Kaiseraugst (CH) | Heerlen (NL). (dsf) DSM-Firmenich AG reports its financial results for the first half 2023. The Release includes information that is presented on a pro forma basis as well as other alternative performance measures (APMs), and information that is presented in accordance with IFRS.
- DSM and Firmenich merger successfully completed on May 08, 2023
- Integration progressing in-line with plan, with initial benefits of synergies already being delivered
- Perfumery + Beauty and Taste, Texture + Health delivered good performances in a volatile macro-economic environment
- Weak vitamin market conditions primarily affected Animal Nutrition + Health, but also, to a lesser extent, Health, Nutrition + Care, leading to an acceleration of plans to improve performance
Chief Executives Statement
The Co-CEOs Geraldine Matchett and Dimitri de Vreeze say in their summary: «We are well advanced in the integration phase of the merger and excited by the positive response of customers to our enhanced business proposition, giving us even greater confidence in the delivery of our synergy targets. The performance of our Perfumery + Beauty and Taste, Texture + Health units in the first six months demonstrates the quality of these businesses and the synergy potential of the merger.
«As communicated in our trading update of June 28, 2023, market conditions in our vitamin activities weakened throughout the first half, impacting in particular Animal Nutrition + Health, leading to an acceleration of our plans aimed primarily at structurally improving the earnings quality and reducing the volatility of our vitamins business. We expect these measures to deliver savings of around EUR 200m annually. These are on top of our integration synergy cost savings.
«Through principally the quality of our core activities, our targeted synergies and the decisive and impactful actions recently announced, we are confident that we will realize our mid-term financial targets. All of this is underpinned by the attractive opportunities presented by our highly complementary portfolio of ingredients, science and technologies enabling us to deliver superior innovation-led growth as the world leader in nutrition, health and beauty.»
As announced on June 28, 2023, given the current weak macro-economic outlook, DSM-Firmenich does not anticipate a material improvement in business conditions in the second half of 2023. As a result, the company estimates a FY-2023 on a pro forma basis Adjusted Ebitda of between EUR 1,800-1,900 million (versus EUR 2,275 million in FY-2022). Within this, the company estimates a negative vitamin effect on full year Adjusted Ebitda of about EUR 400 million as well as a negative foreign exchange effect for DSM-Firmenich of about EUR 100 million. The vitamin effect has been exacerbated by high vitamin inventories, produced at elevated costs, delaying the expected positive impact from lower input costs in H2-2023.
For additional information please read the Company’s PDF file below (466 KB | 32 pages):20230827-DSM-FIRMENICH-H1-2023