DSM reports Q3 2015 results
(Thomson Reuters ONE) -
* Sales up 8%, driven by 7% organic growth in Nutrition and foreign exchange
* Solid volume growth in Human Nutrition; very strong volume growth in Animal
Nutrition
* Nutrition EBITDA: negative impact of vitamin E and Swiss franc largely
offset
* Performance Materials EBITDA: improved on lower input costs and cost savings
despite soft sales
* Strong operating cash flow of ?300 million
* 2015 outlook maintained
+------------------------------------------------------------------------+
| third quarter price / exch. |
| |
| 2015 2014 yoy in ?m volume mix rates other |
| |
| Group |
| |
| 1,945 1,794 8% Sales 2% -1% 6% 1% |
| |
| 287 281 2% EBITDA |
+------------------------------------------------------------------------+
| Nutrition |
| |
| 1,253 1,091 15% Sales 6% 1% 6% 2% |
| |
| 213 225 -5% EBITDA |
+------------------------------------------------------------------------+
| PM |
| |
| 631 638 -1% Sales -3% -5% 7% 0% |
| |
| 102 87 17% EBITDA |
+------------------------------------------------------------------------+
Commenting on the results, Feike Sijbesma, CEO/Chairman of the DSM Managing
Board, said:
"DSM continued to make good progress in Q3 in both EBITDA and cash generation.
These results demonstrate the benefits of our focus on improving our operational
performance. We are starting to implement the previously announced ?125-150
million cost reduction program for the DSM-wide support functions. Tomorrow at
our Capital Markets Day, we will announce our strategy and targets for the
coming years, as well as an additional efficiency and cost reduction program in
Nutrition.
It is increasingly difficult to predict macro-economic developments. Assuming no
major changes in current market conditions for the remainder of this year, we
maintain our full year outlook 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
+------------------------------------------------------------------------------+
| third |
| quarter |
| |
| 2015 2014 +/- in ? million volume price/mix exch. rates other|
+------------------------------------------------------------------------------+
| Net sales |
| |
|1,253 1,091 15% Nutrition 6% 1% 6% 2% |
+------------------------------------------------------------------------------+
| 631 638 -1% Performance Materials -3% -5% 7% |
+------------------------------------------------------------------------------+
| 42 40 5% Innovation Center -5% -1% 11% |
+------------------------------------------------------------------------------+
| 19 25 Corporate Activities |
+------------------------------------------------------------------------------+
| Total continuing |
|1,945 1,794 8% operations 2% -1% 6% 1% |
+------------------------------------------------------------------------------+
| Discontinued |
| 157 529 operations |
| |
| |
+------------------------------------------------------------------------- |
| third January - |
| quarter September |
| |
| 2015 2014 +/- in ? million 2015 2014 +/- |
+------------------------------------------------------------------------------+
| EBITDA |
| |
| 213 225 -5% Nutrition 616 650 -5% |
+------------------------------------------------------------------------------+
| 102 87 17% Performance Materials 294 243 21% |
+------------------------------------------------------------------------------+
| 0 -4 Innovation Center -8 -15 |
+------------------------------------------------------------------------------+
| -28 -27 Corporate Activities -88 -94 |
+------------------------------------------------------------------------------+
| Total continuing |
| 287 281 2% operations 814 784 4% |
+------------------------------------------------------------------------------+
| Discontinued |
| 3 34 operations 94 94 |
+------------------------------------------------------------------------------+
| |
+------------------------------------------------------------------------------+
| Core net profit |
| (continuing |
| 123 132 -7% operations) 340 360 -6% |
+------------------------------------------------------------------------------+
| Net profit before |
| 106 113 -6% exceptional items, 285 312 -9% |
| |
| continuing operations |
+------------------------------------------------------------------------------+
| Net profit after |
| 36 93 -61% exceptional items, 65 252 -74% |
| total DSM |
| |
| |
+------------------------------------------------------------------------------+
| 0.70 0.76 -8% Core EPS (?/share) 1.95 2.08 -6% |
+------------------------------------------------------------------------------+
| Net EPS before |
| 0.59 0.64 -8% exceptional items, 1.61 1.78 -10% |
| continuing operations |
| (?/share) |
+------------------------------------------------------------------------------+
| 0.19 0.51 -63% Net EPS after 0.33 1.41 -77% |
| exceptional items, |
| total DSM (?/share) |
| |
| |
+------------------------------------------------------------------------------+
| Cash flow from |
| 300 252 continuing operations 487 387 |
+------------------------------------------------------------------------------+
| Capital expenditures |
| 113 87 continuing operations 321 269 |
| (cash, net of customer |
| funding) |
+------------------------------------------------------------------------------+
| Net debt 2,395 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 31 July 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
Q3 sales increased 15%, driven by very strong volume growth in Animal Nutrition
& Health and solid volume developments in Human Nutrition & Health. As a result
of higher prices for some vitamins and other, partly in-sourced, ingredients,
the price/mix-effect was slightly positive despite lower vitamin E prices.
