Ladies and gentlemen, welcome to the Givaudan 2024 Full Year Results Conference Call and Live Webcast. I'm Sandra, the Chorus Call operator. I would like to remind you that all participants have been in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time it's my pleasure to hand over to Gilles Andrier, CEO. Please go ahead sir.

Thank you. Dear ladies and gentlemen, welcome to our 2024 full year results conference call. Stewart Harris, our CFO, will be with me on this call today and we will take you through the presentation before answering your questions at the end. All relevant documents related to the 2024 full year results, including the slides we are presenting just now, have been published this morning and are available in the results centers on our website. So I'm very pleased to present to you an outstanding set of results looking at the two ends of our P&L, a very strong top line growth and another record free cash flow for 2024. But before moving into the numbers, let me first talk about the change in the executive committee, which has been announced this morning. Antoine Khalil, currently Commercial Head of Taste & Wellbeing in North America, has been appointed as President of the Taste & Wellbeing division, effective 1st of April 2025. He succeeds Louie D'Amico, who will retire. And to ensure a smooth transition, Louis will remain available until the end of September 2025 to provide management advice and support on strategic projects. With Antoine Khalil, we have another homegrown talent taking over. He brings over 21 years of commercial leadership and a broad industry experience with him, all of which has been with Givaudan, spanning from Fragrance & Beauty, where he started in 2004 in Paris, to Taste & Wellbeing, where he led initially the region Africa and Middle East and later SAMEA before he became Commercial Head of North America in 2023. Antoine has a profound expertise across both businesses, customers and regions successful at every step of his development. Louie will retire following a distinguished 35 years career in the flavor industry, culminating in his eight year tenure as President of the Taste & Wellbeing division at Givaudan, he played a pivotal role in driving Givaudan's successful growth in the flavors business, leading the integration of several strategic acquisitions and expanding the portfolio beyond Flavors and Taste to include functional, health and nutrition solutions. He has also developed a strong team of leaders to continue running the division successfully. Again, it demonstrates the strong continuity we have in succession planning at Givaudan. Now let's have a look at the performance highlights on Slide 3. As I mentioned, I'm very pleased with the excellent set of results for 2024 driven by a high level of volume growth across all markets, segments and customer groups. These industry leading results once again confirm the unique position of Givaudan. We are proud of the entire Givaudan organization in delivering these outstanding results. So first, sales amounted to CHF 7.4 billion with a strong increase of 12.3% on a like-for-like basis and 7.2% in Swiss francs. Our strong performance was achieved across all markets with high growth markets achieving an impressive 19.5% growth and also mature markets growing by 6.4% on a like-for-like basis. Reported EBITDA amounted to CHF1.765 billion, an increase close to CHF300 million, almost 20%. Comparable EBITDA margin improved to 24.5% compared to 22.4% in 2023. This was mainly driven by the operational leverage, thanks to the strong growth in volumes alongside a generally benign raw materials price environment and some residual benefits from the Performance Improvement program, which we initiated in 2023. And finally, thanks to our continuous focus on cost control. Net income reached CHF1.090 billion, an increase of 22% over 2023 and leading to a net profit margin of 14.7%. And finally, we achieved another record free cash flow of CHF1.158 billion, representing this year 15.6% of sales. Finally, the Board of Directors will propose a dividend of CHF70 at the AGM in March 2025, which marks the 24th consecutive dividend increase for our shareholders. Before Stewart will provide more details on the operational performance, let me focus on the sales performance on the following slides. The excellent sales growth in 2024 was very broad based across all markets, all segments and all customer groups, leading to a strong growth in both divisions. The over 20% like-for-like growth was driven by a high level of volume growth of almost 10%, while pricing contributed to less than 3%, almost entirely from FX pricing, mainly due to Argentina. As expected, the real pricing effect was minor. While the 12.3% like-for-like growth is indeed impressive, it is important to contextualize this outstanding result. First, the strong growth has been driven by fundamental factors, including, the continued strength in Fine Fragrance, a focus from our customers on innovation, and a higher investment in scent and flavors from our customers to create consumer differentiating products. In addition, the sequential improvement in our Taste & Wellbeing performance during the second half of the year highlights our resilience and ability to adapt to market dynamics. Second, we benefit from our great balances or natural hedges around customers and regions. This year we have seen good performance across all our customers, however, as in recent years with the continued outperformance of the L&R which today make up 57% of our sales. In addition, high growth markets contributed significantly to this performance. As we will see in more details on the next slide. Lastly, in 2024 we have been facing a relatively low comparison base from the previous year of like-for-like 4.1%. However with a -2.2% volume decline in 2023. The very strong balances in our business between segments, geographies and client groups enable us to achieve consistent results over time reflected in the average sales growth of 7.2% for the period 2021 to 2024 above our average sales growth target of 4 to 5% on a like-for-like basis for the strategic cycle 2021 to 2025. Now coming back to the geographic performance in more detail on Slide 5. High growth markets continued the excellent performance at the rate of 19.5% and now represent 47% of our total sales. In particular key markets such as China, the Middle East, India, Southeast Asia and Brazil, all continued to grow double digit. This year also the mature market showed a very solid growth of 6.4% led by continued resilient performance in Europe and a good recovery in North America. For a more granular view by geographies, let’s turn now to Slide 6. Latin America continued to show the highest like-for-like growth of 26.1%, driven indeed by FX pricing in Argentina. But as you can see we also continue to grow in Swiss francs which is a good proxy for the underlying growth. Volume growth indeed in LATAM was close to 10%. In Asia Pacific like-for-like sales growth continued with good momentum at 11.4% with all key markets contributing except for Japan, which had a low single-digit growth and with ongoing double-digit growth in