Azelis Group NV: Q1 2026 Results: Strong Cash Generation in Volatile Markets

ANTWERP, Belgium--(BUSINESS WIRE)--Regulatory News:

Azelis Group NV (Brussels:AZE):

Highlights Q1 2026

• Revenue of EUR 1.0bn, down 0.7% year-on-year in constant currency (-5.2% reported), reflecting a 3.9% organic decline, offset by a 3.3% contribution from acquisitions. Organic performance was underpinned by a solid 4% growth in APAC and broadly stable trends in the Americas, offset by weaker conditions in EMEA.
• Gross profit of EUR 246m resulting in gross profit margin of 23.7%. The 38 bp gross profit margin contraction reflects negative mix effects across our businesses, notably in Asia Pacific.
• Adjusted EBITA of EUR 104m, reflecting an 86 bp reduction in adjusted EBITA margin, with cost discipline partially mitigating the impact of lower revenue and supporting a conversion margin of 42.4%.
• Free cash flow of EUR 119m representing a 13 percentage point expansion in cash conversion ratio to 113%, underscoring the asset-light, resilient cash-generation capacity of the business.
• Leverage stood at 3.4x, with net debt further reduced for the second consecutive quarter to EUR 1.5bn (-3.7% versus December 2025).
• Outlook: While some end markets are starting to stabilise, geopolitical tensions continue to drive volatility. Any near-term uplift from pre-buying or price inflation is expected to be more moderate than in the post-Covid disruption cycle, reflecting a softer pre-conflict demand backdrop, and may affect the pace of recovery. Against this backdrop, Azelis remains focused on cost discipline and strong cash generation.

(in millions of €)	Q1 2026	Q1 2025	Change	Constant currency
Revenue	1,041	1,098	-5.2%	-0.7%
Gross profit	246	264	-6.6%	-2.3%
Gross profit margin	23.7%	24.0%	-38 bp	-43 bp
Adjusted EBITA^1	104	120	-12.7%	-7.9%
Adjusted EBITA margin	10.0%	10.9%	-86 bp	-83 bp
Conversion margin^1	42.4%	45.4%	-293 bp	-270 bp
Free cash flow^1	119	120	-1.4%
FCF conversion ratio^1	112.7%	99.7%	1302 bp
1 Refer to the definitions of alternative performance measures in the Group's Integrated Report

Comment from Anna Bertona, Group CEO:

"We remain focused on disciplined execution, advancing our commercial programmes to drive growth. We are also maintaining a clear focus on supporting our customers, particularly during supply chain disruptions, while defending our position in more challenging markets. This balanced approach supports resilience today and positions us to capture upside as conditions evolve.

We are committed to continuously adding innovative products to strengthen our portfolio, enhancing profitability, and optimising our balance sheet, underpinned by disciplined cost management and strong cash generation. With a clear strategy and consistent execution, we are well positioned to benefit from a gradual market recovery and deliver sustainable long-term value for our stakeholders.

I would like to once again thank our colleagues for their exceptional commitment in a demanding environment."

Outlook

The market for speciality chemicals and food ingredient distribution remains structurally attractive. While near-term conditions continue to limit visibility on the pace of recovery, Azelis is confident in its strategy and positioning to navigate the current environment and capture the opportunities created by the long-term trends shaping the industry. Supported by its asset-light, diversified, resilient business model, the Group is well positioned to manage volatility while continuing to generate sustainable cash flow.

In the near-term, geopolitical tensions drive market volatility across the world. Any near-term uplift from the current Middle East conflict is likely to be more moderate than post-Covid supply chain disruptions given the weaker demand environment prior to the start of the conflict, and may affect the pace of a sustained recovery.

Conference call

The management of Azelis invites you to a conference call and live webcast at 09:00 CET to discuss our Q1 2026 results and current operating trends. Please click here to view the webcast.

