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Alex Sokolowski: Good morning, everyone, and welcome to Corbion's Full Year and Fourth Quarter 2025 Results Conference Call. This morning, we published our full year 2025 results press release and presentation. These can be found on our website at www.corbion.com Investor Relations Financial Publications. Before we begin this morning, please note that today's discussion will include forward-looking statements based on current expectations and assumptions. These statements involve risks and uncertainties that could cause actual results to differ materially. Corbion does not undertake any obligation to update statements made during this call or in today's publications. For further details, please refer to our annual report 2024. With me this morning on the call are Olivier Rigaud, Chief Executive Officer; and Peter Kazius, our Chief Financial Officer. Now I would like to hand the call over to Olivier to present on the business performance. Olivier?
Olivier Rigaud: Thank you, Alex, and very good morning, everyone. Thank you for joining us today to discuss Corbion's fourth quarter and full year 2025 results. I will start with our business performance, after which Peter will cover the financials in more detail. 2025 was a strong year for Corbion. We delivered solid organic growth, a significant improvement in profitability, and strong free cash flow generation. Volume/mix growth reached 3.4% for the full year, accelerating to 8.8% in the fourth quarter, reflecting healthy demand across our portfolio, particularly in Health & Nutrition and in Natural Preservation Solutions. Profitability improved substantially. Adjusted EBITDA reached EUR 204 million for the full year and EUR 48 million in the fourth quarter, representing organic EBITDA growth of nearly 27% for the year and nearly 40% in Q4. Free cash flow generation was strong. We delivered EUR 91 million of free cash flow in 2025, including EUR 58 million in the fourth quarter, supported by higher earnings, disciplined CapEx and tight working capital management. As a result, earnings per share increased to EUR 1.29, up more than 60% year-on-year. We are proposing a special dividend of EUR 0.34 per share in addition to regular dividend of EUR 0.64, underscoring our commitment to consistent shareholder returns. Overall, we delivered strongly in the fourth quarter, met our full year's commitments and entered '26 with a clear strategic direction and into execution of our BRIGHT 2030 ambition. BRIGHT 2030 defines Corbion's next phase of growth as a focused specialty ingredients' leader in natural preservation and nutrition, powered by fermentation. This is where we win and invest. We build on the strong progress of Advance 2025, a streamlined company, stronger margins and balance sheet, improved food ingredients performance, a profitable omega-3 DHA business and a sharper portfolio after the emulsifiers divestment. Corbion is now more focused and ready to grow. Our priorities are clear: invest in natural preservation, nutrition and biomedical polymers, strengthen innovation, reduce noncore lactic acid exposures and review strategic options for PLA. Our ambitions that we presented last November, 3% to 6% organic growth, 18% EBITDA margin by 2028, EUR 270 million free cash flow over 3 years, 13% ROCE and double-digit EPS growth. BRIGHT 2030 is focused, disciplined and built on our strength. Let me now turn to Functional Ingredients & Solutions. This segment delivered a solid performance in a mixed market environment. Our Food business showed good momentum, driven by continued demand of natural and label-friendly preservation solutions. At the same time, some end markets remain soft, partly in North America, where inflation continued to impact demand. We also continue to expand in attractive adjacencies, including natural mold inhibitors and listeria control, where we see strong long-term growth opportunities. Operational execution remains strong. Our circular lactic acid plant in Thailand is ramping up according to plan, and our sourcing initiatives are delivering benefits. Combined with input cost relief, primarily sugar and structural cost improvement, this resulted in 200 basis points improvement in adjusted EBITDA margin, keeping us on track towards mid-teen margins by 2028. On the second segment, Health & Nutrition, we also delivered another outstanding year, and this remains a key driver of growth and profitability. We saw continued expansion of algae omega-3 DHA with growth expanding beyond aquaculture into petfood and into human nutrition. Biomaterials performed strongly, supported by demand in drug delivery, orthopedics and aesthetics. Our pharma activities continue to grow, driven by medical-grade lactic acid derivatives. Despite some quarterly pricing volatility, the segment delivered an adjusted EBITDA margin of 32.5% for the full year, reflecting the strength of our portfolio and the stability of long-term customer relationships. We also continue to strengthen our operational platform, including debottlenecking omega-3 DHA capacity and ongoing train optimization. Looking forward, we will benefit from further relief in sugar input costs and increases of fish oil prices driven by the supply and demand gap. With that, I will hand over to Peter to walk you through the financial performance. Peter?
