DSM reports Q2 2015 results
(Thomson Reuters ONE) -
* Solid sales performance with a 12% increase to ?1,965 million, supported by
foreign exchange rates and 3% volume growth
* EBITDA increase of 6% to ?279 million
* Nutrition delivered good organic growth of 3%, driven by 5% volume growth
* Performance Materials showed strong EBITDA growth of 25%, benefiting from
lower input costs and 2% volume growth
* Cash from continuing operating activities of ?103 million
* Interim dividend of ?0.55
* 2015 outlook maintained
Royal DSM, the Life Sciences and Materials Sciences company, today reported its
results for Q2 2015. Sales were ?1,965 million, a 12% increase versus Q2 2014,
due to 3% higher volumes, 2% lower prices, 10% positive foreign exchange effects
and 1% acquisition effects. DSM delivered a 6% higher EBITDA of ?279 million
compared to ?264 million in Q2 2014. In the second quarter operating working
capital remained stable versus Q1 2015.
DSM delivered improved results in Q2 driven by overall higher volumes and
positive foreign exchange effects as well as margin expansion in Performance
Materials. While Nutrition continues to be negatively impacted by lower vitamin
E prices, volumes developed well in both animal and human nutrition. In animal
nutrition volume growth would have been higher without the impact of a supply
interruption of a key raw material due to a fire at the port of Santos (Brazil).
Performance Materials had a strong quarter due to higher volumes, cost savings
programs implemented over the recent years, positive foreign exchange effects
and the temporary effect of significantly improved margins as a result of lower
input costs.
Commenting on the results, Feike Sijbesma, CEO/Chairman of the DSM Managing
Board, said:
"I am pleased to report good progress in Q2 with a solid volume growth in
Nutrition and a step-up in Performance Materials. The priority of improving our
operational performance is starting to deliver results. With increasingly
challenging macro-economic conditions we remain focused on further improving the
operational performance of DSM's businesses while making continued progress in
innovation and sustainability. The setting-up of efficiency and cost reduction
programs with a particular focus on the Nutrition business and the DSM-wide
support functions is progressing well. We will announce the scope of the program
for the DSM-wide support functions by the end of this month. More information on
the efficiency and cost reduction programs for the Nutrition business will be
shared at the Capital Markets Day on 4 November.
We maintain our full year outlook: DSM aims to deliver an EBITDA in 2015 ahead
of 2014, the increase mainly driven by positive foreign exchange effects."
Sales, EBITDA, operating working capital and cash flow refer to continuing
operations.
Key figures
+------------------------------------------------------------------------------+
| second |
| quarter |
| |
| 2015 2014 +/- in ? million volume price/mix exch. rates other|
+------------------------------------------------------------------------------+
| Net sales |
| |
|1,247 1,073 16% Nutrition 5% -2% 11% 2% |
+------------------------------------------------------------------------------+
| 664 615 8% Performance Materials 2% -4% 10% |
+------------------------------------------------------------------------------+
| 37 38 -3% Innovation Center -14% 0% 11% |
+------------------------------------------------------------------------------+
| 17 28 Corporate Activities |
+------------------------------------------------------------------------------+
| Total continuing |
|1,965 1,754 12% operations 3% -2% 10% 1% |
+------------------------------------------------------------------------------+
| Discontinued |
| 550 534 operations |
| |
| |
+------------------------------------------------------------------------- |
| second |
| quarter first half |
| |
| 2015 2014 +/- in ? million 2015 2014 +/- |
+------------------------------------------------------------------------------+
| EBITDA |
| |
| 208 222 -6% Nutrition 403 425 -5% |
+------------------------------------------------------------------------------+
| 106 85 25% Performance Materials 192 156 23% |
+------------------------------------------------------------------------------+
| -3 -5 Innovation Center -8 -11 |
+------------------------------------------------------------------------------+
| -32 -38 Corporate Activities -60 -67 |
+------------------------------------------------------------------------------+
| Total continuing |
| 279 264 6% operations 527 503 5% |
+------------------------------------------------------------------------------+
| Discontinued |
| 53 29 operations 91 60 |
| |
| |
| |
| Core net profit |
| (continuing |
| 129 122 6% operations) 217 228 -5% |
+------------------------------------------------------------------------------+
| Net profit before |
