DSM has presented its strategy update, titled “Growth & Value – Purpose led, Performance driven,” positioning the company toward a nutrition, health and sustainable living company. It says it will pursue “enhanced organic growth with a purpose-led coherent set of business activities.”
According to a statement from the company, DSM is committed to organic top-line growth above market, high single-digit adjusted EBITDA growth, step-up in cash generation, a 25 percent dividend increase over 2018 with future dividend growth aligned with long-term earnings growth. DSM says it will focus on value-creating acquisitions predominantly in nutrition.
“Our Strategy 2015-18 has been highly successful,” said Feike Sijbesma, CEO/chairman DSM managing board. “After transforming DSM over the period 2010-15, we delivered strong growth with greatly improved operational and financial performance and significant value creation in all our businesses. In addition, we took important steps to monetize our non-core Pharma and Bulk Chemicals joint ventures. DSM has become a growth company with ambitious sustainability efforts creating value for all stakeholders across the three dimensions of people, planet and profit.
“DSM will evolve further towards a purpose-led, science-based company in nutrition, health and sustainable living. We have created a strong platform for growth, centered on developing innovative solutions addressing nutrition & health, climate & energy and resources & circularity. Increased customer centricity and large innovation projects will enable above-market growth, while we will remain focused on cost control and operational excellence, allowing us to accelerate profit and cash generation. Organic growth will be complemented by acquisitions predominantly in nutrition.”
Purpose sets scope for further growth and evolution
With its unique science-based competences, DSM is ideally positioned to capture the growth opportunities offered by the global megatrends and Sustainable Development Goals (SDGs), with a particular focus on nutrition & health, climate & energy and resources & circularity.
DSM will therefore evolve into a nutrition, health and sustainable living company:
- DSM’s Nutrition business will focus on human nutrition (ingredients and solutions for food & beverages, as well as specialty nutrition, nutritional ingredients, consumer branded products and personalized nutrition), animal nutrition (covering all species with premix and specialty solutions) and personal care and aroma ingredients
- DSM’s Materials business will further develop into a high-growth, higher-margin specialty business and focus on health, bio/ green applications and new mobility & connectivity applications
- By improving the impact of its own operations, enabling sustainable solutions for its customers and advocating sustainable business, DSM can grow faster and reduce its cost and risk profile
- DSM will step up its ambitions regarding the reduction of greenhouse gas emissions, energy efficiency and use of renewable energy
Performance driven to deliver growth and value
Two financial targets have been set for the period 2019-21:
- High single-digit annual percentage increase in adjusted EBITDA
- About 10 percent average annual increase in adjusted net operating cash flow