Press Release
May 7, 2019
DSM reports Q1 2019 results
DSM reports a good start to the year and increases full year outlook.
Heerlen, NL, 07 May 2019 07:00 CEST
Highlights1,2,3
- DSM reports a good start to the year
- Results compared to Underlying business in Q1 2018:
- Group sales up 3%, Adjusted EBITDA up 10% to €412m (up 14% to €424m including IFRS 16 impact of €12m)
- Nutrition: organic sales +3%, Adjusted EBITDA up 11% to €309m (up 14% to €316m including IFRS 16 impact of €7m)
- Materials: organic sales -5%, Adjusted EBITDA flat on €126m (up 1% to €127m including IFRS 16 impact of €1m)
- Adjusted Net Operating Free Cash Flow €60m
- Total Net profit €196m, up versus Q1 2018 of €331m when correcting for the temporary vitamin effect of €165m EBITDA following an exceptional supply disruption in the industry
- Full year outlook increased
Key figures and indicators
| in € million | Q1 2019 | Q1 2018 | % change | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Underlying business1 | Temporary vitamin effect | Total Group | Underlying Organic growth1 | FX & ‘other’1 | Underlying total growth1 | Temporary vitamin effect | Total Group | ||
| Sales | 2,292 | 2,215 | 220 | 2,435 | 1% | 2% | 3% | -9% | -6% |
| Nutrition | 1,517 | 1,430 | 220 | 1,650 | 3% | 3% | 6% | -14% | -8% |
| Materials | 717 | 738 | 738 | -5% | 2% | -3% | -3% | ||
| Adjusted EBITDA | 424 | 373 | 165 | 538 | 14% | -35% | -21% | ||
| Nutrition | 316 | 277 | 165 | 442 | 14% | -43% | -29% | ||
| Materials | 127 | 126 | 126 | 1% | 1% | ||||
| Innovation | 6 | -1 | -1 | ||||||
| Corporate | -25 | -29 | -29 | ||||||
| EBITDA | 416 | 361 | 165 | 526 | |||||
| Adjusted EBITDA margin | 18.5% | 16.8% | 22.1% | ||||||
1) Underlying (business) in 2018 is defined as the performance measures sales and Adjusted EBITDA, corrected for DSM’s best estimate of the temporary vitamin effect.
2) Adjusted EBITDA is an Alternative Performance Measure (APM) that reflects continuing operations.
3) IFRS 16 is only effective as per 1 January 2019, the 2018 figures have not been adjusted.
CEO statement
Feike Sijbesma, CEO/Chairman DSM Managing Board, commented: “I am pleased to report a good start to the year, with continued positive momentum, led by our Nutrition business, while Materials continues to demonstrate its resilience. Last year we benefitted from an exceptional growth and profit contribution in Nutrition following a supply disruption in the vitamin industry. When comparing our results excluding this special event, we realized strong, double digit Adjusted EBITDA growth in the first quarter against a very strong comparable period in the Underlying business.
With our business performance progressing in-line with our plans, we remain confident in our positive outlook for 2019. We are well positioned to deliver on our ambitious Strategy 2021 targets, which aim to deliver above market growth and strong financial performance, driven by our commitment to be a purpose led, performance driven science-based company in Nutrition, Health and Sustainable Living.”
Outlook 2019
DSM increases its full year outlook 2019 and now expects to deliver a full year 2019 high single digit increase in Adjusted EBITDA compared to prior year Underlying Adjusted EBITDA (pre-temporary vitamin effect), together with an improvement in Adjusted Net Operating Free Cash Flow in line with its Strategy 2021 targets. This outlook excludes the impact of IFRS16 (see page 18 of PDF).
Share Buy-Back program started
As per 1 April, DSM commenced its ordinary share repurchase program of an aggregate market value of €1 billion as announced on 14 February 2019, with the intention to reduce its issued capital. This program is in addition to the usual repurchase programs which DSM executes from time to time to cover commitments under share-based compensation plans and the stock dividend.
