DSM have announced strong results for 2016, well ahead of strategic goals. Sales were up 3% to €7,920m ($8,362m), with 4% organic growth. Adjusted EBITDA up 17% to €1,262m ($1,331m), ROCE up 280 bps to 10.4% driven by 38% increase in Adjusted EBIT. Cash from operating activities were up 27% to €1,018m ($,1074m), and a reported net profit of €629m ($663m) compared to €92m in 2015.

Feike Sijbesma, CEO/Chairman of the DSM Managing Board, commented: “With today’s results, we are clearly delivering on the goals we set out at the end of 2015. We are pleased to report a very good year, in which we achieved strong EBITDA and ROCE growth, well ahead of the mid-term targets set out in Strategy 2018: Driving Profitable Growth.

Nutrition achieved a year of strong organic growth, in both Animal and Human Nutrition & Health. The Materials transformation is apparent in strong volume and margin growth, driven by our focus on specialties. In addition, we made good progress on our extensive improvement programs. Besides stepping up our financial performance, we were also able to drive our innovation and sustainability agenda in 2016, as well as taking further steps in anchoring the organizational agility and culture that we aim at.

While macro-economic conditions are uncertain, we are confident that in 2017 we will again deliver on our strategic objectives, despite a higher comparative base year. We will continue to execute our growth initiatives, and we are firmly on track with our ambitious, group-wide cost and productivity improvement programs. In addition, we will maintain our disciplined approach to capital allocation and working capital.”

Strategy 2018: Driving Profitable Growth
Stepping up DSM’s financial performance
DSM’s Strategy 2018: Driving Profitable Growth is focused on ensuring that the potential of the business portfolio that has been created over recent years is translated into improved financial results. Reflecting its disciplined focus on performance, DSM has implemented a three-year strategic period with two headline financial targets: high single-digit percentage annual Adjusted EBITDA growth and high double-digit basis point annual ROCE growth.

In 2016, DSM’s financial results were well ahead of these headline targets. In 2016, both Nutrition and Materials showed above-market growth. The constant drive to improve capital efficiency ensured that Total Working Capital at year-end was better than the level we aspire to. There was also a significant increase in cash from operating activities.

Cost-reduction and improvement programs
DSM has instigated extensive cost-reduction and improvement programs which will deliver €250-300 million versus the 2014 baseline. In 2016, all of these well-identified programs progressed as planned and the programs are on track to deliver the targeted benefits.

Q4 2016 sales increased by 5% compared to Q4 2015. Higher volumes in human nutrition and food specialties were offset by slightly lower volumes in animal nutrition, for which the reported growth percentage was impacted by a tough comparison with prior year. Prices in animal nutrition were up in a number of vitamins and premixes, while human nutrition showed a lower price/mix. Exchange rates had a 3% positive effect, mainly driven by a stronger US dollar and Brazilian real.

Q4 2016 Adjusted EBITDA was €238 million, up 16% compared to Q4 2015, resulting from organic growth and the contribution from the efficiency improvement and cost saving programs. There were some end of year incidental costs and marketing campaigns in human nutrition.

Animal Nutrition & Health
FY 2016: Animal nutrition had a strong year with 8% organic growth, driven by strong volume growth in all regions with the exception of Latin America, due to the weak economic conditions in that region. Prices were up in a number of vitamins and premixes.

Q4 2016 sales were up 11% versus Q4 2015, with 6% organic growth mainly driven by positive price/mix, and positive FX effects. Europe, Asia and North America delivered good volume growth, reflecting continued good market conditions, wheras Latin America saw lower volumes. The reported Q4 volume growth percentage was impacted by a tough comparison with Q4 2015. Prices were up in a number of vitamins and premixes.

Human Nutrition & Health
FY 2016: Human nutrition delivered a significant step-up in organic growth in 2016 versus recent years at 4%. This highlights the successful implementationof the strategy to drive above-market growth through new market initiatives and innovation.

Q4 2016 sales: There was good volume growth in i-Health, food & beverages and infant nutrition. This growth was partly offset by lower volumes in vitamin C as a result of the extended maintenance stop of our plant in China in Q3 2016. The lower price/mix was mainly due to some special price promotion actions in dietary supplements, and a less favorable product mix.

Food Specialties
FY 2016: Food Specialties delivered solid organic growth driven by strong volume developments in hydrocolloids and enzymes.
Q4 2016: Organic growth was strong versus the same period last year, with higher volumes in hydrocolloids, enzymes and savory.

Q4 2016 sales were 6% higher than the same quarter last year, with a strong 7% volume growth driven by specialties on the back of continued favorable trading conditions. Prices were 3% lower, fully reflecting the low input costs. Seasonality effects were less pronounced than usual in Q4 2016, which is understood as demonstrating good end-use demand in many end-markets, in combination with some stocking effects as raw material costs started to increase.