Q3 EBITDA was 5% lower at ?213 million versus Q3 2014. Good volume growth and
overall positive foreign exchange rates largely offset the negative impact of
lower vitamin E prices (of more than ?30 million). Positive foreign exchange
rates effects mainly associated with the US dollar were partly offset by the
negative impact of the Swiss franc, the Brazilian real and the Chinese renminbi.
The weakening of the Brazilian real, to which DSM is exposed mainly via its
Tortuga business, had a negative EBITDA impact of ~?5 million.
Animal Nutrition & Health
Volume: Q3 showed very strong volume growth driven by the premix activities and
specialty products in Europe and Latin America. Although underlying business
conditions in the global animal feed markets are expected to remain favorable,
going forward DSM will face tougher comparative figures for organic growth as
from Q4 2014.
Price: As in the first half of this year, the price development compared to Q3
2014 was a combination of significantly lower vitamin E prices and higher prices
for a range of other products. Since a substantial part of these other products
are in-sourced, these increased prices only have limited benefit at EBITDA
level.
Human Nutrition & Health
Volume: DSM delivered solid volume growth in spite of the continued soft
environment in several key market segments. The dietary supplements businesses
continued to show good growth in Europe and Asia and an ongoing mixed picture in
the US where sales of fish oil and (multi) vitamin based supplements declined in
Q3.
I-Health, DSM's B2C business, continued to deliver double-digit growth.
Conditions in the Food & beverage segment are unchanged with good sales
development in Europe and Asia and ongoing weak sales in North and South
America. Markets for Infant Nutrition are stable, although DSM's sales were
relatively weak in Q3 due to timing of orders.
Price: Prices were slightly lower versus Q3 2014 mainly as a result of lower
vitamin E prices and some mix effects.
Food Specialties
Q3 showed good volume growth in Enzymes and Cultures. Also the yeast extract-
based savory business is performing increasingly well.
Performance Materials
Sales in Q3 decreased by 1% compared to Q3 2014 as a result of overall soft
volumes, although strong in specialties, and lower prices reflecting lower input
costs.
In DSM Engineering Plastics volumes were slightly down. PA6 polymers sales were
weak, amplified by restricted product availability due to temporary production
issues. Compounds and specialty products showed good volume growth.
In DSM Resins and Functional Materials volumes declined due to weak demand.
Lower prices reflected lower input costs and a less favorable mix. The market
environment for the UV curable coating resins business of DSM AGI in Asia
remained difficult.
DSM Dyneema delivered modest organic growth versus Q3 2014 mainly due to timing
of orders in comparison with Q3 2014.
EBITDA in Performance Materials for the quarter increased by 17% versus Q3
2014. On a structural base, good margin management 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 low input costs.
EBITDA of DSM Engineering Plastics was substantially up due to higher margins
and lower costs.
EBITDA of DSM Resins and Functional Materials was materially up due to continued
good margins and lower costs.
DSM Dyneema showed solid EBITDA growth.
Innovation Center
Sales: DSM Biomedical continues to operate in a challenging US market.
EBITDA in Q3 improved compared to Q3 2014 driven by a stronger focus in the
innovation activities, cost savings and positive currency developments.
Corporate Activities
EBITDA in Q3 2015 was in line with the average quarterly run-rate as well as Q3
2014.
Key joint ventures and associates
DSM Sinochem Pharmaceuticals (50% DSM) showed a solid financial performance in
Q3 supported by favorable exchange rate effects.
