Heerlen, NL, 03 Nov 2016 07:00 CET
in € million | Q3 2016 | Q3 2015 | % change | Volume | Price/mix | FX | Other |
---|---|---|---|---|---|---|---|
Sales | 1,998 | 1,945 | 3% | 3% | 0% | 0% | 0% |
Nutrition | 1,303 | 1,253 | 4% | 3% | 2% | -1% | 0% |
Materials | 634 | 631 | 0% | 5% | -5% | -1% | 1% |
EBITDA | 323 | 287 | 13% | ||||
Nutrition | 231 | 213 | 8% | ||||
Materials | 118 | 102 | 16% | ||||
ROCE (%)1 | 10.6 | 7.9 |
1) January until September
Feike Sijbesma, CEO/Chairman of the DSM Managing Board, commented: “We are pleased to report another quarter of strong operational and financial progress. This was driven by both Materials and Nutrition, reflecting the progress we are making on delivering on our Strategy 2018 through our growth initiatives as well as ambitious improvement and cost savings actions.
Materials had a quarter of strong volume growth driven again by specialties, enhanced by particularly high margins as a result of a very favorable product mix and pro-active margin management, while still benefiting from low input costs. Nutrition delivered good EBITDA growth, despite additional costs in the quarter. Animal Nutrition benefited from increased vitamin prices, with solid volume growth against a tougher prior year comparison. Human Nutrition delivered strong volume growth.
While the global macro-economic environment remains a concern, we continue to expect that for the full year 2016, we will deliver ahead of our medium-term goals, given the strong ongoing performance of our business, underpinned by our continued focus on the improvement programs.”
DSM continues to expect to deliver full-year 2016 results ahead of the medium-term targets set out in its Strategy 2018, with a mid-teens EBITDA growth and an increase in ROCE of over 200 basis points.
in € million | Q3 2016 | Q3 2015 | % change | Volume | Price/mix | FX | Other |
---|---|---|---|---|---|---|---|
Sales - Continuing Operations | 1,998 | 1,945 | 3% | 3% | 0% | 0% | 0% |
Nutrition | 1,303 | 1,253 | 4% | 3% | 2% | -1% | 0% |
Materials | 634 | 631 | 0% | 5% | -5% | -1% | 1% |
Innovation Center | 43 | 42 | 2% | 2% | 0% | 0% | 0% |
Corporate Activities | 18 | 19 | |||||
Discontinued operations | 0 | 157 |
in € million | Jan - Sep 2016 | Jan - Sep 2015 | % change | Volume | Price/mix | FX | Other |
---|---|---|---|---|---|---|---|
Sales - Continuing operations | 5,905 | 5,796 | 2% | 5% | -1% | -2% | 0% |
Nutrition | 3,848 | 3,699 | 4% | 5% | 1% | -3% | 1% |
Materials | 1,874 | 1,927 | -3% | 3% | -6% | -1% | 1% |
Innovation Center | 126 | 115 | 10% | 10% | 0% | -1% | 1% |
Corporate Activities | 57 | 55 | |||||
Discontinued operations | 0 | 1,213 |
in € million | Q3 2016 | Q3 2015 | % change | Jan - Sep 2016 | Jan - Sep 2015 | % change |
---|---|---|---|---|---|---|
Sales - Continuing Operations | 1,998 | 1,945 | 3% | 5,905 | 5,796 | 2% |
Nutrition | 1,303 | 1,253 | 4% | 3,848 | 3,699 | 4% |
Materials | 634 | 631 | 0% | 1,874 | 1,927 | -3% |
Innovation Center | 43 | 42 | 2% | 126 | 115 | 10% |
Corporate Activities | 18 | 19 | 57 | 55 | ||
Discontinued Operations | 0 | 157 | 0 | 1,213 | ||
EBITDA - Continuing Operations | 323 | 287 | 13% | 947 | 814 | 16% |
Nutrition | 231 | 213 | 8% | 693 | 616 | 13% |
Materials | 118 | 102 | 16% | 330 | 294 | 12% |
Innovation Center | 1 | 0 | 2 | -8 | ||
Corporate Activities | -27 | -28 | -78 | -88 | ||
Discontinued Operations | 0 | 3 | 0 | 94 | ||
EBITDA margin - Continuing Operations | 16.2% | 14.8% | 16.0% | 14.0% | ||
EBIT - Continuing Operations | 205 | 170 | 21% | 601 | 458 | 31% |
Capital Employed - Continuing Operations1 | 7,620 | 7,558 | ||||
Average Capital Employed1 | 7,561 | 7,757 | ||||
ROCE - Continuing Operations (%)2 | 10.6% | 7.9% | ||||
Profit for the period, before exceptional items - Continuing Operations | 146 | 106 | 38% | 390 | 285 | 37% |
Profit for the period, after exceptional items - Total DSM | 322 | 33 | 542 | 63 | ||
Net EPS before exceptional items - Continuing Operations | 0.81 | 0.59 | 37% | 2.17 | 1.61 | 35% |
Net EPS after exceptional items - Total DSM | 1.82 | 0.19 | 3.04 | 0.33 | ||
Cash Flow - Continuing Operations | 325 | 300 | 644 | 487 | ||
Capital Expenditures - Continuing Operations3 | 128 | 113 | 305 | 321 | ||
Net debt1 | 2,054 | 2,3214 |
1) Before reclassification to held for sale
2) ROCE calculated based on weighted average capital employed
3) Cash, net of customer funding
4) Year-end 2015
In this report:
a) 'Organic sales growth’ is the total impact of volume and price/mix;
b) ‘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;
c) ‘Total Working Capital’ refers to the total of ‘Operating Working Capital’ and ‘non-Operating Working Capital’.
