Management Report: 2023 Highlights
The formation of dsm-firmenich was a resounding success, with integration progressing well ahead of schedule. We’ve been witnessing tangible benefits from the merger, with merger-related cost and sales synergies gaining momentum. As part of our strategic vision, we have decided to separate the Animal Nutrition & Health segment from the Group to mitigate earnings volatility and align with our long-term objectives.
Despite facing challenges such as unprecedentedly low vitamin prices, dsm-firmenich delivered a solid performance across all fronts. The second half of the year saw a robust operating cash flow, reflecting the resilience of our operations. We are pleased to propose a stable dividend of €2.50, underlining our commitment to shareholder value.
Looking ahead, we anticipate significant earnings growth in 2024 and beyond, driven by synergies and our vitamin transformation programs. Dimitri de Vreeze, our CEO, expressed pride in the seamless operation of the company, emphasizing our position as a global leader in nutrition, health, and beauty.
In response to market conditions, we implemented immediate measures to mitigate the impact of low vitamin prices and initiated the separation of the Animal Nutrition & Health business. This strategic move aligns with our focus on high-growth, higher-margin businesses.
Our outlook for 2024 reflects cautious optimism amidst global uncertainties. We anticipate a €200 million increase in Adjusted EBITDA, driven by synergy delivery and our vitamin transformation program. With an effective Adjusted EBITDA run-rate of approximately €1.7 billion in the latter half of 2023, we project Adjusted EBITDA of at least €1.9 billion for FY 2024.
Strategy:
The merger of DSM and Firmenich positioned us as a leader in nutrition, health, and beauty, enabling us to drive innovation-led growth. We are committed to addressing societal needs while ensuring sustainability across our value chain.
Delivering Synergies Through Integration:
Our integration efforts are on track to achieve synergies of approximately €350 million Adjusted EBITDA per year. These synergies are expected to be realized through cost efficiencies and incremental revenues, primarily in our Taste, Texture & Health and Health, Nutrition & Care units.
Separation of Animal Nutrition & Health from the Group:
We have initiated the process to separate the Animal Nutrition & Health business to sharpen our focus on core growth areas. This strategic decision will reduce earnings volatility and align with our long-term objectives.
Progressing the Vitamin Transformation Program:
Our vitamin transformation program is well underway, aimed at restoring profitability and efficiency. We anticipate significant Adjusted EBITDA contributions from this program, complementing our synergy targets.
In conclusion, dsm-firmenich remains steadfast in its commitment to innovation, sustainability, and shareholder value. We are confident in our ability to navigate challenges and capitalize on opportunities for long-term growth and success.