OPERATIONAL REVIEW

Headline results

(in millions of €)	Q1 2026	Q1 2025	F/X	M&A	Organic	Total
EMEA	483	496	-0.4%	7.2%	-9.5%	-2.7%
Americas	351	384	-7.4%	0.0%	-1.2%	-8.6%
Asia Pacific	208	218	-8.8%	0.0%	4.0%	-4.8%
Group revenue	1,041	1,098	-4.5%	3.3%	-3.9%	-5.2%
EMEA	123	126	-0.5%	8.6%	-10.7%	-2.7%
Americas	83	92	-7.6%	0.0%	-2.1%	-9.7%
Asia Pacific	40	45	-8.1%	0.0%	-3.3%	-11.4%
Group gross profit	246	264	-4.3%	4.1%	-6.4%	-6.6%
EMEA	58	62	-0.3%	9.3%	-14.8%	-5.9%
Americas	36	43	-7.6%	0.0%	-9.8%	-17.4%
Asia Pacific	20	24	-9.4%	0.0%	-6.7%	-16.1%
Group adjusted EBITA^1	104	120	-4.8%	4.8%	-12.7%	-12.7%
1 Total adjusted EBITA includes holding companies

EMEA

(in millions of €)	Q1 2026	Q1 2025	Change	Constant currency
Revenue	483	496	-2.7%	-2.3%
Gross profit	123	126	-2.7%	-2.2%
Gross profit margin	25.4%	25.4%	-1 bp	3 bp
Adjusted EBITDA	63	67	-5.3%	-5.0%
Adjusted EBITDA margin	13.1%	13.5%	-37 bp	-37 bp
Adjusted EBITA	58	62	-5.9%	-5.5%
Adjusted EBITA margin	12.1%	12.5%	-41 bp	-42 bp
Conversion margin	47.6%	49.2%	-161 bp	-170 bp

EMEA revenue was EUR 483m in Q1 2026, representing a year-on-year decline of 2.3% in constant currency, driven by organic revenue decline of 9.5%, partially mitigated by revenue growth contribution of 7.2% from acquisitions. The impact of F/X translation was broadly stable compared to the prior year.

Revenue in Life Sciences was stable compared to the prior year at EUR 316m, as contribution from acquisitions offset the organic decline during the quarter, as trends remain weak across end markets. Revenue in Industrial Chemicals decreased by 6.5% to EUR 166m, driven by an 8.7% organic decline, partially mitigated by a 2.2% revenue growth contribution from acquisitions.

Gross profit for the period was EUR 123m, implying gross profit margin of 25.4%, with stronger margins in Europe offsetting continued weakness in Middle East and Africa. Adjusted EBITA was EUR 58m driving a 41 bp contraction in adjusted EBITA margin to 12.1%, with cost discipline and contribution from acquisitions partially mitigating topline pressure. The lower adjusted EBITA margin resulted in a 161 bp contraction in conversion margin to 47.6%.

Americas

(in millions of €)	Q1 2026	Q1 2025	Change	Constant currency
Revenue	351	384	-8.6%	-1.2%
Gross profit	83	92	-9.7%	-2.1%
Gross profit margin	23.7%	24.0%	-30 bp	-25 bp
Adjusted EBITDA	39	47	-16.3%	-8.7%
Adjusted EBITDA margin	11.2%	12.2%	-102 bp	-100 bp
Adjusted EBITA	36	43	-17.4%	-9.8%
Adjusted EBITA margin	10.2%	11.2%	-108 bp	-106 bp
Conversion margin	42.8%	46.8%	-398 bp	-398 bp

Revenue in the Americas was EUR 351m, representing a year-on-year decline of 1.2% in constant currency, reflecting the organic performance during the period. The region recorded a 7.4% F/X translation headwind, resulting in total revenue decline of 8.6%.

Revenue in Life Sciences was stable in constant currency, at EUR 200m (-7.3% on a reported basis), with some of the end markets seeing a stabilisation in volumes and prices. Revenue in Industrial Chemicals decreased by 2.7% (-10.2% on a reported basis) to EUR 150m, as demand remains subdued, notably in CASE.

Gross profit was EUR 83m, representing a decline of 2.1% in constant currency (-9.7% on a reported basis), resulting in gross profit margin of 23.7%. Adjusted EBITA declined by 9.8% in constant currency (-17.4% on a reported basis) to EUR 36m, resulting in a 108 bp contraction in adjusted EBITA margin to 10.2%, due largely to dilution from Latin America. The lower adjusted EBITA resulted in a 398 bp contraction in conversion margin to 42.8%.

Asia Pacific

(in millions of €)	Q1 2026	Q1 2025	Change	Constant currency
Revenue	208	218	-4.8%	4.0%
Gross profit	40	45	-11.4%	-3.3%
Gross profit margin	19.3%	20.8%	-144 bp	-159 bp
Adjusted EBITDA	22	26	-16.0%	-6.7%
Adjusted EBITDA margin	10.5%	11.9%	-140 bp	-133 bp
Adjusted EBITA	20	24	-16.1%	-6.7%
Adjusted EBITA margin	9.6%	10.9%	-130 bp	-123 bp
Conversion margin	49.8%	52.6%	-281 bp	-206 bp

Revenue in APAC increased by 4.0% in constant currency compared to the prior year to EUR 208m, reflecting the organic growth in the region. The 8.8% negative impact from F/X translation resulted in a 4.8% total revenue decline during the quarter.