China, particularly driven by Fragrance & Beauty. The EMEA region grew 12.6% on top of a strong 8.4% in the prior year and the strong performance continued to be broad based in mature markets like Italy, Iberia as well as in high growth markets such as the Middle East and Africa which today make up one quarter of the region. And the encouraging positive like-for-like growth in North America continued this year at 5.9% with solid growth in both divisions. Turning to a divisional view on Slide 7, starting with Fragrance & Beauty. Sales amounted to $3,660,000,000, up 14.1% on the like-for-like basis and 10.5% in Swiss francs. The strong growth was driven by another impressive growth 18.4% increase in Fine Fragrances, supported by sustained high levels of new wins and backed by the thoroughly discussed fundamental drivers related to geographies, consumers and market expansion. It’s quite remarkable that today our Fine Fragrances business is 50% bigger in actual Swiss francs and 80% bigger on a like-for-like basis than compared to the pre-COVID year of 2019. But to pick on one of the drivers of Fine Fragrances, the SAMEA region has become the second largest region for Fine Fragrance sales. It has tripled over the last three years and added an incremental CHF100 through our Fine Fragrances business. We also saw a strong 13.5% increase in consumer products in 2024 to which all product segments contributed, increased dosage of fragrances, some growthflation, the reverse of shrinkflation as well as our continuously increasing exposure to L&R contributed to the strong growth. As it relates to our growth with L&R, it is worth mentioning that it is a combination of them growing fast but also us but also us having an increased penetration with both existing clients and new L&R clients. Fragrance Ingredients and Active Beauty sales increased 11.1% like-for-like with double-digit growth in both segments. I want to emphasize the remarkable success we’ve achieved in developing the Active Beauty business over the past decade, growing it from CHF0 to over CHF200 million in sales. With the addition of b.kolor, that we acquired at the end of last year, we are expanding our growth opportunities in the beauty space, a beautiful space and further enhancing the balance and natural hedges within our portfolio. Now let’s move on to Taste & Wellbeing sales performance on Slide 8. Sales amounted to CHF3.752 billion up 10.7% on the like-for-like basis and 4.1% in Swiss francs. As mentioned before, we are very happy with the sequential improvement in our Taste & Wellbeing performance in the second half of the year. Despite the increasing comparable, all product segments contributed to this strong growth reflecting positively on our strategic choices to expand the portfolio towards more natural but also health and wellbeing which today make up a very significant part of our portfolio. These offerings allow us to create unique solutions that address customer challenges driving growth beyond traditional flavors whilst enabling us to outperform the market. On a regional basis, particularly SAMEA, South Asia, which includes South Asia, Africa and the Middle East, including India showed an impressive growth acceleration to 20.9% on top of a strong 13.2% growth in the prior year. It actually passed the 1 billion mark in 2024. In addition, we see encouraging growth momentum in North America in the second half of the year leading to a solid like-for-like growth of 5.5% for the full year 2024. Europe showed a solid like-for-like increase of 5.9% and Asia-Pacific of 8.8%. The strong double-digit growth in Latin America of 27.3% continues to be driven by FX pricing but also with a strong underlying volume growth. Transitioning from our financial achievements, I want to highlight again that innovation is our lifeblood. It enables us to create unique solutions that address customer challenges and positions us as leaders in biotechnology, sustainability and digitalization to name a few spaces. Our R&D investment of almost 8% of our sales is an industry-leading number but effectively directed on a focused portfolio. This investment empowers our team to leverage novel technologies and ingredients enabling us to develop bespoke solutions that truly resonate with consumers. Let me highlight a few examples. In Fragrance & Beauty, we have launched Bloomful Splash, a groundbreaking innovation in fragrance technology. This advancement allows our perfumers to define and measure what we call the Bloom effect, enhancing the sensory experience of water diluted products by showcasing how a fragrance unfolds and develops when mixed with water. It has many applications in home care and personal care. In Taste & Wellbeing, our innovative offerings such as Amaize Orange-Red and the Taste Collection Fire illustrate our future proof portfolio, helping our customers to address increasing regulations and the need for reformulation and catering to consumer desire for more natural ingredients. Our digitalization efforts are highlighted by Givaudanperfume.id, an e-commerce solution which enables us to better serve local customers and address fragmented markets piloted in Indonesia and China successfully. Additionally, we leverage our secure proprietary generative AI tool to boost efficiency while placing human creativity at its core. Let's also have a look at our non-financial performance progress on Slide 10. At Givaudan, we are proud to report significant progress on our ambitious non-financial targets which align seamlessly with our group's purpose to create for happier, healthier lives with love for nature. Let me give you some highlights of this year's progress. Related to our nature, ambition and our target to be climate positive before 2050, we have achieved a remarkable 48% reduction in Scope 1 and 2 emissions compared to our 2015 baseline and an 8% reduction compared to 2023, all while experiencing strong volume growth. And we have already met in 2024, our 2025 target by converting our entire electricity supply to fully renewable resources. In line with our goal to responsibly source all materials and services by 2030, we have increased our responsible sourcing of natural ingredients to 85%, up from 76% last year. This shows our commitment to ethical sourcing practices that benefit both our business and the communities we support. Looking at our progress on people targets, I'm pleased to share that as of 2024, 32% of our senior leadership positions are held by women. We were at 28% in 2023, so a significant step improvement. We are committed to transparency in climate-related financial disclosures. For the first time, we have included our climate-related financial disclosure in line with the TCFD in our integrated report, featuring a climate scenario analysis to assess the impacts of climate change on our business. Additionally, we have recently announced that our net-zero targets have been validated by the science-based target initiatives, SBTI aligning with their net-zero standard and committing us to achieve net-zero greenhouse gas emissions across our value chain by 2045. And with that, let me hand over to Stewart for more details on the financial results.

