DSM-Firmenich: Strong 2Q/July colour drives upgrades; unwind risk may be delayed, not eliminated

Research evidence excerpt

DSM-Firmenich: Strong 2Q/July colour drives upgrades; unwind risk may be delayed, not eliminated

unchanged at +3%. We raise

FY26/27/28E adj EPS by 4%/3%/6% with our new estimates still 4%/9%/12% below Edward G Hockin

pre-results Vara consensus. We remain UW and raise our Dec-27 PT to €68 (€60). We (44-20) 7742-6937

edward.hockin@jpmorgan.com

prefer Novonesis (OW, AFL) for its strongest moat and best organic/underlying J.P. Morgan Securities plc

returns profile, yet DSFIR now trades on a slight premium on 2026E P/E (DSFIR 28x;

NSISB 27x), and Croda (OW), where we see similar/somewhat better organic growth Specialist Sales contact details:

with better earnings quality/FCF conversion and greater restructuring upside, trading Sam Edmunds - Specialist Sales -

on 21x 2026E P/E (~25% discount to DSFIR). European Industrials

(44-20) 7742-8733

• Current trading comment: Management said June was particularly strong, sam.edmunds@jpmorgan.com

citing improved customer sentiment as Middle East tensions appeared to ease,

Key Changes (FYE Dec)

and noted a good July start to Q3; they also highlighted that they cannot

Prev Cur Δ

distinguish restocking vs pre-buying in orders and estimate any such benefit at Adj. EPS - 27E (€) 3.48 3.62 4.0%

up to ~1% of Q2 OSG.

• Design wins / pipeline: Management reiterated a strong brief and innovation Style Exposure

pipeline with solid win rates (notably in fine fragrance, supported by new

launches and account momentum), and also highlighted commercial traction/

revenue synergies in Taste, Texture & Health from combining “hero”

ingredients (enzymes/cultures/probiotics) with flavour capabilities—

positioned as a more durable support for growth than over-interpreting any

single month’s order pattern.