DPx holdings (49% DSM): DPx showed a solid performance. Margin was in line with
previous quarters. On 8 June 2015 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.
ChemicaInvest (35% DSM): Sales in Q3 were lower than last year, with lower
caprolactam sales coming from a loss in production following an outage in China
and low feedstock costs.
Discontinued operations
Polymer Intermediates and Composite Resins
Discontinued operations comprises net sales and operating profit of DSM Fibre
Intermediates and DSM Composite Resins up to and including 31 July 2015. From
that date onwards their activities have been transferred to ChemicaInvest.
Financial overview
Exceptional items
Exceptional items in the third quarter included non-cash impairment charges of
?25 million related to the obsolescence of certain IT assets as a consequence of
outsourcing and equipment no longer being used. A charge of ?15 million was
recognized for the devaluation of financial assets in Venezuela. Restructuring
costs and related expenses amounted to ?36 million, whilst acquisition related
costs and other items were ?12 million. Due to these charges a tax benefit of
?23 million could be recognized resulting in a total after tax impact of ?65
million. Associates reported exceptional items of ?6 million after tax.
Net profit
Financial income and expense in Q3 2015 amounted to -?28 million compared to
-?26 million in Q3 2014.
The effective tax rate in Q3 2015 remained 18%, equal to the full year 2014.
Net profit from continuing operations, before exceptional items in Q3 2015
amounted to ?106 million compared to ?113 million in Q3 2014.
Net earnings per ordinary share (continuing operations, before exceptional
items) amounted to ?0.59 in Q3 2015 compared to ?0.64 in Q3 2014.
Cash flow, capital expenditure and financing
Cash provided by operating activities from continuing operations in Q3 2015 was
?300 million (Q3 2014: ?252 million).
Operating working capital (continuing operations) expressed as a percentage of
annualized sales amounted to 24.9% compared to 26.3% at year-end 2014, in line
with DSM's ambition to further reduce operating working capital. In Nutrition,
operating working capital as a percentage of annualized sales declined from 34%
at year-end 2014 to 32%. The operating working capital in absolute terms
increased by ?32 million from ?1,903 million at year-end of 2014 to ?1,935
million at the end of Q3 2015.
Cash used for capital expenditure net of customer funding (continuing
operations) amounted to ?113 million in Q3 2015 compared to ?87 million in Q3
2014.
Net debt decreased by ?468 million compared to Q2 2015, reflecting the good
operating cash flow and a positive development in mark-to-market value of
financial derivatives held as well as the proceeds from the sale of the Polymer
Intermediates and Composite Resins activities of ?282 million.
Outlook 2015
The volatility in currencies, including the strengthening of the Swiss franc and
the US dollar against the Euro, and the recent weakening of the Brazilian real
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.
The negative price impact of vitamin E on DSM's 2015 EBITDA is estimated to be
approximately ?100 million compared to 2014.
It is increasingly difficult to predict the macro-economic developments.
Assuming current market conditions will continue for the remainder of the year,
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 investors and analysts from 09.00 to
9.45 CET. Details on how to access this call can be found on the DSM website,
www.dsm.com.
Tomorrow, 4 November 2015, DSM will issue a press release at 7.15 CET on the
information to be discussed at tomorrow's Capital Markets Day, where DSM will
update the markets on DSM's strategy and targets. DSM will organize a conference
call for the media tomorrow on both the Q3 results and the highlights of the
Capital Markets Day from 09.00 AM to 09.30 AM CET. Details on how to access this
call can be found on the DSM website, www.dsm.com. The DSM Capital Markets Day
can be followed live via Video webcast from 13.30-19.00 hrs (CET). The
presentations can be found on www.dsm.com as from 13.30 hrs (CET).
Important dates
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, 3 November 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
Presentation to Investors PDF:
http://hugin.info/130663/R/1963533/716476.pdf
Press release-PDF:
http://hugin.info/130663/R/1963533/716475.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#1963533]
Unternehmensinformation / Kurzprofil:
Datum: 03.11.2015 - 07:15 Uhr
Sprache: Deutsch
News-ID 431316
Anzahl Zeichen: 25064
contact information:
Town:
Heerlen
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 188 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"DSM reports Q3 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).
