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DSM maintains positive momentum in challenging markets

DSM

HEERLEN, Netherlands, Nov. 5, 2013 (GLOBE NEWSWIRE) --

  * DSM records 27% higher Q3 EBITDA compared to Q3 2012 (€342 million versus
    €270 million)
  * Life Sciences EBITDA up 23% from Q3 2012
  * Materials Sciences EBITDA up 27% from Q3 2012
  * Q3 cash flow from operating activities €310 million, higher than Q3 2012
  * Core Earnings per Share Q3 2013 up 28% from Q3 2012
  * Outlook full year 2013 unchanged

Royal DSM, the Life Sciences and Materials Sciences company, today reported a
third quarter EBITDA of €342 million compared to €270 million in Q3 2012. This
improvement of 27% was realized despite an ongoing challenging macro-economic
environment.

Commenting on the results, Feike Sijbesma, CEO/Chairman of the DSM Managing
Board, said:
"I am pleased to report increased profitability in all our business clusters
despite the initial impact from adverse currency movements and a continued
challenging macro-economic environment. Nutrition continued its good performance
notwithstanding some headwinds that emerged towards the end of Q3. Materials
Sciences also delivered solid performance with higher profits.

Our focus remains on the full integration of acquisitions and delivery of
synergies, which together with continued success in our wide-ranging Profit
Improvement Program will help improve DSM's returns. Current trading conditions
are similar to those experienced at the end of Q3, while foreign exchange rates
deteriorated. Nevertheless, we are firmly on track to deliver a significant
increase in EBITDA for the full year. The 2013 outlook given at our Capital
Markets Day remains unchanged."

Key figures

--------------------------------------------------------------------------------
   third
  quarter

 2013   2012  +/-   in € million            volume price/mix  exch.  rates other
--------------------------------------------------------------------------------
2.397  2.304   4%   Net sales                 5%      -2%         -4%       5%

1.061    945  12%   Nutrition                 5%      -3%         -4%       14%

  183    172   6%   Pharma                    6%       4%         -4%

  700    703   0%   Performance Materials     6%      -2%         -3%       -1%

  374    384  -3%   Polymer Intermediates     3%      -3%         -3%

   36     35   3%   Innovation Center         0%       6%         -3%

   43     65        Corporate Activities


---------------------------------------------------------------------------
   third                                        January -
  quarter                                       September

 2013   2012  +/-   in € million              2013       2012          +/-
---------------------------------------------------------------------------
  342    270  27%   EBITDA                     998        866          15%

  242    202  20%   Nutrition                  706        589          20%

   12      4 200%   Pharma                      34         26          31%

   84     72  17%   Performance Materials      246        228           8%

   28     16  75%   Polymer Intermediates       83        115         -28%

   -4     -4        Innovation Center          -11        -29

  -20    -20        Corporate Activities       -60        -63



  148    111  33%   Core net profit            433        378          15%

                    Net profit before
  136    103  32%   exceptional items          398        362          10%

                    Net profit after
  117     81  44%   exceptional items          348        267          30%


---------------------------------------------------------------------------
 0,86   0,67  28%   Core EPS (€/share)        2,53       2,29          10%

                    Net EPS before
                    exceptional items
 0,76   0,61  25%   (€/share)                 2,27       2,15           6%

                    Net EPS after
                    exceptional items
 0,65   0,47  38%   (€/share)                 1,98       1,57          26%



                    Cash flow from
  310    253        operations                 463        547

                    Capital expenditures
  175    186        (cash)                     507        474

                    Net debt                 2.043      1.668 *

                    * year-end 2012





In this report:
- 'net profit' is the net profit attributable to equity holders of Koninklijke
DSM N.V.;
- 'core net profit' is the net profit before exceptional items and before
acquisition accounting related intangible asset amortization;
- 'organic sales growth' is the total impact of volume and price/mix.