Peter Kazius: Thank you, Olivier, and good morning, everyone. I will now cover our financial performance for Q4 and the full year 2025. If we look to the full year sales and adjusted EBITDA, we see that group sales for 2025 amounted to EUR 1.267 billion for full year. The organic sales growth was 2.2%, driven by positive volume/mix in both segments. As anticipated, we had a stellar sales growth in the fourth quarter in H&N. The organic growth was more than offset by negative currency effects, mainly from the U.S. dollar. As a consequence, full year results growth was minus 1.6%. The U.S. dollar last year was on average 1.13 and prior year, it was 1.08. The adjusted EBITDA increased to EUR 204.3 million, representing a 26.7% organic growth. This improvement was driven by strong performance in both Health & Nutrition as well as Functional Ingredients & Solutions. The adjusted EBITDA growth, including negative currency effects was plus 16.7%. If we now look to the full year P&L below sales and EBITDA, we can see that the adjusted EBITDA margin went up with 250 basis points to 16.1%, depreciation went up with 1.8%, which is the combination of the start of the depreciation of our new Thai lactic acid facilities, partly offset by currency impact. Adjustments in the year were very limited and mainly related to an impairment of a small asset. If we go to financial charges, overall, there were EUR 17.5 million. These increased year-over-year, mainly due to currency effects, partly offset by lower interest costs. These currency effects are mainly related to intercompany positions. The financial charges in cash flow statements were EUR 10.6 million. If we go to the results from joint ventures, it's negative minus EUR 4.1 million, which consists of a positive EBITDA of EUR 10.1 million in the joint venture, which, of course, 50% is attributed to our results, offset by depreciation of EUR 8 million and interest paid to both shareholders of EUR 10 million, of which EUR 5 million is included in our financial income and expense. The effective tax rate for the year was 21.2%, which was benefiting from currency-related tax effects. The anticipated effective tax rate for the coming years, as we disclosed in our Capital Markets Day is around 27% following the tax jurisdictions where we are present. As you can see, our earnings per share reached EUR 1.29, which is an increase of 63.3% versus prior year. If we look into Functional Ingredients & Solutions, we see an organic sales growth of 1.1% for the full year. This is driven by a positive volume/mix of 1.9%, driven by food and lactic acid to the joint venture. The volume growth in Food is supported by momentum in natural preservation and shelf-life extension. The growth to the joint venture is following the volume growth in the PLA market. The Biochemicals segment was slightly down following softness in some end markets. Pricing was minus 0.8%, which is following the input cost and a pass-through mechanism to the joint venture. If we go to adjusted EBITDA, we've seen an improvement versus last year of 230 basis points. The full year EBITDA is 11.1%, which is driven by cost savings and input cost relaxations. Q4 margins decreased sequentially, driven by inventory movements following reduced inventory levels during the quarter. You might have seen in our free cash flow statement that our inventory basically reduced by roughly EUR [ 15 ] million in H2. The positive free cash flow in the quarter was therefore driven by a significant reduction in inventories. If we look to Health & Nutrition, organic sales growth was 6% for the full year and nearly 25% in Q4. Growth was driven by a strong volume/mix across all the 3 segments: Nutrition, Biomaterials and Pharma. Biomaterials sales grew due to increased traction in drug delivery, Orthopedics and aesthetics. We see continued growth in Pharma, driven by higher volumes with positive pricing and organic sales growth in Nutrition has been driven by volume growth, partly offset by reduced pricing. The adjusted EBITDA increased to EUR 96.6 million with a full year margin of 32.5%, which was up 260 basis points versus last year. Despite lower omega-3 pricing in Q4, we've maintained our margin in the quarter. This pricing was due to a high share of noncontracted business. If we look to the results in the joint ventures, then the joint venture sales increased 4.8% in 2025, which is driven by increased volumes, partly offset by lower pricing. The lower pricing did have an impact on the full year margin, and you've seen a margin of 