Press release
DSM reports results first nine months 2019
Heerlen, NL, 05 Nov 2019 07:00 CET
Highlights1,2,3
- DSM reports good first nine months, with a solid performance in Q3
- Results compared to Underlying business in first nine months 2018:
- Group sales +3%, Adjusted EBITDA up 11% (including 3% from IFRS 16)
- Nutrition: organic sales +4%, Adjusted EBITDA up 13% (including 3% from IFRS 16)
- Materials: organic sales –7% (-5% volume), Adjusted EBITDA flat (including 2% from IFRS 16)
- Total Net profit €640m, up versus first nine months 2018 of €821m when correcting for the temporary vitamin effect of €290m EBITDA
- Adjusted Net Operating Free Cash Flow €550m, up 4% versus first nine months 2018 which included the temporary vitamin effect of €290m EBITDA
- Full year outlook maintained
Key figures and indicators
| in € million | Jan - Sep 2019 | Jan - Sep 2018 | % change | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Underlying business1 |
Temporary vitamin effect |
Total Group |
Underlying Organic growth1 |
FX & ‘other’1 |
Underlying total growth1 |
Temporary vitamin effect |
Total Group |
||
| Sales | 6,858 | 6,644 | 415 | 7,059 | 0% | 3% | 3% | -6% | -3% |
| Nutrition | 4,573 | 4,278 | 415 | 4,693 | 4% | 3% | 7% | -10% | -3% |
| Materials | 2,114 | 2,215 | 2,215 | -7% | 2% | -5% | -5% | ||
| Adjusted EBITDA | 1,288 | 1,162 | 290 | 1,452 | 11% | -22% | -11% | ||
| Nutrition | 956 | 847 | 290 | 1,137 | 13% | -29% | -16% | ||
| Materials | 391 | 393 | 393 | 0% | 0% | ||||
| Innovation | 16 | 1 | 1 | ||||||
| Corporate | -75 | -79 | -79 | ||||||
| EBITDA | 1,239 | 1,124 | 290 | 1,414 | |||||
| Adjusted EBITDA margin | 18.8% | 17.5% | 20.6% | ||||||
1) In 2018 DSM benefitted from a temporary vitamin effect (see page 5 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 19 of PDF).
CEO statement
Feike Sijbesma, CEO/Chairman DSM Managing Board, commented: “I am pleased to report again a good nine-month performance, together with a solid third quarter.
"In the quarter, Nutrition delivered a good performance with 4% organic growth and Adjusted EBITDA up 12%, despite some softness in Human Nutrition. Materials experienced ongoing challenging conditions in some of its end-markets, especially in China. Dyneema continued to perform strongly. The earnings performance highlights the relative resilience of our specialty Materials portfolio with a slight Adjusted EBITDA decline of 2%. We made good progress, with our large innovation projects, like Veramaris, Clean Cow and Avansya."
"We are on track to deliver 2019 in line with our targets, and therefore maintain our full year outlook. DSM continues to be well positioned to deliver its ambitious Strategy 2021, with its growth platforms together with increased customer centricity and its large innovation projects, while at the same time remaining focused on cost control and operational excellence.”
Q3 Highlights1,2,3
- DSM reports a solid Q3
- Results compared to Underlying business in Q3 2018:
- Group sales +3%, Adjusted EBITDA up 9% (including 3% impact from IFRS 16)
- Nutrition: organic sales +4%, Adjusted EBITDA up 12% (including 3% impact from IFRS 16)
- Materials: organic sales –7% (-3% volume), Adjusted EBITDA down 2% (including 2% impact from IFRS 16)
Key figures and indicators
| in € million | Q3 2019 | Q3 2018 | % change | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Underlying business1 |
Temporary vitamin effect |
Total Group |
Underlying Organic growth1 |
FX & ‘other’1 |
Underlying total growth1 |
Temporary vitamin effect |
Total Group |
||
| Sales | 2,290 | 2,215 | 50 | 2,265 | 0% | 3% | 3% | -2% | 1% |
| Nutrition | 1,544 | 1,438 | 50 | 1,488 | 4% | 3% | 7% | -3% | 4% |
| Materials | 687 | 723 | 723 | -7% | 2% | -5% | -5% | ||
| Adjusted EBITDA | 426 | 391 | 15 | 406 | 9% | -4% | 5% | ||
| Nutrition | 317 | 283 | 15 | 298 | 12% | -6% | 6% | ||
| Materials | 129 | 132 | 132 | -2% | -2% | ||||
| Innovation | 5 | 1 | 1 | ||||||
| Corporate | -25 | -25 | -25 | ||||||
| EBITDA | 416 | 370 | 15 | 385 | |||||
| Adjusted EBITDA margin | 18.6% | 17.7% | 17.9% | ||||||
1) In 2018 DSM benefitted from a temporary vitamin effect (see page 5 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 19 of PDF).
Outlook 2019
DSM maintains its full year outlook: 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.
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. Up to and including 31 October 2019 DSM has repurchased 5.3 million shares for a total consideration of €563 million; 2.6 million shares relate to the regular repurchase programs and 2.7 million shares relate to the €1 billion share buy-back program.