Thank you, Gilles. I would like to add my warm welcome to all of the participants on the call. On the following slides, I would like to give an overview of the Group's operating performance and that of the two divisions, as well as the financial performance of the Group. Let me start with the financial highlights on Slide 12. As Gilles has given an in-depth review of the sales performance, I will focus more on the financial results in my section of the presentation. As we have seen, Group sales in 2024 increased to CHF7.4 billion, an increase of 12.3% on a like-for-like basis and an increase of 7.2% in Swiss francs. The strong result also includes the sales of b.kolormakeup & skincare from the date of acquisition in July 2024, driven by the excellent operating profitability, the net income increased to CHF1,090 million, an increase of 22.1% compared to 2023 and an increase of more than 32% when measured in local currency. The net income margin was 14.7% of sales. The Group achieved a record free cash flow of CHF1,158 million or 15.6% of sales, compared to 13.3% in 2023. As a result of our strong cash generation, the net debt to EBITDA ratio improved further to 2.3% at the end of 2024, compared to 2.9% at both June 2024 and December 2023. Please turn to Slide 13, which shows the overview of the exchange rate development in 2024. This slide shows the comparison of the average exchange rates in 2024 versus 2023. In the current year, the Swiss franc has continued to strengthen against most of the major currencies in which the group operates with an impact on the group results as reported in Swiss francs. The impact is however limited because of our operational and geographical spread. It continues to provide good natural hedges and our EBITDA margin remains well protected against currency fluctuations. Please turn to Slide 14 for an overview of the operating performance of the Group. The gross margin increased from 41.2% in 2023 to 44.1% this year with the improvement resulting from higher cost absorption due to the strong volumes, minimal impacts from input costs overall as well as the continued contribution from the performance improvement program, which we launched in 2023. The solid improvement in the gross margin is evident in both operating divisions. On the EBITDA level, the EBITDA was CHF1,765 million in 2024, compared to CHF1,473 million in 2023, an increase of 19.8% or 29.1% when measured in local currency. The comparable EBITDA margin after adjustment for non-recurring costs of CHF51 million was 24.5% compared to 22.4% in 2023. On the following two slides, I will spend a few minutes on the operating performance of the two divisions. And if you turn to Slide 15, we will start with Fragrance & Beauty. Fragrance & Beauty recorded an excellent sales increase of 14.1% on a like-for-like basis and 10.5% in Swiss francs driven by the strong volume growth across all business segments, geographies and customer groups. The EBITDA of the division in 2024 was CHF985 million, compared to CHF769 million in 2023, an increase of 28%, whilst the comparable EBITDA exceeded CHF1 billion with a comparable EBITDA margin of 27.8% in 2024, compared to 24.7% in 2023. If you now turn to Page 16, I’ll take you through the operating performance of Taste & Wellbeing. Taste & Wellbeing recorded a sales increase of 10.7% on a like-for-like basis and an increase of 4.1% in Swiss francs, with a sequentially improving performance throughout the year and a strong contribution from our strategic growth pillars. The division recorded an EBITDA of CHF780 million, compared to CHF704 million in the prior year, a solid increase of 10.8%. On a comparable basis, after restructuring costs of CHF19 million, the comparable EBITDA margin improved to 21.3%, compared to 20.3% in 2023. Please turn to Slide 17 on the net income of the Group. The net income before tax was CHF1,313 million in 2024, compared to CHF989 million in 2023, an increase of 32.8% driven by the strong business performance and lower non-operating expenses compared to the prior year. The effective tax rate increased to 17% compared to 10% in 2023. The lower tax rate in 2023 was largely due to one-time effects of tax changes in Switzerland and excluding these one-time effects, the effective tax rate would have been 17% also in 2023. It is further noteworthy that in 2024 the global minimum tax regime under the OECD Pillar 2 framework came into effect with a minimum corporate tax rate of 15% including in Switzerland. The net income rose to CHF1,090 million in 2024, an increase of 22.1% in Swiss francs and 32.1% when measured in local currency. The resulting net income margin was 14.7% in 2024, compared to 12.9% in 2023. Basic earnings per share were CHF118.17 in 2024, compared to CHF96.81 in 2023, an increase of 22.1%. Please now turn to Slide 18, which shows the free cash flow performance. In 2024, the Group generated a record free cash flow, passing the milestone level of over CHF1 billion or 15.6% of sales, compared to 13.3% in 2023. Total net investments were CHF280 million in 2024, representing 3.8% of sales compared to 3.9% in the prior year as the Group continues to invest in its growth. Net working capital was 23.4% of sales in 2024 improved compared to 24.1% in 2023, with the group continuing to have a strong focus on the effective management of all aspects of working capital. Please turn to Slide 19. Since Givaudan became a public company in 2000, the company has generated on a cumulative basis CHF12.8 billion of free cash flow, including the proposed dividend for 2024, the 24th consecutive increase, Givaudan has returned CHF8.4 billion to shareholders in the form of dividends or share buybacks, clearly underlining the strong commitment of Givaudan to shareholder returns. The Board of Directors will propose to the Annual General Meeting of shareholders a further increase in the cash dividend to CHF70 per share from CHF68 in 2023, an increase of 2.9%. Please turn to Slide 20 to look at the net debt profile of the group. This slide shows that the group continues to have a well balanced and stable debt profile with interest rates which have been locked in at attractive rates. At the end of the year, the net debt was CHF4 billion with a weighted average interest rate of 1.75% compared to 1.69% in 2023. Finally, I'd invite you to turn to Slide 21, which shows the net debt to EBITDA ratio development. At the end of 2024, the net debt to EBITDA ratio was 2.3 times, representing a significant improvement compared to 2.9 times in both June 2024 and December 2023. The strong improvement in leverage is a result of our sustained focus on the balance sheet whilst continuing to invest in the growth of our business and in shareholder returns. This concludes my section of the presentation. I would like to thank you for your attention and now hand it back to Gilles.