Revenue in Life Sciences grew 0.8% to EUR 145m (-8.9% on a reported basis), supported by modest volume growth and stabilising prices across most end markets. In Industrial Chemicals, revenue increased by 12.7% in constant currency (+6.3% on a reported basis) to EUR 63m driven by volume growth as well as constructive pricing.

Gross profit decreased by 3.3% in constant currency (-11.4% on a reported basis) to EUR 40m, mainly due to negative mix effects due to market weakness in Australia and New Zealand, which have structurally higher margin, as well as ongoing competitive pressure due to excess supply in the region. Adjusted EBITA for the quarter was EUR 20m, implying adjusted EBITA margin of 9.6%, or a 130 bp contraction, driven by lower gross profit. This resulted in a conversion margin of 49.8%, representing a 281 bp contraction.

Holding companies

	Q1 2026	Q1 2025	Change	Constant currency
Adjusted EBITA (in millions of €)	-10	-9	1.8%	1.8%
As % of Group revenues	-0.9%	-0.9%	-6 bp	-2 bp

Operating costs at the Group’s holding companies, which relate to the Group’s non-operating entities as well as the head office in Belgium, was broadly stable at 0.9% of Group revenues.

FINANCIAL REVIEW

(in millions of €)	Q1 2026	Q1 2025	Change	Constant currency
Life Sciences	662	693	-4.5%	0.2%
Industrial Chemicals	379	405	-6.2%	-2.1%
Group revenue	1,041	1,098	-5.2%	-0.7%
Gross profit	246	264	-6.6%	-2.3%
Gross profit margin	23.7%	24.0%	-38 bp	-43 bp
Adjusted EBITDA	115	130	-11.8%	-7.1%
Adjusted EBITDA margin	11.0%	11.9%	-84 bp	-81 bp
Adjusted EBITA	104	120	-12.7%	-7.9%
Adjusted EBITA margin	10.0%	10.9%	-86 bp	-83 bp
Conversion margin	42.4%	45.4%	-293 bp	-270 bp

Revenue

Revenue for the quarter was EUR 1.0bn, representing year-on-year decline of 0.7% in constant currency, with revenue growth contribution from acquisitions of 3.3% partially mitigating an organic decline of 3.9%. F/X translation had a negative impact of 4.5%, bringing total revenue decline for the quarter to 5.2%.

Revenue in Life Sciences was stable in constant currency (-4.5% on a reported basis) at EUR 662m, as the 4.6% growth contribution from acquisitions offset the organic decline in the segment, notably in EMEA. Revenue in Industrial Chemicals declined by 2.1% in constant currency (-6.2% on a reported basis) to EUR 379m, with the organic decline of 3.1% partly mitigated by a 1% revenue growth contribution from acquisitions.

Profitability

Gross profit was EUR 246m, representing a year-on-year decline of 2.3% in constant currency (-6.6% on a reported basis), driving gross margin for the period to 23.7%, with the 38 bp margin contraction reflecting negative mix effects across the Group, notably in Asia Pacific.

Adjusted EBITA was EUR 104m, representing a decline of 7.9% in constant currency (-12.7% on a reported basis), with continued cost discipline as reflected in lower operating costs mitigated the impact of lower revenue and the negative mix effect from improved performance in Latin America. The lower adjusted EBITA resulted in conversion margin of 42.4% for the quarter, representing a contraction of 293 bp.

Cash flow and financing

Net working capital to revenue normalised for acquisitions was 13.9% at the end of March 2026, compared to 14.7% in the prior year. The reduction in working capital reflects our focus on continuously improving working capital management and cash generation, as reflected in the further optimisation of working capital intensity compared to the end of December 2025 (14.1% NWC/Sales).

Free cash flow was EUR 119m, broadly stable compared to the prior year, and represents a free cash flow conversion ratio of 113%, compared to 100% in the prior year, and is further improvement from the 106% reported in December 2025.

Net debt was stable at EUR 1.5bn, whilst leverage ratio was 3.4x, representing an uptick of 0.1x compared to December 2025, due to lower EBITDA. At the end of the period, the Group has liquidity of EUR 799m in both cash and unused revolving credit facility.

