the first half of the year, sales grew by a strong 8% organically and 7% in reported euros.

Rainer Lehmann: Thank you, Ester, and good morning, everyone, and welcome to today's call from my side as well. Let's turn to slide 8. In H1 of the year, sales grew by a strong 8% organically and 7% in reported EUR. Pricing and synergies contributed close to 2 percentage points and a good 1 percentage point, respectively. Currencies provided 4 percentage points headwind, while M&A contributed positively with 3 percentage points related to the Feed Enzyme Alliance acquisition. The organic sales growth included around 1.5 percentage point negative effect from exiting certain countries. In Q2, sales grew by 9% organically and by 10% in reported EUR. Pricing contributed here around 2 percentage points, and synergies contributed a good percentage point. Currencies provided 1 percentage point headwind while M&A contributed positively with 2 percentage points.

Speaker #1: Pricing and synergies contributed close to 2 percentage points and a good 1 percentage point, respectively. Currencies provided a 4 percentage point headwind, while M&A contributed positively with 3 percentage points, related to the feed enzyme alliance acquisition.

Speaker #1: The organic sales growth included around a 1.5 percentage point negative effect from exiting certain countries. In the second quarter, sales grew by 9% organically and by 10% in reported euro.

Speaker #1: Pricing contributed around 2 percentage points, and synergies contributed a good percentage point. Currencies provided a 1 percentage point headwind, while M&A contributed positively with 2 percentage points.

Speaker #1: The organic sales growth included around a 1.5 percentage point effect from exiting certain countries. The adjusted gross margin was 59.7%, an improvement of 100 basis points compared to H1 of last year.

Rainer Lehmann: The organic sales growth included around 1.5 percentage point effect from exiting certain countries. The adjusted gross margin was 59.7%, an improvement of 100 basis points compared to H1 of last year. Pricing, productivity improvements, sales leverage, and the Feed Enzyme Alliance acquisition supported the development, partly offset by product mix related to HMO growth. Total operating expenses adjusted for PPA-related depreciation amortization were 29.1% of sales, compared to 28.4% in the H1 of last year. The development was mainly driven by the increase of resources over the course of 2025 from both organic expansion and the Feed Enzyme Alliance acquisition. The adjusted EBITDA margin in H1 was 37.7%, compared to 37.4% last year, mainly driven by the higher gross margin and cost synergies. This was partly offset by higher operating expenses and currency headwinds.

Speaker #1: Pricing, productivity improvements, sales leverage, and the feed enzyme alliance acquisition supported the development, partly offset by product mix related to HMO growth. Total operating expenses, adjusted for PPA-related depreciation and amortization, were 29.1% of sales compared to 28.4% in the first half of last year.

Speaker #1: The development was mainly driven by the increase in resources over the course of 2025, from both organic expansion and the feed enzyme alliance acquisition.

Speaker #1: The adjusted EBITDA margin in H1 was 37.7%, compared to 37.4% last year, mainly driven by the higher gross margin and cost synergies. This was partly offset by higher operating expenses and currency headwinds.

Speaker #1: The inventory build-up at the key customer and in animal in Q1 had a minor positive impact on the margin. Adjusted earnings per share, excluding PPA amortization, increased 9% year over year to €1.09.

Rainer Lehmann: The inventory built up at a key customer in Animal in Q1 had a minor positive impact on the margin. Adjusted earnings per share, excluding PPA amortization, increased 9% year over year to EUR 1.09. Operating cash flow was EUR 523.3 million in the H1 of the year, representing an increase of 23% year on year. This was mainly driven by higher net profits despite higher depreciation and amortization. CapEx in H1 amounted to EUR 216.2 million, equal to 9.7% of sales. Free cash flow before acquisitions was flat year over year at EUR 307.6 million. The development was driven by higher operating cash flow offset by the expected higher investment level. The board of directors of Novonesis has approved an interim dividend of DKK 2.35 per share for the H1 of 2026.

Speaker #1: Operating cash flow was €523.3 million in the first half of the year, representing an increase of 23% year on year. This was mainly driven by higher net profit, despite higher depreciation and amortization.

Speaker #1: Capex in H1 amounted to €216.2 million, equal to 9.7% of sales. Free cash flow before acquisitions was flat year over year at €307.6 million.

Speaker #1: Development was driven by higher operating cash flow, offset by the expected higher investment level. The Board of Directors of Novonesis has approved an interim dividend of DKK 2.35 per share for the first half of 2026.

Speaker #1: The dividend will be disbursed on August 27, 2026, with August 24, 2026, as the last trading day with dividend. With this, let us now turn to slide number 9 to talk about the 2026 outlook.

Rainer Lehmann: The dividend will be dispersed on 27 August 2026, with 24 August 2026 as the last trading day with dividend. With this, let us now turn to slide 9 to talk about the 2026 outlook. Please note that the outlook presented today is based on the current level of global trade tariffs and the prevailing foreign exchange environment. As Ester said earlier, based on the strong results in the H1 of the year and the strong momentum and demand we see for our solutions, we are increasing the outlook for organic sales growth to 7% to 8%. This includes a negative effect of close to one percentage point from exiting certain countries and a softer H2 in human health. Growth is expected to be mainly volume driven, supported by a good one percentage point each from both sales synergies and pricing across both divisions.

Speaker #1: Please note that the outlook presented today is based on the current level of global trade tariffs and the prevailing foreign exchange environment. As Ester said earlier, based on the strong results in the first half of the year, and the strong momentum and demand we see for our solutions, we are increasing the outlook for organic sales growth to 7 to 8 percent.

Speaker #1: This includes a negative effect of close to one percentage point from exiting certain countries, and a softer second half in human health. Growth is expected to be mainly volume-driven, supported by a good one percentage point each from both sales synergies and pricing across both divisions.

Speaker #1: The second-half organic sales growth will also be impacted by the reimbursement of U.S. tariffs to customers. This will only have a minor negative effect and is included in the full-year outlook.

Rainer Lehmann: H2 organic sales growth will also be impacted by the reimbursement of US tariffs to customers. This will only have a minor negative effect and is included in the full year outlook. As we previously talked about, the Q1, and therefore also the H1, benefited from an inventory build-up at a key customer in the animal business. For the full year, this effect will be neutral. In addition, please keep in mind that in the Q3, we will be facing high comparables. We expect the adjusted EBITDA margin to be at the higher end of the range of 37% to 38%, following the increased sales expectations. Compared to last year, the improvement is expected to be driven by a stronger gross margin, the Feed Enzyme Alliance acquisition, and synergies partly offset by currency headwinds and slightly higher input costs.

Speaker #1: As we previously talked about, the first quarter, and therefore also the first half, benefited from an inventory build-up at a key customer in the animal business.

Speaker #1: For the full year, this effect will be neutral. In addition, please keep in mind that in the third quarter, we will be facing high comparables.

Speaker #1: We expect the adjusted EBITDA margin to be at the higher end of the range of 37 to 38 percent, following the increased sales expectations.

Speaker #1: Compared to last year, the improvement is expected to be driven by a stronger gross margin, the Feed Enzyme Alliance acquisition, and synergies, partly offset by currency headwinds and slightly higher input costs.

Speaker #1: Net debt to EBITDA ratio is expected to be around 1.8 times at year-end, supported by strong cash generation and continued deleveraging. This is despite the increased capex level and the acquisition we announced earlier this month, where we have signed an agreement to acquire the remaining 77% of the shares in Microbiogen.

