“Positive momentum”: dsm-firmenich’s Q3 financial results show strong improvement

Nutrition company dsm-firmenich’s 2024 Q3 financial data indicate an 8% organic sales growth. The company has increased its 2024 full-year outlook with an adjusted operating result (EBITDA) toward €2.1 billion (US$2.28 billion). Adjusted EBITDA increased 32% in the quarter. 

As the vitamin market experienced supply disruptions during the quarter, the company expects that the growth in some vitamin prices will lead to a temporary profit contribution of around €80 million (US$86.9 million) in Q4. dsm-firmenich highlights that its synergies and vitamin transformation programs are “firmly on track.” 

“Our business maintained positive momentum through the third quarter, supported by our improvement programs and strong performances in Perfumery & Beauty and Taste, Texture & Health. Health, Nutrition & Care saw a further gradual improvement in organic sales growth, while Animal Nutrition & Health saw good momentum in its business,” details Dimitri de Vreeze, CEO of dsm-firmenich. 

“Recently, we marked a key milestone in sustainability with our ambitious net-zero emissions targets receiving validation from the Science Based Targets initiative.”

At the same time, the company remains focused on improving cash flow generation. 

Vitamin transformation and synergies

The company notes that in early August, vitamin supply disruptions led to price increases, especially in vitamins A and E. According to dsm-firmenich, this had a minimal impact on the third quarter as volumes were already primarily contracted, and production capacity was limited due to planned stops. The company says the higher prices will be reflected in the next quarter. 

In mid-2023, dsm-firmenich restructured its vitamin activities to reduce costs. Its business restructuring and vitamin transformation program delivered €95 million (US$103 million) in the first six months of 2024.

“Our comprehensive sales and cost synergies, together with the vitamin transformation program, continue to deliver according to our expectations, driving good financial performance and underpinning our innovation-driven growth strategy,” adds De Vreeze. 

The company reports that supplements grew well, driven by increased demand for vitamins and minerals and its algal omega-3 oils.“At the same time, our strategic actions, including the carve-out of Animal Nutrition & Health and divestments of de-prioritized activities, are progressing well.”

Earlier this year, the company announced it would divest its animal nutrition business in 2025 to focus on other business units in food, nutrition and personal care. 

Business unit results

The company’s Taste, Texture & Health business unit had a solid quarter at 12% organic sales growth, which the company says is partly bolstered by catching up after destocking last year. Moreover, sales synergies gained traction, supporting dsm-firmenich’s decision to combine taste and ingredients solutions. 

Additionally, as the company completed sales of its yeast extract business to Lesaffre on October 1, this unit will not contribute to its Q4 results. 

Health, Nutrition & Care resulted in a 5% organic sales growth, which is “fully driven by volumes,” according to dsm-firmenich. 

The company reports that supplements grew well, driven by increased demand for vitamins and minerals and its algal omega-3 oils. Although Early Life Nutrition recorded good growth, this was lower than in the same quarter last year. There was a good performance in i-Health, a global consumer health and wellness company subsidiary of dsm-firmenich, especially in its women’s health product range. 

Last month, dsm-firmenich completed selling and transferring its marine lipids business to KD Pharma Group, resulting in a 29% minority stake in KD Pharma’s parent company MidCo Omega. 

The Animal Nutrition & Health business unit saw a continued improvement in business conditions with growing consumer demand and some normalization of vitamin profitability after the August disruption. The unit reported an overall organic sales growth of 7%. 

Meanwhile, the Perfumery & Beauty unit delivered 11% volume growth, driven by customers looking for premium products.