DSM reports H1 2020 results

HEERLEN, Netherlands, Aug. 4, 2020

H1 Highlights¹

• DSM reports a solid first half in a challenging COVID-19 environment
• Group sales -1% and Adjusted EBITDA -4%
  - Nutrition: sales +6%, organic sales +5%, Adjusted EBITDA +5%
  - Materials: sales -16%, volumes -14%, Adjusted EBITDA -28%
• Adjusted net profit down 4% to €399m. Net profit: €270m
• Adjusted Net Operating Free Cash Flow of €342m, up 33% year to date
• Interim dividend of €0.80 per ordinary share
• Outlook 2020 unchanged: DSM expects Nutrition to deliver at least a mid-single digit increase in Adjusted EBITDA, but given current limited visibility in Materials the overall earnings outlook remains suspended

Key figures and indicators

in € million	H1 2020 ARIVA.DE Börsen-Geflüster Kurse Koninklijke DSM 43,10 $ +0,19% Koninklijke DSM ADR -   0,00%	H1 2019	% Change	Volume	Price/mix	FX	Other
Sales	4,532	4,568	-1%	-1%	-1%	0%	1%
Nutrition	3,224	3,029	6%	5%	0%	-1%	2%
Materials	1,194	1,427	-16%	-14%	-3%	1%	0%
Adjusted EBITDA	825	862	-4%
Nutrition	674	639	5%
Materials	189	262	-28%
Innovation	11	11
Corporate	-49	-50
EBITDA	746	823
Adjusted EBITDA margin	18.2%	18.9%
(1) Adjusted EBITDA is an Alternative Performance Measure (APM) that reflects continuing operations.
Organic sales growth is the total impact of volume and price/mix.
Adjusted Net Operating Free Cash Flow is the cash flow from operating activities, corrected for the cash flow of      the APM  adjustments, minus the cash flow of capital expenditures and drawing rights.

Co-CEOs statement

Geraldine Matchett and Dimitri de Vreeze, Co-CEOs, commented: "Our teams continued to successfully navigate the challenging global environment, with Q2 developments in line with the expectations we set out in May. Business conditions for Nutrition were good overall in the first half, with spikes in demand for Animal Nutrition in Q1 and Human Nutrition in Q2 as end-markets reacted in response to COVID-19. Trading conditions in Materials deteriorated abruptly at the end of Q1 as customers' operations and end user demand were impacted by COVID-19, with these effects continuing throughout Q2.

Having taken early actions to limit capital expenditure and minimize operating costs in Materials, we have now also initiated the next phase of our profit improvement actions aimed at delivering annualized recurring savings of €25-30 million.

Early in the year we launched the Fit for Growth program in Nutrition. The new organizational structure, which enables a more differentiated go-to-market approach, is in place and we are now working on further building out our specialty business. Our recent acquisitions all add to our specialty solutions offerings, accelerating our growth strategy.

The global human impact of the COVID-19 pandemic is a clear lesson and therefore we have joined several of the 'Build Back Better' initiatives. As a purpose-led organization, we believe it is more important than ever for the world to commit to a more sustainable, fair and resilient future."

Q2 Highlights

• Group sales -2% and Adjusted EBITDA –8%:
  - Nutrition: sales +9%, organic sales +9%, Adjusted EBITDA +8%
  - Materials: sales –25%, volumes –21%, Adjusted EBITDA –47%
• Adjusted net profit down 15% to €183m. Total net profit: €102m
• Adjusted Net Operating Free Cash Flow of €191m, compared to €197m in Q2 2019

Key figures and indicators  

in € million	Q2 2020	Q2 2019	% Change	Volume	Price/mix	FX	Other
Sales	2,239	2,276	-2%	-2%	0%	-1%	1%
Nutrition	1,649	1,512	9%	6%	3%	-2%	2%
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