HEERLEN, NETHERLANDS -- 09/25/08 --
Royal DSM N.V., the global Life Sciences and Materials Sciences
company headquartered in the Netherlands, will update analysts and
investors at its annual conference in Vaalsbroek on 25 and 26
September 2008 on the progress made in its Vision 2010 strategy. DSM
is also updating its 2008 EBIT guidance today, from EUR 970 million,
with potential upside, to EUR 1,025-1,075 million on the back of
continued strength in some of DSM's businesses, particularly DSM
Agro.
"DSM continues to benefit from favorable market conditions,
particularly in Nutrition and Fertilizers, and our Materials Sciences
activities are showing sufficient resilience to the more difficult
macro-economic environment from which of course nobody is completely
immune," said Feike Sijbesma, Chairman of the DSM Managing Board.
"Since the publication of our Q2 2008 results, we have seen a
continuation of these trends, which allows us to further specify our
full year guidance."
"Our decision to focus our accelerated Vision 2010 strategy on Life
Sciences and Materials Sciences is based on global trends that are
here to stay. It puts us in an excellent position to reap financial
benefits from opportunities in our markets and create value for all
our stakeholders in the future," Sijbesma said.
Vision 2010 update
DSM's acceleration of the strategic program Vision 2010, announced in
September 2007, focuses on delivering faster growth, higher margins
and improved earnings quality from the company's portfolio. The
strategy will see the transformation of DSM into a Life Sciences and
Materials Sciences company capable of sustainable growth and reduced
sensitivity to economic cycles.
DSM recently completed the carve-out of most of the businesses which
do not fit with the accelerated shift towards Life Sciences and
Materials Sciences. The divestment process for Agro and Melamine,
Elastomers and Urea Licensing has commenced in the form of a
controlled auction process and the divestments are expected to be
completed within the timeframe of Vision 2010, as planned.
DSM is confident that the Vision 2010 targets will be achieved. In
Nutrition, the performance of the vitamins business has improved on
the back of heightened customer quality awareness, changing dynamics
in China and the current balanced market due to strong market growth,
in combination with reduced or stable production capacities. These
changing dynamics are in large part expected to be sustainable over
the medium term and have resulted in substantially higher
profitability for the Nutrition cluster. In the four quarters up to
and including Q2 2008, the Nutrition cluster met its EBITDA margin
target of at least 18%.
Performance Materials continues to demonstrate sufficient resilience
against economic headwinds, based on a well thought-out market and
innovation strategy. Polymer Intermediates continues to benefit from
a sustained healthy supply-demand balance, which is an important
prerequisite for the profitability of this business.
Earlier this month, DSM successfully increased its outstanding EUR
300 million 4.00% bond due 2015 by EUR 200 million. DSM continues to
enjoy a Single A rating from the rating agencies.
DSM Dyneema investment program
Earlier this year, plans for the largest investment program ever for
DSM Dyneema were announced, expected to involve up to USD 450 million
over the next 2-3 years, to increase production capacity for the
worlds strongest fiber(TM). Under Phase 1 of this program, projects
have been approved to build additional capacity for UD
(UniDirectional) and fiber, and construction has begun in DSM
Dyneema's Greenville (North Carolina, United States) facility, with
completion due in early 2009 and 2010, respectively. In addition,
investments have been made in process improvements in the company's
existing plants, the benefits of which are already being seen. As a
consequence of both these initiatives, DSM will substantially
increase fiber capacity and effectively double UD capacity by 2009.
In addition to the USD 450 million program, it has also been decided
to build the first dedicated line for manufacturing Dyneema Purity®
fiber at the Greenville facility. Dyneema Purity® is used among other
things for high strength medical sutures. Its versatile properties
make Dyneema Purity® a suitable material in the development of
several other innovative medical devices. The line will be
operational by mid 2010.
Trading Update and Outlook
Market conditions in Nutrition continue to be favorable, as expected,
and Performance Materials and Polymer Intermediates are showing
sufficient resilience against the deteriorating economic climate. In
some of DSM's other businesses, particularly DSM Agro, trading
conditions are more favorable than anticipated. As a result, based on
the currently available information and barring unforeseen
circumstances, DSM is updating its guidance on operating profit from
continuing operations (before exceptional items) for the year to EUR
1,025-1,075 million.
Webcast
The annual conference for analysts can be followed via an audio
webcast. For a link see the Investors section on the DSM corporate
website.
DSM - the Life Sciences and Materials Sciences Company
Royal DSM N.V. creates innovative products and services in Life
Sciences and Materials Sciences that contribute to the quality of
life. DSM's products and services are used globally in a wide range
of markets and applications, supporting a healthier, more sustainable
and more enjoyable way of life. End markets include human and animal
nutrition and health, personal care, pharmaceuticals, automotive,
coatings and paint, electrics and electronics, life protection and
housing. DSM has annual sales of almost EUR 8.8 billion and employs
some 23,000 people worldwide. The company is headquartered in the
Netherlands, with locations on five continents. DSM is listed on
Euronext Amsterdam. More information: www.dsm.com
For more information:
DSM Corporate Communications DSM Investor Relations
Herman Betten Hans Vossen
tel. +31 (0) 45 tel. +31 (0) 45 5782864
5782017 fax +31 (0) 45 5782595
fax +31 (0) 45 e-mail
5740680 investor.relations@dsm.com
e-mail media.relations@dsm.com
Press release-pdf: http://hugin.info/130663/R/1254285/273131.pdf
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