DSM Reports Robust Q1 with Solid Input from Nutrition
02 May 2017 --- DSM is reporting a robust first quarter with sales up 13% to €2.159 million (US$2.35 million) and a strong input from nutrition.
According to the Q1 figures for 2017, the Netherlands-based Royal DSM - a global science-based company active in health, nutrition and materials - has net profit up 75% to €149 million (US$162 million) and is forecasting a strong outlook throughout 2017.
Cash from operating activities is up 43% to €196m (US$213 million), organic growth is up 9%, while adjusted EBITDA up 17% to €345 million (US$376 million).
"We are pleased to report a very good start to the year, with continued positive momentum in all businesses as we execute on our mid-term strategic and financial ambitions,” says
Feike Sijbesma, CEO/Chairman of the DSM Managing Board.
“Nutrition continued to deliver on its objectives with good growth from Animal and Human Nutrition. Materials demonstrated once again the benefit of its focus on specialties. Both businesses achieved strong volume growth, well above the market.”
According to DSM, Q1 2017 sales increased by 12% compared to the same period the previous year, driven predominantly by organic growth of 8%. Volume growth continued to be good across all business lines, with both animal and human nutrition benefiting in part from timing of sales between quarters. Higher prices were driven by animal nutrition. Exchange rates had a 4% positive effect, mainly coming from a stronger US dollar and Brazilian real.
Q1 2017 Adjusted EBITDA was €257 million, up 14% compared to Q1 2016, resulting from good organic growth and the profit improvement programs. Currencies had a positive effect with the stronger US dollar and Brazilian real, partly offset by the stronger Swiss franc.
Q1 2017 Adjusted EBITDA margin was 18.4%, up from 18.0% in Q1 2016, it adds.
Sales development in nutrition and health were 10% higher compared to Q1 2016 driven predominantly by higher volumes, with good growth across all regions and market segments, well above the market.
The reported volume growth in human nutrition in the quarter benefited from additional vitamin C volumes that could not be delivered in Q4. Normalized for this effect, Q1 2017 volume growth was about 5%. Prices were slightly down with lower contractual prices in Infant Nutrition and a product mix effect. Exchange rates had a positive effect led by the stronger US dollar.
And in food specialties, first quarter sales showed solid organic growth in enzymes, cultures and savory ingredients, while hydrocolloids had a weaker quarter.
“Notwithstanding the current global socio-economic volatility, we are confident that we will be able to deliver against our full-year objectives given our focus on improving our financial performance through our growth initiatives and our extensive and ambitious profit improvement programs. At the same time we continue to manage our business for the longer term by pursuing our innovation-driven growth strategy,” adds Sijbesma.
