Dsm-firmenich Ag · EURONEXT:DSFIR
Dsm-firmenich — FY 2023 Earnings Presentation
37 slides from Dsm-firmenich's earnings presentation, Feb 15, 2024
Slide 1: Presentation to Investors FY 2023 results
Presentation to Investors FY 2023 results
Slide 2: Highlights
Highlights FY 2023 summary Successful creation of dsm-firmenich with integration well on track Merger-related cost and sales synergies already gaining traction Animal Nutrition & Health to be separated from the Group Solid performance across the company significantly impacted by unprecedente
Slide 3: Embarked on decisive actions addressing challenging environment
Embarked on decisive actions addressing challenging environment Strategic review Macro Micro Strong future ahead across segments Operating in a tough Own actions to Strengthen Reflected in our environment with no improve short-term portfolio mid-term targets inflection yet performance • Weakness in
Slide 4: Integration well ahead of plan
Integration well ahead of plan Operating Model Synergy Delivery Implemented and operating First €15m contribution in Q4 +500 leaders appointed in new roles Top-line Values & Behaviors Cross-selling, new solutions +5,500 participants from all and joint concepts across BUs / BPs participated in HNC, T
Slide 5: Synergy delivery well on track
Synergy delivery well on track Significant value creation Timing of incremental synergies (in €m) 125 100 75 50 100 100 100 25 35 0 15 2023Q4 2024 2025 2026 2027 Monitoring: Bi-Weekly sales synergy pipeline Split synergies per category (TTH example, pipeline recently passed €100m ) 2024 Total G&A Pu
Slide 6: Top line synergy potential validated, including cross-selling opportunities
Top line synergy potential validated, including cross-selling opportunities and the development and market introduction of new joint concepts P&B - Shampoo HNC - Flavored VMS TTH - Melody - premium TTH - Chicken Soup concept haircare sticks healthy yogurt Concept for Asian market Premix for healthy
Slide 7: Vitamin transformation with €200m cost reduction, well under way
Vitamin transformation with €200m cost reduction, well under way Separate out the Animal Vitamin B6 plant Xinghuo Simpler, more responsive Inventories reduced Nutrition & Health (ANH) closed ‘go-to-market’ model through extended business from the Group production shut-downs Vitamin C plant
Slide 8: Acceleration of strategic review: separating out Animal Nutrition & Health
Acceleration of strategic review: separating out Animal Nutrition & Health* Strategic rationale for dsm-firmenich Clear strategic benefits for ANH ● Full focus on nutrition, health and beauty to better drive superior Full potential of ANH best innovation-led growth realized through different ownersh
Slide 9: Our purpose & values – We are here for a reason
Our purpose & values – We are here for a reason To bring progress to life Essential Desirable Sustainable NEED WANT MUST Together, with our customers Shape the Be a force Own the future for good outcome 9
Slide 10: Financial Performance
Financial Performance dsm-firmenich eee
Slide 11: Group financial highlights FY & Q4 2023
Group financial highlights FY & Q4 20231 Pro forma Pro forma % Actual Pro forma % In €m FY 2023¹ FY 2022¹ Change Q4 2023 Q4 2022¹ Change Sales 12,310 13,238 (7) 3,112 3,295 (6) Organic sales growth (%) (5) (3) Adj. EBITDA 1,777 2,275 (22) 439 499 (12) Adj. EBITDA margin (%) 14.4 17.2 14.1 15.1 Adj.