Rainer Lehmann: Net debt to EBITDA ratio is expected to be around 1.8x at year-end, supported by strong cash generation and continued deleveraging. Despite the increased CapEx level and the acquisition we announced earlier this month, where we have signed an agreement to acquire the remaining 77% of the shares in MicroBioGen. We have been a minority shareholder since 2013, and this is a good example of a bolt-on technology acquisition that expands our technology footprint, in this case, building and expanding our yeast capabilities. As previously communicated, our temporary step up in CapEx means that in 2026, CapEx is expected to be between 12% to 14% of sales. On a different note, starting in 2027, sales trading updates will replace the current format of the interim announcements for Q1 and Q3.

Speaker #1: We have been a minority shareholder since 2013, and this is a good example of a bolt-on technology acquisition that expands our technology footprint—in this case, building and expanding our use capabilities.

Speaker #1: As previously communicated, our temporary step-up in capex means that, in 2026, capex is expected to be between 12% to 14% of sales. On a different note, starting in 2027, sales trading updates will replace the current format of the interim announcements for Q1 and Q3.

Speaker #1: We have delivered strong results in the first half of the year, and we are seeing good momentum and strong demand for our biosolutions. To continue this journey, we are deploying our capital where it creates the most value, according to our capital allocation principles.

Rainer Lehmann: We have delivered strong results in the H1 of the year, and we are seeing good momentum and strong demand for our biosolutions. To continue this journey, we are deploying our capital where it creates most value according to our capital allocation principles. Please turn to the next slide for a quick look at how we see this developing. Our number one capital allocation priority is to reinvest in organic growth through innovation, people, and capacity, as this is where we see the greatest return on invested capital. We continue to deploy capital innovation and commercial reach, while at the same time staying disciplined on cost. An example of this is the more than 400 commercial roles we added last year to support future growth.

Speaker #1: Please turn to the next slide for a quick look at how we see this developing. Our number one capital allocation priority is to reinvest in organic growth through innovation, people, and capacity.

Speaker #1: As this is where we see the greatest return on invested capital, we continue to deploy capital into innovation and commercial reach, while at the same time staying disciplined on cost.

Speaker #1: An example of this is the more than 400 commercial roles we added last year to support future growth. In addition, and as previously communicated, we’re making a temporary step-up in capex to build the capacity, flexibility, and resilience needed toward 2030 and beyond.

Rainer Lehmann: In addition, as previously communicated, we are making a temporary step up in CapEx to build the capacity, flexibility, and resilience needed towards 2030 and beyond. By 2030, we expect CapEx as a percentage of sales to normalize to a high single-digit level. These dedicated investments include significant expansions of our US culture capacity, a new large-scale multipurpose enzyme facility in emerging markets, which we expect to initiate soon, expanding the new facility in Thailand for HMO, and a new ERP system that allows us to scale and gain efficiencies. We see an attractive return profile on these growth investments. This is contributing to our target of doubling the adjusted return on invested capital, excluding goodwill, to 16% by 2030.

Speaker #1: By 2030, we expect capex as a percentage of sales to normalize to a high single-digit level. These dedicated investments include significant expansions of our US culture capacity, a new large-scale multipurpose enzyme facility in emerging markets—which we expect to initiate soon—expanding the new facility in Thailand for HMO, and a new ERP system that allows us to scale and gain efficiencies.

Speaker #1: We see an attractive return profile on these growth investments. This is contributing to our target of doubling the adjusted return on invested capital, excluding goodwill, to 16% by 2030.

Speaker #1: If we exclude the merger-related PPA and goodwill, as mentioned in the strategy update last year, the underlying return on invested capital was around 20 percent in 2024, with a positive trend towards 2030.

Rainer Lehmann: If we exclude the merger-related PPA and goodwill, as mentioned in the strategy update last year, the underlying return on invested capital was around 20% in 2024, with a positive trend towards 2030. Next, we continue to look for complementary bolt-on M&A. The acquisition of MicroBioGen mentioned earlier is a perfect example of such a bolt-on technology acquisition. As we are entering our target leverage range, we are now also in a position to return excess cash to our shareholders. Therefore, we announced inaugural share buyback program in the total amount of EUR 1 billion, which we expect to be finalized by 2029, while giving us room to continue to deleverage. With this step, we clearly show our commitment to all three building blocks of our capital allocation principles. With that, I will now hand over to Ester for a wrap-up. Ester?

Speaker #1: Next, we continue to look for complementary bolt-on M&A. The acquisition of Microbiogen mentioned earlier is a perfect example of such a bolt-on technology acquisition.

Speaker #1: As we're entering our target leverage range, we are now also in a position to return excess cash to our shareholders. Therefore, we announced an inaugural share buyback program in the total amount of €1 billion, which we expect to be finalized by 2029, while giving us room to continue to deleverage.

Speaker #1: With this step, we clearly show our commitment to all three building blocks of our capital allocation principles. With that, I will now hand over to Ester for a wrap-up.

Speaker #1: Esther?

Speaker #2: Thank you very much, Rainer. Could you please turn to slide number 11? Thank you. Let me summarize our message today. We continue to deliver strong results with positive momentum across all sales areas and in both developed and emerging markets.

Ester Baiget: Thank you, Mike. Rainer, could you please turn to slide number 11? Thank you. Let me summarize our message today. We continue to deliver strong results with positive momentum across all sales areas and in both developed and emerging markets, also driving a strong profitability and cash flow. Our sustained performance quarter after quarter underlines the growing need for biosolutions, underlines the strength of our offering, and the resilience of our broad market reach. On this basis, we have raised the full-year outlook. Overall, we are delivering on our promises of today, while also positioning the business for sustainable value creation ahead. With that, we are eager and are ready to open the call for Q&A. Operator, please.

Speaker #2: Also driving strong profitability and cash flow. Our sustained performance, quarter after quarter, underlines the growing need for biosolutions. It underlines the strength of our offering and the resilience of our broad market reach.

Speaker #2: And on this basis, we have raised the full-year outlook. Overall, we are delivering on our promises of today, while also positioning the business for sustainable value creation ahead.

Speaker #2: And with that, we are eager and ready to open the call for Q&A. Operator, please.

Speaker #3: Ladies and gentlemen, we will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their telephone.

Operator: Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to disable the loudspeaker mode while asking a question. Anyone who has a question may press star and one at this time. One moment for the first question, please. The first question comes from Thomas Lind Petersen from Nordea. Please go ahead.

Speaker #3: You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two.

Speaker #3: Questioners on the phone are requested to disable the loudspeaker mode while asking a question. Anyone who has a question may press star and one at this time.

Speaker #3: One moment for the first question, please. The first question comes from Thomas Lind Peterson from Nordea. Please go ahead.

Speaker #1: Hi, good morning. Esther, good morning. Rainer, good morning. Good morning, everyone. Congratulations on the strong results. So, two questions from my side, please. The first one is regarding the guidance and the second half assumptions.

Thomas Lind Petersen: Hi. Good morning, Ester. Good morning, Rainer. Good morning, everyone. Congratulations on the strong results. Two questions from my side, please. The first one is regarding the guidance and the H2 assumptions. You have delivered a strong 8% organic growth in H1. You raised the full year range to 7% to 8%. Sorry for being greedy here, but what specifically prevents the H2 growth from remaining around the H1 level or accelerating? You touched a bit upon the tough comps, but you also have the exit of Russia coming out. Just where is the greatest conservatism in your new guidance here? That would be the first question. The second question is regarding energy and E15.

