Life S ciences and Materials S ciences Presentation to Investors Q3 Result s 2013, 5 November 2013 Page
Safe harbor statement This present at ion may cont ain forward-looking st at ement s wit h respect t o DSM’ s fut ure (financial) performance and posit ion. S uch st at ement s are based on current expect ations, estimates and proj ections of DS M and informat ion current ly available t o t he company. DS M caut ions readers t hat such st at ements involve cert ain risks and uncert aint ies t hat are difficult t o predict and t herefore it should be underst ood t hat many factors can cause act ual performance and position to differ materially from t hese st at ement s. DS M has no obligat ion t o updat e t he st at ement s cont ained in t his present at ion, unless required by law. A more comprehensive discussion of the risk factors affect ing DS M’ s business can be found in t he company’ s lat est Annual Report , which can be found on t he company's corporate websit e, www.dsm.com Page Page 1
Highlights Q3 2013 DSM maintains positive momentum in challenging markets • DS M records 27% higher Q3 EBITDA compared to Q3 2012 (€342 million versus €270 million) • Life S ciences EBITDA up 23% from Q3 2012 • Mat erials S ciences EBITDA up 27% from Q3 2012 • Q3 cash flow from operat ing activit ies €310 million, higher than Q3 2012 • Core Earnings per S hare Q3 2013 up 28% from Q3 2012 • Out look full year 2013 unchanged Page Page 2
Quote from Feike Sijbesma “ I am pleased t o report increased profit abilit y in all our business clust ers despit e the init ial impact from adverse currency movement s and a continued challenging macro-economic environment . Nut rit ion cont inued it s good performance not wit hst anding some headwinds t hat emerged t owards t he end of Q3. Mat erials S ciences also delivered solid performance wit h higher profit s. Our focus remains on t he full int egrat ion of acquisit ions and delivery of synergies, which t oget her wit h cont inued success in our wide- ranging Profit Improvement Program will help improve DS M’ s ret urns. Current t rading condit ions are similar t o t hose experienced at t he end of Q3, while foreign exchange rat es det eriorat ed. Nevert heless, we are firmly on t rack t o deliver a significant increase in EBITDA for t he full year. The 2013 out look given at our Capit al Market s Day remains unchanged.” Feike Sijbesma CEO / Chairman of t he Managing Board Page Page 3
Results Q3 2013 - Key figures � % � % Q3-2013 Q3-2012 (€(€ million) YTD-2013 YTD-2012 Before except ional it ems: 2,397 2,304 +4% Net S ales 7,241 6,862 +6% 342 270 +27% EBITDA 998 866 +15% 206 147 +40% EBIT 598 515 +16% 148 111 +33% Core net profit 433 378 +15% 136 103 +32% Net profit 398 362 +10% 0.86 0.67 +28% Core EPS (€) 2.53 2.29 +10% 0.76 0.61 +25% EPS (€) 2.27 2.15 +6% Total DS M including exceptional items: 117 81 +44% Net profit 348 267 +30% 0.65 0.47 EPS (€) 1.98 1.57 +26% • ‘ net profit’ is the net profit att ributable to equit y holders of Koninklij ke DSM N.V .; • ‘ core net profit ’ is the net profit before exceptional items and before acquisit ion accounting related int angible asset amortization. Page 4 Page
EBITDA Q3 – DSM continuing business EBITDA (€ million) Q3-2013 Q3-2012 Q3-2011 Q3-2010 Nutrition 242 202 176 167 Pharma 12 4 13 7 Performance Materials 84 72 77 72 Polymer Int ermediat es 28 16 109 46 Innovat ion Center -4 -4 -14 -10 Corporat e Act ivit ies -20 -20 -22 -14 342 270 339 268 DSM Page Page 5
EBITDA YTD Q3 – DSM continuing business EBITDA (€ million) YTD-2013 YTD-2012 YTD– 2011 YTD-2010 Nutrition 706 589 542 521 Pharma 34 26 25 35 Performance Materials 246 228 250 227 Polymer Int ermediat es 83 115 301 156 Innovat ion Center -11 -29 -40 -36 Corporat e Act ivit ies -60 -63 -75 -18 998 866 1,003 885 DSM Page Page 6
Net sales growth Q3-2013 versus Q3-2012 Price/ (€ million) Q3-2013 Q3-2012 Diff. Volume FX Other Mix Nutrition 1,061 945 12% 5% -3% -4% 14% Pharma 183 172 6% 6% 4% -4% Performance Materials 700 703 0% 6% -2% -3% -1% Polymer Int ermediat es 374 384 -3% 3% -3% -3% Innovat ion Cent er 36 35 3% 0% 6% -3% Corporat e Act ivit ies 43 65 2,304 4% 5% -2% -4% 5% DSM 2,397 Page Page 7
