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Press release

DSM reports H1 2018 results

Heerlen, NL, 01 Aug 2018 07:00 CEST

Highlights H11

  • DSM reports a very good H1 with strong performance across all businesses
  • Continued strong organic sales growth in underlying business estimated at 10%
  • Adjusted EBITDA growth of underlying business estimated at 7%, despite significant FX headwind
  • ROCE of underlying business estimated at 13.8%, up 160 bps
  • Additional temporary vitamin price benefit estimated at €275m on Adjusted EBITDA
  • Total Adjusted EBITDA up 45% and Net profit up 103% to €633m
  • Cash from Operating Activities €503m up 53%
  • Interim dividend of €0.77, reflecting the proposed dividend increase of about 25% for 2018
  • Full year outlook reconfirmed

Key figures and indicators1

in € millionH1 2018H1 2017% change
 Underlying
business2		Temporary
vitamin effect2		Total
Group		Total
Group		Underlying
organic growth2		FX &
‘other’2		Underlying
total growth2		Temporary
vitamin effect2		Total
Group
Sales4,4293654,7944,32010%-7%3%8%11%
Nutrition2,8403653,2052,77810%-8%2%13%15%
Materials1,492 1,4921,4269%-4%5% 5%
Adjusted EBITDA7712751,046721  7%38%45%
Nutrition564275839528  7%52%59%
Materials261 261241  8% 8%
Innovation0 01     
Corporate-54 -54-49     
EBITDA7542751,029689     
Adjusted EBITDA
margin		17.4% 21.8%16.7%     

1) Adjusted EBITDA is an Alternative Performance Measure (APM) that reflects continuing operations.
2) Underlying business is defined in this press release as the performance measures sales and Adjusted EBITDA, corrected for DSM’s best estimate of the vitamin effect, which is expected to be temporary.

CEO statement

Feike Sijbesma, CEO/Chairman DSM Managing Board, commented: “Our ongoing focus on driving above market growth while pursuing efficiency initiatives and maintaining capital discipline, continues to drive our results. Following a strong start to the year, we are very pleased to report very good H1 results, with organic growth above market across all our businesses, and strong underlying Adjusted EBITDA growth despite significant foreign exchange headwinds. During the quarter, we also took another important step in monetizing our partnerships through announcing our exits from Fibrant and DSM Sinochem Pharmaceuticals. Our business conditions remain strong and we reiterate our full year 2018 outlook.

We are convinced our recent strategy update will create enhanced organic sales growth and continued EBITDA momentum, as DSM evolves further towards a purpose-led, science-based company in Nutrition, Health and Sustainable Living. The step-up in our dividend for 2018, already reflected in the interim dividend, demonstrates our confidence in our future earnings growth.”

Q2 Highlights1

  • DSM reports a very good Q2 with strong performance across all businesses
  • Continued strong organic sales growth in underlying business estimated at 8%
  • Adjusted EBITDA growth of underlying business estimated at 6%, despite significant FX headwind
  • Nutrition: an estimated 8% underlying organic sales growth and Adjusted EBITDA growth of underlying business estimated at 6%
  • Materials: 7% organic sales growth and Adjusted EBITDA growth of 5%
  • Additional temporary vitamin price benefit estimated at €110m on Adjusted EBITDA
  • Total Adjusted EBITDA up 35%

Key figures & indicators1

in € millionQ2 2018Q2 2017% change
 Underlying
business2		Temporary
vitamin effect2		Total
Group		Total
Group		Underlying
organic growth2		FX &
‘other’2		Underlying
total growth2		Temporary
vitamin effect2		Total
Group
Sales2,2141452,3592,1618%-6%2%7%9%
Nutrition1,4101451,5551,3808%-6%2%11%13%
Materials754 7547257%-3%4% 4%
Adjusted EBITDA398110508376  6%29%35%
Nutrition287110397271  6%40%46%
Materials135 135128  5% 5%
Innovation1 10     
Corporate-25 -25-23     
EBITDA393110503355     
Adjusted EBITDA
margin		18.0% 21.5%17.4%     

1) Adjusted EBITDA is an Alternative Performance Measure (APM) that reflects continuing operations.
2) Underlying business is defined in this press release as the performance measures sales and Adjusted EBITDA, corrected for DSM’s best estimate of the vitamin effect, which is expected to be temporary.

Outlook 2018

DSM confirms its full year outlook 2018, as provided at Q1 2018, and expects an Adjusted EBITDA growth towards 25% and a related higher ROCE growth. This is based on:

  • a low double-digit Adjusted EBITDA growth in the underlying business at constant currencies,
  • a negative foreign exchange effect on Adjusted EBITDA of about €70 million, and
  • an additional Adjusted EBITDA benefit estimated at €275 million from a temporary exceptional vitamin pricing environment

Key figures & indicators1

in € millionH1 2018H1 2017% changeVolumePrice/mixFXOther
Sales4,7944,32011%5%13%-7%0%
Nutrition3,2052,77815%5%18%-9%1%
Materials1,4921,4265%6%3%-4%0%
Innovation Center7584     
Corporate Activities2232     
in € millionQ2 2018Q2 2017% changeVolumePrice/mixFXOther
Sales2,3592,1619%3%12%-6%0%
Nutrition1,5551,38013%2%17%-7%1%
Materials7547254%5%2%-3%0%
Innovation Center3941     
Corporate Activities1115     
in € millionH1 2018H1 2017% changeQ2 2018Q2 2017% change
Sales4,7944,32011%2,3592,1619%
Adjusted EBITDA1,04672145%50837635%
Nutrition83952859%39727146%
Materials2612418%1351285%
Innovation Center01 10 
Corporate Activities-54-49 -25-23 
Adjusted EBITDA margin21.8%16.7% 21.5%17.4% 
EBITDA1,029689 503355 
Adjusted EBIT81747871%39425654%
EBIT800441 389235 
Capital Employed8,1157,692    
Average Capital Employed  7,8747,831    
ROCE (%)220.8%12.2%    
Effective tax rate318.0%18.0%    
Adjusted net profit464333890%30617575%
Net profit - Total DSM4633312103%30216385%
Adjusted net EPS3.641.9092%1.730.9877%
Net EPS - Total DSM3.581.75 1.700.91 
Operating Cash Flow50332953%19313345%
Capital Expenditures5295250 125120 
Net debt8312,205    
Average number of ordinary shares175.0175.0 175.2174.9 
Workforce (headcount end of period)
20,69721,0546    

1) Including temporary vitamin effect
2) ROCE from underlying business H1 2018 is estimated at 13.8%
3) Over Adjusted taxable result
4) Including result attributed to non-controlling interest
5) Cash, net of customer funding, investment grants and excluding financial leases
6 )Year-end 2017

In this report:
‘Organic sales growth’ is the total impact of volume and price/mix;
‘Total Working Capital’ refers to the total of ‘Operating Working Capital’ and ‘non-Operating Working Capital’

The complete version of this press release with accompanying financial statements and the Presentation to Investors are below in PDF format.

For more information

Lieke de Jong-Tops

Senior Communications Manager
+31 45 578 2420
media.contacts@dsm.com

Dave Huizing

Vice President Investor Relations
+31 45 578 2864
investor.relations@dsm.com

Lieke de Jong-Tops

Senior Communications Manager
+31 45 578 2420

Email

Dave Huizing

Vice-President Investor Relations
+31 45 578 2864

Email