Note: all tables are available in the attached Press release-pdf

Review by cluster

Nutrition



Sales in Q3 rose 12% compared to Q3 2012, mainly driven by acquisitions. Organic
sales growth was 2% compared to Q3 2012. Currencies had a -4% impact on sales
compared to Q3 2012.

EBITDA for Q3 was €242 million, up 20% from Q3 2012. The increase was driven by
acquisitions, organic growth and the Profit Improvement Program. The EBITDA
margin of 22.8% was again at the upper end of DSM's target range. The favorable
product mix was partly offset by the initial impact from adverse currency
movements.

Human Nutrition & Health delivered 5% organic growth compared to Q3 2012, mainly
driven by volume. Compared to the previous quarter, organic sales development
was -5% driven by the soft demand faced by Food & Beverage customers in
developed markets. Moreover, demand for fish oil based Omega 3 dietary
supplements was impacted by sharp retail price increases as the entire value
chain pushed through higher raw materials prices. Infant nutrition and premixes
performed well. In Q3 Fortitech realized sales of €47 million and EBITDA of €12
million, in line with expectations.

Animal Nutrition & Health delivered an organic sales growth of 1% compared to Q3
2012, driven by the continued recovery in global animal protein production.
However, this recovery remains fragile creating price pressure towards the end
of the quarter especially in vitamin E. In addition, poultry and aquaculture
protein markets continued to be impacted by diseases in several high growth
economies. In Q3 Tortuga delivered sales of €76 million and EBITDA of €15
million, in line with expectations.

DSM Food Specialties showed sales growth driven by the contribution of the
acquired cultures and enzymes business.

Pharma



Organic sales growth was 10% compared to Q3 2012, mainly driven by higher
volumes at DSM Pharmaceutical Products and improved pricing at DSM Sinochem
Pharmaceuticals. Currencies had a 4% negative impact on cluster sales.

EBITDA for the quarter grew to €12 million from €4 million in the same quarter
of 2012 mainly due to DSM Pharmaceutical Products. Higher sales together with
cost savings contributed to this positive development.

Performance Materials



Organic sales growth was 4% compared to Q3 2012. Volumes increased in all three
business groups, with  DSM Dyneema delivering double-digit growth. Prices
decreased at DSM Resins & Functional Materials, driven by the continued weak
European economic climate and mix effects. Prices were stable at DSM Dyneema and
DSM Engineering Plastics. Adverse currency movements, mainly in DSM Engineering
Plastics, offset a significant part of the cluster's organic growth.

EBITDA for Q3 was €84 million compared to €72 million in the same quarter of
2012. EBITDA margins continued to improve, reaching 12% in the quarter. DSM
Dyneema saw its EBITDA improve significantly compared to 2012, driven by strong
top-line growth. EBITDA of DSM Resins & Functional Materials showed an
improvement due to strong cost control. DSM Engineering Plastics delivered a
stable EBITDA performance, with negative currency effects compensated for by
cost savings.



Polymer Intermediates



Organic sales development was in line with Q3 2012, with higher volumes fully
offset by lower prices. Overall sales were lower due to currency effects.

EBITDA for the quarter was higher than in the same quarter of 2012, when there
were negative effects from scheduled plant turnarounds in China and the USA.
Cost savings and license income also contributed to the improvement in EBITDA.

Innovation Center



The sales level of the Innovation Center was the same as in 2012. Following the
completion of the integration  of Kensey Nash in DSM, its sales contribution is
from Q3 onward reported as part of organic growth and is no longer disclosed
separately.

EBITDA remained at the same level as Q3 2012.

Corporate Activities



EBITDA in Q3 2013 was in line with  Q3 2012. The effects of costs related to the
Dutch 'crisis tax', higher share-based payments costs, and the non-recurrence of
a profit on the sale of certain assets at the Chemelot site which was included
in Q3 2012 were compensated for by lower corporate costs.



Financial overview
Exceptional items
Total exceptional items in the third quarter amounted to a loss of €26 million
before tax (€19 million after tax). These included €6 million in expenses
related to the Profit Improvement Program, €5 million for restructuring to
capture acquisition related synergies and €15 million in acquisition and
integration related costs.

