DSM-Firmenich: Navigating Challenges in First Half, Aims for Growth in the Medium Term

2023-08-02 09:35:43

– DSM-Firmenich takes its bearings following a difficult first half

The merged group saw its turnover weaken during the first half. Management wanted to be pessimistic for the rest of the current financial year, but wants to return to growth in the medium term.

Posted today at 11:35 a.m.

The Firmenich campus and center of excellence, 7 rue de la Bergère in Satigny.

LUCIEN LUCKY

The merged DSM-Firmenich group saw its turnover weaken during the first half. Pessimistic for the rest of the current financial year, the management relies on the heritage of the two companies to develop its portfolio by betting on innovations.

From January to June, turnover fell by 5% to 6.1 billion euros, reports a press release published on Wednesday. “The slowdown in the activities of the Animal nutrition and health division is the repercussion of the economic situation in China”, explained co-general manager Dimitri de Vreeze to the AWP agency, also citing the fall in demand for vitamins, the chain of halted supply or even the weight of inflation.

Adjusted gross operating income (Ebitda) was posted at 929 million, or 21% less than a year earlier.

Regarding the collaboration between the two former directors of DSM and Firmenich, the co-director says he is extremely delighted. “We take advantage of both legacies to create opportunities. The pipeline is loaded and innovations will allow us to better develop these synergies.” The latter should generate around €350 million of additional adjusted EBITDA per year and overall savings of around €200 million.

Slight drop in the stock market

For 2023, management is pessimistic and does not expect macroeconomic conditions to improve. “For the Perfumes and Beauty unit, there will be no major changes. The second semester of Tastes, texture and health will also be in the same line”, warns the co-director. Adjusted EBITDA is expected between 1.8 and 1.9 billion euros.

In the medium term, “we will achieve our objectives”, assures Mr. de Vreeze, that is to say an annual organic growth in sales of 5 to 7%.

Around 11:00 a.m., the DSM-Firmenich stock fell 2% to 96.83 euros on the Amsterdam Stock Exchange.

ATS

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