Speaker #1: You delivered a strong 8 percent organic growth in the first half. You raised the full-year range to 7 to 8 percent. And sorry for being greedy here, but what specifically prevents the second half's growth from remaining around the first half level or accelerating?

Speaker #1: You touched a bit upon the TOFCOMs, but you also have Russia—the exit of Russia—coming out. So, just where is the greatest conservatism in your new guidance here?

Speaker #1: That would be the first question. And then the second question is regarding energy and E15. And I know you cannot say whether it will go through, but what are customers currently assuming regarding year-round E15 in the US?

Thomas Lind Petersen: I know you cannot say whether it will go through, but what are the customers currently assuming regarding year-round E15 in the US, and has the probability or timing of approval changed your commercial planning or capacity decisions here? That would be my questions. Thank you.

Speaker #1: And has the probability or timing of approval changed your commercial planning or capacity decisions here? That would be my question. Thank you.

Speaker #2: Thank you. Thank you, Thomas, for your questions. Let me start with the first one, pass it to Rainer, and then cover the E15 question afterwards.

Ester Baiget: Thank you, Thomas, for your questions. Let me start with the first one, pass it to Rainer, and then cover the E15 question afterwards. I will let Rainer bring the specifics of the drivers, particularly in the H2. Let me put a little bit of color of how we see where we stand. We are in a good place, in a very good place. It has been a quarter after quarter that we have been delivering solid performance. We have delivered 8% in the H1, and with that strong 8% and the good momentum year to date, including the momentum we are seeing in Q3, including our read of the market and the continuous pull of the underlying demand of the solutions that we bring in, that puts us in a very good place to upgrade our guidance to 7% to 8%.

Speaker #2: I'll let Rainer bring the specifics of the drivers, particularly on the second half. But let me put a little bit of color on how we see where we stand.

Speaker #2: We are in a good place, in a very good place. It's been quarter after quarter that we have been delivering solid performance. We delivered 8% in the first half.

Speaker #2: And with that strong 8 percent and the good momentum year to date, including the momentum we’re seeing in Q3, and including our reach of the market and the continuous pull of the underlying demand for the solutions that we bring in, that puts us in a very good place to upgrade our guidance to 7 to 8.

Speaker #2: And with that, also comes aiming for the high end of profitability and a strong position on cash flow. And Rainer, I'll pass it to you.

Ester Baiget: With that also comes aiming to the high end of the profitability and also the strong position on cash flow. Rainer, I will pass it to you for the-

Speaker #1: Yes. So, Thomas, let me give you some color on what actually impacts a little bit the H2 growth rate. Well, as I said, we're really still having strong momentum.

Rainer Lehmann: Yes. Thomas, let me give you some color on what actually impacts a little bit the H2 growth rate, while, as I said, really having still strong momentum. First of all, we have that one-time effect in Q1 about the inventory buildup in animal or at one of our customer site. That was a one-off. Of course, we said for the full year, this is going to be neutral. That means that, of course, this stems the H2 in this regard. Then, we also have the tariffs, basically, that we got partially reimbursed and also partially are giving back to the customers. That, of course, has also impact on the H2 sales growth. In addition, we also flagged that human health will only have a slight growth. That means that we also see here an impact on the H2 growth rate.

Speaker #1: So, first of all, we have that one-time effect in Q1 about the inventory build-up in Animal at one of our customers' sites. So, there was a one-off.

Speaker #1: Of course, we said that for the full year, this is going to be neutral. That means, of course, this stems from the second half in this regard.

Speaker #1: Then we also have the tariffs, basically, that we got partially reimbursed and also are partially giving back to the customers. That, of course, also has an impact on the second half.

Speaker #1: Sales growth. And in addition, we also flagged that Human Health will only have slight growth. So that means that we also see here an impact on the second half growth rate.

Speaker #1: And all of that together, you're pretty much there where you thought you expected us to be. And these are basically the main drivers for that softening.

Rainer Lehmann: All of that together, you are pretty much there where you expected us to be, and these are basically the main drivers for that softening. In quotations marks, "softening," I would say.

Speaker #1: In quotation marks, softening, I would say.

Speaker #2: Yeah, strong underlying overall and in a really good place, as Rainer mentioned. And then let me build back on your question on E15. It is true, what you mentioned, that we don't predict the future.

Ester Baiget: Yeah. Strong underlying overall and in a really good place, as Rainer mentioned. Let me build back on your question on E15. It is true what you mentioned, that we do not predict the future. It is true that it passed the House and likely the hearing on the Senate this fall. It has never been that far, but it also, we have seen it evolving and then going backwards in the past. What I can tell you is that is not part of what we have in our growth projections. It is not included on the long-term financial plan. The drivers of the growth that we are seeing, it is driven by innovation, by penetration, and by the intimate relationship with our customers. The growth in bioenergy is broad-based. Yes, North America is strong, and we see also now an increasing pool of demand in North America for exports into Southeast Asia.

Speaker #2: It is true that it passed the House and is likely to have a hearing in the Senate this fall. It's never been that far, but we've also seen it evolving and then going backwards in the past.

Speaker #2: What I can tell you is that's not part of what we have in our growth projections. It's not included in the long-term financial plan.

Speaker #2: And the drivers of the growth that we're seeing—it's driven by innovation, by penetration, and by the intimate relationship with our customers. And the growth in bioenergy is broad-based.

Speaker #2: Yes, North America is strong. And we see also now an increasing pull of demand in North America for exports into Southeast Asia. But we also see good momentum in other areas, like Brazil moving from E15 to E30 in August.

Ester Baiget: We also see good momentum in other areas, like Brazil move from E15 to E30 in August, and now they are starting a trial of E32 for close to 180 days. We also see India moving in the right direction or increasing the blend rate and speaking even building a path for E100. We see countries in Southeast Asia talking about increasing blend dates, not only for biofuels, but also for bioethanol, also for biodiesel. Overall, extraordinary pool that we see increasing with countries embracing bolder. The de-risking and de-leveraging of energy, not only from a climate perspective, but also from a national security, geopolitical stability, and to drive local jobs. Wrapping it up, we are not making our long-term projections based on regulation, based on what we have today. It is not in the plan.

Speaker #2: And now they're starting a trial of E32 for 100 and close to 180 days. We also see India moving in the right direction, increasing the blend, and even putting a path for E100.

Speaker #2: We see countries in Southeast Asia talking about increasing blends, not only for biofuels, but also for bioethanol and biodiesel. So, overall, there's an extraordinary pull that we see increasing with countries embracing bolder measures.

Speaker #2: The de-risking and de-leveraging of energy, not only from a climate perspective, but also from a national security, geopolitical stability, and to drive local jobs.

Speaker #2: Wrapping it up, we're not making our long-term projections based on regulation—based on what we have today. It's not in the plan, but we are present and sitting at the table, having the right conversations with our customers and ready to capitalize on the momentum when it happens.

Ester Baiget: We are present and sitting at the table, having the right conversations with our customers, and ready to capitalize on the momentum when it happens.

Speaker #1: Thank you. And the next question comes from Alex Sloane from Barclays. Please go ahead.

Rainer Lehmann: Thank you.

Thomas Lind Petersen: Thank you.

Operator: The next question comes from Alex Sloane from Barclays. Please go ahead.

