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Press Release

November 5, 2019

DSM reports results first nine months 2019

DSM reports a good first nine months in 2019 with a solid performance in Q3.

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Heerlen, NL, 05 Nov 2019 07:00 CET

Highlights1,2,3
  • DSM reports good first nine months, with a solid performance in Q3
  • Results compared to Underlying business in first nine months 2018:
    • Group sales +3%, Adjusted EBITDA up 11% (including 3% from IFRS 16)
    • Nutrition: organic sales +4%, Adjusted EBITDA up 13% (including 3% from IFRS 16)
    • Materials: organic sales –7% (-5% volume), Adjusted EBITDA flat (including 2% from IFRS 16)
  • Total Net profit €640m, up versus first nine months 2018 of €821m when correcting for the temporary vitamin effect of €290m EBITDA
  • Adjusted Net Operating Free Cash Flow €550m, up 4% versus first nine months 2018 which included the temporary vitamin effect of €290m EBITDA
  • Full year outlook maintained
Key figures and indicators
in € millionJan - Sep 2019Jan - Sep 2018% change
  Underlying
business1		Temporary
vitamin effect		Total
Group		Underlying
Organic growth1		FX &
‘other’1		Underlying
total growth1		Temporary
vitamin effect		Total
Group
Sales6,8586,6444157,0590%3%3%-6%-3%
Nutrition4,5734,2784154,6934%3%7%-10%-3%
Materials2,1142,215 2,215-7%2%-5% -5%
Adjusted EBITDA1,2881,1622901,452  11%-22%-11%
Nutrition9568472901,137  13%-29%-16%
Materials391393 393  0% 0%
Innovation161 1     
Corporate-75-79 -79     
EBITDA1,2391,1242901,414     
Adjusted EBITDA margin18.8%17.5% 20.6%     

1) In 2018 DSM benefitted from a temporary vitamin effect (see page 5 of PDF). Underlying (business) is defined as the performance measure sales and Adjusted EBITDA, corrected for DSM’s best estimate of this temporary vitamin effect.
2) Adjusted EBITDA is an Alternative Performance Measure (APM) that reflects continuing operations.
3) DSM adopted IFRS 16 as per its effective date of 1 January 2019 and has not restated 2018 (see page 19 of PDF).

CEO statement

Feike Sijbesma, CEO/Chairman DSM Managing Board, commented: “I am pleased to report again a good nine-month performance, together with a solid third quarter.

"In the quarter, Nutrition delivered a good performance with 4% organic growth and Adjusted EBITDA up 12%, despite some softness in Human Nutrition. Materials experienced ongoing challenging conditions in some of its end-markets, especially in China. Dyneema continued to perform strongly. The earnings performance highlights the relative resilience of our specialty Materials portfolio with a slight Adjusted EBITDA decline of 2%. We made good progress, with our large innovation projects, like Veramaris, Clean Cow and Avansya."

"We are on track to deliver 2019 in line with our targets, and therefore maintain our full year outlook. DSM continues to be well positioned to deliver its ambitious Strategy 2021, with its growth platforms together with increased customer centricity and its large innovation projects, while at the same time remaining focused on cost control and operational excellence.”

Q3 Highlights1,2,3
  • DSM reports a solid Q3
  • Results compared to Underlying business in Q3 2018:
    • Group sales +3%, Adjusted EBITDA up 9% (including 3% impact from IFRS 16)
    • Nutrition: organic sales +4%, Adjusted EBITDA up 12% (including 3% impact from IFRS 16)
    • Materials: organic sales –7% (-3% volume), Adjusted EBITDA down 2% (including 2% impact from IFRS 16)
Key figures and indicators
in € millionQ3 2019Q3 2018% change
  Underlying
business1		Temporary
 vitamin effect		Total
Group		Underlying
Organic growth1		FX &
‘other’1		Underlying
total growth1		Temporary
 vitamin effect		Total
 Group
Sales2,2902,215502,2650%3%3%-2%1%
Nutrition1,5441,438501,4884%3%7%-3%4%
Materials687723 723-7%2%-5% -5%
Adjusted EBITDA42639115406  9%-4%5%
Nutrition31728315298  12%-6%6%
Materials129132 132  -2% -2%
Innovation51 1     
Corporate-25-25 -25     
EBITDA41637015385     
Adjusted EBITDA margin18.6%17.7% 17.9%     

1) In 2018 DSM benefitted from a temporary vitamin effect (see page 5 of PDF). Underlying (business) is defined as the performance measure sales and Adjusted EBITDA, corrected for DSM’s best estimate of this temporary vitamin effect.
2) Adjusted EBITDA is an Alternative Performance Measure (APM) that reflects continuing operations.
3) DSM adopted IFRS 16 as per its effective date of 1 January 2019 and has not restated 2018 (see page 19 of PDF).

