DuPont Nutrition & Biosciences reports strong probiotics growth amid COVID-19

06 May 2020 --- In the midst of preparations for its International Flavors & Fragrances (IFF) merger, DuPont has released its 2020 first quarter results, noting the impact of COVID-19 and how it is dealing with it. The company states that it actively offered support across sectors influenced by COVID-19 by providing personal protective equipment and materials that are important in other companies’ supply chains. Meanwhile, DuPont also reported growth in its Nutrition & Biosciences segment, with its probiotics section seeing its strongest growth period to date.

“In the face of an unprecedented health, financial and humanitarian crisis, we are working to support the massive effort to provide critical protection to healthcare and other front-line workers. Our innovation capabilities are enabling us to rapidly create and deploy new tools in this battle and we will continue to advance those, along with targeted in-kind and financial donations, to provide as many as possible with our solutions,” notes Ed Breen, DuPont Executive Chairman and Chief Executive Officer.

“By continuing to invest in our R&D engine, prioritizing cash generation, further improving our cost structure and advancing our portfolio rationalization efforts, we delivered first quarter results above our initial expectations in each core segment and positioned ourselves for future growth and profitability.”

The company’s Nutrition & Biosciences segment reported net sales of US$1.5 billion, up 1 percent from the year-ago period.He further notes that along with IFF, the company remains committed to creating the global leader in high-value ingredients and solutions for Food & Beverage, Home & Personal Care, and Health & Wellness markets. “The combination of our Nutrition & Biosciences business with IFF remains on track for a Q1 2021 closing and we plan to file the initial registration statement with the US Securities and Exchange Commission (SEC) in the coming days. This represents another important milestone toward creating opportunity for our employees and customers, as well as value for our shareholders,” Breen adds.

Nutrition & Biosciences growth
The company’s Nutrition & Biosciences segment reported net sales of US$1.5 billion, up 1 percent from the year-ago period. Organic sales were up 3 percent with a 2 percent price improvement and a 1 percent volume gain. Currency was a 2 percent headwind, DuPont highlights.

Sales gains were led by Health & Biosciences with high-single digit growth versus the same period last year. The probiotics business recorded its strongest quarter ever with mid-teens growth as key initiatives to strengthen the North America market were implemented and consumer demand for immune health strengthened globally. 

Last month, Probi also reported that its probiotic sales had been bolstered, noting a clear increase in interest in its immunity products. This was seen with early and extended orders in all markets, with the company saying this is likely an effect of the pandemic. 

Moreover, strong consumer demand in the Home and Personal Care and Animal Nutrition markets also provided double-digit growth in the quarter. Food & Beverage sales were up slightly on an organic basis with improvement in protein solutions driven by increased demand for packaged foods and on-going strength in the plant-based meat category, off-set by continued upstream challenges in the sweeteners supply chain. Steady demand across Pharma Solutions contributed to the gains in the quarter.

The probiotics business recorded its strongest quarter ever, the company reports.In this segment, DuPont’s XIVIA xylitol – a wood-based sweetener – was recently found to have a positive effect on skin microbial growth. This is according to a study published in the Korean Journal of Microbiology, which showed that xylitol inhibited the growth of pure cultures of pathogenic S. aureus and C. acnes strains linked to skin conditions. DuPont also flagged that the data can be used to help promote the use of XIVIA Xylitol outside the traditional space of chewing gum and oral care applications.

Operating EBITDA for the segment was US$385 million, an increase of 10 percent from pro forma operating EBITDA of US$349 million in the year-ago period. Pricing gains across the segment and a favorable product mix led by the strength in Health & Biosciences provided a 210 basis point improvement in segment operating EBITDA margins.

First quarter 2020 overall results
The company reports that net sales totaled US$5.2 billion, down 4 percent versus the year-ago period. On an organic basis, 3 percent growth in Nutrition & Biosciences was more than offset by organic sales declines in the other segments.

GAAP Income (loss) from continuing operations totaled US$610 million, versus pro forma GAAP Income from continuing operations of US$18 million in the year-ago period. Operating EBITDA was US$1.3 billion, down 8 percent versus pro forma operating EBITDA in the prior year. 

This first quarter has seen a range of movements for the company, including a US$7 million project with the APC Microbiome Ireland SFI Research Centre to rebalance the gut bacteria of babies after antibiotics or Caesarean-section births. The company is also collaborating with biopharmaceutical company MRM Health to tackle a range of metabolic diseases via innovative solutions based on the human microbiome.

By Kristiana Lalou