• 2013 FY EBITDA substantially up to 1,314 million (2012 FY: 1,109 million) • Q4 2013 EBITDA 316 million (Q4 2012: 243 million) • Strong cash generation from operating activities of 889 million in 2013 (2012: 730 million) • Dividend increase of 10% proposed to 1.65 per ordinary share (2012: 1.50) • Share repurchase program to hedge existing option plans continues • Target for 2014 to improve business performance to at least offset negative currency impact
For the full year 2013,
For Q4 the company realized 30% higher EBITDA.
In Q4 all clusters delivered a solid performance despite negative exchange rate effects. Nutrition was in addition impacted by a combination of unrelated market headwinds. These included weakness in dietary supplements and fish oil based Omega 3 markets in the US, soft demand in Western food & beverage markets, and price pressures especially in vitamin E following weak demand in animal feed markets earlier in the year.
Due to the transaction announced with
Commenting on these results,
We remain firmly on track to deliver on our strategy and to create sustainable value with all our clusters. Therefore we propose a dividend increase of 10%. In the short term our focus will continue on the operational performance of our businesses, supported by our Profit Improvement Program and intensified R&D and innovation programs."
|fourth quarter||exch. rates|
|2,219||2,118||5%||Total continuing operations||7%||-3%||-3%||4%|
|full year||exch. rates|
|9,051||8,588||5%||Total continuing operations||5%||-3%||-3%||6%|
In this report:
- 'Organic sales growth' is the total impact of volume and price/mix.
- 'Discontinued operations' comprises net sales and operating profit (before depreciation and amortization) of
|fourth quarter||full year|
|297||230||29%||Total continuing operations||1,263||1,073||18%|
|118||71||66%||Core net profit, continuing operations||549||463||19%|
|Net profit before exceptional items,|
|-77||18|| Net profit after exceptional items, total ||271||278||-3%|
|0.68||0.42||62%||Core EPS (/share)||3.19||2.80||14%|
|Net EPS before exceptional items,|
|0.58||0.41||41%||continuing operations (/share)||2.84||2.59||10%|
|-0.46||0.10|| Net EPS after exceptional items, total ||1.52||1.62||-6%|
|426||183||Cash flow from operations||889||730|
|228||212||Capital expenditures (cash)||735||686|
In this report:
- 'Net profit' is the net profit attributable to equity holders of
- 'Core net profit' is the net profit from continuing operations before exceptional items and before acquisition accounting related intangible asset amortization;
- Joint ventures are included in the results of 2013; proportional consolidation will be terminated from 2014 onward.
- The 2013 EBITDA on comparable basis for 2014 is 1,261 million due to the discontinuation of
- From 2014 onward these entities will be reported in the line Associates and the results thereof will be shown in
Note: all tables are available in the attached Press release-PDF
Review by cluster
Sales in the fourth quarter increased 12% compared to Q4 2012, mainly driven by acquisitions. Organic sales growth was 3% compared to Q4 2012, including 4% higher volumes and 1% lower prices. Currencies had a negative impact of about 4% on sales compared to Q4 2012.
EBITDA for Q4 was 208 million, up 2% from Q4 2012. The positive impact of the organic growth, the contribution from acquisitions and the Profit Improvement Program was offset by negative foreign exchange developments, lower prices and a less favorable product mix resulting in an EBITDA margin of 20% for the quarter.
In Human Nutrition & Health net sales were 386 million in Q4. Organic sales growth in Q4 was 1% due to 1% higher price/mix. Volumes were essentially flat compared to Q4 2012 but down 5% from Q3 2013. Lower consumer demand in the US for dietary supplements, even more pronounced for fish oil based Omega 3 dietary supplements negatively impacted sales volumes in Q4. Also the food & beverage markets in Western countries were soft. Premixes and Infant Nutrition showed good performance. In Q4
In Animal Nutrition and Health net sales were 512 million in Q4. Organic sales growth in Q4 was 9% as volumes were up 12% compared to the weak Q4 2012 and 3% above Q3 2013. Price/mix had a negative effect of 3% compared to Q4 2012. A prolonged period of demand weakness earlier in the year has affected prices of several animal nutrition products negatively in 2013, most notably vitamin E. This demand weakness in combination with market speculation about possible increases in supply has increased price pressure on this vitamin. In Q4 Tortuga delivered sales of 68 million and an EBITDA of 9 million.
DSM Food Specialties had a good Q4 with continued growth in food enzymes and cultures.
Full year organic growth for the cluster was 2%. Volumes increased by 5%, while price/mix was down 3%. In Human Nutrition & Health, organic growth was 4% with volumes up 5% and price/mix down 1%. Animal Nutrition & Health organic growth was almost flat with volumes up 5% and price/mix down 4%. The EBITDA of the Nutrition cluster increased 15% in 2013, driven by the positive impact of acquisitions, organic growth and operational performance, despite a negative impact from currencies.
Overall the acquisitions have performed well in Q4 as well as the full year.
Pharma (continuing operations)
Organic sales growth at
Pharma (discontinued operations)
Organic sales growth in Q4 2013 was 5% compared to Q4 2012. Overall sales were driven by good volume growth (7%) with lower prices (2%). Adverse currency effects amounted to 3%. Volumes in Q4 2013 increased versus same period last year especially in
EBITDA for the quarter was 78 million compared to 52 million in Q4 2012 with considerable increases in all three business groups, supported by a strong execution of the Profit Improvement Program.
Full year organic sales growth was 2%, with 4% higher volumes and 2% lower prices.
Full year EBITDA was up 16% compared to 2012.
Organic sales growth in Q4 2013 was 2% compared to the same quarter last year, with higher volumes (11%) and lower prices (9%). Sales were negatively impacted by currency effects of 2%.
