Earnings Call: Q1 2026

May 18, 2026

Summary

Q1 revenue rose 38.6% YoY to $83.6 million, including 9% organic growth, while adjusted EBITDA margin reached 23.2%. May acquisitions expanded the annualized sales run rate to $380 million and lifted net debt to EBITDA to 1.8–1.9x.

Ladies and gentlemen, thank you for standing by. My name is Kenny Green, and I am part of the investor relations team at Turpaz. I would like to welcome all of you to Turpaz's results Zoom webinar for the first quarter of 2026. I would like to thank Turpaz's management for hosting this conference call. All participants other than the presenters are currently muted. Following the formal presentation, we will open the call for a questions and answer session. If you do have a question at any time during the call, you can enter it in the Zoom question and answer box. After we finish the formal presentation, we will go through your questions. I would like to remind everyone that this conference call is being recorded, and the recording will be available from the link in the earnings press release and on Turpaz's website from tomorrow. With me today on the call is Ms. Keren Cohen Khazon, CEO, and Mr. Guy Gill, Executive Vice President and CFO. Keren will begin with a short introduction to Turpaz for the benefits of those who do not know the company well, and then with a summary of the quarter's results, as well as the acquisitions, followed by Guy with a summary of the financials. We will then open the call for the question and answer session. You should have all received by now the company's press release. I also want to remind everybody that the safe harbor statements that you see here and that was in the press release earlier today applies to the contents of this conference call. With that, I would like to hand the call over to Keren. Keren, please go ahead. Good morning, America, and good afternoon, our European investors and analysts. I am very happy and pleased to be here today and to present to you Turpaz, fast-growing global F&F company. Last four-year sales CAGR was 34%. 34%. Our revenue for first Q 2026 was almost $84 million, growth of 38.6% compared to the first quarter in 2025. Our current sales run rate of today, after the two acquisition in May, presenting $380 million. $380 million, and I am saying it twice just because we started our journey less than 10 years ago, and we went to an IPO five years ago in Tel Aviv Stock Exchange, and we traded today on Tel Aviv 125. Our adjusted EBITDA margin is 23.2%. Till today, in the last 10 years, we did 20 successful acquisitions, and our net debt to EBITDA is 0.5. Today, Turpaz is serving close to 5,000 customers in more than 95 countries in the world. Turpaz have a very clear roadmap to double the sales every four year or less, and to become one of the top 10 companies in the world for F&F. We are leveraging our synergies, and we are doing quite a nice cross-sellings between the companies that we are acquiring to the companies in the group and to our customers of these companies. Turpaz proven M&A expertise, bringing value and leveraging the synergy. We have a very large pipeline for acquisition. More than that, Turpaz is a rapid growth company with strong balance sheet and cash generation. Turpaz is focused on SMB, small, medium-sized customers or businesses, which is the growing sector in our world today. More than that, we built some expertise on flavors for clean label trends, applicable to GLP-1 product flavors, and ready-to-drink, RTD, and natural ingredient demand. Okay. This slide shows very nicely the growth between 2021 to 2025 results by all revenues, EBIT, and adjusted EBITDA, how we grew all of them. Not only the sales, but also the profit and the profitability. If you look, the current sales run rate as of today in May for 2026 is $380 million. Turpaz global presence today is in North America, Europe, Africa, and Asia. If we will look further in this slide, we can see how the sales distribution was in the first Q of 2026 compared to the current one after the two acquisitions. We diversified our sales between Europe and North America. Today, North America, we built a platform of growth for the future with 17% of our sales today, our revenue are in North America compared to less than a month and a half, which was 8.5%. If we look on the other side of the slide, on the right side, we see the sales by segment on the end of the first quarter 2026, and the current segment, sales by segment, which is divided differently between our core business, fragrance and flavors, and of course, Specialty Fine Ingredients. Turpaz have today 30 production sales and R&D sites with more than 1,100 happy employees in the world. As I shared with you, we did 28 successful acquisitions in the last 10 years, and we have a very large pipeline, strong pipeline for continue our growth by M&A and combined with organic growth. If you can see from 2017 till today, we expand our footprint on the globe. What is our strategy and vision? To double the sales every four year or less, and to become one of the top 10 F&F companies in the world by M&A combined with organic growth. How we do it? We acquire companies, we add them to the group, we leverage our synergies with our strategic partnership. We create a lot of value to our current companies in the group and our customers and our shareholders, as well as we bring new technologies, new customers, new product, and creating, leveraging the best-in-class know-how to accelerate the SMB growth. Thinking global, acting local. We serve the SMB markets, serving them with all our global know-how. I'm handing to Guy. Thank you, Keren. to share with you our Q1 results. Thank you, Keren. You're welcome. Q1 results continue our journey with record results in almost all parameters. Sales went up by close to 40% and reached $83.6 million. As Keren has said, our current run rate, yearly run rate is close to $380 million. We had a strong organic growth in Q1 of 9%, which resulted in an improvement of the gross profit by almost 50% to reach $75 million with almost 42% of gross margin. Adjusted EBITDA margin grew up also by 42% and reached a margin of 23.2%. Our reported net profit doubled itself compared to last year to $11 million with a margin of 13.2%. Our non-GAAP net profit went up by almost 50% to $11.7 million with a margin of 40%. The difference between the two is coming mainly from the amortization of know-how and customer relationship that we add with each acquisition that