| 110 108 2% exceptional items, 179 199 -10% |
| |
| continuing operations |
+------------------------------------------------------------------------------+
| Net profit after |
| 99 78 27% exceptional items, 29 159 -82% |
| total DSM |
| |
| |
+------------------------------------------------------------------------------+
| 0.74 0.71 4% Core EPS (?/share) 1.25 1.32 -5% |
+------------------------------------------------------------------------------+
| Net EPS before |
| 0.63 0.62 2% exceptional items, 1.02 1.14 -11% |
| continuing operations |
| (?/share) |
+------------------------------------------------------------------------------+
| 0.56 0.45 24% Net EPS after 0.14 0.90 -84% |
| exceptional items, |
| total DSM (?/share) |
| |
| |
| |
| Cash flow from |
| 103 124 continuing operations 187 135 |
+------------------------------------------------------------------------------+
| Capital expenditures |
| 107 90 continuing operations 208 182 |
| (cash, net of |
| customer funding) |
+------------------------------------------------------------------------------+
| Net debt 2,863 2,420 * |
| |
| * year-end 2014 |
| |
| |
+------------------------------------------------------------------------------+
In this report:
* 'Organic sales growth' is the total impact of volume and price/mix;
* 'Discontinued operations' comprises net sales and operating profit (before
depreciation and amortization) of DSM Pharmaceutical Products up to and
including 10 March 2014 as well as DSM Fibre Intermediates and DSM Composite
Resins up to and including Q2 2015;
* 'Core net profit' is the net profit from continuing operations before
exceptional items and before acquisition related (intangible) asset
amortization.
Note: all tables are available in the attached Press release-PDF
Review by cluster
Nutrition
Sales in the second quarter increased by 16% compared to Q2 2014. Organic sales
growth was 3% as a result of 5% higher volumes and 2% lower price/mix effects.
The acquisition of Aland, which was finalized on 31 March 2015, had a 2%
positive effect on sales. Currencies had an 11% positive impact versus Q2 2014.
EBITDA for Q2 was ?208 million, down ?14 million or 6% from Q2 2014. Positive
volume developments were more than offset by significantly lower vitamin E
prices which had a negative impact of around ?30 million in the quarter.
Positive effects of certain foreign exchange rates, especially the US dollar,
were partly offset by the negative impact of the Swiss franc.
Animal Nutrition and Health net sales were ?571 million in Q2, a 10% increase
versus Q2 2014. Organic sales growth in Q2 was 3%, with 4% higher volumes and
1% lower prices. The premix business continued to perform strongly. Reported
volume growth in Q2 2015 was impacted by a key raw material supply interruption
at Tortuga due to a fire in the port of Santos (Brazil). This led to lost sales
of ?15 million with ?7 million business interruption damages, the latter being
covered under DSM's captive insurance. Excluding this business interruption at
Tortuga, organic growth in the quarter would have been 5% for animal nutrition
and 4% for the total Nutrition cluster.
As expected, vitamin E prices were significantly lower compared to Q2 2014. The
negative price effect on sales was largely compensated by higher prices for
other ingredients. However, as a substantial part of these other ingredients are
in-sourced for DSM's premix activities, these increased prices only have a
limited benefit at EBITDA level.
Human Nutrition & Health net sales increased by 19% to ?479 million in Q2.
Volumes were up 5% and prices were down 2% while currencies had a positive
effect of 16%.
US dietary supplements showed a mixed picture: I-Health continued to deliver
strong growth and (multi) vitamin sales were growing on the back of increased
promotional activities by multi-vitamin producers, whereas fish
oil-based Omega 3 dietary supplements were still down versus Q2 last year. Fish
oil-based Omega 3 sales showed good growth in Europe and Asia. Sales in DSM's
food & beverage segments also showed a mixed picture with Europe and Asia
performing well, but with ongoing tough business conditions in North and South
America. Infant nutrition returned to normalized growth rates after the
destocking in Q2 last year.
DSM Food Specialties showed good volume growth, supported by positive currency
developments. In particular the enzymes and cultures businesses performed well
with double-digit volume growth and increased market share.
Performance Materials
Sales in Q2 2015 increased by 8% compared to Q2 2014 as a result of 2% volume
growth, 4% lower prices (reflecting lower raw materials costs) and 10% positive
currency effects.
DSM Engineering Plastics showed good volume growth versus Q2 2014. Sales were
supported by a substantial foreign exchange effect. Prices were lower mainly in
the polyamide 6 value chain.
