HEERLEN, THE NETHERLANDS – EBITDA for Royal DSM jumped 27% in the third quarter of 2013 as gains from acquisitions more than offset lower demand for omega-3 fatty acids used in dietary supplements. In the quarter, Royal DSM reported EBITDA of €342 million ($460 million), up from €270 million ($364 million) in the previous year’s third quarter. Third-quarter net sales of €2,397 million ($3,227 million) were up 4% from €2,304 million ($3,102 million) in the previous year’s third quarter.
“I am pleased to report increased profitability in all our business clusters despite the initial impact from adverse currency movements and a continued challenging macro-economic environment,” said Feike Sijbesma, chief executive officer and chairman of the DSM managing board, when the company gave financial results Nov. 5. “Nutrition continues its good performance notwithstanding some headwinds that emerged towards the end of Q3. Materials Sciences also delivered solid results with higher profits.”
DSM’s Nutrition cluster in the third quarter had EBITDA of €242 million, up 20% from €202 million, and net sales of €1,061 million, up 12% from €945 million. Recent acquisitions mainly drove sales.
Within human nutrition and health, retail price increases affected demand for fish oil-based omega-3 fatty acid dietary supplements. The entire value chain pushed through higher raw materials prices, according to DSM.
Human nutrition and health had 5% organic growth in the third quarter, mainly driven by volume. Organic sales development fell 5%, driven by soft demand faced by food and beverage customers in developed markets. Fortitech, Inc. had third-quarter sales of €47 million and EBITDA of €12 million. DSM completed its acquisition of Fortitech in December of 2012.
The contribution of a cultures and enzymes business acquired from Cargill in 2012 drove sales growth for DSM Food Specialties in the third quarter of 2013.
Through the first nine months of 2013 Royal DSM companywide had EBITDA of €924 million, up from €774 million in the same time period of the previous year, and net sales of €7,241 million, up from €6,862 million. For the full year DSM expects EBITDA to top the €1.1 billion mark reached in 2012.“The challenging macro-environment experienced during the first three quarters of 2013 continues, with little or no growth in Europe,” DSM said. “Asia continues to show good levels of economic activity, though at more modest levels, while the U.S. maintains a modest rate of recovery.”