EBITDA for the quarter doubled compared to Q4 2012, when there was a negative effect from a plant turnaround in the US. Cost savings and license income further contributed to the improvement in EBITDA.
Full year organic sales development was in line with 2012 as higher volumes (7%) were offset by lower prices (7%). Full year EBITDA decreased compared to 2012 given the lower caprolactam prices and higher benzene prices since Q2 2012. This impact could not be completely compensated for by cost savings and license income.
Both Q4 EBITDA and full year showed an increase compared to the same period last year as a result of higher biomedical sales and lower project costs.
EBITDA of Q4 as well as for the full year improved compared to the same period in 2012, as a result of lower share-based payments costs, lower project costs and some incidentals.
Total exceptional items in the fourth quarter amounted to a loss of 192 million before tax (187 million after tax). These included a 152 million impairment of
Full yearexceptional items amounted to a loss of 270 million before tax (237 million after tax) including the 152 million impairment of
Financial income and expense in Q4 2013 decreased by 4 million and amounted to -31 million compared to
-35 million in Q4 2012. This decrease was mainly due to favorable hedge results. Full yearfinancial income and expense increased by 33 million compared to the previous year to a level of -142 million. This increase was mainly the result of unfavorable hedge results and higher interest expenses due to higher net debt.
The effective tax rate was 18%, in line with the full year 2012.
Net profit from continuing operations, before exceptional items in Q4 2013 increased by 44% and amounted to 101 million, compared to 70 million in Q4 2012. Full yearnet profit, from continuing operations before exceptional items increased by 11% and amounted to 497 million, compared to 449 million in 2012.
Net earnings per ordinary share (continuing operations, before exceptional items) increased by 41% and amounted to 0.58 in Q4 2013 compared to 0.41 in Q4 2012. Full yearnet earnings per ordinary share (continuing operations, before exceptional items) increased by 10% to a level of 2.84 compared to 2.59 in 2012.
Core net profit (net profit from continuing operations, before exceptional items and before acquisition accounting related intangible asset amortization) in Q4 2013 increased by 66% and amounted to 118 million, compared to 71 million in Q4 2012. For the full year 2013 core net profit increased by 19% and amounted to 549 million compared to 463 million in 2012.
Core net earnings per share increased by 62% and amounted to 0.68 in Q4 2013 compared to 0.42 in Q4 2012. For the full year 2013 core net earnings per share increased by 14% to a level of 3.19 compared to 2.80 in 2012.
Cash flow, capital expenditure and financing
Cash provided by operating activities in Q4 2013 was very good at 426 million (Q4 2012: 183 million) due to a strong reduction in operating working capital. Cash provided by operating activities for the full year resulted in a healthy improvement and amounted to 889 million compared to 730 million in 2012.
Total cash used for capital expenditure amounted to 228 million in Q4 2013 (Q4 2012: 212 million). Cash used for capital expenditure for the full year 2013 amounted to 735 million of which 37 million was funded by customers (2012: 686 million, of which 13 million funded by customers).
Net debt increased by 194 million compared to year-end 2012, mainly due to the acquisition of Tortuga, and stood at 1,862 million (gearing 23%).
Operating working capital(continuing operations) increased from 1,807 million at the end of 2012 to 1,873 million at the end of 2013 (OWC as a percentage of Q4 annualized sales increased from 20.7% to 21.1%).
Share repurchase program
In Nutrition DSM continues to implement further efficiency improvements (affecting some 300 positions) in support of its unique business model, emphasizing increasingly local solutions in addition to its strong global product positions. This will further strengthen its customer relationships, while increasing its ability to deliver tailor-made local applications and blends, meeting increasingly demanding requirements from customers through deeper insights and customized solutions. The Nutrition targets for 2015 are unchanged: sales growth of GDP +2% with an EBITDA-margin of 20-23%.
In Performance Materials DSM is seeking to accelerate growth and improve performance by upgrading its portfolio and leveraging opportunities arising from megatrends, implementing differentiated strategies for its business to capture profitable growth. At the same time it is implementing its Profit Improvement Program to further offset macro-economic headwinds and actively manage its margins and costs. The 2015 targets for Performance Materials are unchanged: sales growth at double GDP with an EBITDA-margin of 13-15%. In Polymer Intermediates the company continues to look at options to reduce its exposure to the merchant caprolactam markets.
Below are some highlights of
High Growth Economies: from reaching out to being truly global
Sales to high growth economies reached a level of 39% of total sales in 2013 compared to 38% in 2012. Today more than 30 percent of
Innovation: from building the machine to doubling innovation output
In 2013 innovation sales as percentage of total sales amounted to 19% compared to 18% in 2012. Gross margins of
Sustainability: from responsibility to business driver
Acquisitions & Partnerships: from portfolio transformation to driving focused growth
Upon closing of the announced transaction with JLL,
Based on the above,
Comparable EBITDA in 2013 from continuing operations after new accounting rules for Joint ventures amounted to 1,261 million.
A restatement of 2013, following the discontinuation of
Report for the first quarter of 2014 Tuesday,
Annual General Meeting of Shareholders Wednesday,
Ex-dividend date 2014 Friday,
Report for the second quarter of 2014 Tuesday,
Report for the third quarter of 2014 Tuesday,
Capital Markets Day Wednesday,
Notes to the financial statements
The full financial statements of
The consolidated financial statements of
The Managing Board
Or find us on:
For more information:
tel. +31 (0) 45 5782017
| DSM Investor Relations|
tel. +31 (0) 45 5782864
Press release-pdf http://hugin.info/130663/R/1764545/598350.pdf
Presentation to Investors http://hugin.info/130663/R/1764545/598351.pdf