DSM reports positive start to the year with robust Q1 results
• Q1 EBITDA from continuing operations €306 million (Q1 2011: €325 million)
• Strong results in Life Sciences due to continued growth in Nutrition
• Materials Sciences showed strong improvement compared to Q4 2011
• Joint venture with POET established to unlock the advanced biofuels opportunity
• Recently announced planned tender offer to acquire Kensey Nash to establish DSM Biomedical as new profitable growth platform
• Cautiously optimistic outlook, on the way to achieve 2013 targets
Commenting on the results, Feike Sijbesma, CEO and chairman of the DSM Managing Board, said:
“In a challenging business environment, DSM continued to make good progress in Q1 and the robust results represent a positive start to 2012. In Life Sciences, Nutrition continued to deliver excellent performance despite the currency headwinds, benefiting from the acquisition of Martek and continued organic growth. Materials Sciences delivered an improved performance compared to the previous quarter in Performance Materials and another good result in Polymer Intermediates.
“We continue to make important steps in the execution of our strategy. During the quarter we established the joint venture with US based POET, one of the world’s largest bio-ethanol producers, to unlock the exciting potential of advanced cellulosic biofuels. Last week we announced the execution of a Merger Agreement with Kensey Nash and planned tender offer, which will put DSM Biomedical clearly on the map as the second new growth platform for DSM in addition to our Bio-based Products & Services business.
“DSM has successfully transformed itself into a Life Sciences and Materials Sciences company. Our attractive portfolio in health, nutrition and materials together with our broad geographic spread with a significant presence in high growth economies and our very strong balance sheet has positioned us well to deliver shareholder value with stronger, more stable growth and profitability. We remain cautiously optimistic for 2012 despite the uncertain macro-economic situation.”
The global macro-economic environment did not change materially in Q1 compared to the end of 2011. The European economy remained weak without showing real signs of improvement during the quarter,while the US maintained its positive momentum. The high growth economies, especially China, remainedsolid, but growth moderated from last year’s levels.
Against this background, the performance of DSM’s businesses was robust.
Overall EBITDA (€306 million) was 6 percent lower than in Q1 2011. This can be almost completely attributed to the anticipated drop in Polymer Intermediates, which had record results in 2011.
Nutrition continued its profitable growth. Due to good trading conditions and the Martek acquisition EBITDA was clearly higher, despite the combined effect (approximately €20 million in the quarter) of the stronger Swiss franc compared to Q1 2011 and the absence of a positive hedge result, which had eased the impact of the strong Swiss franc in 2011. Compared to Q1 2011 Martek was included for two additional months.
The Pharma performance remained weak, although first signs of improvement are visible.
Performance Materials improved its performance compared to Q4 2011 despite the weak economic conditions but was down against Q1 2011.
Polymer Intermediates continued to perform clearly above its long term trend; compared to 2011 the business was affected by anticipated lower margins and a scheduled major plant turnaround.
Cash provided by operating activities was €97 million in Q1 2012 versus €23 million in the same quarter of the previous year. Net debt decreased by €53 million compared to year-end 2011 to a level of €265 million.