Thank you, Stewart. Let me now come back to our 2025 strategy and the outlook on the next slide. We are entering the last year of our 2025 strategic cycle so let me reflect on the transformation of Givaudan. Over the last strategic cycle, we have been expanding beyond a core fragrance and flavors house, moving into spaces such as health and wellness, becoming the number one in naturals and adding adjacent functional food ingredients, providing value adding integrated solutions to our customers. We have substantially grown our Fine Fragrance business, benefiting from positive market trends but even more so capitalizing on our strategic choices to extend our customer reach, by strengthening our business with local and regional customers and focused market strategies in high growth markets. We have expanded the portfolio and built a high precision Active Beauty business and most recently stepped into color cosmetics. All in accordance to the company's purpose and underpinned by a commitment to excellence, innovation and simplicity in everything we do. Let's move to Slide 24 and look at our performance commitment for the 2025 strategy. Givaudan's 2025 strategy consists of ambitious targets aiming to achieve like-for-like sales growth of 4% to 5% and free cash flow above 12% of sales, both measures as an average over the five year period. We have now completed four of our five-year strategic cycle with our financial performance, we are fully on track to deliver on our commitment. In addition, the company aims to deliver on key non-financial targets around sustainability, diversity and safety linked to Givaudan's purpose. Our focus remains on implementing our 2025 strategic focus areas guided by our purpose. We remain confident in our plan and have the right foundations in place to continue growing with our customers. Let me finish with the 2025 outlook on Slide 25. As just mentioned, we are fully on track to deliver on our 2025 strategy. With average like-for-like sales growth of 7.2% for the period 2021-2024, Givaudan is highly likely to exceed the upper end of this average five-year sales growth target of 4% to 5% on a like-for-like basis for the five-year period. Our natural hedges across the portfolio segments, regions and markets provide balance and give us confidence in our ability to grow despite very high comparables that we will be facing in 2025. In 2025, we see a firmer outlook for input costs and expect an increase of around 4% on root level. With continued pressure particularly in naturals in both divisions, for example, ingredients like patchouli and citrus which go mainly in the fragrance consumer products. We will maintain a strong focus on operational excellence, reviewing the manufacturing footprint particularly in taste and well being in the last year of the strategic cycle while emphasizing business continuity to navigate in a volatile geopolitical environment. Related to this, we expect a cost of around CHF30 million for acquisition, restructuring and other projects related expenses in 2025. With that, we arrive at the end of our 2024 full year results presentation and I'd like to hand back to the operator for the instructions to open the Q&A. Stewart and I look forward now to taking your questions.