FINANCIAL CALENDAR

Date	Event
13 May 2026	Annual General Meeting 2026
29 June 2026	Ex-dividend date
30 June 2026	Dividend record date
1 July 2026	Dividend payment date
30 July 2026	Half year 2026 results
22 October 2026	Q3 2026 trading update

ALTERNATIVE PERFORMANCE MEASURES

Throughout its financial communication (annual and interim reports, website, press releases, presentations, etc.), Azelis presents certain financial measures and adjustments that are not in accordance with IFRS, or any other internationally accepted accounting principles. Certain of these measures are termed 'alternative performance measures' (APMs) because they exclude amounts that are included in, or include amounts that are excluded from, the most directly comparable measure calculated and presented in accordance with IFRS, or are calculated using financial measures that are not calculated in accordance with IFRS. For more information regarding these APMs, including definitions and calculation methodology, refer to the section 'alternative performance measures' in the Azelis Group Integrated reports.

NOTES TO THE EDITOR

About Azelis
Azelis is the reference global innovation service provider in the speciality chemical and food ingredients industry, present in 64 countries across the globe with over 4,100 employees. Our knowledgeable teams of industry, market and technical experts are each dedicated to a specific market within Life Sciences and Industrial Chemicals. We offer a comprehensive portfolio of complementary products to more than 65,000 customers, supported by +2,800 principal relationships, creating a turnover of €4.1 billion (2025). Azelis Group NV is listed on Euronext Brussels under ticker AZE and is included in the BEL20 and BEL®ESG indices.

Across our extensive network of more than 70 application laboratories, our award-winning teams develop innovative and sustainable formulations and provide technical guidance throughout the product development process. We combine global market reach with a local footprint to offer reliable, integrated, and unique digital services to local customers and attractive business opportunities to principals. Recognised for our sustainability leadership, we are committed to responsible growth that positively impacts people, communities and the planet. Through the application of science and deep market expertise, we act as catalysts for innovation, enabling our customers to win and our principals to grow.

Impact through ideas. Innovation through formulation.

Important disclaimer
This press release may contain statements relevant to Azelis Group NV (the Company) and/or its affiliated companies (collectively Azelis or the Azelis Group) which are not historical facts, contain wording like 'potential', 'believes', 'anticipates', 'expects', 'intends', 'plans', 'seeks', 'estimates', 'may', 'will', 'continue' and similar expressions, and are hereby identified as 'forward-looking statements'. Such forward-looking statements include, without limitation, those relating to the future business prospects, revenue, working capital, liquidity, capital needs, interest costs, and income, in each case relating to the Azelis Group.

The forward-looking statements and estimates contained herein represent the judgment of and are based on the information available to the Board of Directors and the Company’s management as of the date of this press release. They are subject to a number of known and unknown risks, uncertainties, assumptions and other factors that could cause actual results, financial condition, performance or achievements, or industry results to differ materially from those expressed or implied by the forward-looking statements.

These forward-looking statements should not be considered as guarantees for the future performance of the Azelis Group and should, therefore, be considered in light of various important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements. These include without limitation global spread and impact of military conflicts and pandemics, changes in economic, and business cycles, the terms and conditions of Azelis's financing arrangements, foreign currency rate fluctuations, competition in Azelis's key markets, acquisitions or disposals of businesses or assets, potential or actual data security breaches, changes in laws and regulations, changes or uncertainties in tax laws or the administration thereof, hiring and retention of employees, and trends in Azelis's principal industries or economies. Azelis's efforts to acquire and integrate businesses may not be as successful as Azelis may have believed at the moment of acquisition. Last but not least, a breakdown, cyberattack or information security breach could compromise the confidentiality, integrity and availability of Azelis's data and systems.

The foregoing list of important factors is not exhaustive. When considering forward-looking statements, careful consideration should be given to the foregoing factors and other uncertainties and events, as well as factors described in any other document published by the Company with the Belgian Financial Services and Markets Authority (FSMA) or on the Azelis website from time to time. No undue reliance should be placed on such forward-looking statements, which are relevant only as of the date of this publication and do not reflect any potential impacts from the evolving military conflicts, pandemics or other adversity, unless indicated otherwise. Except as required by the FSMA, Euronext, or otherwise in accordance with applicable law, the Company disclaims any obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Certain financial information in this press release has been rounded according to established commercial standards. As a result, this press release may show minor rounding differences versus comparable periods as presented earlier. Pursuant to Belgian Law, Azelis is required to prepare this press release in Dutch. Azelis has also made this report available in English.