Ladies and gentlemen, welcome to the Symrise H1 2026 Analyst and Investor Conference Call. I am Healy, the conference call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A 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 René Weinberg, Head of Investor Relations. Please go ahead.
Good afternoon, ladies and gentlemen. Welcome to our first half 2026 call. Thank you for joining us today. All related documents are available on our website.
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America and Asia Pacific. We continue to deliver strong profitability while significantly improving cash generation, despite a more challenging cost environment and continued investment behind future growth. We continue to advance our transformation, and during the first half, we validated our key business cases, prioritized the most impactful initiatives, and moved the program from planning towards implementation. Overall, we are making very good progress on our journey in our accelerated way.
Turning to the results. First, our sales were EUR 2.539 billion with organic growth of 2%. The most important development was the sequential improvement through the half organic growth increase from a slight decline in the first quarter to 4.5% in the second quarter, reflecting stronger customer demand and strong execution across our businesses. This brings H1 results in line with our 2026 outlook of 2%-4% organic sales growth. Adjusted EBITDA was EUR 553 million, with a margin of 21.8%. While the margin was modestly below last year's comparable margin, it remained resilient, primarily due to the reinvestment of efficiencies into the ONE Symrise transformation. In addition, higher logistics and certain raw material costs, particularly those related to the geopolitical situation in the Middle East, had an impact. Cash generation was a clear highlight.
Adjusted business free cash flow increased to EUR 347 million, or 13.7% of sales, up 450 basis points from the prior year. We will also continue to execute our ONE Symrise strategy, further strengthening our portfolio through the contemplated acquisition of Floral Concept. Overall, the first half gives us confidence for our full-year outlook, supported by stronger commercial momentum, steady profitability, and improved cash conversion. Let's now look at the Q2 performance in more detail. Turning to slide five. In the second quarter, we delivered sales of EUR 1.22 billion. Organic sales increased by 4.5%, with 5.1% volume growth, partially offset by 0.7% negative pricing. Portfolio effects were slightly negative following the exit from Aqua Feed business, while foreign exchange had little impact. The quarter reflected improving momentum across much of the portfolio, although performance remained mixed by business.
In Taste, Nutrition & Health, we delivered strong organic sales growth of 4.9%, driven by volume growth of 3.9% and positive pricing impacts of 1%. In Food & Beverage, we continue to perform particularly well, with market-leading mid-single-digit organic growth driven by strong demand across savory, Naturals, and sweets. Pet Food reported a slight organic sales decline, mainly reflecting continued price normalization in pet nutrition. In the Scent & Care segment, sales were up 3.8% organically, driven by strong volume growth of 6.9%, partially offset by negative pricing of 3.1%. Fragrance delivered mid-single-digit organic sales growth, led by high single-digit growth in Consumer Fragrance, demonstrating sustained demand for consumerized innovative solution. Fine Fragrance declined mid-single-digit against high prior year comparables. Importantly, this reflects timing rather than underlying customer engagement, which remained very strong.
Care & Wellness declined low single digits, mainly due to a mid-single-digit decline in UV filters, but improved sequentially from Q1. Aroma Molecules delivered high single-digit organic sales growth, benefiting from easier comparables. Performance was driven by double-digit organic sales growth in Specialty Fragrance Ingredients and Menthol. Finally, regarding the planned divestment of our caffeine ingredient business, discussions with interested parties continue to progress constructively. Let's now turn to the regional highlight on slide six. As you can see, growth was led by North America and Asia Pacific, where organic sales increased 9.6% and 12.3% respectively. Both regions benefited from healthy customer demand, innovation traction, and strong commercial execution. Performance in EAME and Latin America remained softer at -0.4% and -2.1% respectively, due to a slower demand environment.
