Early orders from fragrance brands boost dsm-firmenich's Q1 earnings
Q1 Performance and Market Dynamics
May 6 (Reuters) - Dsm-firmenich reported first-quarter core profit broadly in line with market expectations on Wednesday, supported by strong demand for fine fragrances as some clients front-loaded orders due to supply concerns.
Its shares rose more than 6% in the first two hours of trading.
Impact of Early Orders and Supply-Chain Concerns
The European supplier of ingredients for beauty, nutrition and health products, including perfumes made by LVMH and Kering, said some customers had brought forward orders amid supply-chain uncertainty linked to the Iran war.
Sales Boost from Consumer Fragrance Business
The company's management, talking to analysts in a conference call, estimated that early orders gave an up to 1% boost to quarterly sales, mainly in the consumer fragrance business, as large branded clients sought to secure supply.
Business Model Limitations
This was driven by supply‑chain concerns rather than pricing, CEO Dimitri de Vreeze said. However, he added that dsm-firmenich's make‑to‑order business model limited the scope for large-scale pre-buying.
"We have tailored products. We have customized products. We have more than 5,000 ingredients which need to be customized as such. A lot of make-to-order. So even if people want to pre-buy massively, our model is not capable of doing that," de Vreeze said.
Outlook and Financial Results
The company has so far not seen any reversal in early second-quarter trading, though such effects could unwind once uncertainty eases, the management said.
Dsm-firmenich reaffirmed its full-year guidance, assuming a limited impact from Middle East tensions in the second half of 2026.
Financial Highlights
First-quarter adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were 434 million euros ($509 million), slightly above analysts' consensus of 431 million euros provided by the company.
The corresponding margin slipped to 19.1% from 19.7% a year earlier, reflecting negative currency effects and higher freight and energy costs.
CEO Statement
"We made a solid start to the year, with good (like-for-like) sales growth across all businesses while navigating a highly dynamic geopolitical and macroeconomic environment," de Vreeze said in the earnings statement.
($1 = 0.8525 euros)
(Reporting by Antonis Pothitos; editing by Milla Nissi-Prussak)
