DSM reports good start to the year in challenging environment

DSM reports good start to the year in challenging environment 
HEERLEN, THE NETHERLANDS -- (Marketwired) -- 05/02/13 --    * DSM
records higher Q1 EBITDA of EUR311 million (Q1 2012: EUR306 million) 
* Healthy profitability in Life Sciences with Nutrition proving
* Materials Sciences delivered a solid performance 
* Integration of acquisitions and realization of synergies on track 
* Good progress with implementation of Profit Improvement Program 
* Outlook 2013 unchanged, moving towards EBITDA of EUR1.4
Royal DSM, the Life Sciences and Materials Sciences
company, today reported a
first quarter EBITDA of EUR311 million
compared to EUR306 million in Q1 2012 and EUR243 million in Q4 2012.
The improvement compared to Q1 2012 was realized despite a negative
caprolactam effect of EUR65 million. This was achieved in a context
of uncertain global macro-economic conditions as the European
remained weak, Asia continued to show good levels of growth
whilst the US maintained its modest rate of recovery. Life Sciences
delivered growth once again, driven by Nutrition, while Materials
Sciences performed well, except for
caprolactam. During the quarter
DSM benefited from the sale of certain DSM Resins & Functional
Materials related distribution activities. 
Commenting on the results, Feike Sijbesma, CEO/Chairman of the DSM
Managing Board, said:  "In a challenging economic environment, I'm
pleased to report a good start to
the year with a robust performance.
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 EUR1.4 billion." 

Key figures
in EUR million   
 2013       2012  +/- volume price/mix  exch. rates  other
Net sales        2.376      2.290   4%   3%      -3%        -1%       5%
Nutrition          988        900  10%   3%      -3%        -1%       11%
Pharma             178        175   2%   1%      2%         -1%
Materials          673        701  -4%  -2%      -1%        -1%       0%
Intermediates      437        430   2%   9%      -7%         0%
Innovation center   38         16
Activities          62         68
EBITDA             311         306   2%
Nutrition          215         192  12%
Pharma               8           5  60%
Materials           80          79   1%
Intermediates       29          69 -58%
Innovation Center   -4         -15
Activities         -17         -24
Core net profit    129         149 -13%
Net profit before
exceptional items  121         145 -17%
Net profit after
exceptional items  119         145 -18%
Core EPS
(EUR/share)         0,76      0,91 -16%
Net EPS before
exceptional items
(EUR/share)         0,70      0,87 -20%
Net EPS after
exceptional items
(EUR/share)         0,69      0,87 -21%
Cash flow from
operations           -78        97
expenditures (cash)  164       126
Net debt           1.932     1.668 *
* year-end 2012

In this report: 
* 'net profit' is the net profit attributable to equity holders of
DSM N.V.; 
* 'core net profit' is the net profit before exceptional items and
before     acquisition related (intangible) asset amortization. 
Note: all tables are available in the attached press release-pdf 
Review by cluster 
Sales in Q1 rose 10% compared to Q1 2012, driven primarily by
acquisitions.  Organic sales growth in Human Nutrition & Health and
DSM Food Specialties was
offset by lower sales in Animal Nutrition &
Health. Overall 3% volume growth was offset by a 3% decline due to
price/product mix effects. 
Despite some softness in established Food & Beverage markets, Q1
delivered good
organic growth in Human Nutrition & Health, driven by
increased volumes with
slightly lower prices, mainly due to mix
effects. Ocean Nutrition Canada (ONC)
and Fortitech delivered healthy
double digit growth in line with expectations.
ONC has been
successfully integrated in DSM Nutritional Products and is therefore
no longer reported separately. In Q1 Fortitech realized sales of
million and EBITDA of EUR9 million. 
Animal Nutrition & Health experienced a decline in volume and an
price/mix impact, driven by the after-effects of the
historically high grain
prices in 2012 and the resulting lower demand
that rolled through the production
and downstream value chains for
animal protein. Price increases for some vitamins were announced in
Q1 2013. 