Net profit
Financial income and expense in Q3 2013 was in line with the previous quarter
and amounted to -€38 million compared to -€23 million in Q3 2012. This increase
was mainly caused by unfavorable hedge results, higher interest expense due to
increased net debt and a change in presentation of pension related interest
income and expense.

The effective tax rate was 18%, in line with the full year 2012.

Net profit before exceptional items in Q3 2013 increased by 32% and amounted to
€136 million, compared to €103 million in Q3 2012. This was mainly due to a
higher operating profit, which was partly offset by higher net finance costs.

Net earnings per ordinary share (before exceptional items) increased by 25% and
amounted to €0.76 in Q3 2013 compared to €0.61 in Q3 2012.

Core net profit (net profit before exceptional items and before acquisition
accounting related intangible asset amortization) increased by 33% and amounted
to €148 million, compared to €111 million in Q3 2012.

Core net earnings per share increased by 28% and amounted to €0.86 in Q3 2013
compared to €0.67 in Q3 2012.

Cash flow, capital expenditure and financing
Cash provided by operating activities in Q3 2013 was €310 million (Q3 2012: €253
million).

Operating working capital increased from €1,936 million at the end of 2012 to
€2,268 million at the end of Q3 2013 (OWC as a percentage of annualized sales
increased from 20.7% to 23.7%).

Cash used for capital expenditure amounted to €175 million in Q3 2013 compared
to €186 million in Q3 2012. Capital expenditure in Q3 2013 included investments
in the POET joint venture for advanced biofuels and the second caprolactam line
in China as well as the new ammonium sulfate plant for Polymer Intermediates.

Net debt increased by €375 million compared to year-end 2012, mainly due to the
acquisition of Tortuga, and stood at €2,043 million (gearing 25%).

Share buy-back program
In Q4 2013 DSM intends to repurchase 2.5 million shares in order to cover its
commitments under existing management and personnel option plans. This share
repurchase program is anticipated to continue into Q1 2014 and is the first part
of a program of in total 4-5 million shares, which was announced in September
2013.



Strategy update
DSM in motion: driving focused growth is the strategy that the company embarked
on in September 2010. It marks the shift from an era of intensive portfolio
transformation to a strategy of maximizing sustainable and profitable growth.
DSM's strategic focus on Life Sciences (Nutrition and Pharma) and Materials
Sciences (Performance Materials and Polymer Intermediates) is fueled by three
main societal trends: Global Shifts, Climate & Energy and Health & Wellness. DSM
aims to meet the unmet needs resulting from these societal trends with
innovative and sustainable solutions.

In September 2013 DSM presented a review of its strategic progress and an update
on its 2015 targets. These targets reflect a transformed portfolio and market
dynamics and include a new group EBITDA margin target of 14-15% with a ROCE
target of 11-12%.

Below is an overview of DSM's Q3 2013 achievements.

High Growth Economies: from reaching out to being truly global
Sales to high growth economies reached a level of 41% of total sales in Q3 2013
compared to 37% in Q3 2012. The strongest contribution to growth in sales to
high growth economies was in Nutrition through the acquisition of Tortuga in
Latin America. Sales to China amounted to USD 449 million, compared to USD 398
million in Q3 2012.

Innovation: from building the machine to doubling innovation output
DSM received top 10 honors in Biofuels Digest's prestigious '50 Hottest
Companies in Bioenergy' and '30 Hottest in Renewable Chemicals' polls.

Sustainability: from responsibility to business driver
DSM was once again named among the leaders in the Materials industry group
(previously named Chemicals supersector) in the Dow Jones Sustainability World
Index. Since 2004 DSM has ranked among the very top leaders in the sector four
times and has held the worldwide sustainability leader position six times.

Acquisitions & Partnerships: from portfolio transformation to driving focused
growth
DSM completed the acquisition of a 19% equity interest in Yantai Andre Pectin
Co. Ltd., a China based producer of texturing ingredients, in addition to the
10% stake that the company already owned.

