Dutch chemicals firm DSM-Firmenich ups 2024 profit forecast on higher vitamin prices

Dutch chemicals maker DSM-Firmenich raised its annual adjusted core profit forecast on Thursday, citing a vitamin supply disruption that has increased prices, bringing a temporary earnings contribution in the fourth quarter.

Lower vitamin prices, paired with a destocking cycle took a toll on the company’s profit in 2023, it said in May, adding that these trends were expected to reverse.

The group, formed through a merger of Dutch speciality chemicals firm DSM and Swiss flavours and scents maker Firmenich, expects adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of €2.1 billion ($2.28 billion) for 2024, slightly higher the €2 billion it forecast earlier this year.

To focus on perfumes and flavours – one of its main businesses – DSM-Firmenich said it plans to carve-out its Animal Health and Nutrition division by the end of 2025 after the business reported a 76% plunge in core earnings last year.

“Our strategic actions, including the carve-out of Animal Nutrition & Health and divestments of de-prioritized activities, are progressing well,” CEO Dimitri de Vreeze said in a statement.

The company, whose fragrances are used in the perfumes of French luxury giants LVMH and Kering, reported a 32% rise in third-quarter EBITDA to €541 million, outpacing the €536 million forecast by analysts in a company-compiled consensus.

The Dutch firm attributed the rise to strong organic sales growth and contributions from the synergies and the vitamin transformation program, despite a negative foreign exchange effect of around €15 million.