7.5% for the full year. The Q4 margin is also impacted by inventory movements related to a planned maintenance shutdown in the quarter. If we look into next year, then we anticipate to come back to a double-digit EBITDA margin for the full year. And this is driven by cost reduction measures in the joint venture as well as lower anticipated input costs. Capital expenditure in 2025 amounted to EUR 68.5 million, with maintenance being around EUR 44 million and expansion around EUR 24 million. The expansion CapEx was mainly supporting the Nutrition capacity projects and the in-sourcing of Vinegar supporting the Food business. Operating working capital improved to 24.2% of sales, which is the lowest level since 2021, with inventories being reduced with 100 basis points year-over-year, mainly impacting the second half of the year. Free cash flow, therefore, reached EUR 90.8 million, which was reflecting the strong EBITDA delivery and our disciplined CapEx and working capital focus. Based on our results and the cash flow generation, we propose to distribute a dividend of EUR 1 per share, consisting of a regular dividend of EUR 0.64 per share and a special dividend of EUR 0.36 per share, which underscores our commitment to consistent shareholder returns. With that, I would like now to hand over back to Olivier for the outlook.
Olivier Rigaud: So looking ahead to 2026, we expect organic sales growth of 3% to 6% and adjusted EBITDA margin of around 17% and free cash flow between EUR 85 million and EUR 90 million. Capital expenditure is expected to be around EUR 80 million, and we target double-digit growth in adjusted earnings per share. Adjusted EBITDA growth will be second half weighted, reflecting phasing effects in the first quarter. Overall, we remain confident in our strategy, our portfolio and our ability to deliver sustainable value creation. Now Peter and I are happy to take your questions. Operator?
Alex Sokolowski: [Operator Instructions] Our first question this morning comes from Robert Jan Vos from ABN AMRO ODDO BHF. Robert Jan, please go ahead.
Robert Vos: I have a few questions on the H&N division. Pricing, far more negative than expected. You mentioned temporarily lower fish oil price and also more exposure to short-term contracts. So first question is, since you mentioned the temporarily impact, how is the pricing situation currently? And what should we expect for pricing in the division in 2026? That's my first question. Second, Peter, you rightfully said that EBITDA profitability in the division remained quite stable in Q4 despite this pricing effect. Is that purely the volume leverage impact because the volume growth was very strong? And related to this, do you expect to be able to maintain EBITDA profitability of the levels that you've shown in the full year 2025? And last question, at the CMD, the 3% to 6% organic sales growth guidance through 2028 was including 8% to 10% for H&N. Is that also a range that we can anticipate in 2026, knowing what you said about Q1? And my final question is on PLA. Can you provide a bit more color on the progress that you made since the CMD when you announced that you were looking to sell your stake?
Peter Kazius: Thanks, Robert Jan, for the question. And let me do them one by one. And let's start with the outlook. So the outlook, we reiterate indeed the CMD, which is an organic sales growth of 3% to 6% as well as the growth we anticipated both in Functional Ingredients & Solutions as well as Health & Nutrition. If you look in terms of H&N in the fourth quarter, we've seen indeed a negative pricing impact, which is driven by a high share of noncontracted business following fish oil prices, which, as you know, went down during the course of this year. And the good news, by the way, if you look to the last year, is nicely going up. If you look to the expectation for next year in the aggregate, I anticipate a mild decline in terms of pricing of H&N. But in terms of the total margin, I anticipate still an EBITDA margin of around 30% for the full year. And this is driven by the combination on the one hand of mildly lower prices. But on the other hand, the main input cost also in H&N is sugar related, which is on a positive kind of journey. And positive means lower prices, so positive impact in terms of EBITDA. In terms of your question on PLA, we started to execute a plan to sell our interest in the joint venture. I would say we are fully on track with this plan in executing it. And I anticipate to share more news by mid-2026. I think I answered the questions.