DSM Dyneema showed double digit volume growth with somewhat lower prices due to
mix effects.
In DSM Resins and Functional Materials volumes were lower versus Q2 2014 with
relatively weak demand in coating resins as well as lower volumes in functional
materials. Foreign exchange had a positive effect. Pricing was slightly down
reflecting lower input costs and severe price competition for DSM AGI in Asia.
EBITDA in Performance Materials for the quarter increased by 25% versus Q2 2014
to ?106 million which is a new record for the cluster. On a structural base,
volume growth and efficiency & cost savings programs over recent years
contributed positively. The increase in EBITDA was, however, also enhanced by
positive foreign exchange effects as well as temporarily strong margin
improvements due to lower input costs.
EBITDA of DSM Engineering Plastics was substantially up compared to previous
year as a result of volume growth in combination with substantially higher
margins.
DSM Dyneema delivered solid EBITDA growth on the back of double-digit organic
growth and favorable currencies.
EBITDA of DSM Resins & Functional Materials was flat with lower volumes, stable
margins and lower costs.
Innovation Center
Net sales in Q2 2015 were 3% lower than in Q2 2014. Positive foreign exchange
effects could not fully compensate for the lower volumes in DSM Biomedical,
which were mainly caused by destocking at a major customer and the absence of
St. Jude royalty revenues which were still partly included in Q2 2014.
EBITDA in Q2 2015 improved versus Q2 2014 driven by a stronger focus in the
innovation activities, cost savings and positive currency developments.
Corporate Activities
EBITDA in Q2 2015 was slightly below the average quarterly run-rate mainly due
to timing of certain costs. In Q2 2014 higher captive insurance costs were
incurred resulting from last year's fire at Sisseln. In Q2 2015 the insurance
costs of the Tortuga supply interruption amounted to ?7 million, largely offset
by other insurance related results.
Pharma activities and other associates
Total Q2 2015 sales of joint control entities amounted to ?122 million on a
100% basis (Q2 2014: ?115 million) of which ?112 million from DSM Sinochem
Pharmaceuticals (Q2 2014: ?108 million). DSM Sinochem Pharmaceuticals further
improved results, with an EBITDA margin for the quarter of about 15%.
DPx holdings (49% DSM) realized total sales (100% basis) of ?447 million, for
the period 1 February - 30 April 2015, with a corresponding EBITDA margin of
about 20%. The net income of DPx was negatively impacted by ?15 million
exceptional items (before tax) related to restructuring, integration and
realizing synergies of the company. In Q2 2015, following a successful
refinancing of DPx, DSM received a capital distribution of ?155 million.
DPx, to be renamed Patheon, has filed a registration statement on Form S-1 with
the United States Securities and Exchange Commission relating to the proposed
initial public offering of its common stock. The timing of the offering as well
as the number of shares to be offered and the price range for the offering have
not yet been determined.
Discontinued operations
Polymer Intermediates and Composite Resins
Net sales amounted to ?550 million supported by foreign exchange rates. EBITDA
amounted to ?53 million, an increase of ?24 million mainly related to positive
exchange rate effects and currently elevated margins as a result of lower input
costs.
Financial overview
Exceptional items
Total exceptional items in the second quarter amounted to a loss of ?44 million
before tax (?31 million after tax). This includes a ?20 million impairment of a
DSM Dyneema tape production line in the US, primarily used for vehicle
protection, and ?24 million restructuring and related expenses.
Net profit
Financial income and expense in Q2 2015 amounted to -?35 million compared to
-?32 million in Q2 2014 which was mainly due to higher interest expenses as a
result of a higher debt.
The effective tax rate in Q2 2015 remained 18%, in line with the full year 2014.
Net profit from continuing operations, before exceptional items in Q2 2015
amounted to ?110 million compared to ?108 million in Q2 2014.
Net earnings per ordinary share (continuing operations, before exceptional
items) amounted to ?0.63 in Q2 2015 compared to ?0.62 in Q2 2014.
Cash flow, capital expenditure and financing
Cash provided by operating activities from continuing operations in Q2 2015 was
?103 million (Q2 2014: ?124 million).
Operating working capital (continuing operations) expressed as a percentage of
annualized sales amounted to 26.7% compared to 26.3% at year-end 2014. The
operating working capital in absolute terms increased by ?197 million from
?1,903 million at year-end of 2014 to ?2,100 million at the end of Q2 2015 which
was largely due to the foreign exchange translation effect and some seasonality.