Overall, we continue to benefit from our diversified geographical footprint, while we focus on improving performance in the regions where demand remains more subdued. Beyond our strong financial performance in the second quarter, we continue to strengthen our customer relationships and innovation capabilities, as you can see on slide seven. Amongst others, we broke ground on the second phase of our logistics center in Holzminden. This investment supports future growth by improving service levels, increasing supply chain efficiency, and providing additional scalability across our operations. Over time, this will enhance both customer satisfaction and operational productivity. Another example, we were recognized by Mars as a Supercore Supplier, reflecting our status as a strategic innovation and supply partner. This high distinction underscores our ability to consistently and reliably deliver innovation and create value for one of the world's most well-known consumer goods companies.
We're named as Bath & Body Works' 2025 Supplier of the Year. This recognition highlights the quality of our fragrance capabilities, customer service, and execution, and demonstrates our ability to win and grow with leading customers in attractive end markets. Taken together, this achievement reinforces the progress we're making in executing our strategy while strengthening the long-term competitiveness of the business. With that, I will hand over to Olaf to review our financial performance in more detail.
Yeah. Thank you, Jean-Yves, and a warm welcome also from my side to all of you. Let's turn to slide nine. Our first half results demonstrate the resilience of the business despite a dynamic cost environment and targeted investments to accelerate our growth. Gross profit was EUR 1.05 billion, with a gross margin of 41.3%, essentially in line with last year. Disciplined cost management and operational efficiencies helped offset slightly higher manufacturing costs. Adjusted EBITDA was EUR 553 million, with EBITDA adjustments for extraordinary items of EUR 9.3 million related to M&A activities, legal expenses, and one-time transformation costs. Adjusted EBITDA margin was 21.8%. The 30-basis-point decline versus the prior year was primarily due to three factors. First, higher freight and logistic costs related to the geopolitical situation in the Middle East. Second, a timing lag between those cost increases and implementation of our customer surcharges.
Third, continued investments behind our strategic priorities and future growth. Important, we do not view these factors as indicative of any structural shift in the earnings profile of the business. Let's now look at the segment dynamics behind this performance on slide 10. In Taste, Nutrition, Health, adjusted EBITDA was up 0.6% to EUR 372 million, with margin expanding by 10 basis points to 24.5%, supported by profitable growth and ongoing productivity improvements. In Scent and Care, adjusted EBITDA declined 6.7% to EUR 178 million, and margins decreased by 90 basis points to 17.7%. Margins were impacted by portfolio changes and mix effects, as well as increased freight and logistic costs related to the geopolitical situation in the Middle East. Continuing pricing actions are taken to compensate for logistics, supply chain, and specific raw material price developments. Our efficiency initiatives are progressing and are allowing to moderate these headwinds.
Turning to slide 11, cash generation was one of the strongest aspects of our first half performance. Adjusted business free cash flow increased 47% year-on-year to EUR 347 million, with a business free cash flow margin of 13.7%, an increase of 450 basis points year-on-year. The improvement reflects disciplined working capital management and optimization initiatives, as well as continued control of capital expenditures. The stronger cash conversion increases our financial flexibility while supporting investments into the business, portfolio development, and attractive shareholder returns. Although we are only halfway through the year, our first-half performance gives us confidence in achieving our full-year objective of an adjusted business free cash flow margin above 14%. Let's now review how this is reflected in the balance sheet. For that, please turn to slide 12.
Net debt, including pension provisions and lease obligations, increased from EUR 2.1 billion at year-end 2025 to EUR 2.3 billion at half year one, 2026. We have, nevertheless, strengthened the equity ratio to 49.2% amid our ongoing share buyback program, which at the end of H1 2026, stood at around EUR 192 million invested. At the same time, our net leverage ratio improved to 2.2 times adjusted EBITDA compared to the end of 2025, comfortably within our target range of 1.5- 2.5 times adjusted EBITDA. Our financial discipline enables us to return capital to shareholders while preserving strategic flexibility. Strong cash generation provides the basis to invest in growth and support portfolio development without compromising our investment-grade profile. With that, let me hand back things to Jean-Yves for the strategy update.