Alex Sokolowski: Our next call this morning comes from Setu Sharda of Barclays.
Setu Sharda: So again, a question on the 3% to 6% guidance. So basically, what are the key variables you think for achieving whether it's going to be 3% or 6% or is this -- so what would be the key sensitivity over here? And my second question would be about the FIS division. Like how much of the slowdown in FIS division is your end market weakness or there is -- which is cyclical or there might be some structural reasons because of the GLP-1 penetration?
Olivier Rigaud: Yes. Okay, Setu, thanks. I will answer the first one and let Peter -- I am letting the second. So yes, when you look at the 3% to 6% key variables, obviously, 2 different things. Peter just mentioned our confidence into the H&N for the year. So -- and we see a continued momentum despite the high comping we mentioned in Q1. On FIS, as you know, it's really, I think, related to, of course, our high exposure to the North American market, where we've seen some softness into some of the key markets as Bakery and Meat last year. And we see 2 different dynamics in the market are also relating to your point on GLP-1. One is on one side, following the cancellation of the -- of course, the financial support by the administration for lower income people. We've seen really our customers asking for more affordable recipes and reformulation, asking to us to help them reduce cost in use. But you see that basically, there is a reduction in demand also on the more, let's say, bulky categories as Bakery and Meat on one side. And that is something obviously that, again, we are tracking very closely, but we see really some decline in terms of overall consumption in the U.S. market on the low end. And there is, I mean, the other angle on the more indeed sophisticated product and the nutritious product backed on the GLP-1 trend, but also on the MAHA trend in the U.S. where we have a lot of requests to reformulate more nutritious products, higher protein, higher fibers. We see also more supplement in terms of mineral salts related to our calcium lactate, magnesium lactate type of products. So where -- we see a strong demand. And so this is a part where we are feeling pretty confident and have a good pipeline. Now I have to say the U.S. is still lacking visibility with basically a lot of volatility coming from the discussions around tariff. We've said a few times that basically we do not have a large impact coming from tariffs, but this is where we have the lowest visibility. On the rest, I think we have good momentum primarily in regions like Asia Pacific and LatAm as well. So this is a bit what we see happening as market dynamics there. On the FIS, peter, maybe you take this one.
Peter Kazius: Yes. If you look in terms of FIS, Q4, Setu, and if you look a bit on the dynamics and the buildup, then there is underlying positive volume/mix in the Food business. If you look to lactic acid in the joint venture, there are actually -- although full year, we've seen a positive volume momentum, there, Q4 is negative. So if you look into the kind of underlying businesses specifically for Food, I think there where we do plan to grow and also plan to grow into next year, those businesses are actually nicely growing.
Alex Sokolowski: Okay. Our next question this morning comes from Wim Hoste from KBC Securities. Wim, please go ahead.
Wim Hoste: Yes, I have 3, please. Can you maybe comment on the overall raw material cost outlook for you in '26? That's the first question. Second one is on the Omega-3 business. There was, yes, more or a certain degree of spot or shorter-term contracts in '25 that played a role in the pricing. Can you comment on the duration or the average duration of your contracts for '26 and the overall pricing levels in a bit more detail? And then third question is on PLA. I think you mentioned to expect an improvement in EBITDA margin in '26, but -- and you -- if I explained the levers there on cost efficiencies, et cetera. But can you maybe comment a little bit more on also the volume outlook for the PLA business? How do you see that evolving?
