Dsm-firmenich's fragrance-led core profit beat sends shares higher

By Jesus Calero and Vera Dvorakova

July 30 (Reuters) - Dsm-firmenich on Thursday beat market expectations for second-quarter core earnings and said full-year sales growth should reach the upper end of its target range on the back of broad-based volume growth.

That sent the chemical group's shares rising 11% in early trading, among top gainers on Europe's benchmark STOXX 600 index.

As a supplier to consumer goods, food and nutrition companies, including perfumes made by LVMH and Kering, dsm-firmenich's results are closely watched for signals on demand, pricing and customer purchasing patterns.

Its adjusted quarterly earnings before interest, taxes, depreciation and amortization were €466 million ($534 million) and exceeded a company-provided consensus of €452 million.

Like-for-like sales grew 6%, entirely driven by volumes, while its adjusted EBITDA margin improved sequentially to 19.5%, also beating market estimates, despite a 70-basis-point drag from currency movements.

Perfumery & Beauty sales grew 7%, with both fine and consumer fragrances recording double-digit growth, suggesting underlying demand remained firm after precautionary customer orders boosted first-quarter results.

CEO Dimitri de Vreeze told Reuters that he expected fragrance growth to moderate in the second half of 2026 and beyond, seeing high-single-digit percentage growth more in line with the industry's normal pace.

The company said activity accelerated strongly in June as customer sentiment improved amid easing Middle East concerns.

Growth in the food ingredients business also picked up, helped by revenue synergies and stronger demand across regions, including a recovery in Latin America.

Dsm-firmenich kept its 2026 outlook unchanged, but said like-for-like sales growth should come in at the higher end of its 2% to 4% target range.

"This outlook assumes that, also in the second half, the conflict in the Middle East will have a limited impact," it said.

The June growth acceleration may suggest the growth guidance is conservative, J.P. Morgan analysts said in a note.

The company also said its restructuring programme could reduce about 1,000 positions over the next 18 to 24 months, while generating €100 million in recurring savings at a one-off cost of roughly the same amount.

($1 = 0.8735 euros)

(Reporting by Vera Dvorakova and Jesus Calero in Gdansk; editing by Milla Nissi-Prussak)