Key figures and indicators (comparison with Q1 2018 excluding temporary vitamin effect)
| in € million | YTD Q1 2019 | YTD Q1 2018 | % change | Volume | Price/mix | FX | Other |
|---|---|---|---|---|---|---|---|
| Sales | 2,292 | 2,215 | 3% | 1% | 0% | 2% | 0% |
| Nutrition | 1,517 | 1,430 | 6% | 3% | 0% | 2% | 1% |
| Materials | 717 | 738 | -3% | -6% | 1% | 2% | 0% |
| Innovation Center | 47 | 36 | |||||
| Corporate Activities | 11 | 11 |
Q1 2019 excluding IFRS 16 impact
| in € million | YTD Q1 2019 | YTD Q1 2018 | % change | Q1 2019 | Q1 2018 | % change |
|---|---|---|---|---|---|---|
| Sales | 2,292 | 2,215 | 3% | 2,292 | 2,215 | 3% |
| Adjusted EBITDA | 412 | 373 | 10% | 412 | 373 | 10% |
| Nutrition | 309 | 277 | 11% | 309 | 277 | 11% |
| Materials | 126 | 126 | 0% | 126 | 126 | 0% |
| Innovation Center | 5 | -1 | 5 | -1 | ||
| Corporate Activities | -28 | -29 | -28 | -29 | ||
| Adjusted EBITDA margin | 18.0% | 16.8% | 18.0% | 16.8% | ||
| ROCE % | 13.2% | 13.3% |
Q1 2019 including IFRS 16 impact
| in € million | YTD Q1 2019 | YTD Q1 2018 | % change | Q1 2019 | Q1 2018 | % change |
|---|---|---|---|---|---|---|
| Adjusted EBITDA | 424 | 373 | 14% | 424 | 373 | 14% |
| Nutrition | 316 | 277 | 14% | 316 | 277 | 14% |
| Materials | 127 | 126 | 1% | 127 | 126 | 1% |
| Innovation Center | 6 | -1 | 6 | -1 | ||
| Corporate Activities | -25 | -29 | -25 | -29 | ||
| Adjusted EBITDA margin | 18.5% | 16.8% | 18.5% | 16.8% | ||
| ROCE % | 12.9% | 13.3% |
In this report:
‘Organic sales growth’ is the total impact of volume and price/mix;
‘Total Working Capital’ refers to the total of ‘Operating Working Capital’ and ‘non-Operating Working Capital’;
‘Adjusted Net Operating Free Cash Flow’ is the cash flow from operating activities, corrected for the cash flow of the APM adjustments, minus the cash flow of capital expenditures and drawing rights.
Key figures and indicators (comparison with Q1 2018 including temporary vitamin effect)
| in € million | YTD Q1 2019 | YTD Q1 2018 | % change | Volume | Price/mix | FX | Other |
|---|---|---|---|---|---|---|---|
| Sales | 2,292 | 2,435 | -6% | 0% | -8% | 2% | 0% |
| Nutrition | 1,517 | 1,650 | -8% | 2% | -13% | 2% | 1% |
| Materials | 717 | 738 | -3% | -6% | 1% | 2% | 0% |
| Innovation Center | 47 | 36 | |||||
| Corporate Activities | 11 | 11 |
| in € million | YTD Q1 2019 | YTD Q1 2018 | % change | Q1 2019 | Q1 2018 | % change |
|---|---|---|---|---|---|---|
| Sales | 2,292 | 2,435 | -6% | 2,292 | 2,435 | -6% |
| Adjusted EBITDA | 424 | 538 | -21% | 424 | 538 | -21% |
| Nutrition | 316 | 442 | -29% | 316 | 442 | -29% |
| Materials | 127 | 126 | 1% | 127 | 126 | 1% |
| Innovation Center | 6 | -1 | 6 | -1 | ||
| Corporate Activities | -25 | -29 | -25 | -29 | ||
| Adjusted EBITDA margin | 18.5% | 22.1% | 18.5% | 22.1% | ||
| EBITDA | 416 | 526 | 416 | 526 | ||
| Adjusted EBIT | 279 | 423 | -34% | 279 | 423 | -34% |
| EBIT | 271 | 411 | 271 | 411 | ||
| Capital Employed | 8,907 | 7,741 | ||||
| Average Capital Employed | 8,652 | 7,753 | ||||
| ROCE (%) | 12.9% | 21.8% | ||||
| Effective tax rate1 | 18.0% | 18.0% | ||||
| Adjusted net profit2 | 200 | 337 | -41% | 200 | 337 | -41% |
| Net profit - Total DSM2 | 196 | 331 | -41% | 196 | 331 | -41% |
| Adjusted net EPS | 1.12 | 1.91 | -41% | 1.12 | 1.91 | -0.41 |
| Net EPS - Total DSM | 1.1 | 1.88 | 1.1 | 1.88 | ||
| Operating Cash Flow | 201 | 310 | -35% | 201 | 310 | -35% |
| Adjusted Net Operating Free Cash Flow | 60 | 154 | -61% | 60 | 154 | -61% |
| Capital Expenditures3 | 148 | 170 | 148 | 170 | ||
| Net debt4 | 414 | 579 | ||||
| Average number of ordinary shares | 176.1 | 174.8 | 176 | 174.8 | ||
| Workforce (headcount end of period) | 21,438 | 20,9775 |
1) Over Adjusted taxable result
2) Including result attributed to non-controlling interest
3) Cash, net of customer funding, investment grants and excluding leases
4) Net debt end of Q1 2019 includes €206 million following the adoption of IFRS 16 on ‘Leases’
5) Year-end 2018
The complete version of this press release with accompanying financial statements and the Presentation to Investors are below in PDF format.