Press release

DSM reports Q1 2019 results

Heerlen, NL, 07 May 2019 07:00 CEST

Highlights1,2,3

  • DSM reports a good start to the year
  • Results compared to Underlying business in Q1 2018:
    • Group sales up 3%, Adjusted EBITDA up 10% to €412m (up 14% to €424m including IFRS 16 impact of €12m)
    • Nutrition: organic sales +3%, Adjusted EBITDA up 11% to €309m (up 14% to €316m including IFRS 16 impact of €7m)
    • Materials: organic sales -5%, Adjusted EBITDA flat on €126m (up 1% to €127m including IFRS 16 impact of €1m)
  • Adjusted Net Operating Free Cash Flow €60m 
  • Total Net profit €196m, up versus Q1 2018 of €331m when correcting for the temporary vitamin effect of €165m EBITDA following an exceptional supply disruption in the industry 
  • Full year outlook increased

Key figures and indicators

in € millionQ1 2019Q1 2018% change
  Underlying
business1
Temporary
vitamin effect
Total
Group
Underlying
Organic growth1
FX &
‘other’1
Underlying
total growth1
Temporary
vitamin effect
Total
Group
Sales2,2922,2152202,4351%2%3%-9%-6%
Nutrition1,5171,4302201,6503%3%6%-14%-8%
Materials717738 738-5%2%-3% -3%
Adjusted EBITDA424373165538  14%-35%-21%
Nutrition316277165442  14%-43%-29%
Materials127126 126  1% 1%
Innovation6-1 -1     
Corporate-25-29 -29     
EBITDA416361165526     
Adjusted EBITDA margin18.5%16.8% 22.1%     

1) Underlying (business) in 2018 is defined as the performance measures sales and Adjusted EBITDA, corrected for DSM’s best estimate of the temporary vitamin effect.
2) Adjusted EBITDA is an Alternative Performance Measure (APM) that reflects continuing operations.
3) IFRS 16 is only effective as per 1 January 2019, the 2018 figures have not been adjusted.

CEO statement

Feike Sijbesma, CEO/Chairman DSM Managing Board, commented: “I am pleased to report a good start to the year, with continued positive momentum, led by our Nutrition business, while Materials continues to demonstrate its resilience. Last year we benefitted from an exceptional growth and profit contribution in Nutrition following a supply disruption in the vitamin industry. When comparing our results excluding this special event, we realized strong, double digit Adjusted EBITDA growth in the first quarter against a very strong comparable period in the Underlying business.

With our business performance progressing in-line with our plans, we remain confident in our positive outlook for 2019. We are well positioned to deliver on our ambitious Strategy 2021 targets, which aim to deliver above market growth and strong financial performance, driven by our commitment to be a purpose led, performance driven science-based company in Nutrition, Health and Sustainable Living.”

Outlook 2019

DSM increases its full year outlook 2019 and now 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 Adjusted Net Operating Free Cash Flow in line with its Strategy 2021 targets. This outlook excludes the impact of IFRS16 (see page 18 of PDF).

Share Buy-Back program started

As per 1 April, DSM commenced its ordinary share repurchase program of an aggregate market value of €1 billion as announced on 14 February 2019, with the intention to reduce its issued capital. This program is in addition to the usual repurchase programs which DSM executes from time to time to cover commitments under share-based compensation plans and the stock dividend.

Key figures and indicators (comparison with Q1 2018 excluding temporary vitamin effect)

in € millionYTD Q1 2019YTD Q1 2018% changeVolumePrice/mixFXOther
Sales2,2922,2153%1%0%2%0%
Nutrition1,5171,4306%3%0%2%1%
Materials717738-3%-6%1%2%0%
Innovation Center4736     
Corporate Activities1111     

Q1 2019 excluding IFRS 16 impact

in € millionYTD Q1 2019YTD Q1 2018% changeQ1 2019Q1 2018% change
Sales2,2922,2153%2,2922,2153%
Adjusted EBITDA41237310%41237310%
Nutrition30927711%30927711%
Materials1261260%1261260%
Innovation Center5-1 5-1 
Corporate Activities-28-29 -28-29 
Adjusted EBITDA margin18.0%16.8% 18.0%16.8% 
ROCE %13.2%13.3%    

Q1 2019 including IFRS 16 impact

in € millionYTD Q1 2019YTD Q1 2018% changeQ1 2019Q1 2018% change
Adjusted EBITDA42437314%42437314%
Nutrition31627714%31627714%
Materials1271261%1271261%
Innovation Center6-1 6-1 
Corporate Activities-25-29 -25-29 
Adjusted EBITDA margin18.5%16.8% 18.5%16.8% 
ROCE %12.9%13.3%    

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’;
‘Adjusted Net Operating Free Cash Flow’ is the cash flow from operating activities, corrected for the cash flow of the APM adjustments, minus the cash flow of capital expenditures and drawing rights.

Key figures and indicators (comparison with Q1 2018 including temporary vitamin effect)

in € millionYTD Q1 2019YTD Q1 2018% changeVolumePrice/mixFXOther
Sales2,2922,435-6%0%-8%2%0%
Nutrition1,5171,650-8%2%-13%2%1%
Materials717738-3%-6%1%2%0%
Innovation Center4736     
Corporate Activities1111     
in € millionYTD Q1 2019YTD Q1 2018% changeQ1 2019Q1 2018% change
Sales2,2922,435-6%2,2922,435-6%
Adjusted EBITDA424538-21%424538-21%
Nutrition316442-29%316442-29%
Materials1271261%1271261%
Innovation Center6-1 6-1 
Corporate Activities-25-29 -25-29 
Adjusted EBITDA margin18.5%22.1% 18.5%22.1% 
EBITDA416526 416526 
Adjusted EBIT279423-34%279423-34%
EBIT271411 271411 
Capital Employed8,9077,741    
Average Capital Employed8,6527,753    
ROCE (%)12.9%21.8%    
Effective tax rate118.0%18.0%    
Adjusted net profit2200337-41%200337-41%
Net profit - Total DSM2196331-41%196331-41%
Adjusted net EPS1.121.91-41%1.121.91-0.41
Net EPS - Total DSM1.11.88 1.11.88 
Operating Cash Flow201310-35%201310-35%
Adjusted Net Operating Free Cash Flow60154-61%60154-61%
Capital Expenditures3148170 148170 
Net debt4414579    
Average number of ordinary shares176.1174.8 176174.8 
Workforce (headcount end of period)21,43820,9775    

1) Over Adjusted taxable result
2) Including result attributed to non-controlling interest
3) Cash, net of customer funding, investment grants and excluding leases
4) Net debt end of Q1 2019 includes €206 million following the adoption of IFRS 16 on ‘Leases’
5) Year-end 2018

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

Dave Huizing

Vice-President Investor Relations
+31 45 578 2864