Company update: DSM Q1 2011
Life Sciences company DSM reported its Q1 results this week. EBITDA from continuing operations was up 14% to € 325 million. 2011 is expected to be a strong year for DSM towards achieving the 2013 targets.
Life Sciences results were driven by ongoing good performance in Nutrition and Materials Sciences posted solid results reflecting volume gains and pricing strength.
Feike Sijbesma, CEO/Chairman of the DSM
Managing Board, said: "Our robust performance in Q1 2011 represents further progress towards our 2013 targets as we continue to successfully execute our strategy. In the quarter we successfully completed our acquisition of Martek, welcoming its employees to DSM. The integration of Martek started immediately and the contribution to our profit is in line with expectations. Our business outlook for the rest of the year is positive and we expect 2011 to be a strong year for DSM."
Volatility of prices
The monetary and financial instability, reflected in volatile currency exchange rates and inflationary pressures, impacted costs. The strength of the Swiss franc affected Nutrition. The increasing input prices were, on average, compensated for by pricing strength. The events in Japan had very little impact on DSM's businesses.
Nutrition showed ongoing volume growth. This compensated for the negative effect on costs caused by the strength of the Swiss franc. Compared to Q4 2010 prices were stable. The Martek acquisition closed on 25 February and has since then been included in the Nutrition results.
Net sales increased by 16% compared to Q1 2010, of which 6% volume growth, 8% price increase and 2% currency exchange rate development (weaker euro versus the Chinese yuan and the US dollar). The sales momentum is also illustrated by a 7% higher sales level (of which 5% organic) compared to Q4 2010.
Nutrition continues to show above GDP volume growth and, although still slightly below Q1 2010, prices are stable compared to Q4 2010. Martek added € 37 million to the Nutrition sales. This was partly compensated for by the shift of the ARA sales to Martek from external sales to internal supplies.
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