(Bloomberg) — DSM-Firmenich AG raised its full-year profit outlook, sending its shares soaring, as a sluggish vitamin market began to recover and demand for its fragrance business gained momentum.
The chemicals group now expects full-year adjusted earnings before interest, taxes, depreciation and amortization to be about 2 billion euros ($2.2 billion), up from a previous forecast of at least 1.9 billion euros, above analysts’ expectations surveyed by Bloomberg.
The company expects cost efficiencies and a vitamin conversion program to contribute 200 million euros to full-year profit. In Amsterdam, the company’s shares rose as much as 5 percent to 116 euros per share, its biggest intraday change since April.
“Vitamins are normalizing and prices are going up a little bit,” Chief Executive Officer Dimitri de Vries said in an interview after the company reported first-half results on Tuesday. “It always takes more than a quarter or two before it impacts our results,” he said.
DSM-Firmenich launched a restructuring plan last year in the face of a downturn in the global vitamin market. “Demand in China had completely collapsed,” de Vries said. The company said in February it was considering selling its Animal Nutrition and Health division, which had second-quarter sales of 795 million euros, to reduce the impact of the downturn in the vitamin market.
DSM-Firmenich will select a team to carry out the separation and “make the organisation available to new buyers from 2025 onwards,” de Vries said.
The company reported second-quarter adjusted EBITDA of 513 million euros, beating the 491 million euros expected by analysts surveyed by Bloomberg. Net sales rose 6.5 percent to 3.23 billion euros for the quarter from a year earlier. Sales of fragrances and beauty products rose 13 percent, accounting for about a third of revenue.
DSM-Firmenich was formed last year through the merger of chemical company Royal DSM NV and Swiss ingredients manufacturer Firmenich International SA to create one of the world’s largest makers of nutrition, health and beauty products.
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