Speaker #3: Yeah. Hi, morning, all. Thanks for taking the questions. Two also from my side, please. First one, just on the Food & Beverage division. Obviously, another exceptional underlying quarter.

Alex Sloane: Yeah. Hi. Morning, all. Thanks for taking the questions. Two also from my side, please. The first one, just on the food and beverage division, obviously another exceptional underlying quarter, but what really stood out, I guess, is its broad base. Last year, I guess a lot of the conversation centered around dairy. This quarter, you are talking about strength in baking, beverages, meat, plant-based. Many of those end markets are not really growing as quickly as dairy. Could you give a bit more color on maybe what specific Novonesis solutions are gaining traction and driving that outperformance? Is it sustainable into the H2, please? The second one, just on the buyback.

Speaker #3: But what really kind of stood out, I guess, is its broad base. Last year, I guess a lot of the conversation centered around dairy.

Speaker #3: This quarter, you're talking about strength in baking, beverages, meat, and plant-based. Many of those end markets are not really growing as quickly as dairy, so could you give a bit more color on maybe what specific Novonesis solutions are gaining traction and driving that outperformance?

Speaker #3: And is it sustainable into the second half, please? And then the second one, just on the buyback. I guess, should investors sort of interpret the announcement on the buyback at this stage as kind of a signal that the current period of elevated capital intensity is temporary, and that you have maybe growing confidence that the returns on that capex are coming through or will come through?

Alex Sloane: I guess should investors sort of interpret the announcement on the buyback at this stage as a signal that the current period of elevated capital intensity is temporary and that you have maybe growing confidence that the returns on that CapEx are coming through, or will come through? Is it fair to assume that this level of buyback still leaves scope for deleverage and bolt-on M&A? Maybe on that latter point, can you give a bit more context on what the MicroBioGen bolt-on deal that you announced earlier this month actually provides you with full ownership? Thank you.

Speaker #3: And is it fair to assume that this level of buyback still leaves scope for de-leveraging and bolt-on M&A? And maybe on that latter point…

Speaker #3: Can you give a bit more context on what the Microbiogen bolt-on deal that you announced earlier this month actually provides you, with full ownership?

Speaker #3: Thank you.

Speaker #2: Thank you, Alex. I'll answer your first question and then pass it to Rainer on share buyback. You summarized it beautifully in your question. Yes, it is broad-based.

Ester Baiget: Thank you, Alex. I will answer your first question and then pass it to Rainer on share buyback. You summarized it beautifully in your question. Yes, it is broad-based. Yes, it is here to stay. Yes, it is underlying. Yes, it is the outcome of a lot of self-help. We are collecting the fruits of investments we have made in the past, and we are also collecting the fruits of the combination and having an extraordinarily strong portfolio on enzymes, cultures, all together under one roof. We could go into many details one by one, but maybe there is two underlying drivers of why that pool is very strong. Our solutions, biosolutions, they enable lower cost, higher productivity, savings, higher yields, and differentiated claims. Cleaner label, healthier foods, higher protein.

Speaker #2: Yes, it's here to stay. Yes, it's underlying. And yes, it is the outcome of a lot of self-help. And we're collecting the fruits of investments we've made in the past.

Speaker #2: And we're also collecting the fruits of the combination and having a extraordinary strong portfolio on enzymes, cultures, all together under one roof. There is we could go into many details in one by one, but maybe there is an underlying drive, two underlying drivers of why that pull is very strong.

Speaker #2: Our solutions, biosolutions, they enable lower cost, higher productivity, savings, higher yields, and differentiated claims. Cleaner label, healthier foods, higher protein. And the demand and the pull for those ones has never been that strong.

Ester Baiget: The demand and the pull for those ones has never been that strong, and we are the company who is best positioned to make it happen. We have a global market reach. We are investing 10% of our revenue in innovation. We are investing in CapEx. We give a lot of comfort to our customers that we are the partner for growth. When you put that together, GLP-1 trends, nutritional increasing needs, looking, seeking for healthier products, increasing productivity in the way that foods are produced, and our offering, and the deep customer intimacy, that translates into growth. We feel we are in a very good place. We like the 9%, we see the underlying drivers, and we are very comfortable on the future ahead.

Speaker #2: And we are the company best positioned to make it happen. We have global market reach. We invest 10% of our revenue in innovation.

Speaker #2: We invest in our capex. We give a lot of comfort to our customers that we are the partner for growth. And when you put that together—GLP-1 trends, nutritional increasing needs, looking and seeking for healthier products, increasing productivity in the way that foods are produced, and our offering and the deep customer intimacy—that translates into growth.

Speaker #2: We are in a very good place. We like the 9%. We see the underlying drivers, and we're very comfortable with the future ahead.

Speaker #1: Good. And Alex, on the share buyback program—basically, yeah, I can only agree with what you said, right? It's—we've pointed out, or I’ve pointed out, several times that the elevated capex is temporary, right?

Rainer Lehmann: Well, Alex, on the share buyback program, basically, yes, I can only agree to what you said. We pointed out, or I pointed out several times, that the elevated CapEx is temporary. That is really the next 2 years, and that by 2030, we are going to go into high single digits then gradually. So you can see that also, the share buybacks commitment as another confirmation of that step. Yes, you are absolutely right. Of course, we see good returns. These are capacity investments, and with our margins, of course, you see also then the high returns on these investments. The share buyback program will still leave room to deleverage. We expect the end of the year, I said 1.8, so we are probably going to diverge down to 1.7. Do we have to reach exactly the 1.5?

Speaker #1: It's really the next two years, and then by 2030 we're going to high single digits, then gradually. So, you can see that also, the share buyback commitment is another confirmation of that step.

Speaker #1: And yes, you're absolutely right. Of course, we see good returns. These are capacity investments, and with our margins, of course you also see the high returns on these investments.

Speaker #1: It will. The share buyback program will still leave room to de-leverage, right? And we expect, at the end of the year—I said 1.8—so we're probably going to de-leverage down to 1.7.

Speaker #1: Do we have to reach exactly the 1.5? We always said around 1.5, so therefore that leaves us room in this regard. And it still leaves us room for bolt-on M&As.

Rainer Lehmann: We always said around 1.5, so therefore, that leaves us room in this regard, and it still leaves us room for bolt-on M&As. Absolutely. That is important because that is our second capital allocation principle, and bolt-on here is basically in the volume of what, 100 to 200 million, around there. So that should give comfort, basically, into our capital allocation principles and also that we are true to what we said. Once we see the deleveraging and mention that we are coming now into this target corridor, that we are then ramping up. Ramping up is also the keyword here for the share buyback program. From today's perspective, definitely more loaded towards the H2 than the H1, because there we still have the higher CapEx.

Speaker #1: Absolutely. It is important because that's our second capital allocation principle. And bolt-on here is basically in the volume of, what, $100 to $200 million—around there.

Speaker #1: So that should give comfort, basically, in our capital allocation principles and also that we are true to what we said, right? Once we see that de-leveraging—and we mentioned that we're coming now into this target corridor—we are then ramping up, and 'ramping up' is also the keyword here for the share buyback program.

Speaker #1: It will, how it looks from today's perspective, definitely be more loaded towards the second half than the first half, because there we still have the higher capex.

Speaker #2: On microbiogen, do you want to comment there also?

Ester Baiget: The MicroBioGen, do you want to comment there also, Rainer?

Speaker #1: Microbiogen. So, on the financial impact here, basically, it's a vertical integration at the end of the day on the biofuel. We're acquiring great capabilities in that space.

