DSM Reports Results First Nine Months 2019

News provided by

Royal DSM

05 Nov, 2019, 06:00 GMT

HEERLEN, Netherlands, Nov. 5, 2019 /PRNewswire/ --

Highlights1,2,3

  • DSM reports good first nine months, with a solid performance in Q3
  • Results compared to Underlying business in first nine months 2018:
    • Group sales +3%, Adjusted EBITDA up 11% (including 3% from IFRS 16)
    • Nutrition: organic sales +4%, Adjusted EBITDA up 13% (including 3% from IFRS 16)
    • Materials: organic sales –7% (-5% volume), Adjusted EBITDA flat (including 2% from IFRS 16) 
  • Total Net profit €640m, up versus first nine months 2018 of €821m when correcting for the temporary vitamin effect of €290m EBITDA
  • Adjusted Net Operating Free Cash Flow €550m, up 4% versus first nine months 2018 which included the temporary vitamin effect of €290m EBITDA
  • Full year outlook maintained

Key figures and indicators

in € million

Jan - Sept
2019

Jan – Sept

2018

% Change



Underlying1
business

Temp. vitamin effect

Total

Group

 Underlying1   

Organic
 growth 

FX & 'other'1

Underlying1 

total growth

Temporary
vitamin effect

Total
Group

Sales

6,858

6,644

415

7,059

0%

3%

3%

-6%

-3%

  Nutrition

4,573

4,278

415

4,693

4%

3%

7%

-10%

-3%

  Materials

2,114

2,215


2,215

-7%

2%

-5%


-5%

Adjusted EBITDA

1,288

1,162

290

1,452



11%

-22%

-11%

  Nutrition

956

847

290

1,137



13%

-29%

-16%

  Materials

391

393


393



0%


0%

  Innovation

16

1


1






  Corporate

-75

-79


-79






EBITDA

1,239

1,124

290

1,414






Adjusted EBITDA margin

18.8%

17.5%


20.6%






CEO statement

Feike Sijbesma, CEO/Chairman DSM Managing Board, commented: "I am pleased to report again a good nine-month performance, together with a solid third quarter.

In the quarter, Nutrition delivered a good performance with 4% organic growth and Adjusted EBITDA up 12%, despite some softness in Human Nutrition. Materials experienced ongoing challenging conditions in some of its end-markets, especially in China. Dyneema continued to perform strongly. The earnings performance highlights the relative resilience of our specialty Materials portfolio with a slight Adjusted EBITDA decline of 2%. We made good progress, with our large innovation projects, like Veramaris, Clean Cow and Avansya.

We are on track to deliver 2019 in line with our targets, and therefore maintain our full year outlook. DSM continues to be well positioned to deliver its ambitious Strategy 2021, with its growth platforms together with increased customer centricity and its large innovation projects, while at the same time remaining focused on cost control and operational excellence."

Q3 Highlights1,2,3

  • DSM reports a solid Q3
  • Results compared to Underlying business in Q3 2018:
    • Group sales +3%, Adjusted EBITDA up 9% (including 3% impact from IFRS 16)
    • Nutrition: organic sales +4%, Adjusted EBITDA up 12% (including 3% impact from IFRS 16)
    • Materials: organic sales –7% (-3% volume), Adjusted EBITDA down 2% (including 2% impact from IFRS 16)

Key figures and indicators

in € million

Q3 2019

Q3 2018

% Change



Underlying1
business

Temp. vitamin effect

Total

Group

 Underlying1   

Organic
 growth 

FX & 'other'1

Underlying1 

total growth

Temporary
vitamin effect

Total
Group

Sales

2,290

2,215

50

2,265

0%

3%

3%

-2%

1%

  Nutrition

1,544

1,438

50

1,488

4%

3%

7%

-3%

4%

  Materials

687

723


723

-7%

2%

-5%


-5%

Adjusted EBITDA

426

391

15

406



9%

-4%

5%

  Nutrition

317

283

15

298



12%

-6%

6%

  Materials

129

132


132



-2%


-2%

  Innovation

5

1


1






  Corporate

-25

-25


-25






EBITDA

416

370

15

385






Adjusted EBITDA margin

18.6%

17.7%


17.9%






1 In 2018 DSM benefitted from a temporary vitamin effect (see page 5). Underlying (business) is defined as the performance measure sales and Adjusted EBITDA, corrected for DSM's best estimate of this temporary vitamin effect.

2 Adjusted EBITDA is an Alternative Performance Measure (APM) that reflects continuing operations.

3 DSM adopted IFRS 16 as per its effective date of 1 January 2019 and has not restated 2018 (see page 19).

Outlook 2019

DSM maintains its full year outlook: DSM expects to deliver a full year 2019 high single digit increase in Adjusted EBITDA compared to prior year Underlying Adjusted EBITDA (pre-temporary vitamin effect), together with an improvement in Underlying Adjusted Net Operating Free Cash Flow in line with its Strategy 2021 targets. This outlook excludes the impact of IFRS 16 (see page 19).

Share Buy-Back program

On 1 April 2019, DSM commenced its ordinary share repurchase program of an aggregate market value of €1 billion, with the intention to reduce its issued capital, as first announced on 14 February 2019. This program is in addition to the regular repurchase programs to cover commitments under share-based compensation plans and the stock dividend. Up to and including 31 October 2019 DSM has repurchased 5.3 million shares for a total consideration of €563 million; 2.6 million shares relate to the regular repurchase programs and 2.7 million shares relate to the €1 billion share buy-back program.

Note for the editors: for the full press release including all tables and a link to the Presentation to Investors, click here>


Financial calendar                       

13 February 2020                                Publication of full year 2019 results

7 May 2020                                         Publication of the results of the first three months of 2020

8 May 2020                                         Annual General Meeting of Shareholders

4 August 2020                                     Publication of the half year results of 2020

3 November 2020                                Publication of the results of the first nine months of 2020

Additional Information

Today DSM will hold a conference call for media at 08:00 CET and a conference call for investors and analysts at 09:00 CET. Details on how to access these calls can be found on the DSM website, www.dsm.com.

DSM – Bright Science. Brighter Living.™

Royal DSM is a global, purpose-led, science-based company active in Nutrition, Health and Sustainable Living. DSM's purpose is to create brighter lives for all. DSM addresses with its products and solutions some of the world's biggest challenges while simultaneously creating economic, environmental and societal value for all its stakeholders – customers, employees, shareholders, and society at large. DSM delivers innovative solutions for human nutrition, animal nutrition, personal care and aroma, medical devices, green products and applications, and new mobility and connectivity. DSM and its associated companies deliver annual net sales of about €10 billion with approximately 23,000 employees. The company was founded in 1902 and is listed on Euronext Amsterdam. More information can be found at www.dsm.com.

Forward Looking Statements

This press release may contain forward-looking statements with respect to DSM's future (financial) performance and position. Such statements are based on current expectations, estimates and projections of DSM and information currently available to the company. DSM cautions readers that such statements involve certain risks and uncertainties that are difficult to predict and therefore it should be understood that many factors can cause actual performance and position to differ materially from these statements. DSM has no obligation to update the statements contained in this press release, unless required by law. The English language version of the press release is leading.

Contact Information

Investor Relations
Dave Huizing
t. +31 (0) 45 578 2864
e. investor.relations@dsm.com

Media Relations
Lieke de Jong
t. +31 (0) 45 578 2420
e. media.contacts@dsm.com

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