Recent acquisitions drive DSM’s Nutrition cluster

by Jeff Gelski
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HEERLEN, THE NETHERLANDS — The Nutrition cluster of Royal DSM posted a net sales increase of 11% and an EBITDA increase of 12% in the fiscal year’s first quarter. Recently acquired Ocean Nutrition Canada, Fortitech, Inc., and a cultures and enzymes business formerly owned by Cargill all provided a boost.

Net sales of €988 million ($1,293 million) in the first quarter of 2013 compared with €900 million in the first quarter of 2012. First-quarter EBITDA rose to €215 million ($281 million) from €192 million.

Ocean Nutrition Canada and Fortitech delivered double-digit growth in line with expectations. DSM no longer reports Ocean Nutrition Canada separately since it has been integrated into DSM successfully. DSM acquired the supplier of fish oil-derived omega-3 fatty acids in 2012. Fortitech, a supplier of food ingredient blends acquired in 2012, had sales of €52 million and EBITDA of €9 million in the first quarter.

The cultures and enzymes business acquired from Cargill in 2012 also contributed to higher first-quarter sales.

Companywide in the first quarter, Heerlen-based Royal DSM posted EBITDA of €311 million, up 2% from €306 million in the previous year’s first quarter, and net sales of €2,376 million, up 4% from €2,290 million.

“In a challenging economic environment, I’m pleased to report a good start to the year with a robust performance,” said Feike Sijbesma, chief executive officer/chairman of the DSM managing board. “Nutrition, which accounts for about 70% of group EBITDA, has proved the resilience and quality of its broad offering across the value chain, delivering another quarterly improvement in profitability, together with healthy margins.

“Where the last two years were characterized by acquisitions, in 2013 we will fully focus on the operational performance and the integration of acquisitions, with special attention to capturing synergies whilst also ensuring the successful execution of our group-wide profit improvement initiatives. We expect strong EBITDA growth in 2013, moving towards €1.4 billion.”
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