DSM Reports Another Strong Quarter, Growth in Organic Sales

03 Nov 2016 --- DSM continues to expect to deliver full-year 2016 results ahead of the medium-term targets set out in its Strategy 2018, the companies Q3 2016 sales increased by 4% compared to Q3 2015, with a good organic sales growth of 5%. Volumes were up by 3% and price/mix up 2%, driven by higher vitamin prices. Exchange rates had a 1% negative impact on sales, mainly due to a slightly weaker US dollar.

EBITDA was €231 million, up 8% compared to Q3 2015, as a result of good organic growth and the effects of the improvement programs, despite higher costs related to marketing and sales campaigns in human nutrition and the costs related to the maintenance shut downs in vitamin E and vitamin C. The vitamin C plant in China had an extended shut down for improvement projects.

EBITDA margin was 17.7% compared to 17.0% in the same period last year, reflecting the good organic growth, supported by the progress made on the improvement programs. The margin was slightly below Q2 2016 (18.3%), as a result of higher costs in the quarter.
 
Feike Sijbesma, CEO/Chairman of the DSM Managing Board, commented: “We are pleased to report another quarter of strong operational and financial progress. This was driven by both Materials and Nutrition, reflecting the progress we are making on delivering on our Strategy 2018 through our growth initiatives as well as ambitious improvement and cost savings actions.”

“Nutrition delivered good EBITDA growth, despite additional costs in the quarter. Animal Nutrition benefited from increased vitamin prices, with solid volume growth against a tougher prior year comparison. Human Nutrition delivered strong volume growth,” he added. 

“While the global macro-economic environment remains a concern, we continue to expect that for the full year 2016, we will deliver ahead of our medium-term goals, given the strong ongoing performance of our business, underpinned by our continued focus on the improvement programs.”

Human Nutrition & Health
Organic sales growth in human nutrition was 4% compared to Q3 2015, driven by 5% higher volumes. 

Food & beverage performed well, driven by good sales volumes in Asia and Europe.

Dietary Supplements sales to North America remained relatively weak, both in multi-vitamins and fish-oil based omega-3. Outside North America, sales of these products continued to show good growth.

Infant Nutrition continued to perform well, with solid volume growth in Q3. Recent regulations in China have brought some volatility to the market.

The Food Specialties businesses delivered flat organic growth. Hydrocolloids as well as enzymes continued to deliver good growth, although some capacity constraints prevented the enzymes business from fully benefiting from continued strong customer demand. These were however offset by lower sales in the other product lines.

Animal Nutrition & Health
DSM reported sales in animal nutrition delivered 7% organic growth, with 2% volume growth and 5% improvement in price/mix compared to Q3 2015.

Volume growth of 2% was achieved against the background of strong comparative figures in 2015 (10% volume growth). Good growth was realized in premix, carotenoids and feed enzymes. Tortuga volumes were only down slightly, which was a good performance considering the tough market conditions in Latin America. Market conditions remained good in North America, Asia and Europe.

Prices showed a 5% increase versus the same period last year, driven by higher vitamin and premixes prices.