Outlook 2019

DSM maintains its full year outlook: DSM 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 Underlying Adjusted Net Operating Free Cash Flow in line with its Strategy 2021 targets. This outlook excludes the impact of IFRS 16.

Share Buy-Back program

On 1 April 2019, DSM commenced its ordinary share repurchase program of an aggregate market value of €1 billion, with the intention to reduce its issued capital, as first announced on 14 February 2019. This program is in addition to the regular repurchase programs to cover commitments under share-based compensation plans and the stock dividend. Up to and including 31 October 2019 DSM has repurchased 5.3 million shares for a total consideration of €563 million; 2.6 million shares relate to the regular repurchase programs and 2.7 million shares relate to the €1 billion share buy-back program.

Key figures and indicators (comparison with January – September 2018 excluding temporary vitamin effect)
in € millionJan - Sep 2019Jan - Sep 2018% changeVolumePrice/mixFXOther
Sales6,8586,6443%0%0%2%1%
Nutrition4,5734,2787%3%1%2%1%
Materials2,1142,215-5%-5%-2%2%0%
Innovation Center140118     
Corporate Activities3133     
in € millionQ3 2019Q3 2018% changeVolumePrice/mixFXOther
Sales2,2902,2153%1%-1%2%1%
Nutrition1,5441,4387%3%1%2%1%
Materials687723-5%-3%-4%2%0%
Innovation Center5043     
Corporate Activities911     
in € million including IFRS 16 impactJan - Sep 2019Jan - Sep 2018% changeQ3 2019Q3 2018% change
Sales6,8586,6443%2,2902,2153%
Adjusted EBITDA1,2881,16211%4263919%
Nutrition95684713%31728312%
Materials3913930%129132-2%
Innovation Center161 51 
Corporate Activities-75-79 -25-25 
Adjusted EBITDA margin18.8%17.5% 18.6%17.7% 
ROCE %12.7%13.6%    
in € million excluding IFRS 16 impactJan - Sep 2019Jan - Sep 2018% changeQ3 2019Q3 2018% change
Adjusted EBITDA1,2501,1628%4133916%
Nutrition93484710%3092839%
Materials386393-2%127132-4%
Innovation Center151 51 
Corporate Activities-85-79 -28-25 
Adjusted EBITDA margin18.2%17.5% 18.0%17.7% 
ROCE %13.0%13.6%    

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 January - September 2018 including temporary vitamin effect)
in € millionJan - Sep 2019Jan - Sep 2018% changeVolumePrice/mixFXOther
Sales6,8587,059-3%1%-7%2%1%
Nutrition4,5734,693-3%4%-10%2%1%
Materials2,1142,215-5%-5%-2%2%0%
Innovation Center140118     
Corporate Activities3133     
in € millionQ3 2019Q3 2018% changeVolumePrice/mixFXOther
Sales2,2902,2651%2%-4%2%1%
Nutrition1,5441,4884%4%-4%3%1%
Materials687723-5%-3%-4%2%0%
Innovation Center5043     
Corporate Activities911     
in € million, incl. IFRS impact where applicableJan - Sep 2019Jan - Sep 2018% changeQ3 2019Q3 2018% change
Sales6,8587,059-3%2,2902,2651%
Adjusted EBITDA1,2881,452-11%4264065%
Nutrition9561,137-16%3172986%
Materials3913930%129132-2%
Innovation Center161 51 
Corporate Activities-75-79 -25-25 
Adjusted EBITDA margin18.8%20.6% 18.6%17.9% 
EBITDA1,2391,414 416385 
Adjusted EBIT8441,100-23%276283-2%
EBIT7841,049 266249 
Capital Employed9,3308,221    
Average Capital Employed8,8437,960    
ROCE (%)12.7%18.4%    
Effective tax rate118.0%18.0%    
Adjusted net profit2659852-23%24420917%
Net profit - Total DSM2640821-22%23918827%
Adjusted net EPS3.684.82-24%1.361.1815%
Net EPS - Total DSM3.574.64 1.331.06 
Operating Cash Flow9419331%4344301%
Adjusted Net Operating Free Cash Flow5505294%293303-3%
Capital Expenditures3410445 146150 
Net debt4852680    
Average number of ordinary shares176.3175.2 176.2175.7 
Workforce (headcount end of period)22,20420,977    

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 September 2019 includes €217 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.

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