Thank you. Thank you very much, Olaf, and let's move now to slide 14. Our ONE Symrise strategy has not changed. We remain focused on improving portfolio quality, accelerating growth, strengthening profitability, and generating sustainable strong cash flow. Our ONE Sym transformation program supports all those objectives. In phase I, we focused on design and implementation, and now in phase II, we are activating and starting to deliver in a structured way. This translates into clearer priorities, stronger process ownership, and more disciplined resource allocation across the whole organization. Over time, our transformation will drive profitable growth and stronger cash conversion. We are building a more focused, more scalable, and more competitive Symrise. Turning now to slide 15.
During the first half, we continued to strengthen the portfolio while investing in This expansion will create new opportunities for profitable growth and enable us to create more differentiated solutions for our customers. While the broader EUR 16 billion-EUR 18 billion Fine Fragrance market is expected to grow at approximately 6%-8% per year, the Premium Naturals market is expected to grow at approximately 8%. This is supported by structural trends including premiumization, demand for traceability, and demand for differentiated natural ingredients. Floral Concept will bring sourcing depth and extraction know-how for high-end fragrance customers.
Combined with Maison Rouzier, our heritage naturals house in Grasse in France, Floral Concept will become part of a broader and more differentiated platform for premium natural ingredients. This contemplated acquisition will strengthen our Naturals range, further expand our presence in Grasse, and improve our relevance for premium fragrance customer. Beyond portfolio optimization, our ONE Sym transformation is also making meaningful progress. Turning now to slide 17. We continue to target organic sales growth of 5%-7% CAGR by 2028. Achieving that ambition will require consistent execution across several areas. That includes strengthening innovation, improving commercial excellence, simplifying our operations, and increasing the speed and efficiency of how we serve customers. ONE Sym will enable that execution. The next phase of value creation requires both growth and efficiency. So focus in on accelerating that work and executing with greater speed and discipline.
Let me now explain where we stand in terms of implementation. For that, please turn to slide 18. During the first half of the year, we built the foundations for execution in phase II. We established the operating framework, validated the main opportunities, and prioritized which measures to implement and how to minimize the risk. We are now progressing to implementing these initiatives, which are expected to improve productivity, reduce complexity, and generate additional funds to invest into future growth. The program is therefore designed to support both growth and profitability over time. Turning now to slide 19. We see clear opportunities to achieve our midterm organic sales growth ambition by focusing on four key areas: investing in high-growth segments, commercial excellence, innovation, and digitalization. Let me illustrate this a little bit. We continue to invest in attractive growth markets, where we can leverage existing strengths and differentiated capabilities.
For example, in Food & Beverage, we are expanding our taste solutions across the portfolio, including new citrus application beverages. We are building on our leading natural platform and investing in Premium Naturals in fragrance. At the same time, we are investing in Care & Wellness, in innovation-driven application in health, wellbeing, and beauty, where we see attractive opportunities to support our customers with differentiated solutions and strengthen our market position. All these investments reflect our strategy of focusing resources on attractive growth opportunities, where we can create differentiated value for customers and support our sustainable growth over time. We are rolling out digitalization to increase speed and transparency across our organization. Please turn now to slide 20. We are continuing to advance a broad set of efficiency initiatives across procurement, global asset management, productivity improvement, and portfolio optimization.
Having already delivered substantial improvement over the last two years, we are now further embedding structural efficiency measures across our operations. To illustrate how we are driving these improvements in practice, let me highlight procurement as one example of where we are creating tangible value. In procurement, we continue to leverage our global scale and sourcing expertise to improve efficiency, strengthen governance, and enhance transparency. In maintenance, repair, and operations, we have implemented global policies that standardize supplier usage and purchasing behavior across the group. This helps increase spend visibility, reduce complexity, and ensure greater purchasing discipline. Building on this approach, we have also transformed the way we manage logistics procurement. During the period, we completed our first group-wide pan-European road freight tender, bringing together purchasing volumes that had previously been managed locally.
This allows us to better leverage our scale, establish harmonized sourcing standards, and create a scalable procurement model that can be replicated across other regions over time. Let's turn now to slide 22. Based on our first half performance and current business momentum, we reaffirm our 2026 outlook. We continue to expect organic growth of 2%-4%, adjusted EBITDA margin of 21.5%-22.5%, and an adjusted business free cash flow margin above 14%. Q2 organic sales growth rate of 4.5% is a run rate needed to support full-year guidance after a softer Q1. The current business momentum is expected to support Q3 organic sales growth similar to Q2.
