Heerlen, NL, 26 Apr 2016 07:00 CEST
in € million | Q1 2016 | Q1 2015 | % change | Volume | Price/Mix | FX | Other |
---|---|---|---|---|---|---|---|
Sales | 1,913 | 1,886 | 1% | 5% | -3% | -2% | 1% |
Nutrition | 1,250 | 1,199 | 4% | 7% | -1% | -4% | 2% |
Materials | 600 | 632 | -5% | 1% | -6% | 0% | |
EBITDA | 296 | 248 | 19% | ||||
Nutrition | 225 | 195 | 15% | ||||
Materials | 95 | 86 | 10% | ||||
ROCE (%) | 9.8% | 6.8% |
Feike Sijbesma, CEO/Chairman of the DSM Managing Board, commented: “We are pleased to report that we delivered a strong first quarter in terms of growth, profitability and returns, with all businesses seeing the effects of our improvement programs.
Both Animal and Human Nutrition delivered above-market volume growth, with Human Nutrition showing a marked improvement, albeit against a relatively weak comparable quarter in 2015. Our efforts resulted in EBITDA growth and an improved margin in Nutrition. Materials remained robust, helped in part by the shift towards higher added-value products in the portfolio. In addition, low input prices continued to support margins during Q1 2016 despite softer volumes in some segments, although we expect this support to diminish somewhat going forward.
While the macro-economic environment remains uncertain, we are confident that we will deliver in line with our medium-term goals. This will be supported by innovation, our growth initiatives and underpinned by our group-wide cost and productivity improvement programs.”
DSM aims to deliver increased full-year EBITDA and ROCE in line with the targets set out in its Strategy 2018: Driving Profitable Growth.
in € million | Q1 2016 | Q1 2015 | % change | Volume | Price/mix | FX | Other |
---|---|---|---|---|---|---|---|
Sales - Continuing Operations | 1,913 | 1,886 | 1% | 5% | -3% | -2% | 1% |
Nutrition | 1,250 | 1,199 | 4% | 7% | -1% | -4% | 2% |
Materials | 600 | 632 | -5% | 1% | -6% | 0% | |
Innovation Center | 43 | 36 | 19% | 19% | 0% | 0% | |
Corporate Activities | 20 | 19 | |||||
Discontinued Operations | 0 | 506 |
in € million | Q1 2016 | Q1 2015 | % change | YTD Q1 2016 | YTD Q1 2015 | % change |
---|---|---|---|---|---|---|
Sales - Continuing Operations | 1,913 | 1,886 | 1% | 1,913 | 1,886 | 1% |
Nutrition | 1,250 | 1,199 | 4% | 1,250 | 1,199 | 4% |
Materials | 600 | 632 | -5% | 600 | 632 | -5% |
Innovation Center | 43 | 36 | 43 | 36 | ||
Corporate Activities | 20 | 19 | 20 | 19 | ||
Discontinued Operations | 0 | 506 | 0 | 506 | ||
EBITDA - Continuing Operations | 296 | 248 | 19% | 296 | 248 | 19% |
Nutrition | 225 | 195 | 15% | 225 | 195 | 15% |
Materials | 95 | 86 | 10% | 95 | 86 | 10% |
Innovation Center | 1 | -5 | 1 | -5 | ||
Corporate Activities | -25 | -28 | -25 | -28 | ||
Discontinued Operations | 0 | 38 | 0 | 38 | ||
EBITDA margin - Continuing Operations | 15.5% | 13.1% | 15.5% | 13.1% | ||
EBIT - Continuing Operations | 185 | 131 | 41% | 185 | 131 | 41% |
Capital Employed - Continuing Operations2 | 7,456 | 8,143 | 7,456 | 8,143 | ||
Average Capital Employed2 | 7,505 | 7,750 | 7,505 | 7,750 | ||
ROCE - Continuing Operations (%)1 | 9.8% | 6.8% | 9.8% | 6.8% | ||
Profit for the period, before exceptional items - Continuing Operations | 109 | 69 | 58% | 109 | 69 | 58% |
Profit for the period, after exceptional items - Total DSM | 85 | -71 | 85 | -71 | ||
Net EPS before exceptional items - Continuing Operations | 0.60 | 0.39 | 54% | 0.60 | 0.39 | 54% |
Net EPS after exceptional items - Total DSM | 0.46 | -0.42 | 0.46 | -0.42 | ||
Cash Flow - Continuing Operations | 137 | 84 | 137 | 84 | ||
Capital Expenditures - Continuing Operations1 | 99 | 101 | 99 | 101 | ||
Net debt2 | 2,269 | 2,3213 | 2,269 | 2,3213 |
1 Cash, net of customer funding
2 Before reclassification to held for sale
3 Year-end 2015
In this report:
The ‘Performance Materials’ cluster is henceforth referred to as ‘Materials’;
'Organic sales growth’ is the total impact of volume and price/mix;
‘Discontinued operations’ comprises net sales and operating profit (before depreciation and amortization) of DSM Fibre Intermediates and DSM Composite Resins up to and including 31 July 2015;
