NETHERLANDS: DSM Q3 earnings slide despite nutrition drive

By Katy Askew | 7 November 2012

  •  Q3 EBITDA down 23%
  •  Sales down 1%
  •  Investment in nutrition M&A "creates significant future value"
DSM Cargill buy "creating future value"

DSM Cargill buy "creating future value"

Dutch ingredients group DSM has seen third-quarter earnings drop by almost one-quarter, despite what it described as a "strong" performance from its nutrition business.

EBITDA dropped 23% to EUR270m (US$346m) in the three months to end-September, the company revealed in a filing yesterday (6 November).

Total sales fell 1% to EUR2.3bn. However, excluding currency exchange, organic sales fell by a total of 7%.

DSM emphasised the group's polymer ingredients arm weighed on the result, while its nutrition business offered a comparatively robust performance. Nutrition accounted for 76% of third-quarter EBITDA, the company said.

Feike Sijbesma, CEO and chairman, said that the result came "despite a challenging global trading environment" and was "mainly driven by our nutrition cluster".

DSM is focused on growing its nutrition business through acquisitions, including the recent purchase of Tortuga and Cargill's cultures and enzymes business.

Sijbesma said: "We have now invested EUR2.3bn in acquisitions since the end of 2010, of which EUR1.9bn in nutrition. With these acquisitions we are building new platforms and are strengthening our downstream network. This will create significant future value for the company whilst further increasing the resilience of DSM's earnings profile." 

Show the press release

DSM reports solid Q3 results despite weak economic conditions

http://www.dsm.com/en_US/cworld/public/media/pages/press-releases/29-12-...

Heerlen, NL, 06 November 2012 07:15 CET Q3 EBITDA from continuing operations €270 million (Q3 2011: €339 million) Life Sciences, driven by Nutrition, showed good performance, representing 76% of Q3 EBITDA Materials Sciences continued to perform well, except for caprolactam Further strategic progress with acquisitions Strong Q3 cash flow from operating activities of €253 million Outlook 2012 largely unchanged Commenting on the results, Feike Sijbesma, CEO/Chairman of the DSM Managing Board, said: “Despite a challenging global trading environment DSM continued to generate good results mainly driven by our Nutrition cluster. We continued to make good progress towards our strategic goals with the purchase of Tortuga and Cargill’s cultures and enzymes business. We have now invested €2.3 billion in acquisitions since the end of 2010, of which €1.9 billion in Nutrition. With these acquisitions we are building new platforms and are strengthening our downstream network. This will create significant future value for the company whilst further increasing the resilience of DSM’s earnings profile.”

“Our Profit Improvement Program, designed in part to offset the impact of adverse external developments, is on track to deliver significant cost savings. We expect that trading conditions will remain tough. Our strong focus on cost control and cash flow together with our strong balance sheet leaves DSM well placed to navigate near term external challenges.”

Original source: DSM

Sectors: Commodities & ingredients, Financials

Companies: Cargill

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