The outlook is further supported by the acceleration of Symrise, strong project vitality with key customers, a healthy innovation pipeline, resilient core end markets, and moderating FX headwinds. From a financial perspective, the guidance reflects our objective to balance growth acceleration, disciplined margin management, and cash conversion. Our midterm targets also remain unchanged, supported by the continued execution of our ONE Symrise strategy and the ONE SYM transformation. With that, we are happy to take questions.
We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star 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 two. Questioners on the phone are requested to disable the loudspeaker mode while asking a question. In the interest of time, please limit yourself to two questions. Anyone who has a question may press star one at this time. The first question comes from the line of Matthew Yates from Bank of America. Please go ahead.
Hey, ladies and gentlemen. Thanks for taking the questions. Two, if I can. The first one for Olaf. I'm struggling to decipher your cash flow statement for the H1. Obviously, the cash conversion looks really strong, but when I dig into what drove that, there's some fairly big swings in what you bucket as other and tax timing. I wanted to get your take on whether the H1 performance is indicative of the structural changes you've been making to cash collection or whether there's some sort of phasing timing effect here. Maybe the second question, just on the business and specifically around Pet Food. Can I get your perspective on this trend towards fresh pet food or frozen pet food? It seems to be gaining traction. I think it's now 10% of the market or so.
From a Symrise perspective, what does that mean in terms of content that goes into those sorts of products versus what we might call traditional or conventional types of pet food? Thank you.
Thank you, Matthew, for your two questions, and I will let Olaf answer the first one. I will take the second one.
Thank you, Matthew, and thank you for the question. As you've seen, we have a very strong cash flow in the first half. I think we have set this as a priority for ourselves to work on the opportunities we have, and it comes along with a very disciplined approach to address our working capital opportunities. Looking at the structure, if you dig into, you will see that, especially on the supplier side, we have improved substantially. Last year was a very big headwind for half year purposes. The first half this year, exactly the opposite. The reason is that we have worked tremendously on supplier payment terms, which is part of the initiatives that we are taking at the moment in our procurement phase. These are efficiency opportunities, and we take that very seriously. We were very disciplined when it comes to building up inventories.
What was also a big driver for the good cash flow is the CapEx discipline, which we apply at the moment. It's very strong discipline. We are building a stronger network at Symrise at the moment to drive CapEx projects in a much more disciplined way. All this is paying off, and that's what you see in the cash flow statement. There's nothing structural which I would pinpoint as an exceptional situation for H1, either to tax or others. We drive this further, and we expect that this will help us to deliver the above 14% business in cash flow by the end of the year.
Thank you.
Over to you, Jean-Yves.
Thanks, Olaf. Thanks for the question about the pet and the fresh and the wet pet food area. Just to come back on a big picture on pet, the good news that the pet market is very dynamic. We've seen some key customer continuing to invest in production, and by the way, the last big investment in Europe in wet pet food products.
We are historically more in the dry than in the wet because for the dry, for the kibble, you need palatants, and that's where Symrise was very well-positioned, and historically with Royal Canin, now with Royal Canin the reason why we did the acquisition of ADF, IDF, chicken protein, egg protein, but we're also working on some emulsifying effects of the eggs. We are also working on different type of food protections. The wet business is, for us, a new growth driver. We are now moving and investing more in this market, which is growing. Is it growing faster than the dry?
It depends on the regions and on the type of customers. The dry is very practical. It's really a food service, and the wet is more difficult to sell and for the logistic. That being said, for us, it's a very good opportunity that the wet and the dry markets are growing, and I'm very confident in the market to really recover some colors in the future and in wet and in dry.
Thanks, both.
The next question comes from the line of Alex Sloane from Barclays. Please go ahead.
Yeah. Hi, thanks for taking the questions. Two from my side also, please. Firstly, can I just ask on the Scent & Care pricing, I think -3.1%.