DSM Food Specialties showed higher sales through organic growth and
the contribution of the Cultures & Enzymes business acquired from
The integration of Ocean Nutrition Canada, Fortitech and Cargill's
Cultures &
Enzymes business is proceeding well and the acquired
businesses are meeting expectations. The integration of Tortuga
started after the closing on 5 April
EBITDA for Q1 was EUR215 million, up 12% compared to Q1 2012, driven
by strong
operational performance including acquisitions, with an
overall EBITDA margin of 21.8%, well within the target range. 
Organic sales growth was 3% compared to Q1 2012, mainly driven by
higher prices
at DSM Sinochem Pharmaceuticals (DSP). Volumes at DSP
were stable. Sales of DSM
Pharmaceutical Products were at the same
level as in Q1 2012. 
EBITDA for the quarter was EUR8 million versus EUR5 million in Q1
2012. The increase
was mainly caused by lower fixed costs at DSM
Pharmaceutical Products. 
Performance Materials 
Organic sales development was -3%. Volumes declined at DSM Resins &
Materials especially in Europe in building and
construction, but were up at DSM
Engineering Plastics and DSM
Dyneema. Price increases at DSM Resins & Functional
Materials could
not fully offset the negative impact of caprolactam in DSM
Engineering Plastics. 
Q1 EBITDA was stable compared to the same period last year as
continuous cost
savings offset the -anticipated-lower margins in the
polyamide-6 value chain
caused by caprolactam. Q1 results included a
one-time book profit of a high single digit amount on the sale of
certain DSM Resins & Functional Materials
related distribution
activities. Compared to Q4 2012 EBITDA improved significantly,
benefiting from a 3% increase in sales, stable margins in
polyamide-6 value chain and lower costs. 
Polymer Intermediates 
Organic  sales growth was 2%, driven by higher volumes, which were
partly offset
by  lower prices.  Volumes in  Q1 2012 were  impacted by
 the turnaround of the caprolactam plant in Europe. In Q1 2013 there
was no turnaround. 
EBITDA declined significantly versus Q1 2012 mainly due to lower
prices and substantially higher benzene prices. Q1
included a high single digit
income as the initial e
ffect from a
long-term license agreement with Shenyuan in China for a caprolactam
plant. Compared to Q4 2012 EBITDA improved due to higher
volumes, as Q4 results were impacted by a turnaround in the US. 
Innovation Center 
DSM Biomedical showed a strong increase in sales versus Q1 2012,
mainly due to
the contribution of Kensey Nash (EUR19 million). All
other activities at the
Innovation Center were at the same level as
in Q1 2012. The POET-DSM Advanced
Biofuels JV is making good progress
with the construction of the cellulosic bio-ethanol refinery, which
is on track for timely completion. 
EBITDA increased by EUR11 million compared to Q1 2012 of which EUR7
million was due to the contribution of Kensey Nash. 
Corporate Activities 
EBITDA in Q1 2013 improved compared to Q1 2012, which was mainly due
to lower
share-based payments costs as a result of a lower share price
increase in Q1
2013 compared to Q1 2012. 
Financial overview 
Exceptional items 
Total exceptional items in the first quarter amounted to EUR11
million before tax (EUR2 million after tax), including EUR22 million
expenses related to the  Profit
Improvement Program and EUR13 million
due to acquisition and other costs, which is partly compensated for
by the book profit of EUR24 million on the sale of DEXPlastomers
Net profit 
Financial income and expense in Q1 2013 amounted to -EUR35 million,
which is EUR24 million more negative than Q1 2012. This was mainly
caused by hedge results being positive in Q1 2012 (+EUR8 million) and
negative in Q1 2013 
(-EUR3 million), higher interest and expense due to increased debt
(-EUR5 million),
lower interest income due to less cash (-EUR1
million), lower contributions from
venturing participations (-EUR4
million) and a change in presentation of pension
related interest
income and expense (-EUR3 million). 