Olivier Rigaud: Okay. Thanks. So I will answer, I mean, the omega-3 and Peter, the raw material cost outlook and the PLA margin. So -- let me start with omega-3 short-term contract. As we discussed in the past, we have roughly 2/3 of our business that is on a longer-term contract, where there, we have good visibility on pricing, and these are prices that we are not tying up to any, let's say, monthly or weekly fish oil price variations. Yes, so we have more stability and visibility on that part. On the non-contracted, usually, the market rules there runs from either monthly to quarterly contracting on that part. And what we've seen last year is that we initially booked some deals for Q4 prior to the increase in fish oil price that the market saw starting in October, November. So levels, again, if I give you high-level numbers of fish oil pricing used to be around the $3,000 in the course of Q3, went up close to $4,000 in the course of Q4. And the latest one, if you look to the trend over the last 2, 3 weeks is more around $4,000, $4,200 yes. But at the time, we had some Contracted business on the short-term type of customers in Q4 that we agreed at the previous fish oil price. So going forward, we are feeling really good because we see the current trend on fish oil dynamic. And we are waiting for further news on this famous fishing quotas from Peru, but all indications have been confirmed that this quota are going to be much lower than a year ago. And obviously, when you look at the supply gap, these are also very difficult metrics to get in aggregate. But speaking with the major industry actors, people do believe that the supply gap by the end of '26 is going to be around 50,000 tons of fish oil deficit. Now these are assumptions. So we have to be cautious with that. But it just, I think, to me, confirms that what we basically also communicated a few times that structurally, this market is getting into structural shortage. Now let's see how price is going to develop on these short-term contracts for '26. But on the contracted, we have good visibility. On raw material, Peter?
Peter Kazius: Yes. So if you, Wim, overall look raw material, then as you can follow the New York 11 prices, which are coming down or did come down quite substantially over the last, let's say, 2 years, that's flowing into our P&L, also continues to flow into our P&L next year. So sugar is a clear benefit. If you look to all the other raw materials, on average, they're around stable. And where we have seen some minor increases, we actually passed that through. So I anticipated if you look from a pricing perspective, a bit of positive impact. But of course, there is one assumed negative one, which is the pass-through of the joint venture because the sugar prices, we basically hedge together with the joint venture. So if I look overall, raw materials on a downward curve. That also brings me to your margin question on PLA. If you look to the margin this year around 8%, then there are indeed 2 key levers bringing that up, which are the reduced input prices and input prices read as our price to the joint venture as well as cost reduction measures, which were taken in the joint venture during Q4. If you go back to kind of the volume price dynamics, we've seen price erosion in the joint venture. And I assume that we are roughly at the kind of curve that we don't see further price erosion. And I do expect a volume increase in the joint venture also following the volume increase in this -- or this year, basically in 2025. I hope that answers the questions, Wim.
Alex Sokolowski: Our next question this morning comes from Reg Watson of ING.
Reginald Watson: I have 3 questions, if I may. The first one is the inventory adjustments, Peter. I think in the press release, you -- the margin in FI&S was impacted by inventory adjustments. So I'm wondering if you could elaborate on that a little more, please, and quantify the hit there? That's the first question. Second question is on the EPS guidance range for 2026. I think you mentioned double-digit EPS growth now. I think it doesn't take a mathematician to work out the double digit is 10% to 99%. And I'm wondering if you could narrow that range for us a little, please? And then the final question I have is this phasing of customer buying in Q4 in H&N versus Q1 this year. So again, you highlighted that there is a shift from one quarter to the other. I'm wondering if you could also quantify that for us as well, please, because clearly, 40% volume/mix growth in Q4 is exceptional. It would be useful to know how much of that was phasing.
Peter Kazius: Let me pick the inventory adjustment and the EPS, and then Olivier will comment on the phasing part. If you look to inventory adjustments, I am happy to quantify it, if you look in terms of the elements in terms of inventory, I mean, as I said, a reduction of EUR [ 15 ] million, of which the vast majority is in Q4. And if you look to the impact of inventory movement, how we call it, it's a couple of millions. So from that perspective, it's quite substantial. If you look in terms of EPS growth and if you look to double digit, I don't anticipate to be at 99, Reg, frankly speaking. If you look to the kind of shape in terms of earnings per share, I would be more on your lower part of the range of 10% to 99%.