In quarter two, could you give a bit more color on what's driving that? Maybe, are you sort of pursuing a kind of a volume-focused strategy in aroma and UV filters that's behind that, and how should we think about that pricing evolving in the second half, when I guess you might be taking a bit more pricing to offset raw material inflation and the freight costs that you outlined? Maybe on the flip side, you might be giving some tariff refunds back to customers. That'd be the first question, I guess. Yeah. What's behind that -3.1% and what's the outlook? Secondly, if I could just follow up on pet. It's good to hear you're confident in the market, wet and dry. In terms of your own performance, obviously, I think slightly negative in Q2.
Could you give us a bit more color around the sort of pricing volume trends behind that? I guess, I think it sounds like maybe there's a bit of phasing in palatability that should be supporting the second half. How should we think about the magnitude of improvement that you're expecting in the second half of the year in pet, please? Thank you.
Thank you, Alex. Let's start with Scent & Care and the price decline of around 3%. In Scent & Care , we are playing on price volume. You see also that the volume effect in Scent & Care is very positive. The pricing is a tactical pricing for really coming back to some market prices. We are fighting, in Menthol in term of price, we are fighting in UV filters in term of price, but it's paying off. The volumes are growing. It's really a way to really be in the market and to grow by volume. We are really very happy to see a volume-driven growth. It's pricing adjustment, and for the second half of the year, we will offset two things. We'll offset this price decrease by better operational excellence.
The idea is, even if we decrease price, we don't lose in term of profitability. Procurement, I know I was taking some example of centralization, optimization, operational excellence, logistics. Really, we will offset in term of profitability. In term of growth, the most important for us is to continue to over-perform on the market. The way to over-perform the market for us is to continue to take market shares. This price is really a tactical one, and let's see what will happen in H2. The growth will continue to be there in term of volume. Concerning the tariff refund, it will be done customer by customer, case by case. We don't have a policy on that. It's a very commercial approach we have to take.
Concerning the pets, your question about price and volume, what about next end of the year. The beginning of the year is okay. It's a year where we don't see growth, but it's remaining driven by still a normalization of the prices in nutrition. The volumes are there. The market is, by the way, there. We see some key accounts recovering also some growth, which is a very good news, not only the local and regional. Also, what we are very confident is to see a Q3 and Q4 much better in volume than Q1 and Q2. Even we have some carryover from Q2 to Q3 because we are late in some deliveries. Myself, I'm very confident to see a second year for pets, for palatability and for nutrition with much better performance than in Q1 and Q2.
Thank you.
The next question comes from the line of Ed Hockin from J.P. Morgan. Please go ahead.
Hi, all. Thanks a lot for taking my questions. I have got two, please. My first question is a little bit on the regional breakdown of the growth. North America and Asia, very strong in Q2. I am wondering if you could help us with a bit more granularity by segments where the strengths of that Q2 growth in North America and APAC is coming from. I think the comparatives in these regions also had been a bit easier in Q2. If you could help to give a little bit more color on the growth drivers there and expectations in the second half. My other question, please, is on Food & Beverage and the improvement to mid-single-digit. I think in Q2 you cited savory, Naturals and sweet.
Do we take from that that beverages was a little softer, given that this has been quite a strong growth contributor in recent years? If you could just provide a bit of color on how beverages is performing and the outlook for the Food & Beverage segment overall into the second half. Thank you.
Thank you, Ed, for these two questions about the type of growth. For the regional explanation and the specific business explanation, I will really refer to the comparables. Concerning the quarterly result in the regions, Q2 last year was very strong in EAME. Q2, by the way, was very strong in beverage also, EAME beverage. Q2 was very strong in Latin America, Q2 was very strong in Fine Fragrance. If you combine these things, you can also understand that on a comparative way we appear weaker in Q2 because EAME was very strong and because for Food & Beverage, beverage was very strong also. Now the question is, what happened in North America and in Asia Pacific? The growth drivers are everywhere. The growth is really across the different businesses. It is also our strategy, which is paying off. We are accelerating innovation.
