DSM sees strong quarter

29 Apr 2016

DSM has reported what it describes as strong first quarter. Group net sales were up at €1,913 million, with 2% organic growth. Group EBITDA was up 19% to €296 million. Nutrition saw 6% organic sales growth, with EBITDA up 15%.

DSM sees strong quarter

DSM has reported what it describes as strong first quarter. Group net sales were up at €1,913 million, with 2% organic growth. Group EBITDA was up 19% to €296 million. Nutrition saw 6% organic sales growth, with EBITDA up 15%. The company maintained its outlook.

“We are pleased to report that we delivered a strong first quarter in terms of growth, profitability and returns, with all businesses seeing the effects of our improvement programs,” said Feike Sijbesma, CEO/Chairman of the DSM Managing Board. “Both Animal and Human Nutrition delivered above-market volume growth, with Human Nutrition showing a marked improvement, albeit against a relatively weak comparable quarter in 2015. Our efforts resulted in EBITDA growth and an improved margin in Nutrition. Materials remained robust, helped in part by the shift towards higher added-value products in the portfolio. In addition, low input prices continued to support margins during Q1 2016 despite softer volumes in some segments, although we expect this support to diminish somewhat going forward.

While the macro-economic environment remains uncertain, we are confident that we will deliver in line with our medium-term goals. This will be supported by innovation, our growth initiatives and underpinned by our group-wide cost and productivity improvement programs.”

Q1 2016 sales in Human Nutrition developed strongly, with 8% organic growth, albeit against a relatively weak comparable quarter in 2015. Prices as well as currency effects in this business were stable compared with Q1 2015. Margins in the quarter were supported by a favourable product mix with a good contribution from higher-margin businesses. As of this quarter, the Aland vitamin C business (renamed DSM Jiangshan) is included in the results of Human Nutrition and reported under ‘Other’. It made a 4% contribution to growth in Q1. Food & beverage performed well overall, despite continued weak market conditions in the US and especially in Latin America. Dietary Supplements showed improved sales of both fish oil- and (multi) vitamin-based supplements, as customers’ branded products performed better even though conditions in North American markets were soft overall. i-Health, DSM’s consumer business, again delivered double-digit sales growth in Q1 2016.

Infant Nutrition performed well in a healthy market, and the Food Specialties businesses delivered 4% organic growth in the first quarter of 2016 driven by food enzymes and hydrocolloids.