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Financial Results: Q2 2013

DSM delivers higher profits; full year outlook unchanged
  • DSM records 19% higher Q2 EBITDA versus Q2 2012 (€345 million versus €290 million)
  • Nutrition EBITDA up 28% versus Q2 2012 driven by acquisitions and organic growth
  • Materials Sciences continues to deliver a solid performance
  • Q2 cash flow from operating activities €231 million, higher than Q2 2012 and Q1 2013
  • Core earnings per share Q2 2013 up 28% compared to Q2 2012
  • Interim dividend of €0.50, in line with DSM’s dividend policy
  • Outlook 2013 unchanged, moving towards EBITDA of €1.4 billion

On 6 August 2013 DSM reported a second quarter EBITDA of €345 million compared to €290 million in Q2 2012 and €311 million in Q1 2013. The improvement compared to Q2 2012 was realized despite a negative caprolactam effect of €20 million and a challenging macro-economic environment, which mainly affected Materials Sciences. 

Commenting on the results, Feike Sijbesma, CEO/Chairman of the DSM Managing Board, said: “We are pleased to report that the momentum in our Nutrition business that we saw at the end of Q1 continued into Q2. Nutrition, with its higher profits and healthy margins, is demonstrating the quality of its broad offering across the value chain. Materials Sciences’ profit remained at the same level as last year despite a negative caprolactam impact of €20 million and a challenging market environment.”

“For the rest of this year, we will continue to fully focus on operational performance and on the integration of our acquisitions, ensuring the capture of synergies. In addition, the early successes of our profit improvement initiatives leave us confident that this group-wide program is well on track. We expect strong EBITDA growth in 2013, moving towards €1.4 billion.” 

Outlook 

The challenging macro-economic environment experienced during Q1 2013 continued, with little or no growth in Europe. Asia continues to show good levels of economic activity, though at more modest levels, while the US has maintained a modest rate of recovery.

DSM’s outlook remains unchanged:

  • The Profit Improvement Program is fully on track and is expected to deliver structural annual EBITDA benefits of €150 million by 2014 and €200-250 million to be fully achieved by 2015.
  • Nutrition is expected to show clearly higher results than in 2012 due to organic growth moving towards the target of 2% above GDP and due to the acquisitions made.
  • Business conditions in Pharma are likely to remain challenging, but DSM is confident that it will be able to deliver substantially better results, notwithstanding the usual uneven delivery patterns between quarters.
  • Performance Materials is expected to show improved results in 2013, despite the expected negative effects of caprolactam, especially compared to the first half of 2012.
  • Polymer Intermediates is expected to show lower results than in 2012.
  • For the Innovation Center the activity level will be in line with 2012, with EBITDA clearly improving following the full year contribution of Kensey Nash. The result of the second half of 2013 is expected to be in line with the second half of 2012.

Overall, based on current economic assumptions, DSM expects a step up in EBITDA during 2013 due to stronger organic growth, supported by DSM’s Profit Improvement Program and as the benefits of acquisitions and a more resilient portfolio has an increasing impact. In 2013 the focus is on the operational performance and the integration of the acquisitions DSM completed in 2012, with special attention to capturing synergies. Overall, based on current economic assumptions, the above will enable DSM to move towards its 2013 EBITDA target of €1.4 billion.

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