Press release
DSM reports H1 2019 results
Heerlen, NL, 01 Aug 2019 07:00 CEST
Highlights1,2,3
- DSM reports a good H1
- Results compared to Underlying business in H1 2018:
- Group sales +3%, Adjusted EBITDA up 12% (including 3% from IFRS 16)
- Nutrition: organic sales +4%, Adjusted EBITDA up 13% (including 2% from IFRS 16)
- Materials: organic sales -6%, Adjusted EBITDA flat (including 1% from IFRS 16)
- Adjusted Net Operating Free Cash Flow €257m, up 14% versus H1 2018
- Total Net profit €401m, up versus H1 2018 of €633m when correcting for the temporary vitamin effect of €275m EBITDA following an exceptional supply disruption in the industry
- Interim dividend of €0.77 per ordinary share
- Full year outlook maintained
Key figures and indicators
| in € million | H1 2019 | H1 2018 | % change | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Underlying business1 |
Temporary vitamin effect |
Total Group |
Underlying Organic growth1 |
FX & ‘other’1 |
Underlying total growth1 |
Temporary vitamin effect |
Total Group |
||
| Sales | 4,568 | 4,429 | 365 | 4,794 | 1% | 2% | 3% | -8% | -5% |
| Nutrition | 3,029 | 2,840 | 365 | 3,205 | 4% | 3% | 7% | -12% | -5% |
| Materials | 1,427 | 1,492 | 1,492 | -6% | 2% | -4% | -4% | ||
| Adjusted EBITDA | 862 | 771 | 275 | 1,046 | 12% | -30% | -18% | ||
| Nutrition | 639 | 564 | 275 | 839 | 13% | -37% | -24% | ||
| Materials | 262 | 261 | 261 | 0% | 0% | ||||
| Innovation | 11 | 0 | 0 | ||||||
| Corporate | -50 | -54 | -54 | ||||||
| EBITDA | 823 | 754 | 275 | 1029 | |||||
| Adjusted EBITDA margin | 18.9% | 17.4% | 21.8% | ||||||
1) In 2018 DSM benefitted from a temporary vitamin effect (see page 6 of PDF). Underlying (business) is defined as the performance measure sales and Adjusted EBITDA, corrected for DSM’s best estimate of this temporary vitamin effect.
2) Adjusted EBITDA is an Alternative Performance Measure (APM) that reflects continuing operations.
3) DSM adopted IFRS 16 as per its effective date of 1 January 2019 and has not restated 2018 (see page 23 of PDF).
CEO statement
Feike Sijbesma, CEO/Chairman DSM Managing Board, commented: “I am pleased to report a good performance for the first half year, achieved against a challenging macro-economic environment. The Nutrition business saw continued good business conditions and delivered a strong performance, demonstrating the quality of its innovative portfolio of value-added solutions. Materials experienced ongoing soft market conditions in some of its end-markets, especially in China. Through a continued strong performance in the Dyneema and Functional Materials businesses, combined with good margin management, our Materials business demonstrated resilience with stable earnings.
DSM continues to be well positioned to deliver on our ambitious Strategy 2021 targets, driven by our commitment to be a purpose led, performance driven science-based company in Nutrition, Health and Sustainable Living. We reiterate our outlook for the full year.”
