Heerlen, NL, 24 Sep 2009 08:15 CEST
Royal DSM N.V., the global Life Sciences and Materials Sciences company headquartered in the Netherlands, today will update investors and analysts at its annual Analysts Conference in Amsterdam (NL) on the progress made with its Vision 2010 strategy. DSM is also providing an update on recent trading conditions.
Feike Sijbesma, Chairman of the DSM Managing Board, comments: “Customer demand in some markets improved in Q3 2009 compared to Q2, which is reflected in further improved results compared to the previous quarters. The extent to which this improved demand will be sustained in the coming quarters remains uncertain.
“We continue our strategic commitment to our customers, innovation and values. DSM remains in good shape as a result of ongoing resilience of the Life Sciences businesses, early and aggressive action to reduce costs, a focus on cash, stringent management of working capital and a strong balance sheet. Our net debt continues to decrease. We are in an excellent position to take advantage of opportunities that will arise. DSM is staying the course.”
During today’s conference, DSM will update the investment community on progress made with its accelerated Vision 2010 strategy which is aimed at DSM’s transformation into a Life Sciences and Materials Sciences company. The following information will be given:
During Q3 2009 DSM has seen 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. The potential risk of temporarily lower demand during the summer did not materialize.
As a result of a better performance by the two Materials Sciences clusters and by the Base Chemicals & Materials cluster in July and August, operating profit from continuing operations before exceptional items for Q3 2009 is expected to be about double the €58 million of Q2 2009.
Despite the improved performance in Q3 2009 compared to the previous quarter, customer 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. Therefore DSM will continue to focus on cash and cost, but will at the same time continue its strategic commitment to customers, innovation and values. This is confirmed by the recent ranking as the sector number 1 in the Dow Jones Sustainability World Index.
For the Nutrition cluster, DSM continues to expect full year results to be 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 better towards the end of the year.
In Performance Materials and Polymer Intermediates demand has clearly improved in Q3 compared to the first two quarters of the year. At Polymer Intermediates this improved situation could now lead to an operating result around break-even for the cluster in 2009. Uncertainty regarding demand for the rest of the year continues for both clusters.
The Base Chemicals & Materials cluster is still expected to be loss-making in 2009, in spite of a strong improvement in Q3.
In view of the uncertain economic conditions and the lack of clarity about future demand, DSM will provide no quantitative outlook for the full year 2009.