We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Alex Sloane from Barclays. Please go ahead.

Yes. Hi. Thanks for taking the questions. Two from my side please. Just the first one on consumer products, obviously a bit of a slower Q4 on a much tougher comp, but still the full year 13.5% very strong versus most listed major customers. You flagged increased dosage as a key driver as well as growthflation. Any change in those drivers in Q4 or January so far? And do you think they can continue to be drivers in 2025? And how do you assess your customers’ stock levels versus history in this area? That would be the first one. Second one, just in terms of the Taste & Wellbeing side, we’ve obviously seen red dye number 3 band now in the U.S. Presumably this could be a nice tailwind for Givaudan given your natural colors footprint, but also with any flavor change that’s required with this reformulation. So the question is, do you have sufficient natural colors capability at the moment to take advantage of that given the fire in Kentucky? Thank you.

Yes. Thank you for your two questions. So the first one, quite simple actually if you do simple math, it’s all about comparables. If you add the growth for each quarter for 2023 and 2024, it’s a perfect Swiss clock where you get 20%. So that means when you add the growth, Q1 to Q1 and so on for the four quarters you have exactly 20%. So the reason for, what you call a slowdown in Q4 is basically just comparable. But to add more colors on CP, I mean, yes, you mentioned growthflation. It comes on the back of obviously and that’s true for CP and Taste & Wellbeing by the way. As we completed the – as our plans completed the cycle of price increase to help them growing until 2022, 2023, the whole momentum around driving innovation, driving volumes was basically across the whole portfolio of our clients and that translated for us into more briefs, more wins, more innovations, but also as I mentioned, basically the opportunity taken by clients to reinvest back into the fragments. Because at the end of the day, as we do, they all believe that fragrance is the key driver of liking of any CP product, but also fine and so on. So that’s basically the underlying trend that we’ve seen with a good amount of new wins. One thing I did not mention is – obviously, let’s see where our competitors are at the fourth quarter. But if you just look at the three quarters, our growth of 12.3% for the group is also very much driven by market share gain if we look at the nine month sales of our two or three largest competitors and CP has been part of that. So going – and the thing about the inventories, it’s certainly not the case both when we look at our figures you had a – but also asking clients, and asking global clients. And just to mention if you take the L&R clients of CP it’s about 57% of our sales. None of them have a strategy of building stocks and so forth. So the – let’s say, the up and downs of destocking, restocking does not really apply on L&R. So we are quite confident that there is no built up or significant buildup of inventories in the course of 2024. So then on the – yes, the red dye, basically, we are very well positioned as you said – as you mentioned, we are the leader in natural colors. And actually as I mentioned one of the innovations on the red color is actually we have a replacement – a natural replacement of that. So for us it’s an opportunity. It’s an opportunity as well to reformulate and to – yes, and to basically grow our colors business in this space. Actually the whole trend around – you can even argue in the U.S. about the trends around ultra-processed food. And so there are opportunities for Givaudan because of the position that we have with naturals, the position that we have with things, which actually make things taste better when you reformulate all of those things we see as opportunities for us.

Thank you.

The next question comes from Celine Pannuti from JPMorgan. Please go ahead.

Thank you and good morning, Gilles and Stewart. My first question is on growth. Gilles, if I look at the last two years, the volume average for Givaudan is 2.8% – 2.9%, excuse me, if I look at the average for the past five years is 3.8%. So is that you think the Swiss clock level at which Givaudan should be driving volume growth in 2025. And on the same question on FX driven pricing which was quite a contribution in 2024, whether you could help us understand whether there will be some of that coming true from especially Latin American currency weakness in 2025. That’s my first question. My second question is on margin. Taste & Wellbeing margin is still shy of the 22% to 24% bracket that you aim to achieve for the group by year 2025, but I think as well for that division. So shall we expect you to be in that bracket this year? Thanks to the savings and despite some of the cost inflation. And how sustainable the Fragrance & Beauty margins are at this very high level? Thank you.

