Company update: DSM Q1 2012

DSM’s expectations for the year are broadly in line with its previous guidance.

 

In addition to the already announced restructuring initiatives at DSM Resins, DSM is preparing further cost reduction programs.

 

In Nutrition, the impact of the substantial strengthening of the Swiss franc in 2011 was mitigated by a €50 million currency hedge gain, a benefit which will not be repeated in 2012. Despite this, DSM anticipates that it will make further progress, with EBITDA expected to be above 2011.

 

Business conditions in Pharma are likely to remain challenging, although DSM anticipates that it will make further strategic progress. DSM expects to deliver a slightly improved EBITDA despite the 50% deconsolidation of the anti-infectives business.

 

Trading conditions in Materials Sciences have normalized compared to Q4 2011 but continue to be volatile and the end market outlook is uncertain owing to weak consumer sentiment in some of DSM’s key geographies. In addition, increasing input costs remain a risk. Nevertheless, based on current insights, EBITDA is expected to be somewhat higher than in 2011.

 

In Polymer Intermediates prices and margins continue to be volatile. Results will be impacted in Q2 as a consequence of the end Q1 turnaround and in the second half year by two more planned turnarounds in caprolactam. For Polymer Intermediates another strong year is expected, at a level above the historical average, but EBITDA will be clearly lower than the exceptional result in 2011.

 

Overall DSM remains cautiously optimistic for the year 2012, on its way to achieve the 2013 targets.