Press release

DSM reports Q1 2019 results

Heerlen, NL, 07 May 2019 07:00 CEST

Highlights1,2,3

  • DSM reports a good start to the year
  • Results compared to Underlying business in Q1 2018:
    • Group sales up 3%, Adjusted EBITDA up 10% to €412m (up 14% to €424m including IFRS 16 impact of €12m)
    • Nutrition: organic sales +3%, Adjusted EBITDA up 11% to €309m (up 14% to €316m including IFRS 16 impact of €7m)
    • Materials: organic sales -5%, Adjusted EBITDA flat on €126m (up 1% to €127m including IFRS 16 impact of €1m)
  • Adjusted Net Operating Free Cash Flow €60m 
  • Total Net profit €196m, up versus Q1 2018 of €331m when correcting for the temporary vitamin effect of €165m EBITDA following an exceptional supply disruption in the industry 
  • Full year outlook increased

Key figures and indicators

in € million Q1 2019 Q1 2018 % change
    Underlying
business1
Temporary
vitamin effect
Total
Group
Underlying
Organic growth1
FX &
‘other’1
Underlying
total growth1
Temporary
vitamin effect
Total
Group
Sales 2,292 2,215 220 2,435 1% 2% 3% -9% -6%
Nutrition 1,517 1,430 220 1,650 3% 3% 6% -14% -8%
Materials 717 738   738 -5% 2% -3%   -3%
Adjusted EBITDA 424 373 165 538     14% -35% -21%
Nutrition 316 277 165 442     14% -43% -29%
Materials 127 126   126     1%   1%
Innovation 6 -1   -1          
Corporate -25 -29   -29          
EBITDA 416 361 165 526          
Adjusted EBITDA margin 18.5% 16.8%   22.1%          

1) Underlying (business) in 2018 is defined as the performance measures sales and Adjusted EBITDA, corrected for DSM’s best estimate of the temporary vitamin effect.
2) Adjusted EBITDA is an Alternative Performance Measure (APM) that reflects continuing operations.
3) IFRS 16 is only effective as per 1 January 2019, the 2018 figures have not been adjusted.

CEO statement

Feike Sijbesma, CEO/Chairman DSM Managing Board, commented: “I am pleased to report a good start to the year, with continued positive momentum, led by our Nutrition business, while Materials continues to demonstrate its resilience. Last year we benefitted from an exceptional growth and profit contribution in Nutrition following a supply disruption in the vitamin industry. When comparing our results excluding this special event, we realized strong, double digit Adjusted EBITDA growth in the first quarter against a very strong comparable period in the Underlying business.

With our business performance progressing in-line with our plans, we remain confident in our positive outlook for 2019. We are well positioned to deliver on our ambitious Strategy 2021 targets, which aim to deliver above market growth and strong financial performance, driven by our commitment to be a purpose led, performance driven science-based company in Nutrition, Health and Sustainable Living.”

Outlook 2019

DSM increases its full year outlook 2019 and now expects to deliver a full year 2019 high single digit increase in Adjusted EBITDA compared to prior year Underlying Adjusted EBITDA (pre-temporary vitamin effect), together with an improvement in Adjusted Net Operating Free Cash Flow in line with its Strategy 2021 targets. This outlook excludes the impact of IFRS16 (see page 18 of PDF).

Share Buy-Back program started

As per 1 April, DSM commenced its ordinary share repurchase program of an aggregate market value of €1 billion as announced on 14 February 2019, with the intention to reduce its issued capital. This program is in addition to the usual repurchase programs which DSM executes from time to time to cover commitments under share-based compensation plans and the stock dividend.

Key figures and indicators (comparison with Q1 2018 excluding temporary vitamin effect)

in € million YTD Q1 2019 YTD Q1 2018 % change Volume Price/mix FX Other
Sales 2,292 2,215 3% 1% 0% 2% 0%
Nutrition 1,517 1,430 6% 3% 0% 2% 1%
Materials 717 738 -3% -6% 1% 2% 0%
Innovation Center 47 36          
Corporate Activities 11 11          

Q1 2019 excluding IFRS 16 impact

in € million YTD Q1 2019 YTD Q1 2018 % change Q1 2019 Q1 2018 % change
Sales 2,292 2,215 3% 2,292 2,215 3%
Adjusted EBITDA 412 373 10% 412 373 10%
Nutrition 309 277 11% 309 277 11%
Materials 126 126 0% 126 126 0%
Innovation Center 5 -1   5 -1  
Corporate Activities -28 -29   -28 -29  
Adjusted EBITDA margin 18.0% 16.8%   18.0% 16.8%  
ROCE % 13.2% 13.3%        

Q1 2019 including IFRS 16 impact

in € million YTD Q1 2019 YTD Q1 2018 % change Q1 2019 Q1 2018 % change
Adjusted EBITDA 424 373 14% 424 373 14%
Nutrition 316 277 14% 316 277 14%
Materials 127 126 1% 127 126 1%
Innovation Center 6 -1   6 -1  
Corporate Activities -25 -29   -25 -29  
Adjusted EBITDA margin 18.5% 16.8%   18.5% 16.8%  
ROCE % 12.9% 13.3%        

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’;
‘Adjusted Net Operating Free Cash Flow’ is the cash flow from operating activities, corrected for the cash flow of the APM adjustments, minus the cash flow of capital expenditures and drawing rights.

Key figures and indicators (comparison with Q1 2018 including temporary vitamin effect)

in € million YTD Q1 2019 YTD Q1 2018 % change Volume Price/mix FX Other
Sales 2,292 2,435 -6% 0% -8% 2% 0%
Nutrition 1,517 1,650 -8% 2% -13% 2% 1%
Materials 717 738 -3% -6% 1% 2% 0%
Innovation Center 47 36          
Corporate Activities 11 11          
in € million YTD Q1 2019 YTD Q1 2018 % change Q1 2019 Q1 2018 % change
Sales 2,292 2,435 -6% 2,292 2,435 -6%
Adjusted EBITDA 424 538 -21% 424 538 -21%
Nutrition 316 442 -29% 316 442 -29%
Materials 127 126 1% 127 126 1%
Innovation Center 6 -1   6 -1  
Corporate Activities -25 -29   -25 -29  
Adjusted EBITDA margin 18.5% 22.1%   18.5% 22.1%  
EBITDA 416 526   416 526  
Adjusted EBIT 279 423 -34% 279 423 -34%
EBIT 271 411   271 411  
Capital Employed 8,907 7,741        
Average Capital Employed 8,652 7,753        
ROCE (%) 12.9% 21.8%        
Effective tax rate1 18.0% 18.0%        
Adjusted net profit2 200 337 -41% 200 337 -41%
Net profit - Total DSM2 196 331 -41% 196 331 -41%
Adjusted net EPS 1.12 1.91 -41% 1.12 1.91 -0.41
Net EPS - Total DSM 1.1 1.88   1.1 1.88  
Operating Cash Flow 201 310 -35% 201 310 -35%
Adjusted Net Operating Free Cash Flow 60 154 -61% 60 154 -61%
Capital Expenditures3 148 170   148 170  
Net debt4 414 579        
Average number of ordinary shares 176.1 174.8   176 174.8  
Workforce (headcount end of period) 21,438 20,9775        

1) Over Adjusted taxable result
2) Including result attributed to non-controlling interest
3) Cash, net of customer funding, investment grants and excluding leases
4) Net debt end of Q1 2019 includes €206 million following the adoption of IFRS 16 on ‘Leases’
5) Year-end 2018

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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