Olivier Rigaud: On the phasing, Reg, so basically, 2 things. The first one is the phasing we spoke about before was re-phasing between Q3, which remember was low into Q4 and not getting anticipated sales within Q4, although indeed, it was really good, but we benefit from a lot of these noncontracted deals that we had at that time in Q4. What's important is what do we see in Q1? Because we are still basically have some customer concentration, as you know, in aquaculture. This is a market that is quite concentrated. And this is why also we are pushing really hard to grow beyond aquaculture as well into pet nutrition and human. But still, you are dependent on a few large contracts. So what we see happening in Q1 is that some customers probably anticipating further fish oil price increase, have increased their inventory in Q1. And although we are contracted and we feel very well for our contracting position for '26, what they have told us is that it's going to be really more of a load as from Q2 going forward. So -- and this is what we see, knowing that you play with in aquaculture primarily, which is where the big volume lies still today on a few large customers. And it's exactly the same phenomenon towards -- we have seen to some extent in Q3, between Q3 and Q4 that we anticipate now for Q1, and we see happening in Q1.
Reginald Watson: Okay. So just to be clear then, so the Q1 phasing is more a delay into -- later into the year rather than a shift of demand from Q1 to Q4. Is that correct?
Olivier Rigaud: Exactly correct, yes.
Reginald Watson: Okay. And if I may be really cheek and ask one final question, is a technical one for Peter. Just on the gypsum-free lactic acid plant ramp-up, you mentioned that you started -- depreciation increased for '25. How is that expected to unfold in '26? Do you expect the depreciation charge overall to increase year-on-year and if so by how much?
Peter Kazius: So I anticipate depreciation to indeed increase a bit in 2026 because we started that and we are slowly ramping it up. And also here, I would say, look, a couple of millions, but not an overall significant impact on that.
Alex Sokolowski: Our next question this morning comes from Fernand de Boer from Degroof Petercam. Fernand?
Fernand de Boer: Most of my questions have been answered, but one is on the PLA joint venture. I saw you moved it now to assets for sale with being EUR 69 million, does that mean EUR 65 million for the loan provided to the PLA joint venture and then only a book value for the equity of EUR 4 million? That's the first one. And just to be clear, because I had this discussion this morning, and I thought that the phasing of Q1 was indeed to Q4, but that's not the case of '25, but that's not the case. So it's later in the year that I heard that correctly from the previous question.
Olivier Rigaud: Yes, correct, Fernand. On Q1, just to confirm my comments just made to Reg.
Fernand de Boer: Okay. And then maybe one question. You opt for a special dividend. What's the reason behind that and not to go for a share buyback?
Peter Kazius: Let me answer the 2 questions. One is asset held for sale, which is the EUR 69.2 million and asset held for sale is really because we are in the process to selling it. And that is the combination of the equity and the loan part of the portfolio. So if you look into last year, part of our kind of financing in the joint venture was in loan and part in equity. The EUR 69.2 million is the book value, which is the combination of the loan as well as the kind of stake in the -- the equity stake in the joint venture. And it's the book value from that perspective.
Fernand de Boer: Last year, the book value of the loan was EUR 65 million? Or do I have that wrong?
Peter Kazius: I need to double check. And of course, this is a dollar loan. So the dollar will have an impact on that one. So I think year-over-year, it should be the same, but it can be reduced driven by the U.S. dollar. In terms of special dividends, I think, look, this is really underscoring our commitment to shareholder returns and why special dividend has to do with execution and associated tax impact?
Fernand de Boer: So also going forward, that means that share buybacks is going to be difficult anyway. So if you would sell the PLA JV, then it's going to be difficult to allocate that money to those proceed to a share buyback?
Peter Kazius: The answer is based on what we announced today that will be not that difficult.
Fernand de Boer: It will be not that difficult.
Alex Sokolowski: Okay. Thank you, Fernand. We have 2 more analysts in the queue. The next question will come from Eric Wilmer of Kempen. Eric, please go ahead.
