Dsm-firmenich Ag · EURONEXT:DSFIR
Dsm-firmenich — Q3 2024 Earnings Presentation
29 slides from Dsm-firmenich's earnings presentation, Oct 31, 2024
Slide 1: Presentation to Investors - Q3 2024 trading update
Presentation to Investors Q3 2024 trading update October 31, 2024
Slide 2: Highlights Q3 2024
Highlights Q3 2024 Strong improvement of financial results Synergies and vitamin transformation programs firmly on track Animal Nutrition & Health separation well advanced Strategic portfolio fine-tuning progressing with the sale of marine lipids and yeast extracts Ambitious net-zero emiss
Slide 3: Q3 2024 Group financials
Q3 2024 Group financials secret Key financials Actual Actual % • Strong 8% organic sales growth in €m Q3 2024 Q3 2023 Change Sales 3,244 3,046 7 ✓ Strong performance in Perfumery & Beauty and in Taste, Texture & Health Organic sales growth (%) 8 Adj. EBITDA 541 409 32 ✓ Gradual improvement in Health
Slide 4: YTD Q3 2024 Group financials
YTD Q3 2024 Group financials secret Key financials Actual Pro forma % • 5% YTD organic sales growth, driven by 7% volume growth in €m YTD Q3 2024 YTD Q3 2023 Change Sales 9,542 9,198 4 ✓ Strong performance in Perfumery & Beauty and in Taste, Organic sales growth (%) 5 Texture & Health Adj. EBITDA 1,
Slide 5: Q3 2024 Perfumery & Beauty
Q3 2024 Perfumery & Beauty Key financials Actual Actual % Third consecutive strong quarter for P&B in €m Q3 2024 Q3 2023 Change Sales 991 920 8 Organic sales growth of 9%, with 11% higher volumes Organic sales growth (%) 9 Perfumery recorded continued strength in both Fine Fragrances Adj. EBIT
Slide 6: Q3 2024 Taste, Texture & Health
Q3 2024 Taste, Texture & Health Key financials Actual Actual % • Very strong quarter with organic sales growth of 12%, volume in €m Q3 2024 Q3 2023 Change driven, across all geographies and account categories, and partly Sales 823 737 12 bolstered by catch-up effect after destocking last year Organi
Slide 7: Q3 2024 Health, Nutrition & Care
Q3 2024 Health, Nutrition & Care Actual Actual % • Further gradual improvement in business conditions with 5% in €m Q3 2024 Q3 2023 Change organic sales growth fully driven by volumes Sales 561 545 3 ✓ Dietary Supplements: good growth with improving demand for Organic sales growth (%) 5 vitamins, mi
Slide 8: Q3 2024 Animal Nutrition & Health
Q3 2024 Animal Nutrition & Health Key financials Actual Actual % • Continued improvement, both in customer demand as well as in further in €m Q3 2024 Q3 2023 Change normalization of vitamin profitability Sales 858 823 4 • Organic sales growth: 7%, driven entirely by higher volumes Organic sales grow
Slide 9: Outlook for FY 2024 increased
Outlook for FY 2024 increased 2024 ‘housekeeping’ for H2’24 During Q3 2024, the vitamin market experienced a supply • D&A – around €235m/quarter disruption event. The resulting increase in some vitamin prices will lead to a significant temporary profit • PPA adjustments - around €290m/year contribut
Slide 10: Sustainability Investor Event - Coming soon
People. Planet. Progress. Coming soon dsm-firmenich Sustainability Investor Event best in class performance on all 3 dimensions 10
Slide 11: Strategy
Strategy
Slide 12: Our journey towards bringing progress to life
Our journey towards bringing progress to life Accelerate Tune Focus Innovation and Merge Prioritization of Creation-led Dream Full focus on high growth, high growth, backed 2 iconic building a leading margin segments by science & Bringing progress companies coming consumer with a calibrated sustaina
Slide 13: Operating in a challenging macro environment and taking decisive actions
We have been … and we took decisive operating in a and immediate actions challenging macro environment… Unprecedented dynamics Integration Vitamin Portfolio in vitamins acceleration transformation review High inflation environment Changing geopolitical dynamics Seamless operations Simpler ‘Go-to Mar
Slide 14: Cost synergy delivery with target delivery of €175+ million
Cost synergy delivery with target delivery of €175+ million Cumulative cost synergies, Cost synergy implementation ahead of € million planning Direct Indirect G&A 175+ Examples include G&A: remove role duplications, leverage GES Remove management roles duplication, leverage Global Enterprise Service
Slide 15: Strong progress on revenue synergy with customers