Slide 12: Group full year financial highlights
Group full year financial highlights FY 2023 sales development Good performance in Perfumery & Beauty (P&B) €13,238m €12,310m 1% Solid performance in Taste, Texture & Health (TTH) (2%) (6%) Weak performance in Animal Nutrition & Health (ANH), and Health, Nutrition & Care (HNC) on unprecedented
Slide 13: Q4 2023 Group financial highlights
Q4 2023 Group financial highlights Q4 2023 sales development Market conditions broadly unchanged €3,295m 0% €3,112m (3%) P&B continued to perform well, against a soft prior year (3%) comparable period with TTH remaining resilient AHN and HNC continued to see the same unprecedented market condi
Slide 14: Perfumery & Beauty
Perfumery & Beauty Key financials Pro forma Pro forma % Actual Pro forma % in €m FY 2023¹ FY 2022¹ Change Q4 2023 Q4 2022¹ Change Sales 3,709 3,792 (2) 914 916 (0) Organic sales growth (%) 1 2 Adj. EBITDA 783 748 5 192 166 16 Adj. EBITDA margin (%) 21.1 19.7 21.0 18.1 14 1 Presents the figures on a
Slide 15: Perfumery & Beauty – FY 2023
Perfumery & Beauty – FY 2023 FY 2023 sales development €3,792m 4% €3,709m Strong performance in Perfumery, with 1% organic sales growth, owing in equal part to volumes and pricing, with a particularly (3)% (3)% strong performance in Fine fragrances Significant growth in Consumer Fragrances espec
Slide 16: Perfumery & Beauty – Q4 2023
Perfumery & Beauty – Q4 2023 Q4 2023 sales development €916m 2% organic sales growth, mainly driven by the strong 3% €914m performance of Perfumery, led by consumer ingredients, and (2)% (1)% Personal Care Partially offset by soft demand for Ingredients, which also included some year-end invento
Slide 17: Taste, Texture & Health
Taste, Texture & Health Key financials Pro forma Pro forma % Actual Pro forma % in €m FY 2023¹ FY 2022¹ Change Q4 2023 Q4 2022¹ Change Sales 3,038 3,174 (4) 768 806 (5) Organic sales growth (%) (1) (1) Adj. EBITDA 556 549 1 133 137 (3) Adj. EBITDA margin (%) 18.3 17.3 17.3 17.0 17 1 Presents the fig
Slide 18: Taste, Texture & Health – FY 2023
Taste, Texture & Health – FY 2023 FY 2023 sales development €3.174m €3,038m TTH recorded a modest 1% decline in organic sales (versus an 5% estimated double-digit growth in prior year) with strong pricing (3)% (6)% fully offset by lower volumes due to ongoing destocking and the deliberate decision
Slide 19: Taste, Texture & Health – Q4 2023
Taste, Texture & Health – Q4 2023 Q4 2023 sales development €806m (1)% organic sales development with a continued good 4% €768m performance in Taste but with Ingredients Solutions still (4)% impacted by destocking and lower volumes in lower-margin (5)% business segments Pricing was up year-on-ye
Slide 20: Health Nutrition & Care
Health Nutrition & Care Key financials Pro forma Pro forma % Actual Pro forma % in €m FY 2023¹ FY 2022¹ Change Q4 2023 Q4 2022¹ Change Sales 2,270 2,418 (6) 581 587 (1) Organic sales growth (%) (4) 4% Adj. EBITDA 389 533 (27) 94 121 (22) Adj. EBITDA margin (%) 17.1 22.0 16.2 20.6 20 1 Presents the f
Slide 21: Health Nutrition & Care – FY 2023
Health Nutrition & Care – FY 2023 FY 2023 sales development 4% lower organic sales in a challenging environment: €2.418m 2% Volumes affected mainly by persistent destocking and €2,270m (2)% softer consumer demand (6)% Continued positive pricing was partly offset by low vitamin prices Dietary Sup
Slide 22: Health Nutrition & Care – Q4 2023
Health Nutrition & Care – Q4 2023 Q4 2023 sales development Volume-led organic sales growth of 4%, with no overall change in 5% the challenging market conditions €587m €581m (5)% (1%) Dietary Supplements improved sequentially as the business began to see early signs of a stabilization in demand
Slide 23: Animal Nutrition & Health
Animal Nutrition & Health Key financials Pro forma Pro forma % Actual Pro forma % in €m FY 2023¹ FY 2022¹ Change Q4 2023 Q4 2022¹ Change Sales 3,227 3,784 (15) 833 971 (14) Organic sales growth (%) (13) (12) Adj. EBITDA 128 524 (76) 32 95 (66) Adj. EBITDA margin (%) 4.0 13.8 3.8 9.8 23 1 Presents th
Slide 24: Animal Nutrition & Health – FY 2023
