DSM retains its outlook for 2017

By Jane Byrne contact

- Last updated on GMT

© istock/ermetico
© istock/ermetico

Related tags: Animal nutrition, Netherlands

Yesterday, DSM reported a strong first nine months for this year. Sales were up 9% to €6,456m for the vitamins and enzymes producer, with it noting 8% organic growth in the period January to September 2017.

Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) for the period was up 15% to €1,086m, driven, it said, by both nutrition and materials.

The Netherlands headquartered company also said its adjusted net profit increase 29% to €504m for the first nine months.

Animal nutrition division

The first nine months of 2017 saw 8% organic growth in animal nutrition sales, fully driven by volumes, significantly outperforming the market, said the Dutch group.

“DSM continues to benefit from its ability to address a wide range of species, as well as from its diversified geographic presence, covering all the major growth areas in the world, and its strong forward-integrated premix position.

“Market conditions were favorable year-to-date, except for Latin America where domestic demand was impacted by weak economic conditions.”

Overall prices were flat, though, said the company. Prices for some vitamins showed a positive price effect in the first half of the year but that was offset by a negative price effect in Q3, it added.

Its Q3 2017 organic animal nutrition growth was exceptionally strong at 10% driven by 14% higher volumes, said DSM.

“All regions were strong. The beef exports market in Brazil staged a rapid recovery, especially in September. Sales also benefitted from positive timing of order effects in Brazil as well as in some other geographies.”

“Prices had a 4% negative effect [in Q3], which was largely due to lower comparable prices for some of the vitamins versus 2016, when these prices spiked in the second half of the year.”

It noted sales growth is somewhat flattered by the easy comparison with Q3 last year.

Premix market presence 

September saw DSM acquire Dutch premix company, Twilmij; it said the move would strengthen its position in animal nutrition and health, particularly in Northwest European markets.

A spokesperson for DSM told FeedNavigator told us as the deal was announced that the geographical location of Twilmij was one factor in the rationale for the acquisition: “DSM does not actually have a huge number of premix facilities in the Netherlands so this acquisition addresses that. It is also a very well known and well-established player in the premix market. Moreover, the revenue trajectory of Twilmij has been impressive, exceeding the organic growth rate of the market.”

Twilmij, which is based in the center of the Netherlands and close to the German border, realizes premix production in the region of 50,000 tons per year and generates annual net sales of around €70m.

“In terms of its product portfolio, we see lots of synergies,” ​added the spokesperson.

Twilmji targets the pig, poultry and ruminant sectors, with premixes, milk substitutes and specialty products. It has a particular focus on young animal diets. It is said to be in the top three in the Netherlands and has a substantial market share in north-west Europe.

 

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