Strong progress on revenue synergy with customers TTH HNC P&B Strong pipeline of … translates into confidence to revenue synergies… reach targets according to plan HNC Revenue growth synergies, € m P&B 500 TTH GROUP 350+ Pipeline of revenue synergies, € m 150+ 70 25 2023 24 25 26 2026+ Q2’23 Q3’23 Q
Slide 16: Vitamin Transformation with €200m profit improvement, well under way
Vitamin Transformation with €200m profit improvement, well under way Cumulative profit improvement, € million Optimization Streamlined Improved cash 200 of site network organization management Vitamin B6 plan More focused and agile Inventories reduced Xinghuo closed organization model by ~€100m thro
Slide 17: ANH transaction in the course of 2025
ANH transaction in the course of 2025. With ANH team focusing on delivering strong results 2024 H2 2025 H2 Preparation Phase 2 Transaction phase 2024 Feb • Develop operational separation blueprint • Transaction , subject to customary • Prepare first steps of separation execution, Announcement of int
Slide 18: Macro-trends give rise to holistic well-being, fueling market opportunities
Macro-trends give rise to holistic well-being, fueling market opportunities Increasing focus on Lifespan vitality 50% Driven by growing older population Of global consumers attribute high importance to a healthy, (“>60s" from 12% to 22% by 2050) as well as Nutrition space by younger population natur
Slide 19: We are a Category of One
We are a Category of One We bring progress to life We are innovators and creators in well-being Nutrition Health Beauty Desirable Essential Sustainable Fueled and backed by Science 19
Slide 20: Post separation, we will strengthen our leadership position in Nutrition, Health and Beauty
Post separation, we will strengthen our leadership position in Nutrition, Health and Beauty Well-being Nutrition Health Beauty Fueled and backed by Science €9 bn 3 ~21,000 ~5% Sales Complementary BUs BUs Employees OSG CAGR1,2 ~20% ~7% 60 15 Adj. EBITDA margin2 Sales in R&D Countries Research hubs 1.
Slide 21: We focus on high growth, high margin segments with proven capability to add value
We focus on high growth, high margin segments with proven capability to add value Calibrated portfolio steering • Accelerated portfolio review to focus on high growth, high margin segments • Thorough assessment of Market Attractiveness, Right to Win and Capital Efficiency • Cornerstone of differenti
Slide 22: We deprioritize several businesses across our portfolio
We deprioritize several businesses across our portfolio Non-differentiated Aroma Agro Yeast Marine Vitamins Ingredients Ingredients Extracts Lipids >€100m ~€170m ~€40m ~€120m ~€170m Total sales Organic Sales Growth Adj. EBITDA Margin >€600m Low growth ~10% 22
Slide 23: A focused group consisting of 3 complementary Business Units
A focused group consisting of 3 complementary Business Units dsm-firmenich, building a company with over €10 bn sales 23
Slide 24: Committed to our mid-term objectives
Committed to our mid-term objectives • Mid-single digit percentage of organic sales growth moving to a 5-7% Sales range, supported by revenue synergies and innovations • Adjusted EBITDA margin moving to the 22-23% range, supported by Mid-Term Financial EBITDA synergies and innovations Objectives Cas
Slide 25: Pathway to achieve 5-7% Organic Sales Growth
Pathway to achieve 5-7% Organic Sales Growth Overview • Historically, Group has been delivering sustainable organic growth of 4-5% • Delivery of revenue synergies will contribute ~1pp to yearly organic sales growth in foreseeable future • Tune and acceleration growth will contribute additional ~1pp
Slide 26: Pathway to achieve 22-23% Adj. EBITDA Margin
Pathway to achieve 22-23% Adj. EBITDA Margin Overview • Historically, Group has been delivering 19-20% Adj. EBITDA margin % • 2023 margin of 18% will benefit from Vitamin transformation to gain ~1pp, mainly in HNC and to lesser extent in TTH • Delivery of synergy will add benefits and is expected to
Slide 27: Accelerating growth as a Category of One
Accelerating growth as a Category of One Where? Why? How? What? In the right space We bring progress to life Unique business model Our mid-term targets The rise of holistic well-being We capture these as a We operate from a common, We have confidence in fuels new market opportunities consumer compan
Slide 28: Forward-looking statements disclaimer
secret This presentation may contain 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
Slide 29: We bring progress to life
We bring progress to life™ dsm-firmenich ese