Q2 Highlights1,2,3
- DSM reports another good quarter
- Results compared to Underlying business in Q2 2018:
- Group sales +3%, Adjusted EBITDA up 10% (including 3% impact from IFRS 16)
- Nutrition: organic sales +4%, Adjusted EBITDA up 13% (including 3% impact from IFRS 16)
- Materials: organic sales -7%, Adjusted EBITDA flat (including 1% impact from IFRS 16)
Key figures and indicators
| in € million | Q2 2019 | Q2 2018 | % change | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Underlying business1 |
Temporary vitamin effect |
Total Group |
Underlying Organic growth1 |
FX & ‘other’1 |
Underlying total growth1 |
Temporary vitamin effect |
Total Group |
||
| Sales | 2,276 | 2,214 | 145 | 2,359 | 1% | 2% | 3% | -7% | -4% |
| Nutrition | 1,512 | 1,410 | 145 | 1,555 | 4% | 3% | 7% | -10% | -3% |
| Materials | 710 | 754 | 754 | -7% | 1% | -6% | -6% | ||
| Adjusted EBITDA | 438 | 398 | 110 | 508 | 10% | -24% | -14% | ||
| Nutrition | 323 | 287 | 110 | 397 | 13% | -32% | -19% | ||
| Materials | 135 | 135 | 135 | 0% | 0% | ||||
| Innovation | 5 | 1 | 1 | ||||||
| Corporate | -25 | -25 | -25 | ||||||
| EBITDA | 407 | 393 | 110 | 503 | |||||
| Adjusted EBITDA margin | 19.2% | 18.0% | 21.5% | ||||||
1) In 2018 DSM benefitted from a temporary vitamin effect (see page 6 of PDF). Underlying (business) is defined as the performance measure sales and Adjusted EBITDA, corrected for DSM’s best estimate of this temporary vitamin effect.
2) Adjusted EBITDA is an Alternative Performance Measure (APM) that reflects continuing operations.
3) DSM adopted IFRS 16 as per its effective date of 1 January 2019 and has not restated 2018 (see page 23 of PDF).
Outlook 2019
DSM maintains its full year outlook as provided at Q1 2019: DSM 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 Underlying Adjusted Net Operating Free Cash Flow in line with its Strategy 2021 targets. This outlook excludes the impact of IFRS 16 (see page 23 of PDF).
Share Buy-Back program
On 1 April 2019, DSM commenced its ordinary share repurchase program of an aggregate market value of €1 billion, with the intention to reduce its issued capital, as first announced on 14 February 2019. This program is in addition to the regular repurchase programs to cover commitments under share-based compensation plans and the stock dividend. As per 30 June DSM has repurchased 2.6 million shares for a total consideration of €265 million; 2 million shares relate to the regular repurchase programs and 0.6 million shares relate to the €1 billion share buy-back program.
Key figures and indicators (comparison with H1 2018 excluding temporary vitamin effect)
| in € million | YTD H1 2019 | YTD H1 2018 | % change | Volume | Price/mix | FX | Other |
|---|---|---|---|---|---|---|---|
| Sales | 4,568 | 4,429 | 3% | 1% | 0% | 2% | 0% |
| Nutrition | 3,029 | 2,840 | 7% | 4% | 0% | 2% | 1% |
| Materials | 1,427 | 1,492 | -4% | -5% | -1% | 2% | 0% |
| Innovation Center | 90 | 75 | |||||
| Corporate Activities | 22 | 22 |
| in € million | Q2 2019 | Q2 2018 | % change | Volume | Price/mix | FX | Other |
|---|---|---|---|---|---|---|---|
| Sales | 2,276 | 2,214 | 3% | 1% | 0% | 2% | 0% |
| Nutrition | 1,512 | 1,410 | 7% | 3% | 1% | 2% | 1% |
| Materials | 710 | 754 | -6% | -5% | -2% | 1% | 0% |
| Innovation Center | 43 | 39 | |||||
| Corporate Activities | 11 | 11 |
