DSM reports strong results pricing gains high growth markets

DSM reports strong results on pricing gains and high growth markets

10:58 AM, 13th June 2011
DSM reports strong results on pricing gains and high growth markets
Feike Sijbesma, Chairman and CEO, DSM.

  • Q1 EBITDA from continuing operations up 14 per cent to € 325 million
  • Life Sciences results driven by ongoing good performance in Nutrition
  • Materials Sciences posts solid results reflecting volume gains and pricing strength
  • Martek integration underway; EBITDA in line with expectations
  • 2011 is expected to be a strong year for DSM towards achieving the 2013 targets

 

HEERLEN, THE NETHERLANDS: For DSM, net sales increased by 16 per cent compared to Q1 2010. The company’s operating profit before depreciation and amortization EBITDA from continuing operations in Q1 (€ 325 million) was 14 per cent higher than in Q1 2010. The net profit increased from € 130 million in Q1 2010 to € 166 million in Q1 2011.

 

“Our robust performance in Q1 2011 represents further progress towards our 2013 targets. This improvement can be attributed to our focus on innovation, global customer base, excellent market positions and presence in high growth economies.

 

In the quarter we successfully completed our acquisition of Martek. The integration of Martek started immediately and the contribution to our profit is in line with expectations. Our business outlook for the rest of the year is positive and we expect 2011 to be a strong year for DSM,” said Feike Sijbesma, CEO/Chairman, DSM.

 

The macro-economic trend remained positive in Q1 2011. DSM posted solid sales growth as a result of ongoing volume growth and pricing strength and presence in high growth economies.

 

The monetary and financial instability, reflected in volatile currency exchange rates and inflationary pressures, impacted costs. The increasing input prices were, on average, compensated by pricing strength. There was no fundamental change in the challenging market conditions in pharma. Within performance materials volumes increased substantially. Price increases were implemented successfully which, on average, more than offset the increasing raw material prices. The performance of polymer intermediates was excellent. Its global presence and a very good manufacturing performance were enablers to benefit from the extremely good market conditions, DSM informed.

 

DSM has tapped into high growth economies helping its results. Net sales in China (continuing operations, in USD) increased by 21 per cent from $ 377 million in Q1 2010 to $ 458 million in Q1 2011. In India, DSM recorded a sales increase (in Euro) of 30 per cent. Russia is an increasingly important market for engineering plastics and DSM is expected to capitalize on the anticipated growth. Overall, the consensus economic outlook for 2011 is positive. DSM expects strong growth in China and the other high growth economies, together with moderate growth in mature economies.

 

The unrest in the Middle East has had no impact on DSM’s business, except for the higher oil price. Despite the headwinds from higher input costs and on balance unfavourable currencies, 2011 is expected to be a strong year for DSM. This gives DSM confidence that it will meet the EBITDA target of € 1.4 to 1.6 billion in 2013, with ROCE expected to exceed 15 per cent.

(C) WOC News

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