Press release

DSM reports results first nine months 2018

Heerlen, NL, 31 Oct 2018 07:00 CET

Highlights YTD 20181

  • DSM reports a very good Q3, contributing to a strong first nine months
  • Strong organic sales growth in underlying business at 8%
  • Underlying Adjusted EBITDA growth at 7%, despite significant negative FX
  • ROCE of underlying business at 13.6%, up 130 bps
  • Total temporary vitamin price benefit of €290m on Adjusted EBITDA
  • Total Adjusted EBITDA up 34%; Net profit €821m
  • Cash from Operating Activities €933m up 51%
  • Full year outlook unchanged

Key figures and indicators2

in € million Jan - Sep 2018 Jan - Sep
2017
% change
  Underlying
business2
Temporary
vitamin effect2
Total
Group
Total
Group
Underlying
organic growth2
FX &
‘other’2
Underlying
total growth2
Temporary
vitamin effect2
Total
Group
Sales 6,644 415 7,059 6,456 8% -5% 3% 6% 9%
Nutrition 4,278 415 4,693 4,151 9% -6% 3% 10% 13%
Materials 2,215   2,215 2,132 7% -3% 4%   4%
Adjusted EBITDA 1,162 290 1,452 1,086     7% 27% 34%
Nutrition 847 290 1,137 786     8% 37% 45%
Materials 393   393 369     7%   7%
Innovation 1   1 5          
Corporate -79   -79 -74          
EBITDA 1,124 290 1,414 1,032          
Adjusted EBITDA
margin
17.5%   20.6% 16.8%          

1) Underlying business is defined in this press release as the performance measures sales and Adjusted EBITDA, corrected for DSM’s best estimate of the vitamin effect, which is expected to be temporary.
2) Adjusted EBITDA is an Alternative Performance Measure (APM) that reflects continuing operations.

CEO statement

Feike Sijbesma, CEO/Chairman DSM Managing Board, commented: “We are delighted to report another very good quarter and are confident that we can achieve our full year outlook. The continued organic sales and Adjusted EBITDA growth rates in the underlying business position us well for a strong year which would once again exceed our Strategy 2018 targets.

While there are currently uncertainties around macro-economic developments, we see continued good business conditions in Nutrition and most of our Materials businesses. The strategic plan that we have successfully delivered over the past few years has resulted in a robust portfolio of solution-led, higher value specialty products in Nutrition, Health & Sustainable Living. We are well placed to move forward with our ambitious 2019-2021 strategy. Above market, innovation-led organic growth, as well as inorganic growth will enable us to deliver upon our 2021 strategic targets.”

Q3 Highlights1

  • DSM reports a very good Q3
  • Continued good underlying organic sales growth at 5%
  • Underlying Adjusted EBITDA growth at 7%, despite the negative FX impact
  • Nutrition (underlying business): 7% organic sales growth and 10% Adjusted EBITDA growth
  • Materials: 3% organic sales growth and Adjusted EBITDA growth of 3%
  • Additional temporary vitamin price benefit of €15m on Adjusted EBITDA
  • Total Adjusted EBITDA up 11%

Key figures & indicators2

in € million Q3 2018 Q3 2017 % change
  Underlying
business2
Temporary
vitamin effect2
Total
Group
Total
Group
Underlying
organic growth2
FX &
‘other’2
Underlying
total growth2
Temporary
vitamin effect2
Total
Group
Sales 2,215 50 2,265 2,136 5% -1% 4% 2% 6%
Nutrition 1,438 50 1,488 1,373 7% -2% 5% 3% 8%
Materials 723   723 706 3% -1% 2%   2%
Adjusted EBITDA 391 15 406 365     7% 4% 11%
Nutrition 283 15 298 258     10% 6% 16%
Materials 132   132 128     3%   3%
Innovation 1   1 4          
Corporate -25   -25 -25          
EBITDA 370 15 385 343          
Adjusted EBITDA
margin
17.7%   17.9% 17.1%          

1) Underlying business is defined in this press release as the performance measures sales and Adjusted EBITDA, corrected for DSM’s best estimate of the vitamin effect, which is expected to be temporary.
2) Adjusted EBITDA is an Alternative Performance Measure (APM) that reflects continuing operations.

