Management Report
Q3 2023 highlights
Perfumery & Beauty performed well and Taste, Texture & Health was resilient
Health, Nutrition & Care, and Animal Nutrition & Health were weak, driven by record low vitamin prices
Cash flow prioritized, resulting in an improved cash conversion ratio of 56%
Vitamin transformation and €200 million cost reduction program well under way
Merger integration process progressing well, with synergy delivery in line with plan
FY 2023 outlook: Adjusted EBITDA of around €1,800 million
Key figures
go to https://www.dsm-firmenich.com/corporate/news/press-releases/2023/dsm-firmenich-reports-q3-2023-results.htmlhttps://www.dsm-firmenich.com/corporate/news/press-releases/2023/dsm-firmenich-reports-q3-2023-results.html

Dimitri de Vreeze, CEO, commented: “In the current global economic environment we are working hard to mitigate the effects through strong internal actions. To this end, we are driving a broad range of self-help measures, with the largest contributor being the vitamin transformation program. In addition, we have pushed harder on cash flow, a key priority for us, and see good improvements this quarter. At the same time, we remain relentlessly focused on the successful integration of the merger and the delivery of our targeted synergies.

During the quarter we were pleased with the continued good performance of our Perfumery & Beauty and the resilience of our Taste, Texture & Health businesses. However, destocking continued, and vitamin prices remained under pressure, impacting particularly Animal Nutrition & Health and Health, Nutrition & Care businesses. For the remainder of the year, we do not expect a material change in these business conditions, although the last quarter will begin to reflect the contribution from our internal costs actions.

The decisive actions we are taking at this time provide a strong base from which we will be able to deliver attractive innovation-driven growth. With our market-leading and highly complementary portfolio of ingredients, science and technologies, we are confident in achieving our mid-term financial targets. We are reviewing all segments to prioritize and accelerate the company’s high growth and higher margin business. We will provide an update on progress of all our strategic actions at our Capital Markets Day next year.”

Outlook 2023
The company estimates for FY 2023, on a pro forma basis, an Adjusted EBITDA of around €1,800 million, which includes an estimated negative vitamin effect of about €500 million as well as a negative foreign exchange effect of about €90 million.

Progress on actions to improve performance
The company has embarked on a comprehensive set of short-term and mid-term focused actions:

Cash focus: addressing the current challenging near-term conditions with a wide range of cost reduction and cash flow improvement actions such as decreasing inventories and optimizing CAPEX
Vitamins: improving the profitability of its vitamin activities and structurally reducing exposure to volatility from price fluctuations. The vitamin business transformation with a €200 million cost reduction program, including plant closures, route-to-market simplification, and optimized service levels
Integration: driving the merger-related integration and revenue synergies according to the strict time plan as communicated, and accelerating the cost synergies
Strategic segment reviews: looking across all segments to prioritize and accelerate high-growth and higher-margin businesses

tijd 10.08
DSM EUR 86,01 + 6,32 vol. 283.492