The Dutch chemicals giant proceeded cautiously in recession-struck 2009, paying particular attention to cost control and cash generation. For the first quarter of this year, operating profit across the group is not only up significantly from the same period of last year – EBITDA is up 114 per cent to €304m – but it has also returned to the level seen in Q1 2008.
Chairman Feike Sijbesma cited the nutrition business amongst the drivers of this strong performance, as well as recovery in material sciences and the overall effect of cost saving initiatives, which had a €200m effect last year.
Sales in nutrition were up 4 per cent to €732m on the prior year period, though operating profit took as slight dip, from €141m to €138m, due to unfavourable currency exchange rates. Similar positive forces were seen at play in both DSM Food Specialities and DSM Nutritional Products.
Both the food and animal feed markets saw “healthy growth compared to last year”, the company said.
All geographies were also said to be performing well, but emerging economies like China and Brazil were especially instrumental in boosting sales growth.
Cost control
In December 2008 DSM announced 1000 job cuts across all its businesses. It did not give details of which divisions saw posts culled, but at the time it said the move would bring savings of €100m a year by the end of 2010.
In February DSM announced that is managing board will henceforth be remunerated under a restructured system, based in part around sustainability.
Board members will have a fixed salary base, but their bonus will be determined by greenhouse gas emissions, environmental product launches, and employee engagement. They will no longer be granted options.
The base salary for the managing board will not rise in 2010, for the second year running.