Rainer Lehmann: MicroBioGen, on the financial impact here, it is a vertical integration at the end of the day. On the biofuel, we are acquiring great capabilities in that space, and it is going to be, at the end of the day, slightly accretive to the margin.

Speaker #1: And it's going to be, at the end of the day, slightly accretive to the margin.

Speaker #2: And yes, a full ownership.

Ester Baiget: Yes, a full ownership.

Speaker #1: Yeah, yeah. Of course, full ownership. But we said that, right? We're acquiring 77%. So we then have full ownership. We currently have 23%.

Rainer Lehmann: Yeah, of course, full ownership, but we said that. We are acquiring 77%, so we have then full ownership. We currently have 23%.

Speaker #3: Thank you.

Alex Sloane: Thank you.

Speaker #4: The next question comes from Sebastian Bray from Berenberg. Please go ahead.

Operator: Then the next question comes from Sebastian Bray from Berenberg. Please go ahead.

Speaker #5: Hello. Good morning. And thank you for taking my question. So I have two pleas. The first is on the household care. A lot of the arguments for why the sales have grown so nicely are pretty similar to what they were in previous quarters, higher investment, better penetration, but the organic sales growth was not 12%.

Sebastian Bray: Hello, good morning, and thank you for taking my questions. I have two, please. The first is on the household care. A lot of the arguments for why these sales have grown so nicely are pretty similar to what they were in previous quarters, higher investment, better penetration, but the organic sales growth was not 12%. Could you talk about the extent to which this could moderate and if your assumption on what household care can grow at has changed as we move into 2027? My second question is on HMOs. Can you give an idea of the size of this business these days? Is it still underneath EUR 100 million of sales, and where the margin profile currently sits? Thank you.

Speaker #5: Could you talk about if, and how, to what extent this could moderate, and if your assumption on what household care can grow at has changed as we move into 2027?

Speaker #5: And my second question is on HMOs. Can you give an idea if the size of this business these days is still under €100 million of sales and where the margin profile currently sits?

Speaker #5: Thank you.

Speaker #2: Perfect. Thank you, Sebastian. I'll take the first one and Rainer on HMOs. Household Care, yes, 12% growth in the second quarter. Bear in mind, also, soft comparables.

Ester Baiget: Perfect. Thank you, Sebastian. I will take the first one, and Rainer on HMOs. Household care, yes, 12% growth on Q2. Bear in mind also soft comparable in that quarter that were a driver of the higher comparable. Underlying continues a steady performance with the drivers that you mentioned. Collecting the fruits of the investments on the past, collecting the fruits of innovation, responding to the consumer and customer needs, driving to productivity savings, but also driving to body grime removal, experience of freshness, quick and cold washes, and particularly growth in emerging geographies. Remember last year, we hired 400 people in commercial organizations, two-thirds of them in emerging geographies. They were not all in household care.

Speaker #2: In that quarter, that were a driver of the higher comparable. Underlying continues steady performance. With the drivers that you mentioned—collecting the fruits of the investments in the past, collecting the fruits of innovation, responding to the consumer and customer needs, driving to productivity savings, but also driving to body gram removal, experience of freshness, quick and cold washes, and particularly growth in a margin geography.

Speaker #2: This is you remember last year we invested 400 we hired 400 people in commercial organizations, two-thirds of them in a margin geography. They were not all in household care, but household care is benefiting also from that trend where we see that we the intimacy with the customers and the tailor-made solutions, we just saw as also launching another medley, another blend formulated answer.

Ester Baiget: Household care is benefiting also from that trend, where we see that the intimacy with the customers and the tailor-made solution, we just saw us also launching another medley, another blend formulated answer. We do not sell individual enzymes, we sell cocktails. We call them cocktails. Blends of solutions to our customer fulfilling their needs, dropping solutions to give that excellent performance for the detergents that they produce, and we continue to see penetration in domestic markets and in emerging markets here.

Speaker #2: We don't sell individual enzymes. We sell cocktails—we call them cocktails; blends of solutions—to our customers, fulfilling their needs, dropping solutions to give that excellent performance for the detergents that they produce.

Speaker #2: And we continue to see penetration in domestic markets and in emerging markets here.

Speaker #1: Sorry.

Rainer Lehmann: Sorry.

Speaker #5: That's helpful.

Sebastian Bray: No, no. It is okay.

Speaker #4: Thank you.

Speaker #1: So HMO, basically, from the overall share of human health is actually around 10%. And to the margin profile, as we pointed out in the past, it is still dilutive to the group margin.

Rainer Lehmann: HMO, basically, is from the overall share of human health, is actually 10% around there. The margin profile, as we pointed out in the past, it is still dilutive to the group margin. We will see that improving once we really scale up. The nice thing is we see also good growth momentum. Going forward, of course, with economies of scale, we will get this up to the level of the group margin.

Speaker #1: We'll see that improving once we really scale up. The nice thing is we also see good growth momentum. And going forward, of course, with economies of scale, we'll get this up to the level of the group margin.

Speaker #5: Thank you.

Sebastian Bray: Thank you.

Speaker #4: Then the next question comes from Lars Topholm from DNB Carnegie. Please go ahead.

Operator: The next question comes from Lars Topholm from DNB Carnegie. Please go ahead.

Speaker #5: Yes. Congrats on an impressive quarter. Two questions from me as well. The first one concerns the strong growth in Food and Beverage and the softer growth in Human Health.

Lars Topholm: Yes. Congrats with an impressive quarter. Two questions from me also. The first one goes to the strong growth in Food & Beverage and the soft growth in Human Health. I just wonder if there's any cannibalization effect in here that maybe if people buy more yogurt containing probiotics, they buy less dietary supplements containing the same. So wonder if it's something you see, and if it is it something you can try to maybe put a number on? The second question for you, Rainer, just goes to the tariff refunds. I just wonder, there's an in and there's an out. Why does it negatively affect organic growth, and how do you account for this from an EBITDA perspective? Is any effect? Thanks.

Speaker #5: I just wonder if there’s any cannibalization effect in here—maybe if people buy more yogurt containing probiotics, they buy less dietary supplements containing the same. So I wonder if this is something you see, and if it is, if this is something you can try to maybe put a number on.

Speaker #5: And then the second question for you, Rainer, just goes to the tariff refunds. I just wonder—I mean, there’s an in and there’s an out.

Speaker #5: Why does it negatively affect organic growth, and how do you account for this from an EBITDA perspective? Is there any effect? Thanks.

Speaker #2: Thank you, Lars, also for your kind words. We continue with the tempo. I take the first one. Rainer, you take the second one. So, on Food and Health, really good performance—9% year to date, 9% in Q2.

Ester Baiget: Thank you, Lars, also for your kind words. We continue with the tempo. I take the first one, Rainer, you take the second one. So on Food & Health Biosolutions, really good performance, 9% year to date, 9% in Q2. Yes, Lars, you pointed to an isolated case we see puntual in North America dietary supplements. Important to mention, and you hinted that in your question, the trend of health, it's never been that strong. We see that, yes, in more probiotics in dairy, but we for sure continue to see that in dietary supplements and holistically in Human Health. We see growth, with exception of dietary supplements in North America, we see growth across all the areas. Even within North America, we see growth in the practitioner channel value chain, which is more stable and resilient.

Speaker #2: And yes, Lars, you pointed to an isolated case we see as well, particularly also in North America—dietary supplements. Important to mention, and you hinted at that in your question, the trend of health has never been that strong.