Nutrition � % � % Q3-2013 Q3-2012 (€ million) YTD-2013 YTD-2012 1,061 945 12% Net sales 3,157 2,744 15% 2% Organic growth 1% 242 202 20% EBITDA 706 589 20% 22.8% 21.4% EBITDA margin 22.4% 21.5% 185 154 20% EBIT 539 456 18% Capital employed 4,682 4,122* * year-end 2012 • Sales in Q3 rose 12% compared t o Q3 2012, mainly driven by acquisit ions. Organic sales growt h was 2% compared to Q3 2012. Currencies had a -4% impact on sales compared to Q3 2012. • EBITDA for Q3 was €242 million, up 20% from Q3 2012. The increase was driven by acquisit ions, organic growth and the Profit Improvement Program. The EBITDA margin of 22.8% was again at the upper end of DS M’s target range. The favorable product mix was partly offset by the initial impact from adverse currency movement s. Page 8 Page
Nutrition - continued • Human Nutrition & Health delivered 5% organic growth compared to Q3 2012, mainly driven by volume. Compared t o the previous quart er, organic sales development was -5% driven by the soft demand faced by Food & Beverage customers in developed markets. Moreover, demand for fish oil based Omega 3 dietary supplement s was impact ed by sharp ret ail price increases as t he ent ire value chain pushed t hrough higher raw mat erials prices. Infant nut rit ion and premixes performed well. In Q3 Fortitech realized sales of €47 million and EBITDA of €12 million, in line with expectations. • Animal Nutrition & Health delivered an organic sales growth of 1% compared to Q3 2012, driven by t he cont inued recovery in global animal prot ein product ion. However, t his recovery remains fragile creat ing price pressure towards the end of t he quarter especially in vit amin E. In addit ion, poult ry and aquacult ure prot ein market s cont inued t o be impacted by diseases in several high growth economies. In Q3 Tortuga delivered sales of €76 million and EBITDA of €15 million, in line wit h expect at ions. • DSM Food Specialties showed sales growt h driven by t he cont ribut ion of t he acquired cult ures and enzymes business. Page 9 Page
Pharma � % � % Q3-2013 Q3-2012 (€ million) YTD-2013 YTD-2012 183 172 6% Net sales 548 529 4% 10% Organic growth 6% 12 4 200% EBITDA 34 26 31% 6.6% 2.3% EBITDA margin 6.2% 4.9% 0 -8 EBIT -5 -20 Capital employed 819 766* * year-end 2012 • Organic sales growth was 10% compared to Q3 2012, mainly driven by higher volumes at DS M Pharmaceutical Product s and improved pricing at DSM S inochem Pharmaceuticals. Currencies had a 4% negative impact on clust er sales. • EBITDA for the quart er grew t o €12 million from €4 million in the same quarter of 2012 mainly due t o DSM Pharmaceutical Product s. Higher sales t oget her wit h cost savings cont ribut ed t o t his posit ive development . Page 10 Page
Performance Materials � % � % Q3-2013 Q3-2012 (€ million) YTD-2013 YTD-2012 700 703 0% Net sales 2,087 2,117 -1% 4% Organic growth 2% 84 72 17% EBITDA 246 228 8% 12.0% 10.2% EBITDA margin 11.8% 10.8% 50 39 28% EBIT 145 129 12% Capital employed 2,007 2,026* * year-end 2012 • Organic sales growth was 4% compared to Q3 2012. Volumes increased in all three business groups, with DS M Dyneema delivering double-digit growth. Prices decreased at DS M Resins & Funct ional Mat erials, driven by t he continued weak European economic climate and mix effects. Prices were stable at DSM Dyneema and DSM Engineering Plast ics. Adverse currency movement s, mainly in DSM Engineering Plast ics, offset a significant part of t he clust er’s organic growt h. • EBITDA for Q3 was €84 million compared to €72 million in the same quarter of 2012. EBITDA margins continued to improve, reaching 12% in the quarter. DS M Dyneema saw its EBITDA improve significant ly compared to 2012, driven by strong t op-line growth. EBITDA of DS M Resins & Functional Mat erials showed an improvement due to st rong cost control. DSM Engineering Plast ics delivered a stable EBITDA performance, with negative currency effect s compensat ed for by cost savings. Page 11 Page
Polymer Intermediates � % � % Q3-2013 Q3-2012 (€ million) YTD-2013 YTD-2012 374 384 -3% Net sales 1,186 1,203 -1% 0% Organic growth 0% 28 16 75% EBITDA 83 115 -28% 7.5% 4.2% EBITDA margin 7.0% 9.6% 18 6 200% EBIT 55 91 -40% Capital employed* 583 447* * year-end 2012 • Organic sales development was in line with Q3 2012, with higher volumes fully offset by lower prices. Overall sales were lower due t o currency effect s. • EBITDA for the quarter was higher t han in the same quarter of 2012, when there were negative effect s from scheduled plant t urnarounds in China and the USA. Cost savings and license income also contributed to the improvement in EBITDA. Page 12 Page
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