In Nutrition, operating working capital as a percentage of annualized sales
declined from 34% at year-end 2014 to 33%, in line with DSM's target to further
reduce operating working capital.
Cash used for capital expenditure net of customer funding (continuing
operations) amounted to ?107 million in Q2 2015 compared to ?90 million in Q2
2014.
Net debt decreased by ?69 million compared to Q1 2015, reflecting the cash flow
contribution and a positive development in mark-to-market value of financial
derivatives held, partially offset by interest and dividend payments as well as
the buy-back of own shares for management options.
Interim dividend
DSM will pay an interim dividend of ?0.55 per ordinary share for 2015. As usual,
this represents one third of the total dividend paid for the previous year. The
interim dividend should not be taken as an indication of the total dividend for
the year 2015. The dividend will be payable in cash or in the form of ordinary
shares, at the option of the shareholder. Dividend in cash will be paid after
deduction of 15% Dutch dividend withholding tax. The ex-dividend date is 5
August 2015. The interim dividend will be payable as from 25 August 2015.
DSM in motion: driving focused growth
Strategy update
DSM in motion: driving focused growth is the strategy that the company embarked
on in September 2010, which was updated in September 2013. The next update is
planned for Q4 2015.
Improvement programs
DSM continues to address the ongoing challenging external environment with a
focus on improving operational performance and enhancing profitability. The
setting-up of efficiency and cost reduction programs with a particular focus on
the Nutrition business and the DSM-wide support functions is progressing well.
DSM will announce the scope of the program for the DSM-wide support functions by
the end of this month. More information on the efficiency and cost reduction
programs for the Nutrition business will be shared at the Capital Markets Day on
4 November.
Below are some highlights of DSM's H1 2015 achievements.
High Growth Economies: from reaching out to being truly global
Sales to High Growth Economies reached a level of 43% of total sales in H1 2015
compared to 41% in H1 2014. Sales in China amounted to USD 514 million, versus
USD 516 million in H1 2014.
In China, DSM and NHU announced the formation of a joint venture company for the
market development and manufacturing of high performance plastics PPS compounds.
Innovation: from building the machine to doubling innovation output
Innovation sales in the first half of 2015 - measured as sales from innovative
products and applications introduced in the last five years - amounted to 23% of
sales compared to 19% in the first half of 2014.
MedDay, a biotechnology company focused on the treatment of nervous system
disorders, and DSM announced a partnership and co-investment for the
manufacturing and exclusive supply by DSM for MedDay's lead product MD1003, a
pharmaceutical grade D-Biotin, which is currently being tested in a series of
Phase III clinical trials to treat progressive multiple sclerosis.
Sustainability: from responsibility to business driver
The share of ECO+ products in DSM's innovation pipeline is on track to achieve
the full year aspiration of 80%. The ECO+ share in the running business in H1
2015 was 49%, well on track towards the 2015 aspiration of 50%.
DSM is progressing well in achieving its aspirations regarding energy efficiency
and the reduction of greenhouse-gas emissions. The energy efficiency
of DSM's continuing business improved by 17% in the first half year of 2015
compared to the reference year 2008. DSM is on track to reach its aspiration for
a 20% energy efficiency improvement in 2020.
DSM's greenhouse-gas emissions, measured in absolute CO(2) equivalents, in the
first half year of 2015 were similar to the low (activity) level of 2008. DSM's
aspiration calls for an (absolute) reduction of 25% by 2020, compared to 2008.
With the upcoming deconsolidation of Polymer Intermediates and Composite Resins,
DSM will achieve this target.
For both, energy efficiency and reduction of greenhouse-gas emissions, DSM will
formulate new targets by the end of 2015.
In the Netherlands DSM completed a five-year upgrade of its Engineering Plastics
facility in Emmen. The investment, which represents several million euros,
includes a capture system that uses waste water from the production plant to
reduce emissions to the air of Volatile Organic Compounds (VOCs) to almost zero.
It is DSM's goal to have an injury and incident-free working environment. DSM
has set itself the target of reducing the Frequency Index of Recordable Injuries
by 50 percent or more by the year 2020 compared to 2010. This will require an
index score that is less than or equal to 0.25 by 2020, compared to the 0.57
achieved in 2010. At the end of the first half of 2015 this index amounted to
0.46.