‘Total Working Capital’ refers to the total of ‘Operating Working Capital’ and ‘non-Operating Working Capital’Strategy 2018: Driving Profitable Growth
in € million | Q1 2016 | Q1 2015 | % change | YTD Q1 2016 | YTD Q1 2015 | % change |
---|---|---|---|---|---|---|
Sales | 1,250 | 1,199 | 4% | 1,250 | 1,199 | 4% |
EBITDA |
225 | 195 | 15% | 225 | 195 | 15% |
EBITDA margin (%) | 18.0% | 16.3% | 18.0% | 16.3% | ||
EBIT |
161 | 129 | 25% | 161 | 129 | 25% |
Capital Employed | 5,252 | 5,509 | ||||
Average Capital Employed | 5,281 | 5,234 | ||||
ROCE (%) | 12.1% | 9.9% | ||||
Total Working Capital |
1,399 | 1,438 | ||||
Total Working Capital as % of Sales1 | 28.0% | 30.0% |
1) Annualized last quarter sales
Q1 2016 sales were up 4% compared to Q1 2015. Nutrition delivered 6% organic sales growth driven by strong volume growth in Human Nutrition and continued good volume development in Animal Nutrition. Price/mix was slightly down. Exchange rates had a 4% negative impact on sales, mainly due to the effect of the Brazilian real in Animal Nutrition.
Q1 2016 EBITDA was €225 million, up 15% compared to Q1 2015. EBITDA benefitted from strong organic growth and the effects of the improvement and savings programs. All businesses contributed to this strong improvement in results, especially Human Nutrition, albeit against relatively weak comparable figures in 2015.
Q1 2016 EBITDA margin was 18.0%, markedly up compared to the same period last year (16.3%), reflecting a proportionally higher contribution from Human Nutrition relative to Animal Nutrition, as well as a favorable product mix within Human Nutrition.
Margins in Q1 2016 also improved when compared to Q4 2015, when the margin - adjusted for the maintenance shutdown as reported in Q4 2015 - was slightly above 17%.
Q1 2016 sales in Animal Nutrition showed a 4% organic growth, including 5% volume growth, compared to Q1 2015. This was a good result in particular considering the positive year-end effects on the timing of orders reported in Q4 2015.
Business conditions in all major regions remained robust, with the exception of Latin America, where export conditions in Brazil were good but domestic demand was soft.
Overall, prices showed a 1% decline versus the same period last year while currencies had a 7% negative impact on sales owing to the exposure of the business to the Brazilian real.
Q1 2016 sales in Human Nutrition developed strongly, with 8% organic growth, albeit against a relatively weak comparable quarter in 2015. Prices as well as currency effects in this business were stable compared with Q1 2015. Margins in the quarter were supported by a favorable product mix with a good contribution from higher-margin businesses. As of this quarter, the Aland vitamin C business (renamed DSM Jiangshan) is included in the results of Human Nutrition and reported under ‘Other’. It made a 4% contribution to growth in Q1.
The Food Specialties businesses delivered 4% organic growth in the first quarter of 2016 driven by food enzymes and hydrocolloids.
in € million | Q1 2016 | Q1 2015 | % change | YTD Q1 2016 | YTD Q1 2015 | % change |
---|---|---|---|---|---|---|
Sales | 600 | 632 | -5% | 600 | 632 | -5% |
EBITDA |
95 | 86 | 10% | 95 | 86 | 10% |
EBITDA margin (%) | 15.8% | 13.6% | 15.8% | 13.6% | ||
EBIT |
62 | 53 | 17% | 62 | 53 | 17% |
Capital Employed | 1,755 | 1,930 | ||||
Average Capital Employed | 1,739 | 1,837 | ||||
ROCE (%) | 14.4% | 11.6% | ||||
Total Working Capital |
293 | 418 | ||||
Total Working Capital as % of Sales1 | 12.2% | 16.5% |
1) Annualized last quarter sales
Q1 2016 sales were 5% below Q1 2015. While volumes were slightly up (+1%), prices were down 6% versus prior year on the back of lower input costs. Key markets remained soft in Q1 2016.
Q1 2016 EBITDA increased by 10% compared with Q1 2015 as result of the efficiency and cost saving programs carried out over recent years, good margin management with support from low input costs and the focus on improving the quality of the portfolio.