we are doing, the employees' option plan, and the revaluation of the call option we give to the minority. This quarter, the difference is low between the two because the revaluation of the option call made an income, finance income, and this is due to the acceleration of the call option for the acquisition of Attractive Scent in France, which we have done in July 2025. We have accelerated the option. We bought 100% of Attractive Scent in the beginning of 2025 in order to be ready for the acquisition of Romessence in France, which Keren will touch later. Next slide. We have a CAGR of 32%, and what I like about this slide is that you can see that while we say that our goal is to double ourself at least every four years, our actual result is that in the last four years, we have tripled the company, both in sales and adjusted EBITDA. In the last two years, we have more than doubled the company. Drilling down into the different segment, we consider the taste and the fragrance to be our core business. Our core business grew up by 42% from $52 million to close to $75 million, with organic growth of 9%. The organic growth came from 8.8% growth within the taste division and double-digit 10% growth within the fragrance division. The operating profit of the core business went up from $10.8 million to $15.3 million, with a similar profitability to last year of 20.5%. Drilling down into the different division, the taste division operating profit change is mainly due to different of margin between the different subsidiary of the division. Within the fragrance, Q1 last year was a very high profitability, which leveled down throughout the year. We finalized 2025 with 26% of operating profit in the fragrance, so we are happy with the 28% which we have in Q1. Our Specialty Fine Ingredients also grew. The organic growth was 9%, and the operating profit grew the same, with a similar profitability of 13% like last year. We aim to release a new molecule to the market every year, which will naturally increase the sales of this division from one end, and from the other hand, improve the efficiency, which will result in an increase in the operating profit, profitability of up to 3%-4%. I will start with our balance sheet. Our balance sheet for the end of March is almost not leveraged at all, with a 0.5 net debt to EBITDA. After the two deals that we have finalized in May, our net debt to EBITDA is between 1.8-1.9. I remind everyone that our covenants with the bank is up to 3.5 net debt to EBITDA, which means that we have enough leverage to continue our journey, together with our cash flow from operation and five leading banks, both Israeli banks and multinational banks that we are working on to continue our journey to become one of the 10 biggest F&F house in the world. From P&L perspective, I always like to look over a few periods, so you can see the improvement in the adjusted EBITDA from 21.5% in 2024 to 22.6% in 2025, and to 23.2% in 2026. We are proud to present to you our two acquisition, which we did, one, Phoenix in the U.S. market in New Jersey and Indiana for flavors and fragrance, on the 3rd of May, and Romessence, which we acquired on the 12th of May in South of France for fine fragrances. I will start with Phoenix. Phoenix is a flavor and fragrance house which we acquired in order to build the right platform for the North American market, which we think that it's the most important market to develop in the coming years. If you can move to the next slide. Thank you. Phoenix was been established in 1994. Their turnover in 2025 was almost $37 million. Fragrance is $30 million, and flavors is $6.5 million. They serve more than 500 customers, and their adjusted EBITDA was, in 2025, $6.9 million, with a margin of 18.8%. We today, in Turpaz, when we acquired it, we expected an operational synergies of $2 million, and this is only the operational synergies between our current activity in the US Klabin flavors and Phoenix, which can be done in few very two to three quarters. in Phoenix today, there is a production site in New Jersey, an R&D center, creative center in New Jersey, which is a state-of-the-art, and a flavor facility in Indiana, which is close to the market of the food and flavors and beverages market. They are selling only in the North American market, and with Turpaz capabilities and leveraging the synergies which are not operational, we believe and we know that we will be able to take it to a significant growth in the future. Romessence is a, I would say, premium fragrance, fine fragrance house in the heart of Grasse, in the heart of France, where is the heart of the perfume. We acquired in July Attractive Scent, which was the first fine fragrance activity that we added to the Turpaz fragrance division. We saw the trend in the world of this segment, how is fast-growing segment in all the fragrance segment, and we decided that it will be right to acquire additional fragrance house in France, which will help and, I would say, enlarge our capabilities in the fine fragrance, as well as our footprint in the fine fragrance in the world. In January, we acquired the minority part, and we accelerate the option that we had in Attractive and acquired 100%. In May, we acquired Romessence, which is around 21 kilometer from Attractive Scent in the same area. We didn't even put here today the synergies that generally we are putting between our companies, but we know that between Romessence and Attractive Scent and the rest of the fragrance companies that we have today in the world, we'll be able to explore the fine fragrance to other market that till today we were not offering fine fragrances. More than that, it's selling EUR 8.9 million in 2025. In 2025, the adjusted EBITDA was EUR 2.5 million, which is 28.1% margin. They serve 90 customers, including France, specialize in fine fragrance, but unique one, and we are having a cross-selling geographically expansion. Only 19 employees, but very efficient and successful company. What is our goal for the future? Again, to become one of the top 10 global F&F companies in the world by doubling the sales every four year or less. Turpaz is an experienced F&F leadership, very strong on the SMB market positioning, and having a global footprint with regional expertise. We think global and we act local. We understand the culture of the region we serve, the flavors of it, and the fragrance, and we enjoying for bringing to the SMB customers and market our global capabilities, technologies, product, and