Animal Nutrition & Health – FY 2023 FY 2023 sales development Global animal protein consumption remained resilient driven by €3.784m good demand for poultry. Market conditions in China remained €3,227m (2)% (6)% subdued with pork demand stabilizing in H2 but not showing the (7)% anticipated recove
Slide 25: Animal Nutrition & Health – Q4 2023
Animal Nutrition & Health – Q4 2023 Q4 2023 sales development Weak organic sales (-12%) as market dynamics remained challenging, with the business still facing very low vitamin prices €971m and weak demand for straight vitamins €833m (2)% The business continued reducing inventories as well as ac
Slide 26: FY 2023 Adj. EBITDA – Core Adj. EPS bridge
FY 2023 Adj. EBITDA – Core Adj. EPS bridge Commentary Adj. EBITDA €1,777m • Core Finex was more positive than indicated at Q3, amongst others -/- D&A €927m -/- due to reclassification of APM and the effect of energy derivatives = Core Adj. EBIT €850m • 2023 Core tax rate was 24% while -/- Finex €113
Slide 27: Strong cash delivery by disciplined OWC including inventory reductions
Strong cash delivery by disciplined OWC including inventory reductions Adj. Gross Operating Free Cash flow was €999m in 2023 (up 9% vs 2022) o H2 2023 (+€714m) saw a strong improvement versus H1 2023 (+€285m), driven by OWC/inventory management and prudency with Capex o Adj. Gross Operating Free C
Slide 28: Net Debt – Bridge H1 2023 to year-end 2023
Net Debt – Bridge H1 2023 to year-end 2023 Commentary • APM Merger + Vitamin program €bn €0.2bn in H2 2023. For 2.9 2024/2025, €0.3bn left of the 0,7 total €750m 0,1 2.2 • Net Debt end of 2023 excludes €bn 0,2 0,1 1,8 0,4 ✓ €0.7bn for Buy-out (incl. interest) of remaining DSM 0,6 0,2 B.V. shareholde
Slide 29: Outlook, Sustainability & Key priorities for 2024
Outlook, Sustainability & Key priorities for 2024
Slide 30: Strong, sustainable and profitable future ahead
Strong, sustainable and profitable future ahead Perfumery Taste, Texture Health Nutrition Animal Nutrition & Beauty & Health & Care & Health Good performance Solid performance Solid performance ex vitamin Significantly impacted by impact vitamins ✓ Innovation pipeline ✓ Synergies: revenues ✓ Synergi
Slide 31: Outlook for FY 2024
Outlook for FY 2024 2024 ‘housekeeping’ • D&A – around €235m/quarter • As the global political and economic environment remains • PPA adjustments around uncertain, and given that it is early in the year, we feel it prudent €290m/yr to base our full year outlook for the entire company only on those e
Slide 32: Pursuing our Sustainability Journey: we aim for 3 outcomes
Pursuing our Sustainability Journey: we aim for 3 outcomes • Resilience and long-term success; be partner, employer and investment of choice as innovators in nutrition, health and beauty and a leader in sustainability • Create more value for our customers and drive profitable business growth by offe
Slide 33: Climate & Nature: consolidating our sustainability leadership
Climate & Nature: consolidating our sustainability leadership Strong 2023 progress and new ambitious climate targets for 2024 New targets being set in 2024 Good Sustainability Progress in 2023 Comprehensive science-based targets submitted for validation by the Science Based Targets initiative, align
Slide 34: Decisive action to mitigate challenging macro
Decisive action to mitigate challenging macro Review Future Macro Micro (reflected in our Portfolio mid-term targets) • China • Integration • Strengthen • Macro synergies Portfolio • Vitamins • Vitamin • Micro actions • Input prices transformation • Destocking program • Stronger Portfolio • Cash 34
Slide 35: Welcome at our US Investor Event and Capital Markets Day
Welcome at our US Investor Event in February and/or our Capital Markets Day in June 22 February 2024 US INVESTOR EVENT dsm-firmenich office 250 Plainsboro Road, Plainsboro NJ 08536 3 June 2024 CMD Paris Verso 52 Rue de la Victoire, 75009 Paris 35
Slide 36: Forward-looking statements
This presentation contains forward-looking statements with respect to dsm-firmenich’s future (financial) performance and position. Such statements are based on current expectations, estimates and projections of dsm-firmenich and information currently available to the company. dsm-firmenich cautions
Slide 37: We bring progress to life
gress to dsm-firmenich ese