Commenting on the results, Feike Sijbesma, chairman of the DSM Managing Board, said:
“DSM delivered strongly improved results for Q3 2009, with ongoing resilience in Nutrition and a further improvement in Materials Sciences compared to the previous quarters. Our early action to reduce costs, our focus on cash and our commitment to innovation and China are paying off.
“We are alert that the economic climate remains uncertain and that the path of recovery is likely to prove uneven. However, it seems that the first half of 2009 represented the low point for this recession and we are showing that we are well placed to capitalize as markets improve, which is also reflected in a strong sales volume development.
“Throughout these challenging times, DSM is staying the course. We completed the disposal of two non-core businesses and remain committed to exiting the remaining non-core operations. Our strategic commitment to create a Life Sciences and Materials Sciences company addressing important global trends via a focus on customers, innovation and sustainability is undiminished. Our robust financial strength allows us to capture market opportunities as they arise.”
Outlook
During Q3 2009 DSM saw a continuation of the trends that were visible at the end of the second quarter with ongoing robust performance in Nutrition and a further improvement in Materials Sciences. Despite the improved performance in Q3 2009 compared to the previous quarter, demand is still fragile and the economic outlook remains uncertain. The movements in inventories in the value chain as well as the development of end-demand are difficult to separate and predict. DSM will continue to focus on cash and cost, whilst maintaining its strategic commitment to customers, innovation and sustainability.
It is expected that the current business conditions in Nutrition will remain strong with an ongoing increase in demand and sustained price levels in both the food and feed markets. The Nutrition cluster is expected to achieve full year results somewhat above the 2008 level.
Pharma results are expected to be substantially lower than last year although the results of DSM Pharmaceutical Products are expected to be strong in the last quarter of the year due to temporary additional demand related to the H1N1 flu.
In Materials Sciences and Base Chemicals and Materials business conditions have clearly improved in Q3 2009 compared to Q2 2009. At this moment there is still limited clarity on demand for the last quarter of the year, which is traditionally a weaker quarter. In addition there are signs that some re-stocking occurred in Q3 2009. Furthermore, feedstock prices remain volatile which might affect margins - positively or negatively. The operating result of Performance Materials is expected to be lower in Q4 2009 compared to Q3 2009. At Polymer Intermediates operating profit is expected to be around break-even in 2009. The Base Chemicals and Materials cluster is expected to be clearly loss-making in 2009.
The outlook for the rest of the year remains uncertain. However, the Q4 operating profit from continuing operations is currently expected to be lower than in Q3 2009, but above Q4 last year.
Full press release (PDF: 276 Kb)