Q1 2016 EBITDA margin was 15.8%, up from 13.6% in Q1 2015 supported by the significant effects of lower input costs, although this effect faded somewhat towards the end of the quarter.
in € million | Q1 2016 | Q1 2015 | % change | YTD Q1 2016 | YTD Q1 2015 | % change |
---|---|---|---|---|---|---|
Sales | 43 | 36 | 19% | 43 | 36 | 19% |
EBITDA |
1 | -5 | 1 | -5 | ||
EBIT |
-5 | -12 | -5 | -12 | ||
Capital Employed | 549 | 572 |
Q1 2016 sales were 19% above Q1 2015, with the increase fully driven by higher volumes. There was good volume development at DSM Biomedical, which saw sales volumes normalize following de-stocking in 2015. DSM Advanced Surfaces also showed a healthy development in volumes.
Q1 2016 EBITDA was slightly positive, demonstrating significant progress when compared with Q1 2015 and previous years. This improvement was driven by higher sales, more focused innovation activities and cost savings.
in € million | Q1 2016 | Q1 2015 | YTD Q1 2016 | YTD Q1 2015 |
---|---|---|---|---|
Sales | 20 | 19 | 20 | 19 |
EBITDA |
-25 | -28 | -25 | -28 |
EBIT |
-33 | -39 | -33 | -39 |
Q1 2016 EBITDA was €3 million better than Q1 2015, supported in part by the effects of the savings implemented in the DSM-wide support functions.
in € million | Q1 2016 | Q1 2015 | % change | YTD Q1 2016 | YTD Q1 2015 | % change |
---|---|---|---|---|---|---|
DSM Sinochem Pharmaceuticals | ||||||
Sales | 112 | 117 | -4% | 112 | 117 | -4% |
EBITDA% | 16% | 13% | 16% | 13% | ||
Patheon1 |
||||||
Sales | 376 | 377 | 0% | 376 | 377 | 0% |
EBITDA% | 15% | 18% | 15% | 18% | ||
ChemicaInvest | ||||||
Sales | 455 | n.a. | n.a. | 455 | n.a. | n.a. |
EBITDA% | 4% | n.a. | 4% | n.a. |
1) Patheon (formely reported as DPx Holding) respective periods are from 1 November - 31 January
in € million | Q1 2016 | Q1 2015 | YTD Q1 2016 | YTD Q1 2015 |
---|---|---|---|---|
Sales | 0 | 506 | 0 | 506 |
EBITDA |
0 | 38 | 0 | 38 |
EBIT |
0 | 20 | 0 | 20 |
Exceptional items in the first quarter amounted to -€25 million (-€19 million after tax) of which -€24 million were related to restructuring costs and -€1 million related to acquisition costs.
in € million | Q1 2016 | Q1 2015 | YTD Q1 2016 | YTD Q1 2015 |
---|---|---|---|---|
EBIT | 185 | 131 | 185 | 131 |
Financial Income & Expense | -37 | -52 | -37 | -52 |
Income Tax | -27 | -14 | -27 | -14 |
Effective Tax Rate (%) | 18.5% | 18.0% | ||
Share of profit of associates/ Joint control entities | -12 | 4 | -12 | 4 |
Non-controlling interest | -1 | 2 | -1 | 2 |
Net Profit from Continuing Operations (before exceptional items)1 | 108 | 71 | 108 | 71 |
Net Earnings per ordinary share - Continuing Operations, before exceptional items (€) | 0.60 | 0.39 | 0.60 | 0.39 |
1) Net profit of continuing operations attributable to equity holders of Koninklijke DSM N.V.
Financial income and expense amounted to -€37 million in Q1 2016 compared to -€52 million in Q1 2015, whereas Q1 last year was impacted by the negative development in the valuation of derivatives.
in € million | Q1 2016 | Q1 2015 | YTD Q1 2016 | YTD Q1 2015 |
---|---|---|---|---|
Cash from Operating Activities - Continuing Operations | 137 | 84 | 137 | 84 |
Total Working Capital - Continuing Operations | 1,394 | 1,722 | ||
Total Working Capital as % of Sales - Continuing Operations | 18.2% | 22.8% | ||
Capital Expenditure (cash, net of customer funding) - Continuing Operations | 99 | 101 | 99 | 101 |
Net Debt | 2,269 | 2,3211 |
1) Year-end 2015
Total Working Capital amounted to €1,394 million at the end of Q1 2016 compared to €1,722 million at the end of Q1 2015, which represents 18.2% as a percentage of annualized Q1 sales (Q1 2015: 22.8%).
Net debt decreased by €52 million compared to the end of 2015 and stood at €2,269 million. The decrease was mainly due to the cash flow from operations and value changes of derivatives.
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+31 45 578 2864
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