We are reinforcing sales excellence. We are really targeting more specific sub-segments. All that is paying off. Last year, U.S. was not delivering so well as Europe. This year now, we see the payoff with significant wins with key accounts. Very well-known names, and we want to keep it for us. There are also big wins in U.S. for the time being. APAC is the same. We had a very strong strategy visit last year in APAC, and we are also seeing the payoff. Concerning the Latin American weakness, I will summarize to say that last year we had a very strong impact of Fine Fragrance, which is not happening for this quarter. It has an impact in Latin America and in Fine Fragrance result for this specific quarter, but mainly due to comparables. It does not mean anything in terms of business softness.
Even the contrary, we have a very dynamic opportunity portfolio in Fine Fragrance, for example. I hope I have answered more or less your question about why we're going very well where we are going very well, and why we appear not to go so well, mainly due to these comparables.
Thanks a lot. Thank you.
The next question comes from the line of Nicola Tang from BNP Paribas. Please go ahead.
Hi, everyone. Thanks for taking questions. Maybe starting with the shorter-term one, you mentioned that for Q3, you expect trends to be broadly similar to Q2. Within Q2, as you mentioned, there's variability between different end markets. I was wondering if you could give a bit more color on what you see in terms of your pipeline and order books as we look into Q3, going across the different end markets. The second question is on margins. You, in the prepared remarks, gave quite a lot of detail around sort of the moving parts and some of the headwinds around net pricing, for example. On the ONE Symrise transformation side, I was wondering if you were able to quantify either the growth or net savings in H1 and perhaps the outlook for H2. I think in the last quarter you said you'd provide a bit more quantification with Q2.
I was just looking for a bit more help on the numbers there. Thank you.
Thank you, Nicola.
On the numbers there. Thank you.
Thank you, Nicola. Acceleration will be visible in H2. Concerning the pipe for Aroma Molecules, I take the opportunity to say that we do a great job in Aroma Molecules. Now, after the divestment of Terpenes, we'll have a very solid portfolio in Aroma Molecules, where we continue to clean the product portfolio without sacrificing the top line to the productivity. It takes time to squeeze out some old molecule for a more modern and profitable one, but we're doing a great job there. Last but not least, the fragrance is continuing to really grow very nicely, driven by a very strong opportunity pipe. You see, it's all the different businesses. There is no one going better than the other one. Definitely, the one who will be making a difference the second part of the year will be Pet.
Now, concerning the margin and what is happening in our profitability, I will start the answer and hand over to Olaf. We deliver during two years, EUR 50 million per year, and what we deliver will directly going down to the bottom line. We gained 280 bps in two years, EUR 100 million. As you know, this year we are reinvesting. We're accelerating this transformation. We're accelerating these efficiencies. The impact of the efficiencies this year will be higher than the last year. Now, I told that I will give figures when I will have figures. Today, it's a little too early because as you clearly understand, there are a lot of initiatives which are really on the way to be valorized still. We are continuing to develop, and we are significantly reinvesting. It's difficult to give a figure today.
What I can give you is one thing which is a fact, which is that we deliver 21.8% adjusted EBITDA at the end of June. Apart from that, I will hand over to Olaf to give perhaps more colors in the different parts of the organization there.
Thank you, Jean-Yves, I think first of all, it's important, Nicola, we have a lot of self-help measures in place to maneuver in this not easy environment. That's what you see in the profitability. We definitely had very good progress on the efficiencies, also from a financial perspective. The difference to the last two years is this is reinvested, and we are putting structures in place to help us to make these efficiencies come through in a lasting way. Example, procurement. If we have a global procurement ambition, we need a global procurement organization. These are the people who will make the procurement efficiencies happen. Same thing for global operations. We are steering this now globally. I think Jean-Yves gave a few examples around this earlier. This is what we need to invest to make efficiency gains in a lasting way. Another example is IT.