Okay. So, you have two questions in your first question. So basically, yes, the growth what I can give you more generous, because I don't plan with the same figures you just mentioned on volume growth. Actually, if you look at the average growth of volumes for the first four years of this strategic cycle, we are 3.6%. And if you, which is basically a good level, so and incrementally better than the past cycles. Then on FX pricing it's always a bit difficult to project FX pricing, but we consider based on the projection that we have on the exchange rates and inflation and so forth that it will tune down basically north of 0%, but south of 1% basically. Then your question on the EBITDA margin first. As you know, we don't give a guidance on the EBITDA for a given year. The only promise is basically to be above 12% free cash flow over five years though we give indication of where we want to be to be able to sustain a 12% and indeed it's this range of 2022 to 2024. Today in 2024 we are above 24% EBITDA for the group and we have confidence that we can sustain that in 2025. So that's what I can say. Now how are the two EBITDA is going to develop individually on the two divisions? I won't articulate any figures, but I can give you some indications. So yes, on the Taste & Wellbeing, we want to continue to uplift it. There are opportunities to do that, but doesn't mean that all the things are going to add up, because we have a bit of headwind also on the raw mat on the fragrance side. So basically, that's a bit the trend. It's always good to have, as you see two divisions, two divisions because it creates a natural hedge. But the only thing I can say is to remain confident that we can navigate to continue navigating above the 24% line in 2025.

Thank you.

The next question comes from Charles Eden from UBS. Please go ahead.

Good morning. Thanks for taking my questions. Two from me, please. First, I guess the first one is sort of a follow on from Celine's question. But on the free cash flow, obviously trending just in line with the strategy target for free cash flow. But 15.6% of sales for free cash flow in 2024, very impressive. I guess, if margins aren't going to go backwards, which seems to be the communication and understandably, I guess working capital is not going to be a major change nor is CapEx. Is there any reason or anything to call out last year – in terms of what may be an offset to sort of a very similar year on free cash flow in 2025 compared to 2024? That's my first question. And then secondly on the raw material inflation, is the expectation that you will fully offset that on in terms of Swiss franc terms through pricing, and is a lot of that pricing already sort of negotiated with your customers at this stage of the year? Thank you.

Okay. So, I'll start with the second question. On raw mat, it's obviously 4%, it's mild, it's basically as we project it now. But as a difference to previous cycles where we saw significant raw mat increase, where it was really across the board. Here you're talking about more selective raw mat increase in different supply chains, and we see how much we can actually pass on and compensate for that with our price increase. But again, it's going to be relatively mild. I don't understand why you're saying that we're going to go backwards on EBITDA. If I just said that, we're going to continue to be above 24%, I'm not sure I understand your question.

No, sorry. Gilles, I was saying no reason why you should. So, I guess that was the sort of question is, if margins don't go backwards, cash flow, surely that are similar.

Okay. Yeah. So basically, so yes, if it doesn't go backwards, but obviously you have had in the working capital steps, improvements in 2024, reducing inventory level and then you navigate at this level. So, whenever you have steps, steps or improvements, you don't get it a second time, you get it once. And so basically, we are very confident to continue navigating or closing at the level of the percentage of working capital. But again, you don't get without decreasing it so that in fact you don't get a second time the benefit. But all in all, it means, we are confident to be above the 12% line, for free cash flow and meet our targets.

Thanks.

You're welcome.

The next question comes from Daniel Buerki from ZKB. Please go ahead.

Yes, hello, I would have two questions. First on the accident you had in Kentucky. Could you give us an update? Did you have already some financial implications in the year 2024 or what could we expect for 2025. And then maybe a second question, could you give us a reminder on the dividend policy?

Yes. So just, first, I would like to remind you it’s obviously a very tragic accident beyond the financial implications. We have been quite active supporting the families, supporting the communities. The investigation in the reasons and the root cause of what has happened are still ongoing. So we have no conclusion yet. But – and going – obviously, we also have what we call always business continuation plans. So the sales impact have been minimal and we’ll be looking in the – we are looking in the near future at the options on how to rebuild and such a factory. So – but I’ll pass on to Stewart on the financial implications.

Thanks for the question, Daniel. So, the investigations are still ongoing. In the financial statements for 2024, we’ve recorded an impact of CHF10 million, which represents about CHF9 million in the impairment to the assets which were located on the site in Louisville, and about a further CHF1 million and related to the write-off of inventory losses. So that’s what we’ve recorded so far. And it’s too early to assess any impact on the following years because as I say, the investigation is still ongoing into the root cause and then the associated financial consequences related thereto. With respect to your second question on dividend, I think we’ve seen a consistent dividend practice at Givaudan 24th consecutive increase in the dividend, CHF70 per share. And I think that shows that we have continued to have a balanced view of investing in growth, balance sheet care and also returns to shareholders. And that continues to be the balanced focus we will have going forward.

