November 10, 2011

 

DSM's Q3 sales for Nutrition unit increase 16%

 

DSM's sales in Q3, 2011 for the Nutrition cluster increased by 16% compared to the same period last year because of steady organic sales growth of 8%, reflecting the strong volumes in Animal Nutrition & Health, and the Martek acquisition.

 

Overall prices were in line with Q3 last year. The currency impact on sales of -2% was mainly caused by the weak US dollar. Compared to the second quarter of this year, organic sales growth was 1%, as a result of improving prices.

 

The performance of the cluster continued to be robust with EBITDA margins above 20%. EBITDA in Q3 improved compared to last year despite the negative impact of currencies of around EUR25 million (US$33.8 million) net of hedging results, mainly Swiss franc related) and higher raw material and energy costs. These negative effects were compensated for by volume growth, the effect of the Martek acquisition and the on-going efforts to optimise costs.

 

Martek delivered an excellent performance with sales of EUR84 million (US$113.7 million) and EBITDA of EUR26 million (US$35.1 million). The integration of Martek has been successfully completed. 

 

The monetary and financial instability in DSM continued to increase during Q3 with substantial currency volatility. The Swiss franc in particular appreciated very strongly, reaching an all-time high and almost parity against the euro in Q3 before stabilising at a lower, but still very high level. On average, the Swiss franc was 13% stronger against the euro compared to Q3 last year. The US dollar was 10% weaker compared to Q3 2010. 

 

The governmental austerity programmes combined with the financial turmoil and a drop in consumer and producer confidence caused a slowdown in economic growth in the developed world. The building and construction sector continues to be weak, and demand has also weakened in the electronics and electrical markets. In the high growth economies, economic growth slowed marginally, partly due to interventions to address inflationary pressure.

 

DSM believes that it is well positioned to face the challenges caused by this difficult macro-economic environment. The Life Sciences clusters are relatively resilient to the economic turmoil and DSM overall is benefiting from its strong presence in high growth economies, especially China.