DSM Q3 Net Profit Down on Slowing Demand, Nutrition Boosted by Developing Markets
04 Nov 2014 --- Royal DSM has reported third quarter 2014 EBITDA from continuing operations of €315 million compared to €293 million in Q2 2014 and €331 million in Q3 2013. Commenting on the results, Feike Sijbesma, CEO/Chairman of the DSM Managing Board, said: “In the third quarter DSM delivered improved financial results compared to the previous quarters with good cash flow generation.”
“In Nutrition our resilient business model and strong position in the value chain have enabled us to deliver an increase in result compared to the previous three quarters, although challenges in some human nutrition end-markets remain and pricing pressure, particularly in vitamin E, intensified in the latter part of the third quarter.”
“In Performance Materials, our continued focus on efficiencies and ongoing cost control served us well, and we are pleased by the overall performance with all businesses contributing to increased EBITDA.”
“Increasing macro-economic uncertainty and continued low consumer confidence are impacting market dynamics. Some currency rates have developed favorably towards the end of the third quarter but currencies remain volatile.”
“We remain committed to our strategy for growth across our Nutrition and Performance Materials businesses and will continue to pursue strategic actions for Polymer Intermediates and Composite Resins. We are strongly focused on operational excellence and delivering efficiencies to protect and enhance our profitability and cash flow. For the remainder of the year, we anticipate performance in line with current market expectations.”
Human Nutrition & Health net sales were €406 million in Q3 2014 in line with Q2 2014. Organic sales development was negative at -2% compared to Q3 2013 owing to lower volumes. Volumes were impacted by lower vitamins and fish-oil based Omega-3 sales for dietary supplements in the US.
Sales in infant nutrition continued to be affected by destocking.
Although Western food & beverage markets remained sluggish, markets in high growth economies continued to develop well. Demand for premixes stayed healthy. The momentum for dietary supplements outside the US was positive and demand for DSM’s consumer business i-Health remained robust.
Animal Nutrition & Health net sales were €527 million in Q3 2014 up 2% compared to Q2 2014. Organic sales growth was 4% driven by global volume growth with strong performance from the premix businesses. The impact of the significantly lower spot prices for Vitamin E was still limited in Q3.
DSM Food Specialties delivered strong organic growth and continued to gain market share in both enzymes and cultures.