The effective tax rate was 18%, in line with the full year 2012. 
Net profit before exceptional items in Q1 2013 decreased by EUR24
million compared
to Q1 2012 and stood at EUR121 million. Main reasons
were higher depreciation and amortization mainly due to the
acquisitions of last year as well as higher net
finance costs. 
Net earnings per ordinary share (continuing operations, before
exceptional items) amounted to EUR0.70 in Q1 2013 compared to EUR0.87
in Q1 2012. 
Cash flow, capital expenditure and financing Cash provided by
operating activities in Q1 2013 was -EUR78 million (Q1 2012: EUR97
Operating working capital increased from EUR1,936 million per end of
2012 to
EUR2,226 million per end Q1 2013 (in percentage of annualized
sales an increase
from 20.7% to 23.6%). This increase is mainly
caused by the higher trade receivables, which is partly related to
the seasonal pattern with especially
higher sales in March. 
Cash used for capital expenditure amounted to EUR164 million in Q1
2013 compared
to EUR126 million in Q1 2012. The increase is among
other things due to investments in the joint venture with POET for
advanced bio-fuels and the new
ammonium sulphate plant for Polymer
Net debt increased by EUR264 million compared to year-end 2012 and
stood at EUR1,932
million (gearing 24%). 
DSM in motion: driving
focused growth 
DSM in motion: driving focused growth is the strategy that the
company embarked
on in September 2010. It marks the shift from an era
of intensive portfolio transformation to a strategy of maximizing
sustainable and profitable growth.
DSM's strategic focus on Life
Sciences (Nutrition and Pharma) and Materials Sciences (Performance
Materials and Polymer Intermediates) is fueled by three
main societal
trends:  Global Shifts, Climate & Energy and Health & Wellness.
aims to meet the unmet needs resulting from these societal trends
with innovative and sustainable solutions. 
Below is an overview of DSM's strategic achievements in Q1 2013. 
High Growth Economies: from reaching out to being truly global DSM
entered into a license agreement with Fujian Shenyuan New Materials
Ltd. in China to supply DSM's proprietary HPO+(TM) technology
for the production
of caprolactam in a new plant consisting of two
200kt lines. This license agreement underlines DSM's position as the
global technology leader in caprolactam. A long-term supply
agreement, with an initial term of 3 years, has
been concluded under
which DSM secures a substantial part of the output of the
caprolactam plant currently under construction in China. 
DSM signed a Memorandum of Understanding (MOU) for a strategic
partnership with
Rostekhnologii (Rostec), a Russian State Corporation,
in the fields of biotechnology and functional materials. DSM also
signed an MOU with the Ministry
of Health Care in the Republic of
Tatarstan with the aim of modernizing the Republic's public health
sector through fortified nutrition. 
DSM acquired Bayer's China feed mill and farm premix business in
Chengdu, Sichuan province, China. 
Innovation: from building the machine to doubling innovation output
DSM and its joint venture partners won two awards at the Sustainable
Awards 2013 ceremony: Global Deal of the Year (for POET-DSM
Advanced Biofuels)
and Partnership of the Year (for Reverdia, the
DSM/Roquette joint venture for
bio-based succinic acid). 
DSM acquired a proprietary light trapping technology that can
significantly increase the efficiency of solar panels. With this
acquisition DSM expands its
growing portfolio of solar energy
enabling technologies in its Emerging Business
Area Advanced
Sustainability: from responsibility to business driver 
At the 2013 World Economic Forum in Davos, DSM and the United
Nations' World
Food Programma (WFP) signed an agreement to extend
their existing partnership
for three years (to 2015) to combat hidden
hunger and malnutrition in the developing world. DSM and WFP will
seek to double the number of people who benefit from their work
together, from the current annual reach of 15 million to 25-30
million per year by 2015. 
