DSM predicts Vit E prices to stabilize as its Q4 results show 7% animal nutrition volume growth

By Jane Byrne contact

- Last updated on GMT

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© istock.com/archix

Related tags: Nutrition

DSM said Q4 2015 sales in animal nutrition and health were strong and showed 9% organic growth, driven in particular by the premix business and specialty products. 

“Although growth rates had been anticipated to slow down in Q4 due to tougher comparative figures in 2014, volume growth in fact came in at 7%, supported by positive year-end effects on the timing of orders,”​ said the vitamin producer.

Prices showed a 2% improvement as lower vitamin E prices were more than compensated for by higher prices of other materials including in-sourced materials, said DSM.

Vitamin E prices 

In fact, in a media call on the results, CEO, Feike Sijbesma, said it expects vitamin E prices to stabilize.

He said vitamin E went down quite a bit in 2015, on top of the reductions in 2014. While does not anticipate improvements in vitamin E prices this year, it does not foresee massive impact from that additive either over the next 10 months.

The US market for omega-3 products is not recovering, added Sijbesma. In Q4 though, he said, DSM managed to generate improved results for human nutrition overall.

And the company said, on a regional level in animal health and nutrition sales, Europe and Latin America, including Tortuga in Brazil, performed well, whereas Asia was slightly weaker.

Currency developments had a negative impact on sales: “Support from the stronger US dollar was more than offset by weakness in South American currencies, especially the Brazilian real,”​ said the Dutch additives producer

It reported Q4 EBITA of €261m.

Outlook 2016

The supplements manufacturer said it aims to deliver increased full-year EBITDA in line with the targets set out in its strategy document ‘Driving Profitable Growth’

In summary, the CEO said: “DSM’s fourth quarter performance, slightly ahead of expectations, was encouraging. We are particularly pleased with our progress in nutrition, where both animal and human nutrition delivered strong organic growth.”

And he noted solid results overall for 2015.

In terms of the outlook: “We expect to make further progress with our growth initiatives in 2016 both in nutrition and performance materials although the macro-economic context remains challenging.

“These will be underpinned by our group-wide cost and productivity improvement programs as well as our disciplined focus on capital allocation and working capital.”

Sijbesma said, on the call, it will “capture the full potential”​ of the whole portfolio in the coming years and it does not anticipate any major divestments this year. 

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