Speaker #2: We see that, yes, there are more probiotics in dairy, but we for sure continue to see that in dietary supplements and holistically in human health.

Speaker #2: We see growth, with the exception of dietary supplements in North America. We see growth across all the areas. Even within North America, we see growth in the practitioner channel value chain, which is more stable and resilient.

Speaker #2: We continue to see the pull on HMO, where we're growing across the regions, also in China, cross-border, but we're growing. We continue to see the pull of infant formula, where the trend of health and available nutrition continues to be stronger.

Ester Baiget: We continue to see the pool of HMO, where we're growing across the regions, also in China cross-border, but we continue to see the pool of infant formula, where the trend of health as an available nutrition, it continues to be stronger. We are also very pleased with the quality and the caliber of our innovation pipeline. We have a new project, we launched it a few months ago with Novo Nordisk, where we're starting to evaluate and doing trials in the H2 with patients taking GLP-1 and evaluating the power or the impact of the symbiotic effect of prebiotics and probiotics, and hence as a driver of a stronger and better quality life. So trend of health continues to be strong. We see it across all areas.

Speaker #2: We are also very pleased with the quality and caliber of our innovation pipeline. We have a product, or a new project, that we launched a few months ago with Novo Nordisk, where we're starting to evaluate and do trials in the second half with patients taking GLP-1, and evaluating the power or the impact of the symbiotic effect of prebiotics and probiotics, and hence as a driver of a stronger and better-quality life.

Speaker #2: So, trend of health continues to be strong. We see it across all areas. Punctual effect on isolated in North America dietary supplements market, but strong pipeline, strong pull across all the areas, and continue to be very comfortable about the long-term growth.

Ester Baiget: Puntual effect on isolated in North America dietary supplements market, but strong pipeline, strong pool across all the areas and continue to be very comfortable about the long-term growth.

Speaker #1: Yes. And last, regarding the tariff refunds, you're absolutely right. It's an in and out. It's just that the out is in a different position than the in.

Rainer Lehmann: Yes. Lars, regarding the tariff refunds, you are absolutely right. It is an in and out. It is just that the out is in a different position than the in. Therefore, basically we have the, basically a credit note affects the sales number. Therefore, we see here an impact on organic sales growth. The in is on the expense side. To your second question then regarding EBITDA, the impact on the EBITDA is neutral. There is no impact on the absolute number of the EBITDA in this regard.

Speaker #1: So therefore, basically, we have the basic credit note affecting the sales number. Therefore, we see here an impact on organic sales growth. But the impact is on the expense side.

Speaker #1: So, to your second question then regarding EBITDA, the impact on the EBITDA is neutral. So there's no impact on the absolute number of the EBITDA.

Speaker #1: In this regard.

Speaker #5: And is it correctly understood that in H2, the impact on organic growth is a drag of around 40 basis points?

Lars Topholm: Is it correctly understood that in H2, the impact on organic growth is a drag of around 40 bps?

Rainer Lehmann: Up to 40 bps, yes. That is correct.

Speaker #1: Up to 40 pips, yes, that's correct.

Speaker #5: Thank you so much.

Lars Topholm: Thank you so much.

Speaker #4: Then the next question comes from Chetan Udeshi from JP Morgan. Please go ahead.

Operator: Then the next question comes from Chetan Udeshi from JPMorgan. Please go ahead.

Speaker #1: Yeah, hi. Thanks for taking my questions. My first question is a bit of a weird one, and maybe this is for Anders. When I speak to some investors, some potential investors, the impression I get is Novonesis is doing so well that people are worried this is not sustainable.

Chetan Udeshi: Yeah. Hi. Thanks for taking my questions. My first question is a bit weird one, and maybe this is for Ester. When I speak to some investors, some potential investors, the impression I get is Novonesis is doing so well that people are worried that this is not sustainable. That it is just too good to be true. Frankly, if you look at your Q2 numbers, 9% organic growth, I do not think anybody can debate that it is not good. I guess the question I have is how would you address that concern of growth being too good to be true? You mentioned new products. I look at your OpEx, which is up almost high single digit organic. Your CapEx is very, very strong.

Speaker #1: That it's just too good to be true. And frankly, if you look at your Q2 numbers—9% organic growth—I mean, I don't think anybody can debate that it's not good.

Speaker #1: I guess the question I have is, how would you address that concern of growth being too good to be true? I mean, you mentioned new products.

Speaker #1: I look at your OPEX, which is up almost high single-digit organic. Your CAPEX is very, very strong. So it feels like, underlying, there's a huge amount of investment going on, and yet people tend to fear that your growth is too good to be true.

Chetan Udeshi: So it feels like underlying, there is a huge amount of investment going on, and yet people tend to fear that your growth is too good to be true. I do not think it is an easy thing to do, but if you were to maybe give some more fillers to the market in terms of getting comfort around the sustainability of growth, not just for Q3, but maybe in terms of next three, four years, I think that would be quite useful. The second question, I was looking at your cash flow statement, and there is a decent step up in intangible asset spend, and I am just curious, is this an ERP spend or are you capitalizing more R&D this year? Thank you very much.

Speaker #1: How do you or—how, I mean, I don't know if it's any—I don't think it's an easy thing to do. But if you were to maybe give some more color to the market in terms of getting comfort around the sustainability of growth, not just for Q3, but maybe in terms of the next three or four years, I think that would be quite useful.

Speaker #1: And the second question—I was just looking at your cash flow statement, and there is a decent step-up in intangible asset spend. I'm just curious, is this the ERP spend, or are you capitalizing more R&D this year?

Speaker #1: Thank you very much.

Speaker #2: Cheta, excellent questions. Short answer: it is true. It is good, and it is true. Long answer—and let me give it a try here.

Ester Baiget: Chetan, excellent questions. Short answer, it is true. It is good, and it is true. Long answer. Let me give it a try here. Biosolutions are the building block of how the world will produce and consume in the future. We are changing the way that foods will be produced, the goods that we will consume. We are the best company, the company that is best equipped to capitalize on that trend. The pull is absolutely clear. We do two things. We do more with less. We bring productivity, efficiency, cost gains for our customers, and we bring differentiated claims, something that makes our customers be able to capitalize a stronger momentum and grow faster. We bring healthier nutrients. We do clean label. We enable high protein. We enable replacing chemicals. It is a combination of higher productivity, higher yields, high efficiencies, and differentiated claims.

Speaker #2: BioSolutions are the building blocks of how the world will produce and consume in the future. We are changing the way that foods will be produced and the goods that we will consume.

Speaker #2: And we are the best company to capitalize, the company that is best equipped to capitalize on that trend. The pull is absolutely clear. There is what we do—two things.

Speaker #2: We do more with less. We bring productivity, efficiency, and cost gains for our customers. And we bring differentiated claims, something that enables our customers to capitalize on stronger momentum and grow faster.

Speaker #2: We bring healthier nutrients. We do clean label. We enable high protein. We enable replacing chemicals. It's a combination of higher productivity, higher yields, higher efficiencies, and differentiated claims.

Speaker #2: Responding to a strong pull on the market in a growing population, that there is the need—exactly of what we're talking about. So the 'what' is there; the pull is there.