Key figures and indicators (comparison with January – September 2018 excluding temporary vitamin effect)
| in € million | Jan - Sep 2019 | Jan - Sep 2018 | % change | Volume | Price/mix | FX | Other |
|---|---|---|---|---|---|---|---|
| Sales | 6,858 | 6,644 | 3% | 0% | 0% | 2% | 1% |
| Nutrition | 4,573 | 4,278 | 7% | 3% | 1% | 2% | 1% |
| Materials | 2,114 | 2,215 | -5% | -5% | -2% | 2% | 0% |
| Innovation Center | 140 | 118 | |||||
| Corporate Activities | 31 | 33 |
| in € million | Q3 2019 | Q3 2018 | % change | Volume | Price/mix | FX | Other |
|---|---|---|---|---|---|---|---|
| Sales | 2,290 | 2,215 | 3% | 1% | -1% | 2% | 1% |
| Nutrition | 1,544 | 1,438 | 7% | 3% | 1% | 2% | 1% |
| Materials | 687 | 723 | -5% | -3% | -4% | 2% | 0% |
| Innovation Center | 50 | 43 | |||||
| Corporate Activities | 9 | 11 |
| in € million including IFRS 16 impact | Jan - Sep 2019 | Jan - Sep 2018 | % change | Q3 2019 | Q3 2018 | % change |
|---|---|---|---|---|---|---|
| Sales | 6,858 | 6,644 | 3% | 2,290 | 2,215 | 3% |
| Adjusted EBITDA | 1,288 | 1,162 | 11% | 426 | 391 | 9% |
| Nutrition | 956 | 847 | 13% | 317 | 283 | 12% |
| Materials | 391 | 393 | 0% | 129 | 132 | -2% |
| Innovation Center | 16 | 1 | 5 | 1 | ||
| Corporate Activities | -75 | -79 | -25 | -25 | ||
| Adjusted EBITDA margin | 18.8% | 17.5% | 18.6% | 17.7% | ||
| ROCE % | 12.7% | 13.6% |
| in € million excluding IFRS 16 impact | Jan - Sep 2019 | Jan - Sep 2018 | % change | Q3 2019 | Q3 2018 | % change |
|---|---|---|---|---|---|---|
| Adjusted EBITDA | 1,250 | 1,162 | 8% | 413 | 391 | 6% |
| Nutrition | 934 | 847 | 10% | 309 | 283 | 9% |
| Materials | 386 | 393 | -2% | 127 | 132 | -4% |
| Innovation Center | 15 | 1 | 5 | 1 | ||
| Corporate Activities | -85 | -79 | -28 | -25 | ||
| Adjusted EBITDA margin | 18.2% | 17.5% | 18.0% | 17.7% | ||
| ROCE % | 13.0% | 13.6% |
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 January - September 2018 including temporary vitamin effect)
| in € million | Jan - Sep 2019 | Jan - Sep 2018 | % change | Volume | Price/mix | FX | Other |
|---|---|---|---|---|---|---|---|
| Sales | 6,858 | 7,059 | -3% | 1% | -7% | 2% | 1% |
| Nutrition | 4,573 | 4,693 | -3% | 4% | -10% | 2% | 1% |
| Materials | 2,114 | 2,215 | -5% | -5% | -2% | 2% | 0% |
| Innovation Center | 140 | 118 | |||||
| Corporate Activities | 31 | 33 |
| in € million | Q3 2019 | Q3 2018 | % change | Volume | Price/mix | FX | Other |
|---|---|---|---|---|---|---|---|
| Sales | 2,290 | 2,265 | 1% | 2% | -4% | 2% | 1% |
| Nutrition | 1,544 | 1,488 | 4% | 4% | -4% | 3% | 1% |
| Materials | 687 | 723 | -5% | -3% | -4% | 2% | 0% |
| Innovation Center | 50 | 43 | |||||
| Corporate Activities | 9 | 11 |
| in € million, incl. IFRS impact where applicable | Jan - Sep 2019 | Jan - Sep 2018 | % change | Q3 2019 | Q3 2018 | % change |
|---|---|---|---|---|---|---|
| Sales | 6,858 | 7,059 | -3% | 2,290 | 2,265 | 1% |
| Adjusted EBITDA | 1,288 | 1,452 | -11% | 426 | 406 | 5% |
| Nutrition | 956 | 1,137 | -16% | 317 | 298 | 6% |
| Materials | 391 | 393 | 0% | 129 | 132 | -2% |
| Innovation Center | 16 | 1 | 5 | 1 | ||
| Corporate Activities | -75 | -79 | -25 | -25 | ||
| Adjusted EBITDA margin | 18.8% | 20.6% | 18.6% | 17.9% | ||
| EBITDA | 1,239 | 1,414 | 416 | 385 | ||
| Adjusted EBIT | 844 | 1,100 | -23% | 276 | 283 | -2% |
| EBIT | 784 | 1,049 | 266 | 249 | ||
| Capital Employed | 9,330 | 8,221 | ||||
| Average Capital Employed | 8,843 | 7,960 | ||||
| ROCE (%) | 12.7% | 18.4% | ||||
| Effective tax rate1 | 18.0% | 18.0% | ||||
| Adjusted net profit2 | 659 | 852 | -23% | 244 | 209 | 17% |
| Net profit - Total DSM2 | 640 | 821 | -22% | 239 | 188 | 27% |
| Adjusted net EPS | 3.68 | 4.82 | -24% | 1.36 | 1.18 | 15% |
| Net EPS - Total DSM | 3.57 | 4.64 | 1.33 | 1.06 | ||
| Operating Cash Flow | 941 | 933 | 1% | 434 | 430 | 1% |
| Adjusted Net Operating Free Cash Flow | 550 | 529 | 4% | 293 | 303 | -3% |
| Capital Expenditures3 | 410 | 445 | 146 | 150 | ||
| Net debt4 | 852 | 680 | ||||
| Average number of ordinary shares | 176.3 | 175.2 | 176.2 | 175.7 | ||
| Workforce (headcount end of period) | 22,204 | 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 September 2019 includes €217 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