DSM-Firmenich to separate animal nutrition, health unit

The company says its animal nutrition and health business is driven by different dynamics than the rest of the group, and the carve-out would minimize exposure to vitamin earnings volatility.

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DSM-Firmenich says plans to carve out and separate its animal nutrition and health (ANH) unit from the group.

The company says its ANH business is driven by different dynamics than the rest of the group, and this has become even more apparent with the “unprecedented challenges in the vitamins market.” Separating the ANH unit from the group would minimize DSM-Firmenich’s exposure to vitamins earnings volatility and reduce capital intensity in line with its long-term strategy, the company said in a February 15 press release.

DSM-Firmenich also said it believes the full potential of the ANH business could be best realized through a different ownership structure for which all potential separation options will be considered. The company expects to be in a position to separate the business in 2025.

“ANH is a fantastic business that over the years we have built to be a true leader in the industry,” said CEO Dimitri de Vreeze. “This is a difficult moment, but we strongly believe that a separation would be better for both businesses and their employees, and ultimately generate better value for all our stakeholders.”

A separation would enable DSM-Firmenich to strengthen its position in human nutrition, health and beauty. By fully focusing on its perfumery and beauty; taste, texture and health; and health, nutrition and care units, the company can further develop its complementary scientific research, technologies and manufacturing. Full focus on these businesses is expected to enhance their commercial potential and synergies, supporting an attractive and consistent growth outlook alongside robust margins, the company said.

“The perimeter of the ANH business expected to be separated out is being reviewed as part of this process,” the press release said. “Given Bovaer’s critical role in reducing emissions across the dairy industry, an important segment for (taste, texture and health), and Veramaris’ significant potential in dietary supplements, it is expected that both businesses would remain part of the group.”

Ivo Lansbergen will continue to lead the ANH business. He joined in 1997 and has led ANH since 2019.

“We have an amazing team within ANH that has built a global leader with scale, a unique portfolio and unrivalled innovation capabilities to help our customers tackle some of the most challenging food security issues and with a strategy that is strongly focused on making animal farming sustainable. It is an exciting prospect for our world class team to pursue our ANH strategy,” Lansbergen said.

More on the ANH unit

Headquartered in Kaiseraugst, Switzerland, last year ANH delivered more than EUR3 billion (US$3.23 billion) in revenues with approximately 6,000 employees. It helps its customers deliver healthy animal proteins efficiently and sustainably while harnessing the power of data to make animal farming practices more sustainable, productive and transparent. The business has a unique premix network across the world that helps deliver global products with local solutions and benefits from precision services capability.

The global vitamins market has experienced a prolonged downturn which has been driven primarily by unprecedented cyclical pressure on vitamin prices in the animal markets. This has been partly mitigated by strong outcomes from the performance solutions business, which provides important tools for farmers to deliver feed efficiency yield management.

As part of the vitamin transformation program announced in June 2023, the company continues to make significant progress on its cost reduction plan including plant closures, route-to-market simplification, and optimized service levels. The company remains confident in realizing a contribution of EUR100 million in adjusted EBITDA in 2024 and the full benefit of EUR200 million in 2025.

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