Acquisitions boost DSM's Nutrition cluster

by Jeff Gelski
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HEERLEN, THE NEHTERLANDS — Recent acquisitions, notably Ocean Nutrition Canada, lifted earnings and sales in DSM’s Nutrition cluster in the fourth quarter and fiscal year of 2012. The Nutrition cluster registered fiscal-year EBITDA of €793 million ($1,058 million), which compared with €735 million in fiscal 2011. Fiscal-year net sales of €3,667 million ($4,894 million) marked a 9% increase from €3,370 million.

In the fourth quarter the Nutrition cluster achieved EBITDA of €204 million, up from €193 million in the same time period of the previous year, and net sales of €923 million, up from €865 million. DSM in 2012 completed its acquisition of Ocean Nutrition Canada, a supplier of fish oil-derived omega-3 fatty acids and based in Nova Scotia.

“Ocean Nutrition Canada showed strong sales momentum (in the fourth quarter) with the first synergy sales being realized,” DSM said. “The Q4 results of Ocean Nutrition were in line with expectations of sales of €36 million and EBITDA of €11 million.”

The Nutrition cluster in the fiscal year experienced continued growth in advanced forms, premixes and nutritional lipids and contributions from acquisitions, DSM said.

Companywide, DSM’s EBITDA fell 16% to €1,109 million, which compared with €1,325 million in the previous fiscal year. Net profit in the fiscal year dropped 65% to €288 million, or €2.78 per share, which compared with €814 million, or €3.66 per share, in the previous fiscal year. Net sales in the fiscal year of €9,131 million marked a 1% drop from €9,048 million in the previous fiscal year.

DSM in 2012 announced eight acquisitions. Since 2010 the company has invested €2.8 billion in acquisitions, including €2.4 billion in Nutrition. In 2012, DSM acquired Cargill’s cultures and enzymes business and Fortitech, Inc., a supplier of food ingredient blends and based in Schenectady, N.Y. The Nutrition cluster now represents more than 70% of the company’s total EBITDA, said Feike Sijbesma, chief executive officer and chairman of the DSM managing board.

“In 2013 we will focus on the operational performance and integration of the acquisitions we completed in 2012 with special attention to capturing synergies,” Mr. Sijbesma said when the company gave financial results Feb. 20. “We expect strong EBITDA growth in 2013, moving towards €1.4 billion.”

DSM in the second quarter of 2012 launched a companywide profit improvement program, which includes cost reductions, efficiency improvements, sales growth and pricing. The program is on track to deliver structural annual EBITDA benefits of €150 million by 2014.
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By Robert 2/20/2013 2:50:22 PM
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