Eric Wilmer: I had a question on the margin expectation for this year. You're anticipating 100 basis points year-on-year EBITDA margin improvement supported by Preservation and Nutrition, which both seem subject to a certain degree of price erosion. If I'm not mistaken, you're also highlighting a 30% EBITDA margin for H&N this year. So this would imply quite a serious step-up in FI&S profitability. Is the main component here sugar pricing? But I was also wondering with regards to, yes, the tough comps or tougher comps in Q1, it -- to me, it seems it would also apply to preservation, just looking at the margin you managed to print in Q1 last year. Is that correct? And last question, some of your competitors are emphasizing Rosemary extracts as a natural preservative, and it seems like end markets are broadly similar for this type of solutions. In which categories would you argue that lactic acid-based solutions strongly outperform these Rosemary extracts or is this really not apples-to-apples?
Peter Kazius: Okay. Let me pick a couple of questions. So the first one, you are fully right. So if you look to the margin step-up of 16.1%, which is the EBITDA margin this year to be around 17%. That is mainly driven by Functional Ingredients & Solutions because in Health & Nutrition, I anticipate to be around the same margin level. If you look into the Functional Ingredients & Solutions, it's indeed a combination of maintaining/increasing prices in parts of the business, whilst, as I explained, the lactic acid to the PLA will be at lower prices, combined with lower sugar prices and some cost efficiency measures, which we have taken and there is a bit of flow. So all in aggregate, that's explaining that one. You're also right, if you look in terms of FIS, Q1. But if you look to the comparable last year in FIS because you might recall that the volume/mix growth Q1 2025 over Q1 2024 was 7.3%. So in FIS, indeed, the comparable is playing a role as well.
Olivier Rigaud: On your second question, Eric, so basically, we are also active in the Rosemary but we are sourcing with basically strategic partners. And what we are doing is building solutions between Rosemary and for instance, our vinegars. Now just maybe to explain how we see it to your question related to lactic acid. If you look at natural preservation, one approach for certain spoilage is to acidify foods with natural organic acids. So this can be indeed lactic acid or other organic acids like propionic that you get through fermentation. Another is to prevent oxidation in the different categories. And this is where Rosemary is being used. And it could also be that it is used in combination with other natural antioxidant. And we see that as a nice opportunity because this is a bit what we explained in the CMD. We would really also like to add this technology of botanical extraction to our portfolio because we speak about Rosemary as a big one. But you see also you have a lot of polyphenols coming from gray or green tea that are strong antioxidant or ascorbic acid that is also natural vitamin C coming from acerola berry. So there is a family that represents a very nice adjacencies which is highly complementary to lactic acid that provides a different functionality in terms of antioxidation versus acidification. I don't want to make it too technical there. But to your point, this is not competing, it's complementary.
Alex Sokolowski: Okay. And our last question this morning comes from Karel Zoete from Kepler Cheuvreux. Karel, please go ahead.
Karel Zoete: A couple of follow-ups. But firstly, maybe the gap between the organic EBITDA growth in the reported was very big in the fourth quarter. Is this all currency related? And how should we think about that going into 2026, where currencies stand today? And then the other question is around the net working capital. You already highlighted here the progress. But what's really based on lower sugar prices and COGS if you look to the working capital and why are you seeing the improvement from a tighter more strict working capital management? And then the third question is in relation to the Pharma business. That's seen good growth this year. But what's driving the growth in pharma?
Olivier Rigaud: Let's have Peter answer the first 2, and I will take the pharma.
Peter Kazius: Yes. So if you look to the currency impact in Q4, then it's related to the U.S. dollars. It's around 6, 6.5 million. And if you look to the currency then -- and if you look Q4 2025, the average is 1.17. And if you might recall, it's a long time ago, we talked almost about U.S. dollar parity, I think, at that moment in time. But in Q4, the average one was 1.07. So there is a 0.10 difference. And if you do that 0.10, then that explains it. If you now -- I did mention that the average U.S. dollar rate is 1.30 in this year. And if you currently look to the U.S. dollar, it's trading on the 1.18 kind of level. So that means that there is a further impact anticipated into 2026 as well with where it currently stands. If you look in terms of the reduction in net working capital, there, the majority is volume driven from that perspective. We ended at 24.2% in aggregate, which is indeed a reduction. In the Capital Market Day, I did indicate that I anticipate an operating working capital of around 24% for the coming year.