We are accelerating to invest into digitalization. We are building our data foundation at the moment to leverage what we need across the group, to be much more efficient. We are sitting, always saying on a gold mine when it comes to data. We are putting this into a structure at the moment, and that's a lasting investment. Therefore, I think we are doing profitability protection at the moment, while at the same time preparing the future through our ONE SYM transformation program. That's behind it, and I think that gives you a good impression. As Jean-Yves said, once we are one step further down the road, we will undermine this also with figures and give you a deeper insight in how this will all progress and work out for Symrise. What stays is our ambition on the margin.
We guided for the upper end of our corridor, that is the remaining ambition which we have in place to run this program. Thank you.
As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question comes from the line of Lisa De Neve from Morgan Stanley. Please go ahead.
Hi, thank you for taking my questions. My first one is a follow-up on a comment you just made. You stated that you're in the process of cleaning the Aroma portfolio. Should we see this as any sort of select phase out of specific ingredients, or should we see this as potentially some further divestitures like you're pursuing with the Terpenes business at the moment? More broadly, can you sort of share where you're looking to do potentially any sort of incremental M&A, as per the announcement and sort of elaboration on today? That's the first one. Then, my second question is, I would like to come back to Pet Food. Can you just confirm whether there's incremental price concessions in the second quarter and we're still in an incrementally negative price environment? I appreciate your margins are very much intact, if not expanding.
I just want to understand if there's incremental price concessions and why that's still happening. Thank you.
Okay. Thanks, Lisa. Aroma Molecule, it's a very good question. When I say that we're really working on Aroma Molecule, when I say we are cleaning, I say we are really optimizing our portfolio. Aroma Molecule is a value driver for Symrise. It is a strength for Symrise. It is really part of our strategy. To call it backward integration or raw material sourcing or integrated margin, it's part of the integrated offer we can do. We are very well-recognized by our customer for having secured solution, sustainable solution, reliable solutions. Also we are recognized by our competitors to have very good raw materials for them. It's a strength we want also to keep within Symrise. It's part of our difference. It is part of our uniqueness.
That being said, in this Aroma Molecule, we are different type of businesses, the Terpenes one was not fitting with our guidance in term of sales, profitability, or even cash intensity, CapEx intensity. We decided to divest. Terpenes is a very strategic, the natural Terpenes, strategic for us. That's the reason why we are not only looking for a buyer, but we are looking for a partner. Now when I say we're optimizing or cleaning the portfolio, I don't mean necessarily cleaning, divesting. I say that what will remain and what is today in our portfolio is very powerful. It's very powerful in term of potential growth, it's very powerful in potential of margin improvement. Why?
Because we're improving through operational excellence the productivity, meanwhile, we're also localizing different type of productions where it makes more sense now, not necessarily either in Germany or in U.S. or in Mexico. Now we are starting to invest in India, for example. It's really something which is very important to understand that Aroma is a very important business for us. It is a very specific business upstream, it is also a business where we are representing a key value drivers even for some competitors. Coming back to the pet nutrition. Yes, the pet nutrition performance for the first semester is impacted still by the incremental price reduction. I like the fact that you say incremental. Last year, it was dramatic. It was really a strategic repositioning. This year, what I call, you say incremental, I say tactical.
We are in commercial negotiation. The market is there, the customers are there, and the price increase, the price concessions we are doing are really very limited compared to last year, but we still see some effect. The effect we have seen in H1 will continue in H2 because the price is down for one year, but it will not go lower. The effect will be across the year, but next year should be really normalized.
Thank you. Maybe if I can follow up and just add one more broader question. Can you maybe share how, and I think this is a question a little bit more for Olaf, how would you think about the structural margin outlook for Scent & Care ?
Improving. I think, we have Michael Friede now, on the Scent & Care driver. We will work on the different parts, as indicated by Jean-Yves, I think we have the upsides, specifically in Care & Wellness. You've heard around the Aroma Molecules, I think there are a lot of pieces, which speak in favor of also improving margin opportunities in Health and Care. That's what's driving us, and that's what we are going after.
Okay. Thank you.
Welcome.
The next question comes from the line of Ranulf Orr from Citi. Please go ahead.
