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DSM sees 4% organic growth in sales
30 Apr 2015DSM has reported its results for Q1 2015. Sales were €1,886 million, an 11% increase versus Q1 2014, due to 3% higher volumes, 1% lower prices and 9% foreign exchange effects. DSM delivered an increased EBITDA of €248 million compared to €239 million in Q1 2014. “DSM delivered higher results in Q1 2015 compared to […]
DSM has reported its results for Q1 2015. Sales were €1,886 million, an 11% increase versus Q1 2014, due to 3% higher volumes, 1% lower prices and 9% foreign exchange effects. DSM delivered an increased EBITDA of €248 million compared to €239 million in Q1 2014.
“DSM delivered higher results in Q1 2015 compared to prior year, driven by higher volumes in both Nutrition and Performance Materials,” said Feike Sijbesma, CEO/Chairman of the DSM Managing Board. “Nutrition delivered mixed results with good volume growth in animal nutrition, partly offset by low prices in vitamin E and weak performance in human nutrition. Performance Materials had another strong quarter with higher volumes and margins. The mix of foreign currencies had an overall positive impact on both clusters.”
“In Q1 we announced a partnership with CVC Capital Partners for Polymer Intermediates and Composite Resins, a significant step in further optimizing our portfolio and reducing our cyclicality. This strategic action will enable us to focus fully on improving the operational performance of our core businesses while capitalizing on the longer term potential for value creation of our various partnerships.”
“We are progressing well with setting up a number of efficiency improvement and cost reduction programs especially in Nutrition and in all support functions across the company.”
“DSM aims to deliver an EBITDA in 2015 ahead of 2014, the increase mainly driven by positive foreign exchange effects,” concluded Sijbesma.
In DSM’s nutrition business, sales in the first quarter increased by 15% compared to Q1 2014. Organic sales growth was 4% compared to Q1 2014 as a result of 3% higher volumes and 1% higher prices. Good volume growth in animal nutrition was partly offset by lower vitamin E prices and by weakness in human nutrition. Currencies had an 11% positive impact on sales.
EBITDA for Q1 was €195 million, down 4% from Q1 2014. Higher volumes in animal nutrition were offset by lower vitamin E prices, lower volumes in human nutrition, intensified marketing and sales activities as well as actions to reduce inventory levels. These factors and the relative higher share of animal nutrition impacted the EBITDA margin. Positive effects of foreign exchange rates, especially the US dollar, were partly offset by the negative impact of the Swiss franc.
Human Nutrition & Health net sales increased by 7% to €452 million versus €422 million in Q1 2014. Volumes declined 6% and prices were flat while currencies had a positive effect of 13%. However, compared to Q4 2014, Q1 showed a positive organic sales growth of 7%, breaking the trend of successive sales declines over the last three quarters of 2014.
The weakness in volumes was broadly across expected product categories, in particular low sales in fish oil based Omega 3 dietary supplements in the US. DSM is addressing organic growth in human nutrition with intensified marketing and sales activities and organizational changes.
Food & Beverage markets in developed economies as well as retail sales of vitamin-based dietary supplements in the US showed early signs of improvement. Volume growth in infant nutrition has normalized since Q4 2014, albeit at lower than historic growth rates. I-Health enjoyed strong sales growth.
DSM Food Specialties delivered a solid performance in Q1, with good organic growth in enzymes and cultures. Issues around manufacturing performance in savoury ingredients and cultures reported in Q4 2014 have been resolved.