DSM continues to explore opportunities to reduce its exposure to the merchant
caprolactam market as well as options for a partnership in DSM Pharmaceutical
Products.

Outlook
The challenging macro-economic environment experienced during the first three
quarters of 2013 continues, with little or no growth in Europe. Asia continues
to show good levels of economic activity, though at more modest levels, while
the US maintains a modest rate of recovery.

Nutrition is expected to show clearly higher results than in 2012 due to organic
growth moving towards the target of 2% above GDP and the acquisitions made, with
EBITDA margins well within the 20-23% range. However, the recovery in animal
protein markets remains fragile, currently leading to some pricing pressure
especially in vitamin E. Additionally, fish oil-based Omega 3 sales are being
impacted by somewhat lower consumer demand following recent sharp retail price
increases. Overall, the compelling growth drivers of the Nutrition business
remain unchanged.

Business conditions in Pharma remain challenging, but DSM is confident that it
will be able to deliver substantially better results, notwithstanding the usual
uneven delivery patterns between quarters.

Performance Materials is expected to show improved results in 2013, despite the
negative effects of caprolactam.

Polymer Intermediates is expected to show lower results than in 2012.

For the Innovation Center the result of the second half of 2013 is expected to
be in line with the second half of 2012.

Overall, DSM expects a significant increase in EBITDA during 2013 from the €1.1
billion realized in 2012. This is a result of stronger organic growth, supported
by DSM's Profit Improvement Program, as the benefits of acquisitions and a more
resilient portfolio are having an increased impact. Foreign exchange rates and
the recently announced Dutch 'crisis tax' renewal are likely to have a negative
impact on EBITDA. Overall, based on current economic assumptions, DSM continues
to expect to move towards its 2013 EBITDA target of €1.4 billion. The
combination of the above factors could however result in an EBITDA for 2013
slightly below €1.35 billion.



Additional information
Today DSM will hold a conference call for the media from 07.30 AM to 08.00 AM
CET and a conference call for investors and analysts from 09.00 AM to 10.00 AM
CET. Details on how to access these calls can be found on the DSM website,
www.dsm.com. Also, information regarding DSM's Q3 2013 results can be found in
the Presentation to Investors that can be downloaded from the Investors section
of the DSM website.

Important dates
Integrated Annual Report 2013                         Wednesday, 26 February
2014
Report for the first quarter of 2014                  Tuesday, 6 May 2014
Report for the second quarter of 2014              Tuesday, 5 August 2014
Report for the third quarter of 2014                 Tuesday, 4 November 2014


Heerlen, 5 November 2013

The Managing Board

Feike Sijbesma, CEO/Chairman
Rolf-Dieter Schwalb, CFO
Stefan Doboczky
Stephan Tanda
Dimitri de Vreeze


DSM - Bright Science. Brighter Living.(TM)
Royal DSM is a global science-based company active in health, nutrition and
materials. By connecting its unique competences in Life Sciences and Materials
Sciences DSM is driving economic prosperity, environmental progress and social
advances to create sustainable value for all stakeholders. DSM delivers
innovative solutions that nourish, protect and improve performance in global
markets such as food and dietary supplements, personal care, feed,
pharmaceuticals, medical devices, automotive, paints, electrical and
electronics, life protection, alternative energy and bio-based materials. DSM's
23,500 employees deliver annual net sales of around €9 billion. The company is
listed on NYSE Euronext. More information can be found at www.dsm.com.


For more information

Media
DSM, Corporate Communications
tel.: +31 (45) 5782017
e-mail: media.relations@dsm.com

Investors
DSM, Investor Relations
tel.: +31 (45) 5782864
e-mail: investor.relations@dsm.com

www.dsm.com


Press release-pdf: http://hugin.info/130663/R/1740428/584499.pdf
Presentation to investors: http://hugin.info/130663/R/1740428/584502.pdf

[HUG#1740428]



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