Acquisitions & Partnerships: from portfolio transformation to driving focused
growth
On 31 July DSM and CVC Capital Partners finalized the partnership for DSM's
activities in Polymer Intermediates (caprolactam and acrylonitrile) and
Composite Resins through the formation of a new company 65% owned by CVC and
35% by DSM, with 1,900 employees.
DSM Dyneema finalized the acquisition of Cubic Tech Corporation. This privately
owned company, based in Mesa (Arizona, USA), is focused on high-end solutions in
applications as diverse as racing yacht sails, equipment and apparel for
sportswear, outdoor and future soldier programs as well as emergency medical
equipment.
Outlook
Macro-economic uncertainty has increased, impacting DSM's end-markets, with
continued low growth in Europe, somewhat weaker growth in North America and a
prolonged slowdown in key emerging economies.
Assuming current low spot prices in vitamin E persist, the negative price impact
on DSM's 2015 EBITDA is estimated to be ?80 to ?90 million compared to 2014.
The volatility in currencies, including the strengthening of the Swiss franc and
the US Dollar against the Euro, will have a mixed effect on DSM's 2015 results
compared to 2014. Based on current exchange rates and the 2015 hedge effects, an
overall annual positive impact on 2015 EBITDA is estimated at approximately ?35
million versus the estimated ?45 million indicated in Q1 2015, should current
rates persist throughout the remainder of the year.
Taking the above into account, DSM maintains its full year outlook: DSM aims to
deliver an EBITDA in 2015 ahead of 2014, the increase mainly driven by positive
foreign exchange effects.
Additional information
Today DSM will hold a conference call for the media from 08.00 AM to 08.30 AM
CET and a conference call for investors and analysts from 09.00 AM to 10.00 AM
CET. Details on how to access these calls can be found on the DSM website,
www.dsm.com. Also, information regarding DSM's half year result 2015 can be
found in the Presentation to Investors, which can be downloaded from the
Investors section of the DSM website.
Important dates
Ex interim dividend quotation Wednesday, 5 August
2015
Record date Thursday, 6
August 2015
Interim dividend payable Tuesday, 25 August
2015
Report for the third quarter of 2015 Tuesday, 3 November 2015
Capital Markets Day Wednesday, 4 November
2015
Full year results 2015 Wednesday, 17 February
2016
Report for the first quarter of 2016 Tuesday, 26 April
2016
Annual General Meeting of Shareholders 2016 Friday, 29 April 2016
Report for the second quarter of 2016 Tuesday, 2 August 2016
Report for the third quarter of 2016 Thursday, 3 November 2016
Heerlen, 4 August 2015
The Managing Board
Feike Sijbesma, CEO/Chairman
Geraldine Matchett, CFO
Stephan Tanda
Dimitri de Vreeze
DSM - Bright Science. Brighter Living.(TM)
Royal DSM is a global science-based company active in health, nutrition and
materials. By connecting its unique competences in Life Sciences and Materials
Sciences DSM is driving economic prosperity, environmental progress and social
advances to create sustainable value for all stakeholders simultaneously. DSM
delivers innovative solutions that nourish, protect and improve performance in
global markets such as food and dietary supplements, personal care, feed,
medical devices, automotive, paints, electrical and electronics, life
protection, alternative energy and bio-based materials. DSM and its associated
companies deliver annual net sales of about ?10 billion with approximately
25,000 employees. The company is listed on Euronext Amsterdam. More information
can be found at www.dsm.com.
Or find us on:
For more information:
DSM Corporate Communications DSM Investor Relations
Herman Betten Dave Huizing
tel. +31 (0) 45 5782017 tel. +31 (0) 45 5782864
e-mail media.contacts(at)dsm.com e-mail investor.relations(at)dsm.com
Press release-PDF:
http://hugin.info/130663/R/1943389/703648.pdf
Presentation to Investors PDF:
http://hugin.info/130663/R/1943389/703649.pdf
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: DSM N.V. via GlobeNewswire
[HUG#1943389]
Unternehmensinformation / Kurzprofil:
Datum: 04.08.2015 - 07:15 Uhr
Sprache: Deutsch
News-ID 411173
Anzahl Zeichen: 31698
contact information:
Town:
Heerlen
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 119 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"DSM reports Q2 2015 results"
steht unter der journalistisch-redaktionellen Verantwortung von
DSM N.V. (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