Hi. Thanks for taking questions. Two, Pete. First, just going back to cash. Obviously, 1H, much stronger than normal. How should we view the seasonality of that? Do you think these changes that you've made will lead to a less first half, second half weighting in cash generation going forward? Related to that, if you have another bumper year of cash flow, how should we think about your use of that, and thinking specifically about further buybacks. My second question just comes back to pet nutrition pricing. It slightly feels like every time we speak, that actually there's more negative pricing and that it's going to go on a little bit longer. Why should we have confidence that actually this is the last year of price declines, and we don't see just sort of continued erosion in 2027 and beyond? That'd be my two.
Thank you.
Ranulf, thanks for the question. We did a lot of work on cash. That is the outcome what you see in H1, and it's a record high performance which we have ever seen in H1 for Symrise. It's really driven by what we are doing at the moment in the company, with a lot of focus and discipline. The second half is normally a stronger one from a cash flow generation perspective, and that's why we are guiding for a higher business free cash flow at the end of the year, with above 14%. I'm not at a point that I can be more specific, but I think what I gave you indicates clearly this is on the right track now, how we approach it. When it comes to cash allocation, and share buyback, I think our current program is well on track.
We are aiming for EUR 400 million by the end of October. I think we are reevaluating how we invest in the future. Naturally, we want to have our shareholders participating in our good performance, and that will be assessed once we are there, latest beginning of next year.
So-
You take pricing?
Yeah, I will take price, pet nutrition, thanks, Ranulf, for the question. Always it's difficult to predict, by being 100% secure that next year will be black or white. What happened is the pricing today of the pet nutrition, there are two things. There are the chicken, and there is the egg. The chicken, nobody speak about it, chicken is a very good and profitable market. In pet and in human, we have the plants making both. Concerning the pet nutrition, I precise because pet nutrition is not only egg. Concerning the egg, which is really something which has been very visible this year and continue to have an impact this year. Last year on impact this year. Last year, we made a strategic decrease. We are in an incremental phase.
We are first at the level of the price pre-COVID or pre-raw material increase. Before we were increasing price, all industry were increasing price. We are back to the price before this raw material crisis. The second thing is the egg protein are the best value protein in the market. All the amino acids, by the way, some phospholipid and so on. The third thing is in the egg protein, in the egg, there's not only protein, we have also different other functionalities. An emulsifying effect I was mentioning before, very interesting for wet, is also something we will price much higher. There are a lot of signals. There are a lot of things where we see the customer coming back to this type of protein because we're exiting the market.
Even if it's the best type of protein, we exited the market because there could be some substitution. What happened is that we started to lose some launchings. Now we see the volume back because the price are back to the market reality. Now the arbitration will be the following, to answer your question. Either we will promote more volumes and still perhaps decrease some prices, but it's not double-digit, right? Price-volume negotiation, yearly price-volume negotiation. Or we say, "No, definitely, we want to protect the price, the profitability, the quality of our offer," because every customer is recognizing that, and we will keep price at this level, even start to increase price again. That will be a commercial decision.
Not to tell you black or white, but I think it's important to understand that we are also working on it every day to make sure we are valorizing the best way this wonderful type of nutrition. That being said, I don't know if there are still questions, but I think we need to stop. It's four to three, even three to three or two to three. Two minutes for me. Let me conclude. For the conclusion, three messages. First, our business gained momentum during the first half with a very clear improvement in organic growth during the second quarter.
The second is we continue to deliver strong profitability and cash generation, Olaf explained that, amid an operating environment that remains very challenging. The third one is we made good progress advancing and accelerating our multi-year program of transformation, the ONE Sym Transformation program. We are now really focused on the implementation, the disciplined implementation. That work progresses. I got the question also from you, Nicola. We'll provide additional detail. Back by the very clear strategy, a very disciplined execution on a very strong investment-grade balance sheet, we are very confident in our ability to deliver the durable earning growth you are all waiting, strong returns, sustained long-term value for shareholders. We thank you for your interest in Symrise, and we look forward for speaking to you again in the very near future. Thanks again.
Ladies and gentlemen, the conference is now over. Thank you for choosing Conference Call, thank you for participating in the conference. You may now disconnect your lines. Goodbye.