Thank you.

The next question comes from Arben Hasanaj from Vontobel. Please go ahead.

Good morning, gentlemen. I would have two questions. First, if you could update us on how far along you are with your footprint optimization? And maybe also the savings level that you’ve already achieved by the end of last year and maybe what you expect for this year? And the second question around APAC, which seems to have had a bit weaker trends towards the end of last year. If you could comment the trends that you see there also in the near term? Thank you.

Yes. Thank you. So when we say footprint optimization, obviously, it includes also a lot of portfolio optimization, meaning streamlining some low or negative margin ingredients. And we have obviously shut down a plant in Spain and we basically continue to look at optimizing and reshuffling some of the manufacturing of ingredients that we have, essentially functional and natural ingredients that we have in Europe. We don’t disclose actually the actual savings. But as you’ve seen, they contribute to basically the improvement that we have seen in Taste & Wellbeing. And also, the forward-looking improvement that we expect also on the Taste & Wellbeing for 2025 going forward. On Asia Pacific, there is no, I mean, basically we’ve been growing 11.4% in – on the like-for-like basis. So I don’t see that really as a slowdown. Always take into account that Asia Pacific you have about 25% to 30% which are mature markets which include Japan, Korea, but also Oceania, Australia and so on, which are actually flat or low single digit growth. But when we look at China for example, we are above double-digit growth. When we look at the whole Southeast Asia, another double-digit growth, and what else then we have also India which has also a very nice double-digit growth. So actually all the high growth markets where we are investing in APAC are showing great growth.

Thank you.

The next question comes from Georgina Fraser from Goldman Sachs. Please go ahead.

Hi. Just about still morning and thanks very much for taking my questions, Gilles and Stewart. The first one is we’ve heard from a couple of other industries, the implication that there might have been some pre buying by customers at the end of 2024 ahead of a potentially evolving tariff environment. Just wanted to get Givaudan’s view if that’s something that’s supported the 4Q figures. And then my second question is you mentioned that China was delivering double-digit growth which seems a bit healthier than what many MNC customers have been experiencing. Is this a region where you’re especially seeing outperformance from your local and regional customers? Thank you.

Okay. So on tariffs, absolutely not. It doesn't apply for us for a number of reasons. Well the first one is that as it relates to the U.S., if I take some of the words of the President, we actually make in the U.S. all of the things that we sell in the U.S. So actually you don't have anything that we make outside of the U.S. which we do sell in the U.S. So actually tariffs don't apply at all to any finished goods that we sell in the U.S. across the whole businesses that we do. The only thing that could happen with tariffs and there, there is – we don't really have any indications and so forth would be the ingredients – some of the ingredients that we actually have to buy outside the U.S. you know, you don't have to my knowledge patchouli and jasmine growing in the U.S. So basically all those naturals which are single source in many countries around the world have to be sourced into the U.S. and therefore if ever there would be some tariffs which would be applicable to those, then we would have to pass on that to our clients. So but essentially it means that absolutely not, no clients vote anything because of the tariffs coming in. And then China, well, China, I mean, again, I think there is a bit of misunderstanding whenever some of our clients publish figures on China. Let me give you a bit of perspective first to talk about luxury because I think there is a lot of misunderstanding around luxury. So first, China as it relates to beauty is a skin care market as it relates to beauty and not a perfume market there. So in-fact the fact if I take Fine Fragrances as an example, Fine Fragrances is in a trend. Actually Fine Fragrances are doing very well not only for us with many local and regional clients, but also for large clients who actually sell Fine Fragrances and perfumes in China because the starting point is very low. So we are in a penetration mode in terms of attracting new Chinese consumers and so forth for perfumes. The second thing is basically that we have a lot of local and regional clients in China in consumer products, in taste and well being, which you don't see anywhere because they're not published because they are usually private or family owned companies. And we benefit from those because we have a high degree of relationships and we also go after the tail end with some of the e-commerce platform I just mentioned, so that means basically we end-up being at more than 12% in China overall for our businesses. So we really don't have the view of China that you can read for my large clients.

Thank you.

Was that the last question?

The next question comes from Nicola Tang from BNP Paribas. Please go ahead.