in € million | Q3 2016 | Q3 2015 | % change | Jan - Sep 2016 | Jan - Sep 2015 | % change |
---|---|---|---|---|---|---|
Sales | 1,303 | 1,253 | 4% | 3,848 | 3,699 | 4% |
EBITDA |
231 | 213 | 8% | 693 | 616 | 13% |
EBITDA margin (%) | 17.7% | 17.0% | 18.0% | 16.7% | ||
EBIT |
159 | 146 | 9% | 485 | 412 | 18% |
Capital Employed | 5,384 | 5,247 | ||||
Average Capital Employed | 5,334 | 5,316 | ||||
ROCE (%) | 12.1% | 10.3% | ||||
Total Working Capital |
1,492 | 1,413 | ||||
Total Working Capital as % of Sales1 | 28.6% | 28.2% |
1) Annualized last quarter sales
Q3 2016 sales increased by 4% compared to Q3 2015, with a good organic sales growth of 5%. Volumes were up by 3% and price/mix up 2%, driven by higher vitamin prices. Exchange rates had a 1% negative impact on sales, mainly due to a slightly weaker US dollar.
Q3 2016 EBITDA was €231 million, up 8% compared to Q3 2015, as a result of good organic growth and the effects of the improvement programs, despite higher costs related to marketing & sales campaigns in human nutrition and the costs related to the maintenance shut downs in vitamin E and vitamin C. The vitamin C plant in China had an extended shut down for improvement projects.
Q3 2016 EBITDA margin was 17.7% compared to 17.0% in the same period last year, reflecting the good organic growth, supported by the progress made on the improvement programs. The margin was slightly below Q2 2016 (18.3%), as a result of higher costs in the quarter as mentioned above.
Q3 2016 sales in animal nutrition delivered 7% organic growth, with 2% volume growth and 5% improvement in price/mix compared to Q3 2015.
Volume growth of 2% was achieved against the background of strong comparative figures in 2015 (10% volume growth). Good growth was realized in premix, carotenoids and feed enzymes. Tortuga volumes were only down slightly, which was a good performance considering the tough market conditions in Latin America. Market conditions remained good in North America, Asia and Europe.
Prices showed a 5% increase versus the same period last year, driven by higher vitamin and premixes prices.
Q3 2016 organic sales growth in human nutrition was 4% compared to Q3 2015, driven by 5% higher volumes. Price/mix was slightly down.
The Food Specialties businesses delivered flat organic growth. Hydrocolloids as well as enzymes continued to deliver good growth, although some capacity constraints prevented the enzymes business from fully benefiting from continued strong customer demand. These were however offset by lower sales in the other product lines.
in € million | Q3 2016 | Q3 2015 | % change | Jan - Sep 2016 | Jan - Sep 2015 | % change |
---|---|---|---|---|---|---|
Sales | 634 | 631 | 0% | 1,874 | 1,927 | -3% |
EBITDA |
118 | 102 | 16% | 330 | 294 | 12% |
EBITDA margin (%) | 18.6% | 16.2% | 17.6% | 15.3% | ||
EBIT |
86 | 69 | 25% | 234 | 196 | 19% |
Capital Employed | 1,798 | 1,833 | ||||
Average Capital Employed | 1,763 | 1,851 | ||||
ROCE (%) | 17.7% | 14.1% | ||||
Total Working Capital |
333 | 332 | ||||
Total Working Capital as % of Sales1 | 13.1% | 13.2% |
1) Annualized last quarter sales
Q3 2016 sales were in line with Q3 2015, with 5% volume growth driven by specialties compensating for 5% lower prices, which reflected lower input costs. The currency effect was slightly negative in Q3 2016 driven by the US dollar.
Q3 2016 EBITDA increased by 16% compared with Q3 2015 as a result of disciplined margin management, strong growth in the specialty segments, lower input costs, and the benefits of the efficiency and cost saving programs carried out over recent years.