H1 2019 including IFRS 16 impact
| in € million | H1 2019 | H1 2018 | % change | Q1 2019 | Q1 2018 | % change |
|---|---|---|---|---|---|---|
| Sales | 4,568 | 4,429 | 3% | 2,276 | 2,214 | 3% |
| Adjusted EBITDA | 862 | 771 | 12% | 438 | 398 | 10% |
| Nutrition | 639 | 564 | 13% | 323 | 287 | 13% |
| Materials | 262 | 261 | 0% | 135 | 135 | 0% |
| Innovation Center | 11 | 0 | 5 | 1 | ||
| Corporate Activities | -50 | -54 | -25 | -25 | ||
| Adjusted EBITDA margin | 18.9% | 17.4% | 19.2% | 18.0% | ||
| ROCE % | 13.1% | 13.8% |
H1 2019 excluding IFRS 16 impact
| in € million | H1 2019 | H1 2018 | % change | Q1 2019 | Q1 2018 | % change |
|---|---|---|---|---|---|---|
| Adjusted EBITDA | 837 | 771 | 9% | 425 | 398 | 7% |
| Nutrition | 625 | 564 | 11% | 316 | 287 | 10% |
| Materials | 259 | 261 | -1% | 133 | 135 | -1% |
| Innovation Center | 10 | 0 | 5 | 1 | ||
| Corporate Activities | -57 | -54 | -29 | -25 | ||
| Adjusted EBITDA margin | 18.3% | 17.4% | 18.7% | 18.0% | ||
| ROCE % | 13.4% | 13.8% |
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 H1 2018 including temporary vitamin effect)
| in € million | YTD H1 2019 | YTD H1 2018 | % change | Volume | Price/mix | FX | Other |
|---|---|---|---|---|---|---|---|
| Sales | 4,568 | 4,794 | -5% | 1% | -8% | 2% | |
| Nutrition | 3,029 | 3,205 | -5% | 4% | -12% | 2% | |
| Materials | 1,427 | 1,492 | -4% | -5% | -1% | 2% | |
| Innovation Center | 90 | 75 | |||||
| Corporate Activities | 22 | 22 |
| in € million | Q2 2019 | Q2 2018 | % change | Volume | Price/mix | FX | Other |
|---|---|---|---|---|---|---|---|
| Sales | 2,276 | 2,359 | -4% | 2% | -8% | 2% | |
| Nutrition | 1,512 | 1,555 | -3% | 5% | -11% | 2% | |
| Materials | 710 | 754 | -6% | -5% | -2% | 1% | |
| Innovation Center | 43 | 39 | |||||
| Corporate Activities | 11 | 11 |
| in € million, incl. IFRS impact where applicable | YTD H1 2019 | YTD H1 2018 | % change | Q2 2019 | Q2 2018 | % change |
|---|---|---|---|---|---|---|
| Sales | 4,568 | 4,794 | -5% | 2,276 | 2,359 | -4% |
| Adjusted EBITDA | 862 | 1,046 | -18% | 438 | 508 | -14% |
| Nutrition | 639 | 839 | -24% | 323 | 397 | -19% |
| Materials | 262 | 261 | 0% | 135 | 135 | 0% |
| Innovation Center | 11 | 0 | 5 | 1 | ||
| Corporate Activities | -50 | -54 | -25 | -25 | ||
| Adjusted EBITDA margin | 18.9% | 21.8% | 19.2% | 21.5% | ||
| EBITDA | 823 | 1,029 | 407 | 503 | ||
| Adjusted EBIT | 568 | 817 | -30% | 289 | 394 | -27% |
| EBIT | 518 | 800 | 247 | 389 | ||
| Capital Employed | 8,735 | 8,115 | ||||
| Average Capital Employed | 8,680 | 7,874 | ||||
| ROCE (%) | 13.1% | 20.8% | ||||
| Effective tax rate1 | 18.0% | 18.0% | ||||
| Adjusted net profit2 | 415 | 643 | -35% | 215 | 306 | -30% |
| Net profit - Total DSM2 | 401 | 633 | -37% | 205 | 302 | -32% |
| Adjusted net EPS | 2.32 | 3.64 | -36% | 1.20 | 1.73 | -31% |
| Net EPS - Total DSM | 2.24 | 3.58 | 1.14 | 1.70 | ||
| Operating Cash Flow | 507 | 503 | 1% | 306 | 193 | 59% |
| Adjusted Net Operating Free Cash Flow | 257 | 226 | 14% | 197 | 72 | 174% |
| Capital Expenditures3 | 264 | 295 | 116 | 125 | ||
| Net debt4 | 589 | 831 | ||||
| Average number of ordinary shares | 176.3 | 175.0 | 176.5 | 175.2 | ||
| Workforce (headcount end of period) | 21,595 | 20,977 |
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 H1 2019 includes €202 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