Outlook 2018

DSM confirms its full year outlook 2018 and expects an Adjusted EBITDA growth of approximately 25% and a related higher ROCE growth. This is based on:

  • a low double-digit Adjusted EBITDA growth in the underlying business at constant currencies,
  • a negative foreign exchange effect on Adjusted EBITDA of about €70 million, and
  • a total Adjusted EBITDA benefit for the full year estimated at €290 million from a temporary exceptional vitamin pricing environment

Key figures & indicators1

in € million Jan - Sep 2018 Jan - Sep 2017 % change Volume Price /mix FX Other
Sales 7,059 6,456 9% 3% 11% -5% 0%
Nutrition 4,693 4,151 13% 4% 15% -7% 1%
Materials 2,215 2,132 4% 3% 4% -3% 0%
Innovation Center 118 126          
Corporate Activities 33 47          
in € million Q3 2018 Q3 2017 % change Volume Price /mix FX Other
Sales 2,265 2,136 6% 0% 7% -1% 0%
Nutrition 1,488 1,373 8% 1% 9% -2% 0%
Materials 723 706 2% -2% 5% -1% 0%
Innovation Center 43 42          
Corporate Activities 11 15          
in € million Jan - Sep 2018 Jan - Sep 2017 % change Q3 2018 Q3 2017 % change
Sales 7,059 6,456 9% 2,265 2,136 6%
Adjusted EBITDA 1,452 1,086 34% 406 365 11%
Nutrition 1,137 786 45% 298 258 16%
Materials 393 369 7% 132 128 3%
Innovation Center 1 5   1 4  
Corporate Activities -79 -74   -25 -25  
Adjusted EBITDA margin 20.6% 16.8%   17.9% 17.1%  
EBITDA 1,414 1,032   385 343  
Adjusted EBIT 1,100 717 53% 283 239 18%
EBIT 1,049 647   249 206  
Capital Employed 8,221 7,620        
Average Capital Employed 7,960 7,779        
ROCE (%)2 18.4% 12.3%        
Effective tax rate3 18.0% 18.0%        
Adjusted net profit4 852 504 69% 209 166 26%
Net profit - Total DSM4 821 1,603 -49% 188 1,291 -85%
Adjusted net EPS 4.82 2.81 71% 1.18 0.91 30%
Net EPS - Total DSM 4.64 9.09   1.06 7.34  
Operating Cash Flow 933 619 51% 430 290 48%
Capital Expenditures5 445 384   150 134  
Net debt 680 703        
Average number of ordinary shares 175.2 174.9   175.7 174.7  
Workforce (headcount end of period)
20,928 21,0546        

1) Including temporary vitamin effect
2) ROCE from underlying business H1 2018 is estimated at 13.8%
3) Over Adjusted taxable result
4) Including result attributed to non-controlling interest
5) Cash, net of customer funding, investment grants and excluding financial leases
6 )Year-end 2017

In this report:
‘Organic sales growth’ is the total impact of volume and price/mix;
‘Total Working Capital’ refers to the total of ‘Operating Working Capital’ and ‘non-Operating Working Capital’

The complete version of this press release with accompanying financial statements and the Presentation to Investors are below in PDF format.

For more information

Lieke de Jong-Tops

Senior Communications Manager
+31 45 578 2420
media.contacts@dsm.com

Dave Huizing

Vice President Investor Relations
+31 45 578 2864
investor.relations@dsm.com

Lieke de Jong-Tops

Senior Communications Manager
+31 45 578 2420

Dave Huizing

Vice-President Investor Relations
+31 45 578 2864

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