Q3 2016 EBITDA margin was particularly high at 18.6%, up from 16.2% in Q3 2015 (and 18.3% in Q2 2016), reflecting a very favorable mix, while still benefiting from low input costs.
in € million | Q3 2016 | Q3 2015 | % change | Jan - Sep 2016 | Jan - Sep 2015 | % change |
---|---|---|---|---|---|---|
Sales | 43 | 42 | 2% | 126 | 115 | 10% |
EBITDA |
1 | 0 | 2 | -8 | ||
EBIT |
-5 | -7 | -15 | -29 | ||
Capital Employed | 553 | 563 |
Q3 2016 sales were 2% above Q3 2015, with the increase fully driven by higher volumes in DSM Biomedical. EBITDA was slightly positive compared to the same period last year.
in € million | Q3 2016 | Q3 2015 | Jan- Sep 2016 | Jan - Sep 2015 |
---|---|---|---|---|
Sales | 18 | 19 | 57 | 55 |
EBITDA |
-27 | -28 | -78 | -88 |
EBIT |
-35 | -38 | -103 | -121 |
Q3 2016 EBITDA improved by €1 million compared to Q3 2015.
in € million | Q3 2016 | Q3 2015 | % change | Jan - Sep 2016 | Jan - Sep 2015 | % change |
---|---|---|---|---|---|---|
DSM Sinochem Pharmaceuticals |
||||||
Sales | 103 | 103 | 0% | 329 | 332 | -1% |
EBITDA% | 13% | 10% | 14% | 13% | ||
Patheon1 |
||||||
Sales | 425 | 403 | 5% | 1,216 | 1,177 | 3% |
EBITDA% | 24% | 23% | 20% | 20% | ||
ChemicaInvest2 | ||||||
Sales | 408 | 365 | 12% | 1,300 | 365 | n.a. |
EBITDA%3 | 5% | 3% | 3% | 3% |
1) Patheon (formely reported as DPx Holding) respective periods are for the 3rd quarter from 1 May - 31 July and
for YTD from 1 November - 31 July"
2) ChemicaInvest in 2015 refers to the period from 1 August - 30 September
3) Q3 2016 EBITDA before PPA adjustment
Exceptional items from continuing operations in Q3 2016 amounted to -€34 million (-€24 million after tax) which included €22 million of restructuring-related costs, and a €12 million asset impairment.
Exceptional items from discontinued operations amounted to -€28 million following adjustments due to various settlements relating to the divestment of DSM Fibre Intermediates and Composite Resins to ChemicaInvest.
Exceptional items regarding the Associates/Joint Control entities amounted to a net profit of €228 million, mainly comprising the gain on the IPO of Patheon for €232 million.
in € million | Q3 2016 | Q3 2015 | Jan - Sep 2016 | Jan - Sep 2015 |
---|---|---|---|---|
EBIT | 205 | 170 | 601 | 458 |
Financial Income & Expense | -30 | -28 | -96 | -115 |
Income Tax | -32 | -25 | -93 | -62 |
Effective Tax Rate (%) | 18.5% | 18.0% | ||
Share of profit of associates /Joint control entities | 3 | -11 | -22 | 4 |
Non-controlling interest | -3 | 0 | -5 | 3 |
Net Profit from Continuing Operations (before exceptional items)1 | 143 | 106 | 385 | 288 |
Net Earnings per ordinary share - Continuing Operations, before exceptional items (€) | 0.81 | 0.59 | 2.17 | 1.61 |
1) Net profit of continuing operations attributable to equity holders of Koninklijke DSM N.V.
Financial income and expense amounted to -€30 million in Q3 2016 compared to -€28 million in Q3 2015, mainly as a result of some unfavorable hedge results (€4 million) which were almost compensated by lower interest expenses (€3 million).
in € million | Q3 2016 | Q3 2015 | Jan - Sep 2016 | Jan - Sep 2015 |
---|---|---|---|---|
Cash from Operating Activities - Continuing Operations | 325 | 300 | 644 | 487 |
Total Working Capital - Continuing Operations | 1,528 | 1,443 | ||
Total Working Capital as % of Sales - Continuing Operations. | 19.1% | 18.6% | ||
Capital Expenditure (cash, net of customer funding) - Continuing Operations | 128 | 113 | 305 | 321 |
Net Debt (before reclassification to held for sale) | 2,054 | 2,3211 |
1) Year-end 2015
Cash flow from operating activities amounted to €325 million showing an improvement of €25 million compared to Q3 2015.
In Q3 2016 a €750 million bond was launched with a ten-year maturity, at a coupon of 0.75%. This bond issue took advantage of favorable market conditions and allowed the company to lock in low interest rates taking into account the maturing of a €750 million bond in 2017.
Total Working Capital amounted to €1,528 million at the end of Q3 2016 compared to €1,443 million at the end of Q3 2015, which represents 19.1% as a percentage of annualized Q3 sales (Q3 2015 18.6%).
Net debt decreased by €267 million compared to the end of 2015 and stood at €2,054 million. The decrease was mainly due to the receipt of dividend and proceeds from the secondary offering of Patheon in total of €235 million.
This quarterly report has not been audited.
Senior Communications Manager
+31 45 578 2420
media.contacts@dsm.com
Vice President Investor Relations
+31 45 578 2864
investor.relations@dsm.com
+31 45 578 2420
+31 45 578 2864