Ester Baiget: Responding to a strong pull on the market in a growing population that has the need exactly of what we are talking about. The what is there, the pull is there. The other question that you make so nicely is why us? Why are we going to win? Well, because we are the leading player on biosolutions. We invest 10% of revenue in R&D. We have a global market reach. We have deep customer intimacy. We connect those needs into answers, and more importantly, we bring them to scale competitively and reliably for our customers. We are investing. So that is why we are delivering and why it is going to be sustainable, is because we continue to invest, to continue to be closer to our customers, to continue to innovate, and continue to be able to supply.

Speaker #2: Then, the other question that you make so nicely is: Why us? Why are we going to win? Well, because we are the leading player on BioSolutions.

Speaker #2: We invest 10% of revenue in R&D. We have a global market reach. We have deep customer intimacy. We connect those needs into answers. And more importantly, we bring them to scale competitively and reliably for our customers.

Speaker #2: And we invest in. So that's why we're delivering, and why it's going to be sustainable is because we continue to invest, to continue to be closer to our customers, to continue to innovate, and continue to be able to supply.

Speaker #2: The best thing I can do is continue to deliver, continue to show you it's true, and continue to make that trend and make it obvious for everybody.

Ester Baiget: The best thing I can do, continue to deliver, continue to show you it is true, continue to make that trend and make it obvious for everybody.

Speaker #1: And Chetan, regarding your cash flow question, you're spot on. The increase in intangibles is related to our ERP journey, so the S/4 journey that we're having.

Rainer Lehmann: Chetan, regarding your cash flow question, you are spot on. The increase in intangibles are related to our ERP journey. So the S/4 journey that we are having. Keep in mind, we do not capitalize R&D. So it is really driven by the capitalization of the S/4 related expenses.

Speaker #1: Keep in mind, we do not capitalize R&D, so it is really driven by the capitalization of the S4-related expenses.

Speaker #5: Thank you very much.

Chetan Udeshi: Thank you very much.

Speaker #4: The next question comes from Soren Samsø from SEB. Please go ahead.

Operator: The next question comes from Søren Samsøe from SEB. Please go ahead.

Speaker #6: Yes, good morning, everyone, and congrats on the impressive result. So, two questions. First, on Fossil Care—very high growth. I just wondered if there’s any sort of extraordinary in the growth, i.e., is there a customer doing an inventory build ahead of a new product launch or anything similar to that?

Søren Samsøe: Yes, good morning, everyone, and congrats on the impressive results. So, two questions. First, on household care, very high growth. Just wondered if there's any sort of extraordinary in the growth. Is there a customer doing an inventory build ahead of a new product launch, anything similar to that? And also, if you could comment, besides emerging market pulling, is there any impact from maybe private label in the US using more enzymes? Is there any impact from higher oil prices yet, or is that still too early? That's my first question.

Speaker #6: And also, if you could comment, besides emerging markets pulling, is there any impact from maybe private label in the US using more enzymes? Is there any impact from higher oil prices yet, or is that still too early?

Speaker #6: That's my first question.

Speaker #1: Excellent. So we'll answer this question, and then we'll wait for a second one. The main driver of the 12% growth was softer comparables.

Ester Baiget: Excellent. So we'll answer this question and then we'll wait for the second one. The main driver of the 12% growth, it was a softer comparables, or that was a strong driver of the 12%. All the drivers are there that you commented. Yes, penetration. Penetration, it's not only in emerging geographies, it's also in domestic markets where we see a continuous pull and the beauty of reaching and bringing a stronger penetration of enzymes across the globe for detergents. Too early to see impact on the trends that we're seeing, not only on oil prices, but it's also on accessibility and reliability of supply of raw materials. But if I would say something, it is we see increased momentum. We see good dialogue with our customers. Too early to be translated and to see it reflected in the sales.

Speaker #1: That was a strong driver of the 12%. Then, all the drivers that you mentioned—yes, penetration. Penetration is normally in emerging geographies.

Speaker #1: It's also in domestic markets where we see continuous pull and the beauty of reaching and bringing a stronger penetration of enzymes across the globe for detergents.

Speaker #1: It's too early to see the impact on the trends that we're seeing, not only on oil prices, but also on the accessibility and reliability of supply of raw materials.

Speaker #1: But if I would say something, it is that we see increased momentum. We see good dialogue with our customers. It's too early to see this translated and reflected in the sales.

Speaker #1: It takes time to move from those dialogues into answers. The drivers of the growth today are innovation of the past; investments we've made in a more boots-on-the-ground approach, both in domestic markets but also in the US, where we continue to see the pull of private label, together growing with our customers around the globe.

Ester Baiget: It takes time to move from those dialogues into answers. The drivers of the growth today are innovation of the past, investments we've made in more boots on the ground, both in domestic markets, but also in US, where we continue to see the pull of private label together growing with our customers around the globe.

Speaker #6: Okay. Then on the DSM-Firmenich feed alliance, it looks like the runway is getting close to what you said when you made the acquisition. But when I do the backwards calculation, it looks like they’re still somewhat behind delivering those 3% of revenue and a DOPDA of €17 million, but you are getting closer.

Søren Samsøe: Okay. Then on the Feed Enzyme Alliance. It looks like the run rate is getting close to what you said when you made the acquisition. But when I do the backwards calculation, it looks like you are still somewhat behind delivering those 3% of revenue and EBITDA of EUR 70 million. But you are getting closer. But maybe you could just tell us sort of how close you are and how is it going with that acquisition. Thank you.

Speaker #6: But maybe you could just tell us sort of how close you are and how’s it going with that acquisition. Thank you.

Speaker #1: So we basically said initially, when we acquired the feed enzyme alliance, it's close to 3 percentage points contribution. And we are actually there. So that is, I would still consider, as in line.

Rainer Lehmann: We basically said initially when we acquired the Feed Enzyme Alliance, it is close to three percentage points contribution, and we are actually there. So, I would still consider this as in line. Therefore, the overall animal business is doing really well. And the EBITDA contribution also that we actually set out, which was important, that one we also fulfilled. You really see that in the accretion in our margin also in the division. So we are overall, and as Ester pointed out also at the beginning, opening comments, the commitments that we put out there at the beginning, we fulfilled basically now after 12 years. And of course, we continue to then build 12 months, sorry, not 12 years. It feels longer. And therefore we consider this in expectations.

Speaker #1: So, therefore, the overall animal business is doing really, really well. And the EBITDA contribution—also that we actually set out, which was important—that one we also fulfilled.

Speaker #1: You really see that in the accretion in our margin, also in the division. So overall, and Esther pointed out also in the beginning, in her opening comments, the commitments that we put out there at the beginning, we have fulfilled basically now after 12 years.

Speaker #1: And of course, we continue then at 12 months—sorry, not 12 years; it feels longer. And therefore, we expect that, and we consider this an expectation.

Speaker #2: And the pylon is very strong. There is only one little thing I would add, which is that the momentum and the conversations with our customers are really, really strong.

Ester Baiget: And the pipeline is very strong. There is only one little thing I would add, is that the momentum and the conversations with our customers is really strong, and we do see the penetration in areas where we were not relevant. We are starting to crystallizing nicely, but also with a good pipeline in place.

Speaker #2: And we do see the penetration in areas where we were not relevant. We're starting to crystallize nicely, but also with a good pipeline in place.

Speaker #6: Okay. Thanks for the answers.

Søren Samsøe: Okay, thanks for the answers.

Speaker #4: The next question comes from Matthew Yates from Bank of America. Please go ahead.

Operator: Then the next question comes from Matthew Yates from Bank of America. Please go ahead.

