DSM readies €2bn+ acquisitions war chest as 2011 profit jumps 15%

By Shane Starling

- Last updated on GMT

Related tags Dsm managing board Martek

DSM readies €2bn+ acquisitions war chest as 2011 profit jumps 15%
Nutrition and polymers were the stand-out divisions for Royal DSM in 2011, a year that saw operating profits rise 15% from €752m to €866m, as the newly life science-oriented ingredients giant singled out Martek buy-out success and committed to ongoing pursuit of an aggressive growth strategy.

Martek contributed €284m to 2011 sales and €88m to EBITDA to the nutrition cluster that generated €3.4bn for the year including animal nutrition and personal care. Board member Stephan Tanda said the company’s long history of working together had smoothed the acquisition waters and boosted integration efficiency as well as the Maryland company's algal omega-3 ingredients being a "perfect fit"with its own.

€2bn kitty

Tanda said €2bn in cash lies ready to build on the carotenoid supplier acquisitions of 2011 – Microbia in the US and Vitatene in Spain.

“We have €2bn cash on the balance sheet which can be leveraged up so we are looking across our portfolio and acquisitions will continue in 2012,”​ Tanda told NutraIngredients, with innovative nutritional ingredients and customer-facing, emerging market, premix facilities prioritised.

“We are looking at a range of targets but as tends to be the way you have ten in mind and then one happens, but we have a good track record and do not want to overpay and disrespect our shareholders.”

In celebrating 11% revenue growth in 2011 on 2010 from €8.176bn to €9.048bn, Tanda said the Dutch multinational was cautious about some markets like the economically challenged Eurozone, but bullish about prospects in emerging markets like Brazil and China which now account for 39% of across-the-board sales.

The company expects this emerging market revenue share to be worth 50% by 2015.

It noted demand growth for a wide variety of bio-ingredients including yeast extracts, cultures and enzymes, “continues in the BRIC countries as well as in more traditional markets such as Europe and North America.”


Tanda worried for the state of European economies but noted, “the innovative part of the nutrition sector is growing more rapidly than generic areas”,​ something that would buffer slowdowns.

The company emphasised the importance of research in its success saying, “nutritional science supported by clinical studies aimed at improved micronutrient supply, based around the well-known vitamins, nutritional lipids and carotenoids as well as an array of new nutritional ingredients.”


Fourth quarter company-wide EBITDA of €293m was 6% above Q4 2010, causing DSM to reflect, “The main contributor was Nutrition, which, even excluding Martek, delivered a higher result, despite the effect of the strong Swiss franc on its cost base.”

Across the board, DSM has frecast 5-7% organic growth until 2015.

Feike Sijbesma, CEO/chairman of the DSM managing board said: "We are conscious that risks to the macro-economic global outlook remain, and that weakness in Europe and some of our end markets, especially building and construction, persists. However, we believe that our balanced, relatively resilient portfolio in health, nutrition and materials, our broad geographic spread with a significant presence in high growth economies, together with our strong balance sheet, leave us well placed to achieve our ambitious 2013 targets."

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