Royal DSM : DSM reports 2019 results

All comparisons on this page are versus the Underlying business in 2018.

Full year 2019 sales

Nutrition sales were 5% higher compared to 2018, with 2% organic growth, 1% from the consolidation of Andre Pectin and 2% from exchange rates driven by the US dollar.

Q4 2019 sales

Nutrition reported minus 1% organic growth, with volumes up 1% and prices down 2%. Overall, sales were up 1% with the contribution of Andre Pectin and positive exchange rates.

Animal Nutrition delivered a solid result with strong sales growth across regions and species. Volumes were partly impacted by the continued spread of the African swine fever in China and South-East Asia. Human Nutrition had a weak quarter on the back of some softer end-markets. The Other Nutrition activities performed strongly.

Full year 2019 Adjusted EBITDA

The Adjusted EBITDA growth was 12%, including a 3% contribution from IFRS 16 and 2% from Andre Pectin (€24 million), driven by higher volumes, lower costs and a small positive foreign exchange effect. The adjusted EBITDA margin was 20.7% (including 0.5% from IFRS 16) versus 19.5% in same period last year.

Q4 2019 Adjusted EBITDA

Nutrition reported 9% growth in Adjusted EBITDA (including 3% from IFRS 16), driven by positive mix effects, lower costs and the consolidation of Andre Pectin. The Q4 2019 Adjusted EBITDA margin was 20.2% (including 0.5% from IFRS 16) versus 18.7% in Q4 2018.

Fit for Growth program

DSM is launching a program in DSM Nutritional Products (DNP) to increase its agility to drive above market profitable growth. By simplifying the operating model and further improving business steering, the program aims to better serve customers and respond to the differentiated needs of their respective end markets. At the same time, it creates a more efficient organization, which will help to adjust to a currently softer and more challenging market environment.

In both Human Nutrition and Animal Nutrition, DNP will introduce two business lines with focused customer-facing teams and differentiated go-to-market approaches.

• In Human Nutrition, the business line General Nutrition focuses primarily on the Food & Beverage segment, whilst the business line Specialty Nutrition includes the segments Early Life Nutrition, Pharma and Dietary Supplements.
• In Animal Nutrition, the business line Core Products & Premix Solutions encompasses DNP's traditional offering, whilst the business line Specialty Solutions focuses on innovative products and solutions, primarily for gut health.

The introduction of these business lines will also significantly strengthen the respective link with DNP's global Supply Chain and Innovation organizations and thus increase agility to fully seize commercial opportunities as well as successfully commercialize novel products and solutions. At the same time, this change simplifies sales operations for DNP's customer-facing teams, resulting in additional and more effective time with its customers. In order to drive faster and more integrated end-to-end decision making, DNP further enhances profit & loss responsibility with corresponding KPIs at Human Nutrition and Animal Nutrition level.

The new operating model will be enabled by a revised organizational structure. The structure is designed to support the more focused business priorities, and to operate with more streamlined central business steering. The new set-up will lead to around 350 redundancies (~3% of total DNP's workforce and ~1.5% of total DSM workforce), mainly in central and at managerial levels, affecting mostly DNP's global HQ in Switzerland and its organization in North America.