Hi everyone. Thanks for taking the questions. I wanted to ask about Fine Fragrance which hasn't really come up so far in the Q&A. Gill, you referenced China there being a strong source of growth. But I was wondering if you could talk a little bit more about the pipeline and the outlook for 2025? And to what extent do you think the strength that we've seen in the past couple of years has been driven by the strong market versus market share? And then the second question, maybe sticking with fragrance. We saw last year Unilever announcing this €100 investment in building in-house fragrance capabilities. I was wondering if you're seeing any other customers doing anything similar either on the fragrance or the flavor side. And do you see this as a competitive threat or is it actually an opportunity to engage more with those customers? Thanks.

Thank you, Nicola. So yes, okay. On Fine Fragrance, yes, it's not the second year that we are growing double-digit; it's the fourth or fifth year actually. So we are going [ph] double-digit and that's why we end up 80% more in like for like, 50% more in Swiss francs. So you have, you know, again, I sort of list a bit but converging trends which explain such a strong figure. First, if I start overall for Givaudan, because I'm talking about Givaudan in fine, it's a combination of market growth, but also Givaudan gaining substantially market share. Now what are the sort of drivers in terms of the market growth? Clearly what we said is that, yes, there is a growing interest, there is a whole cohort of new consumers, Gen Alpha, Gen Z, young consumers. We actually have basically gained, yes, I think to the surprise of everyone of our clients and including us, attraction into perfumes, into Fine Fragrances, into exploring new scents, into spending their weekend afternoons exploring and smelling things in shops and so forth. But also supported and echoed by influences on social media and so forth. So essentially the way we see it is that there is clearly an increasing interest into expressing oneself with perfume, which includes new consumers, especially in the younger generation. And again, that has been supported by the second trend, which is the whole e-commerce influencers, which in a way is a bit the consequence of the COVID where nobody could actually shop in stores and duty-free shops. So that has brought with e-commerce and influencers basically this whole new cohort of consumers. The other trend which is very important in terms of market trend is the whole SAMEA in our region, which basically is again it's a combination of market share again and market growth for Givaudan. But we've added CHF100 million in the last two years just with SAMEA on the business of Fine, which represents 10% of the total sales. So, you can imagine how much that is. And with a lot of local and regional clients. So that's also another cohort of new consumers, new clients coming in that you don't see when you read basically the reports of the large Fine Fragrance clients. So that's another trend. And then we talked a bit about China, Asia in Fine Fragrances is still quite. When we talk about Asia in Fine, it's just the local clients of Fine, because all the cells, all the perfumes, which are being sold in China, for example, go through our large clients who buy our fragrances in Europe, because everything is manufactured in Europe for China. So, what I'm talking about in Asia are all the emergence of new clients, new companies, entrepreneurs going into perfumes, going into beauty, which is also something that has emerged over the last three to four years. So, then the market share, again, clearly yes, when we look. And you know how we measure that for Fine, but we also measure that across all our businesses. It's the ability to win more briefs than the others. It's a bit as simple as that. And we've seen an increase in our brief wins and pipeline in Fine, but also in CP, but also in taste, which basically also explains the market share gains for Fine, but also the other segments. So a bit. So then the question is, how sustainable is that? Well, first thing, there is no stocking up or anything on perfumes and so forth. And you know, and when we look at the retail and NPD and all of those data, it seems that, you know, there is a good momentum out there. And then your question on Unilever investing in CHF100 million on, first, we don't know if it's OpEx, CapEx and so on. So that's a bit. The second point is really about the fact that it shows. It's actually a very good signal that Unilever, but alongside of many other clients, invest into fragrances and then we call that putting value into the jar, meaning, better in a way, more expensive. And we see that with, I'm not talking Unilever there, I'm talking the whole brief pipeline. We see an increase in terms of the value of price point of briefs, meaning that clients want to put more juice into the jar. So this investment of Unilever, this increased interest of Unilever shows also that they are committed to fragrances. They see that as a great lever. But it's not with CHF100 million that you can integrate the whole fragrance that they are buying far from it. And this model is not new. actually, it's not new to Unilever. It was called Quest 30 years ago that we actually acquired in 2007, by the way. And it's also some, you have some others doing this model, so let's see how it evolves. But we are very enthusiastic and very happy to see that development. So basically that's, I think answers your two questions.

Yes, it does. Thank you.

Ladies and gentlemen, this concludes the question-and-answer session. I would like to pass over to Mr. Gilles Andrier for any closing remarks.

Okay, so thank you very much for your interest and your numerous questions. Let me remind you some of the next upcoming events. We look very much forward to welcome you on the 20 of March 2025 to our Annual General Meeting in Geneva. But even more importantly, on 10 of April 2025, we publish our first quarter sales and hopefully can welcome many of you to our Spring Investor Conference this year, which will be back in Geneva in Vernier, where we will have a focus on consumer products and their everyday growth opportunities. Thank you and I wish you a great day.

Ladies and gentlemen, the conference is now over. Thank you for choosing chorus call and thank you for participating in the conference. You may now disconnect your lines. Goodbye.