Acquisitions & Partnerships: from portfolio transformation to driving
DSM completed the sale of its participation in DEXPlastomers V.o.F.,
a 50/50
joint venture of DSM with an affiliate of ExxonMobil Chemical,
to Borealis. 
On 5 April 2013 DSM completed the acquisition of Tortuga, a privately
held Brazilian company. Tortuga is a leading company in nutritional
supplements with
a focus on pasture raised beef and dairy cattle. The
company is headquartered in Sao Paulo, Brazil with approximately
1,200 employees. The acquisition has more than doubled DSM's
workforce in Latin America to around 2,000 people. 
The challenging macro-economic environment experienced during Q4 2012
has continued into 2013, with low or no growth in Europe. Asia
continues to show
good levels of economic activity while the US has
maintained a modest rate of
DSM's outlook stays unchanged: 
The Profit Improvement Program is fully on track and is expected to
deliver structural annual EBITDA benefits of EUR150 million by 2014
and EUR200-250 million
to be fully achieved by 2015. 
Nutrition is expected to show clearly higher results than in 2012 due
to organic
growth moving towards the target of 2% above GDP and due to
the acquisitions
Business conditions in Pharma are likely to remai
n challenging, but
DSM is confident that it will be able to deliver substantially better
results, notwithstanding the usual uneven delivery patterns between
Performance Materials is expected to show improved results in 2013,
despite the
expected negative effects of caprolactam, especially
compared to the first half
of 2012. 
Polymer Intermediates is expected to show lower results than in 2012. 
For the Innovation Center the activity level will be in line with
2012, with
EBITDA clearly improving following the full year
contribution of Kensey Nash. 
Overall, based on current economic assumptions, DSM expects a step up
during 2013 due to stronger organic growth, supported by
DSM's Profit Improvement Program and as the benefits of acquisitions
and a more resilient
portfolio start to have impact. In 2013 the
focus will be on the operational
performance and integration of the
acquisitions DSM completed in 2012 with special attention to
capturing synergies. Overall, based on current economic
the above will enable DSM to move towards its 2013 EBITDA target of
EUR1.4 billion. 
Additional information 
Today DSM will hold a conference call for the media from 07.30 AM to
08.00 AM
CET and a conference call for investors and analysts from
09.00 AM to 10.00 AM
CET. Details on how to access these calls can be
found on the DSM website, www.dsm.com. Also, information regarding
DSM's Q1 result 2013 can be found in
the Presentation to Investors,
which can be downloaded from the Investors section of the DSM

Important dates
Annual General Meeting of Shareholders      Friday, 3 May 2013
Report for the second quarter               Tuesday, 6 August 2013
Report for the third quarter                Tuesday, 5 November 2013

DSM - Bright Science. Brighter Living.(TM) 
Royal DSM is a global science-based company active in health,
nutrition and materials. By connecting its unique competences in Life
Sciences and Materials
Sciences DSM is driving economic prosperity,
environmental progress and social
advances to create sustainable
value for all stakeholders. DSM delivers innovative solutions that
nourish, protect and improve performance in global
markets such as
food and dietary supplements, personal care, feed, pharmaceuticals,
medical devices, automotive, paints, electrical and electronics, life
protection, alternative energy and bio-based materials. DSM's
employees deliver annual net sales of around EUR9 billion. The
company is listed on NYSE Euronext. More information can be found at
Press release-pdf:
Financial summary Q1-pdf:
Presentation to investors Q1-pdf: http://hugin.info/130663/R/1698540/560026.pdf 
This announcement is distributed by Thomson Reuters on behalf of
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other applicable laws; and 
(ii) they are solely responsible for the content, accuracy and     
originality of the information contained therein. 
Source: DSM N.V.  via Thomson Reuters ONE 
For more information 
DSM, Corporate Communications
tel.: +31 (45) 5782421
e-mail: media.relations@dsm.com 
DSM, Investor Relations
tel.: +31 (45) 5782864
e-mail: investor.relations@dsm.com 
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