cross-selling. We have a proven, I would say, track record of 28 successful acquisition in the world. We are leveraging the synergies between every company we are acquiring to all the companies in the group. On the day that we are finalizing and closing the acquisition, we already having a PMI, post-merger integration program, which is starting the next day. It's not stories, it's action. In terms of financial profile, we are fast-growing company. In the last four years, our sales CAGR was 34%, expanding our EBITDA margin, and we are today with 23.2%, which is the highest in our market. Strong balance sheet and cash generation, which will support our strategy of M&A combined with the organic growth. Our current sales run rate is $380 million as of today, before new acquisition this year. We have a large pipeline of acquisition. We are a public company trading in the Tel Aviv Stock Exchange, Tel Aviv 125 Index. Our market cap today is $3 billion, and average daily trading volume is around $6 million. I would like to thank you for listening and learning and knowing a bit about Turpaz, and we will be more than happy to answer any question that you have. Thank you. Now we will open the call for questions. If you do have a question, please type it in the question and answer box, and we will take your questions. We already have a few questions here. First question is, can you elaborate a little bit more about your two recent acquisitions, in particular the one in the U.S.? What synergies are you expecting from a financials perspective and also from an operations perspective? I assume this question was written before Keren described the acquisition, but I will answer it anyway. Phoenix is a very, very good base for us in the U.S. It has the two legs of both flavor and fragrance. This is from one end. From the other hand, it is very close to our fragrance site in the U.S. We are planning by the end of this year to move all of the production from our current location to the Phoenix location, to integrate the sales, the finance, the R&D, and to create a better platform for the fragrance division. As Keren has said, we expect a $2 million of operation saving from this acquisition. This is without future saving, like cross-selling, knowledge, especially in the fine fragrance sector, which we can bring from Europe to the U.S. to penetrate the U.S. market, and prices of and procurement due to better prices of raw material. Okay, we have another question on acquisitions. Can we expect more acquisitions this year? What regions are you looking at? What sizes are you looking at? Of course. Of course. And of course. And the reason I am saying it is this is our strategy. Growing, fast growing by M&A and combined with organic growth. We have a large pipeline of acquisition all over the globe. Okay. Another question about your U.S. strategy. What is your U.S. strategy overall? Would you consider a U.S. listing at some point? I will start, and Guy, you can continue. Our strategy in the U.S. is to We built with this new acquisition our platform for growth on the fragrance and our starting point for the flavors, which mean that we can take this $40 million today of business, or $45 million-$50 million, and we are expecting to make fast growing by M&A in the North American market, as well as with cross-selling and organic growth. Okay. Regarding the dual listing Yeah or registered in the North American market, I believe when the time will come, it will come. Okay. So another question. Given your current growth rates, which is approaching 40% year-over-year, you are on track to doubling sales in less than four years. Do you expect this time your business will double in a much faster time than four years? You know, I do not have a, how you call it? Crystal ball. Crystal ball. Okay? But I believe that till today, we did it twice in less than four years, and I truly believe that we will do it again in less than four years. But if it will take three years and six months, or three years, or four years and one month, I don't know. I don't like to say something that I cannot stand behind it clearly and loud. Okay. While on the subject of growth rates, there's a question here about your organic growth. How are you able to grow organically so much faster than your industry? It's an excellent question, I must say. The reason is Turpaz is focused on the SMB market. The SMB market is growing much faster everywhere in the world compared to the, I would say, the big multinational companies as Estée Lauder, Coca-Cola, and companies like that. By focusing on these customers and these markets, we are growing faster compared to the other markets. Also, I would like to add to it that we are doing quite a large cross-selling. Cross-selling is supporting our growth, as well as leveraging the synergies. Okay. As a reminder, if you have a question, you can enter it into the question and answer box on the Zoom platform. We have currently a last question on other geographic regions you are considering. Do you plan on expanding to South America or further into Asia or Australia? We are planning to expand our footprint, geographically footprint in Southeast Asia, as well as to enlarge our activity in North America and Central America. Okay. I believe- By the way, it does not mean that we will not buy right companies or right opportunities in Europe or in Africa or in other location. But in terms of targets and goals, we are looking to expand our activity in Southeast Asia and to enlarge our activity in North America and Central America. Okay. I believe that is all the questions. Keren, would you like to make any concluding remarks? Of course. First, I would like to thank you all for taking the time and listening and learning more about Turpaz, which will be in the future one of the top 10 companies in the world for F&F. For me personally and for all the Turpaz management, which is really a unique dream team, is an, I would say, an experience of a journey that we do not the first time in life, but the third time in life of building companies in the world, make them successful with fast growing and enjoying from the ride. The only thing I can share with you that I will be more than proud and happy that you will join us for this journey and ride. Thank you very much. Thank you for your patience. If you have any further question or any information that you would like us to share, please don't hesitate to contact us. We are always available to share with you. Thank you very much.