Speaker #7: Hey, good morning, everyone. Just had a couple of questions around CapEx, please. Rainer, did I hear earlier in the call you spoke about potentially initiating a large new-build plant somewhere?

Matthew Yates: Hey, good morning, everyone. I just had a couple of questions around CapEx, please. Rainer, did I hear earlier in the call, you spoke about potentially initiating a large new build plant somewhere, I think you might have said in emerging markets. Just in terms of calibrating expectations for CapEx next year, is it still another year of CapEx, probably above 10% of sales? Then just more shorter term, if I am not mistaken, you have got a big investment that has been going on in West Allis. I think that was supposed to come online mid or late 2026. I guess my question is, clearly the growth you have been delivering in food and beverage is very impressive. I am wondering to what extent you are delivering that growth despite being capacity constrained in any way.

Speaker #7: I think you might have said, "in emerging markets." Just in terms of calibrating expectations for capex next year, is it still another year of capex, probably above 10% of sales?

Speaker #7: And then just more shorter term, if I'm not mistaken, you've got a big investment that's been going on in Wisconsin. I think that was supposed to come online mid or late '26.

Speaker #7: I guess my question is—clearly, the growth you've been delivering in Food and Beverage is very, very impressive. I'm wondering to what extent you're delivering that growth despite being capacity-constrained in any way.

Speaker #7: So, the extent to which you can bring on more capacity over the coming months—does that actually give reason to believe that growth could accelerate, or do I need to be a bit more prudent on the speed at which you can ramp up new plants?

Matthew Yates: The extent to which you can bring on more capacity over the coming months, does that actually give reason to believe that growth could accelerate, or do I need to be a bit more prudent on the speed at which you can ramp up new plants? Thank you.

Speaker #7: Thank you.

Speaker #1: So, regarding the CapEx overall, that's absolutely correct. And actually, I flagged that before, right? We said this year, 12 to 14 percent. And also said that next year, we expect basically nominal, the same kind of value in this regard.

Rainer Lehmann: Regarding the CapEx overall, it is absolutely correct. I actually flagged that before, right? We said this year 12% to 14%, and also said that next year we expect basically nominal, the same kind of value in this regard. Therefore this is temporary elevated part before we then go down to the high single digit in 2030. In that, there is of course, all these expansions that I mentioned included, right? Also the basically bigger multipurpose facility in the emerging markets, that of course takes several years to build and then to be commissioned. So that is basically in line with also the old long-term guidance that we gave. When it comes to the short term, absolutely correct, we made the investment in West Allis.

Speaker #1: So therefore, this is this temporary elevated part before we then go down to the high single digits in 2030. And in that, there is, of course, all these expansions that I mentioned included, right?

Speaker #1: Also, the basically bigger multipurpose facility and the emerging markets—that, of course, takes several years to build and then to be commissioned. So that is basically in line with also all the long-term guidance that we gave.

Speaker #1: When it comes to the short term, absolutely correct. We made the investment in West Allis that's coming online basically, I would even say, a little bit ahead of time, which is great.

Rainer Lehmann: It is coming online basically, I would even say a little bit ahead of time, which is great. That is happening as we speak, the first batches being produced. What I make sure we are really not constrained on capacity here, right? We are timing that fortunately nicely and are able to really use the assets around the world in order to satisfy any kind of growth peaks that we have in the different markets. All in line with our expectations and, yeah, looking forward to West Allis then fully being commercialized.

Speaker #1: That is happening as we speak, the first batches being produced. But what I might be sure of, we are really not constrained on capacity here, right?

Speaker #1: We're timing that, fortunately, nicely and are able to really use the assets around the world in order to satisfy any kind of growth peaks that we have in the different markets.

Speaker #1: So, all in line with our expectations. And, yeah, looking forward to West Ellis then fully being commercialized.

Speaker #7: Many thanks.

Matthew Yates: Many thanks.

Speaker #2: One last question, operator, please.

Ester Baiget: One last question, operator, please.

Speaker #4: Yes. Then today's last question comes from Andre Torman from Danske Bank. Please go ahead.

Operator: Yes. Today's last question comes from André Thormann from Danske Bank. Please go ahead.

Speaker #5: Thanks a lot for taking my questions. First of all, can you maybe put a bit more color on what you're seeing in the second half for Human Health, which I understand would be weak?

André Thormann: Thanks a lot for taking my questions. First of all, can you maybe put a bit more color on what you are seeing in the H2 of Human Health, which I understand would be weak? Second of all, if you can also add some color on when you plan to in-source HMO fully in this Thailand factory. Thank you.

Speaker #5: And then, second of all, if you can also add some color on when you plan to insource HMO fully in this Thailand factory. Thank you.

Speaker #2: Thank you, Andrea. We are, as described, expecting only a small growth in Human Health. That means that we are not forecasting, or not reading the market, as the particular situation in North America moving into an improvement.

Ester Baiget: Thank you, André. We are, as described, expecting only a small growth in Human Health. That means that we are not forecasting or not reading the market as the puntual situation on North America moving into an improvement. It could change. If it happens, I can guarantee you we will capitalize on that momentum. But at this moment, what we are seeing is we are not forecasting changes on the North America cautiousness of the consumers from a dietary supplements point of view. What we are seeing in the H2 in Human Health is continued pull of our solutions across the globe, continuous good momentum. Also in the dietary supplements in North America practitioner channel, and a continued growth on HMO and on infant formula. Those are the drivers that we see as growth. Then on HMO, we are producing it today internally, as you well know.

Speaker #2: That's punctual. It could change. And if it happens, I can guarantee you we'll capitalize on that momentum. But at this moment, what we are seeing is we're not forecasting changes in the North America cautiousness of the consumers from a dietary supplements point of view.

Speaker #2: And what we're seeing in the second half in Human Health is continued pull of our solutions across the globe, continued good momentum also in the dietary supplements in the North America practitioner channel, and continued growth on HMO and on infant formula.

Speaker #2: Those are the drivers that we see as growth. Then on HMO, we are producing it today internally, as you well know. Thailand is an acquisition that we made that brings small capabilities to produce HMO.

Ester Baiget: Thailand is an acquisition that we made that brings small capabilities to produce HMO. With this, we are setting the foundation for the future. Rainer indicated that it is at the expenses of profitability, but it is also coming with a diligent mindset from a capital allocation. We will invest and build a plan accordingly and put us in a position to continue to support our customers and then expand a little better place from a profitability point of view.

Speaker #2: And with this, we're setting the foundation for the future. Rainer indicated that it's at the expense of profitability, but it's also coming with a diligent mindset regarding capital allocation.

Speaker #2: And we will invest and build a plan accordingly and put us in a position to continue to support our customers, and then expand, a little better placed from a profitability point of view.

Speaker #5: Thank you so much.

André Thormann: Thank you so much.

Speaker #3: Thank you so much.

Ester Baiget: Most welcome. With that, we are finalizing the call. Thank you all much for your questions. Looking forward with the dialogue with many of you, also with the rest of the team in our sessions for the rest of the week. Thank you.

Speaker #2: You are welcome. So with that, we are finalizing the call. Thank you all very much for your questions. Looking forward to the dialogue with many of you, also with the rest of the team, in a session for the rest of the week.

Speaker #2: Thank you.

Operator: Ladies and gentlemen, the conference is now over. Thank you for joining, and have a pleasant day. Goodbye.

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Half Year 2026 Novozymes AS Earnings Call

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