Financial results Q1 2011
DSM's Executive Board presented the first quarter results for 2011 on April 27, 2011. Feike Sijbesma, Chairman of the DSM Managing Board, said: "Our robust performance in Q1 2011 represents further progress towards our 2013 targets as we continue to successfully execute our strategy. This improvement can be attributed to our focus on innovation, our global customer base, excellent market positions and presence in high growth economies."
"In the quarter we successfully completed our acquisition of Martek, welcoming its employees to DSM. The integration of Martek started immediately and the contribution to our profit is in line with expectations. Our business outlook for the rest of the year is positive and we expect 2011 to be a strong year for DSM."
Overall, the consensus economic outlook for 2011 is positive. DSM expects the trading conditions experienced during the first quarter to continue in the remainder of the year, with strong growth in China and the other high growth economies, together with moderate growth in mature economies.
DSM is conscious of the macro-economic uncertainties. The unrest in the Middle East has had no impact on DSM's business, except for the higher oil price causing the prices for energy and certain raw materials to increase. DSM continues to pass on these higher costs through further price increases. At this time, DSM believes that the tragic events in Japan are likely to have only a limited impact on full-year earnings.
The Nutrition cluster is expected to achieve sustained good sales performance with healthy volume growth and price increases. Currency exchange rates are expected to remain volatile; the weaker US Dollar and especially the strong Swiss franc are unfavorable for the Nutrition cluster. The EBITDA with the inclusion of Martek is expected to be clearly above last year.
The focus within the Pharma cluster will be on strategy execution such as the announced anti-infectives joint venture with Sinochem. Overall business conditions remain challenging and results are expected to be lower than in 2010.
The Performance Materials cluster is benefiting significantly from continued global growth in the relevant end-markets such as automotive, electronics and packaging. Results are expected to be clearly above last year.
Polymer Intermediates is expected to continue its excellent performance in 2011 based on DSM's unique global presence and very favorable trading conditions, although the current very tight demand-supply balance might ease somewhat. In Q2 2011 a maintenance shutdown is planned for acrylonitrile.
Despite the headwinds from higher input costs and on balance unfavorable currencies, 2011 is expected to be a strong year for DSM. This gives DSM confidence that it will meet the EBITDA target of €1.4 to 1.6 billion in 2013, with ROCE expected to exceed 15%.