Olivier Rigaud: Okay. So on the Pharma business, basically, you have 2 key drivers there. So one is looking to the more traditional outlets of pharma in terms of dialysis and primarily kidney dialysis. But what you see, unfortunately, globally is still increase in obesity rate and type 2 diabetes triggering at one point by end of life more kidney dialysis. So that's something we see as well a lot happening in some of the emerging markets and developing markets. And the second that is also interesting that we've seen developing across '25 is also the similar type of products being used for electrolyte solution, where there is indeed a very good mineral balance you need also into some health condition. And we see that as a kind of adjacency growing now very nicely on top of the traditional Dialysis business that is really also stimulating growth there. So that's the 2 drivers behind Karel.
Alex Sokolowski: And actually, our queue is populated with a returning question from Robert Jan Vos.
Robert Vos: Apologies for coming back. But I have a question on the special dividend. The words suggest that it is a onetime event, but your -- when financial leverage is low. It's actually at the lower end of the optimal range that you guided at the CMD. On top of that, you guide for another year of strong free cash flow of EUR 85 million to EUR 90 million. So my question is -- and that is not even taken into consideration some proceeds for the PLA business. So my question is, will you look at this on a yearly basis? Should we anticipate a special dividend more frequently than only for fiscal year 2025? Or as an answer to your -- to one of the previous questions, will you look more at share buybacks?
Peter Kazius: It's a great question, Robert Jan. So if you look in terms of the dividend, I would see that as a yearly kind of dividend proposal. It's also subject to approval in the AGM. And in terms of your other question, I refer to that we have a balanced capital allocation policy and continuously review our cash position overall. I want to make one comment on your leverage one. You're absolutely right. We are on the low end. If you look to covenants, net debt EBITDA, which is the kind of leverage in our banking covenants. We still will repay the kind of subordinated debt, and we start doing that basically in the course of next year as well.
Robert Vos: Yes, that's a fair addition. Okay. Can you remind me what was the difference if the reported leverage is 1.5?
Peter Kazius: It's EUR 100 million, which you talk on. And of this EUR 100 million, by the way, EUR 16 million to be repaid into next year.
Robert Vos: What is the difference on the leverage points? It's not 1.5, but it is then actually if you add the subordinated loans, it's a bit higher than...
Peter Kazius: 0.5, you need to divide it by the EBITDA of this EUR 204 million.
Alex Sokolowski: Thank you, Robert Jan. We have one more returning question. This is from Fernand de Boer of Degroof Petercam. Fernand, please go ahead.
Fernand de Boer: In your outlook, I heard now several times that actually you will have the benefits coming in from the lower sugar prices. So that I understand. But from the other hand, sugar prices are also relatively volatile. So if you then look at your medium-term target of 18%, how much does that depend on lower sugar prices?
Olivier Rigaud: No, it's a relevant question, Fernand, because you're right, it's volatile. However, we have this hedging policy that is a very strong governance where Peter and I have a risk committee on a monthly base, and we decide our hedging on some of the commodities and sugar is a big one. And of course, we are fully covered for '26, and now we are almost really covered for 3 quarters of '27. So we have a great visibility going forward on that part of our cost. So that is also important to assess that you will not see quarterly volatility in the input cost related to sugar going forward. We do that for sugar. We do that for corn and for energy. So -- although it's a part of our 18%, it is not the only part. We have these 3 levers on getting above 18% margin. One is the input cost, but the second one is really portfolio enhancement to continue to, of course, grow much faster in the 3 specialty segments of H&N. That's, I think, quite important. And the rest is really benefiting from all the investments we've done over the last years where you need to see the return now, I'm primarily thinking about the Thai lactic acid plant. If you remember, we committed to create quite a nice additional value from both insourcing, but also getting the Thai lactic plants are running flat out, and this is also going to contribute to our cost base.
Alex Sokolowski: Okay. It looks like there are no more questions this morning. I look forward to engaging with all the analysts and investors at our upcoming roadshows and conferences. A replay of today's call will be available later today on our website. So thank you all analysts for attending and webcast attendees for listening in.