DSM sees profits soar as innovation drives success

© iStock/ Andrey Popov

One of the world’s biggest makers of nutritional ingredients, Royal DSM, saw pre-tax profits increase by 17% last year, with a strong performance from its nutrition division.

The Dutch supplier of vitamins and omega-3 reported a 3% growth in total sales and a net profit of €629 million for FY 2016, compared to €92 m in 2015, citing innovation for its success.

Western Europe, excluding the Netherlands, had the highest sales figures (€1877 m) for the year, whereas India had the lowest (€178 m).

In particular, the nutrition division saw a 4% rise in sales, reaching €5.1 bn in sales, despite having lower sales of Vitamin C due to a maintenance stop of DSM’s plant in China.

Just under a third of the nutrition division’s sales is made up from vitamin production.

Feike Sijbesma, CEO of DSM, said nutrition had achieved “a year of strong organic growth” which helped the company reach figures well ahead of their strategic goals.

DSM credited its organic growth in Human Nutrition and Health to its strategy of driving above-market growth through new market initiatives and innovation, and its higher sales levels of hydrocolloids, enzymes and savory.

The supplier also commended the growth in i-Health, food & beverages, and infant nutrition.

In an interview with Bloomberg, Sijbesma said the Chinese infant nutrition market had seen a shift as it had previously been dominated by international players but was now seeing an increase in local Chinese players in the industry.

“Those are our customers as well, we benefit from the continued growth in infant formula, whoever is in the stakes for that position; international players or local players, we serve both of them,” he said.

Animal Nutrition and Health had 8% organic growth, with growth in all regions apart from Latin America.

Nutrition’s adjusted EBIDTA in FY 2016 was up 13% compared to 2015, reaching €931 m, despite some end of year incidental costs and marketing campaigns in human nutrition.

After falling €1.72 to €59.24 this morning, DSM share prices are now climbing and at the time of publishing sit at €60.29.

Sijbesma said he is confident the company can continue to deliver strong sales figures in 2017.

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